AGM Minutes 14th June 2016 ‐ At Royal Yacht Club Southampton

Ordinary Business

1.     Notification of SCMS Office Move to Southampton

The President explained that the Society is in the process of moving office to Southampton and this will be complete on 24th June.  The office in Ocean Village is now open now and staffed.  Anyone wishing to visit would be most welcome. 

2.     Minutes of the 2015 AGM Held in Southampton

The minutes of the last Annual General Meeting held at the Royal Southampton Yacht Club on 10th June 2015 had been distributed to all members and were adopted on the proposal of Mark Lockie and seconded by Steve Clarke.

3.     President’s Report

In a change to the agenda the President presented his report, which is appended to the minutes.

4.     Election of any Nominated Fellows to Council

There were no nominated Fellows at this time.

The President observed that as the number of Fellows was diminishing the Council was reducing in size and the average age was rising.  The president therefore proposed that the Council should be able to recruit or co-opt ordinary members on to the Council.

Paul Owen asked whether any other qualification was necessary apart from being a member.  The President replied that in the first instance there would be no additional qualification.  The objective was to get things moving and new blood would probably help even if the member had not been in the Society for very long.  Clearly the Council should not be overrun by members who had only recently joined the Society, but a limit was not necessary at this time.  The President emphasised that new ideas were essential.

Ian Anderson observed that the normal practice for co-opting members to take on new tasks would be to put a finite life on the length of the task.  He asked what that would be.  The President replied that this would be one or two years initially, subject to review.  At some stage it would be advisable to alter the Articles of Association to reflect the practice of enabling members to join the Council, thus removing the need to co-opt members.  The President also agreed that co-opted members would have a vote while on the Council.

On the proposal of the President and seconded by Ed Geary the proposal was unanimously agreed by the members.

5.     Presentation of the Unaudited Financial Statements for the year ended 31st December 2015

The President invited Nick Gladwell to present the Unaudited Financial Statements.

Nick made a presentation of the unaudited accounts for the year ended 31st December 2015 and noted that the abbreviated accounts had already been circulated with notice of the AGM.  Full copies of the accounts were available for perusal.

He observed that the bank balance had reduced over the period.  The main reason (as noted at the 2015 AGM) was that the MCA had experienced difficulties with all Certification Authorities in that the standards expected were raised each year and that the audits were correspondingly more onerous with an expectation of more detailed and rigorous documentation. 

This had been discussed at a number of meetings with the MCA and it had been reiterated that the difficulties were not specific to SCMS, although SCMS is the largest CA for small vessel codes with over 1,100 files.  There were issues with files and the historical information within those files and SCMS spent nearly a year in meticulously going through every file and every document.  This included chasing owners, builders and surveyors for missing documents and information, which consumed a vast amount of time.  A lot of money was therefore spent over the course of nearly a year in complying with the MCA requirement and in passing the audit successfully in February 2016.  There were some equipment costs but the largest expenditure was in people to bring the documentation up to the required standard.

The whole process did allow a review of everything we did that resulted in new procedures, new controls and new methods of doing things.   At the last AGM concerns were raised about accounts and cash flow (with particular regard to aged debts) and so a new accounting system (Xero) had been introduced to improve control although this has not been without cost. 

It would not be productive to go through the accounts in detail at this time but they have been approved and signed off.

In the coming year it is expected there will be a similar although smaller decline due to the office move and redundancy payments to the London staff.  The office lease costs in London were modest as tenants of the Marine Society and Sea Cadets and the equivalent costs in Southampton are higher. 

As part of the move the opportunity has been taken to upgrade critical equipment and to change the office hours, working practices, attitudes and procedures.  From operating with up to six part time staff and attendant continuity problems we now have three full time staff including Stuart Gladwell.  Past problems of vessel certification not arriving on time, lost documents and emails unanswered are being addressed.

The office hours are now 09:00 to 17:00 Monday to Friday. 

Paul Owen asked whether there had been any changes to the Benevolent Fund during the last year.  Nick explained that the value should have gone down but had not in fact done so.  The only beneficiary at present was Peter Hicks but no money had actually been removed from the Benevolent Fund for 2015.  Peter Hicks’ payments have actually been taken from the Trading Account, which is otherwise primarily used for the Certifying Authority part of the operation.  This will be addressed at some stage this year when the appropriate mandates have been raised and approved for operating the bank accounts and the Benevolent Fund.

Ian Anderson asked to see the full financial statement and this was provided. 

Ian asked for the approximate cost of complying with the updated MCA requirements and Nick confirmed that was of the order of £50,000.

Ian also asked the cost of the move to Southampton and Nick advised this was approximately £41,000, including staff redundancies.  The President confirmed that legal advice had been taken in calculating the redundancy costs.  The Vice President stated that the allowances used for the actual redundancy calculations had been deliberately generous.

Simon Oakes asked whether there was an intention to increase surveying fees now it appeared that Society funds had reduced by about £100,000 and the main income stream was based on surveying rather than membership fees. 

Nick replied that the new Xero accounting package allowed the accounts to be followed much more closely than hitherto. It also allows much tighter control of invoicing to ship-owners and to members.  One aspect of this is that vessels may be suspended for non-payment of fees – and investigation has shown that in the past some owners have failed to pay fees for well over 12 months.  Some members have also followed this practice and although the introduction of Xero did delay the issue of invoices for membership fees, about one third of members have not yet paid their fees for 2016.

Simon Oakes pointed out that this was not a long-term solution and asked whether any evaluation had taken place into the amount of work that was involved in providing the various services we offer and to calculate costs and pricing accordingly.  Nick replied that there was certainly intent to do so.  We have started to look at charging and the last time the fees were increased was in October 2014.  In the period leading up to the MCA audit when the team was at full stretch there was a period when we were running late with certificates and owners had asked whether we could offer an express service.  This had been confirmed and fees were doubled by agreement in order to meet critical deadlines.  

Simon reported that the MCA had been conducting a survey review for several years and were proposing to increase their own hourly rate over the next 6 months from about £94 per hour at present to as much as £148 per hour.  Nick confirmed that the SCMS fees review over coming months would compare our fees with other CAs to make sure we still offered a good option.  In conclusion Nick noted that by use of the new accounting package the CA Trading Account has been increasing over the last few months.

The President added that as Bob Barnes had volunteered as the Honorary Membership Secretary it was hoped that membership would increase.  Bob explained that his intention was to pick up from the presentation that Clive Robinson made at the last AGM by looking at the proposal for a new membership structure and way ahead.

The President explained that this would also tie in with changes to the Articles of Association.

Mark Lockie pointed out that membership payments were now kept in a separate account from the CA Trading account and when these were added together (as they affectively had been in previous years) the total was more reassuring.  One of the conclusions that could be drawn from the creation of separate accounts is that the membership funds are not supporting the CA activities.

Bob Barnes requested that the minutes noted this point as it addressed the issue raised in Item 8 of the minutes from the 2015 AGM.

Nick Gladwell noted there had been several membership enquires during day 1 of Seawork and he acknowledged that several issues needed attention including the web site, revision of forms, contact numbers, etc.  He emphasised that these would be addressed but had been put on hold while attention was focused on the MCA audit and the relocation to Southampton.

In response to a question on membership standards Bob Barnes explained that a possible structure had been outlined in the paper that Clive Robinson circulated last year, which now needed updating.  The suggestion was that there would be several streams of membership, such as seagoing, naval architects and student members.

Bob Barnes observed that a new 500 tonne code was being introduced and that there is a possibility that this may provide an opportunity to gain new members.

Nick Gladwell reported that someone from the MoD had approached the SCMS Seawork stand and explained that the government was considering selling their work boat vessels to private contractors, for which the vessels would need to be surveyed and valued before being surveyed again to the commercial vessel standards.  There was an expectation that SCMS members would be invited to quote for this work.

The accounts were agreed by all present on the proposal of Ian Anderson, seconded by Ed Geary.

6.     Appointment of the Society’s Accountants for the Ensuing Year

The President stated that Menzies had been the accountant for some years and they have an office in Southampton.  On the proposal of Bob Barnes and seconded by Simon Oakes, the appointment of Menzies was agreed by the meeting.

7.     To Receive the Announcement of Office Bearers for 2016 / 2017

Nick Gladwell stated that the present Board of Management comprised the President, the Vice President, the Chairman of the CA Committee Paul Johnson and Peter Mansbridge and himself as the two Joint CEOs.  These names were agreed by the meeting on the proposal of Bob Barnes and seconded by Ed Geary.

Nick Gladwell reminded the meeting that Bob Barnes had volunteered to be the Honorary Membership Secretary and asked for a proposer and seconder.  On the proposal of Ian Anderson and seconded by Fiona Dando the appointment of Bob Barnes was agreed.

Paul Owen asked who was on the Council at the 2015 AGM and was not on the Council now.  The President replied that John Banister had resigned on 13th June due to ill health and added that he would be writing to John to thank him for his services over the years.  The President added that Clive Robinson, Chris Jones and Kjel Nilsen-Nygaard had also resigned during the year. 

Nick Gladwell listed the current Council members as the President and Vice President, previous Past Presidents and himself.

The President emphasised that his remarks at the start of the meeting about co-opting members on to the Council was prompted by the shortage of Council members.

In response to a question regarding what the duties of a Council member entailed, the President replied that attendance at the Council meetings, which were held three or four times per year, was the basic requirement.  Norman Finlay added that each Council member contributed experience and knowledge from within their own area of expertise.

On the proposal of Ed Geary and seconded by Ian anderson, the current membership of the Council including Mike Eckles as President and Mark Lockie as Vice President was agreed by the meeting.

Nick added that both the President and Vice President are Directors of SCMS, with both names listed on the Companies House register.

8.     Any Other Business

Bob Barnes proposed a vote of thanks for Peter Mansbridge who became CEO for certification in September 2015.  Nick Gladwell seconded this.
 

Paul Owen asked whether the London staff had been informed of the details of their redundancy payments.  He was particularly concerned about Peter Hicks who had been unwell for the last few weeks and was known to be worrying about the future.  Nick Gladwell replied that he had verbally informed Peter Hicks, Linda and Lesley of their packages but that they would all receive the details in formal letters from Peter Mansbridge well before the final day in the office.  He added that Warner Goodman had approved the calculations, as solicitors to the Society.

Mark Lockie announced that training days would be starting at the Southampton office in September, the date to be announced.  The subject will cover MLC, heel tests (including the formal witnessing of inclining experiments) and details of the certification process including the standard forms.  It is expected to hold training days every two months.  Initially the training will be for CA Examiners but will later be extended to a wider audience.

Steve Clarke asked whether digital conferencing techniques such as Skype could be used to save travelling time.  The President agreed there was every reason to explore this in the future but it was unlikely to be possible for this session.  Presentations could also be published or made available on line for later viewing.

Ian Anderson welcomed the introduction of training and asked whether this was also part of a general strategy to comply with the stated aims of the MCA to address the improving competency of surveyors.  Mark Lockie replied that meetings had been taking place about improving surveyor standards across all certifying authorities and to improve consistency between certifying authorities.  He added that the MCA were expecting CAs to give training.  The reintroduction of SCMS training was broadly in line with this expectation. 

Ian stated that that the MCA expectation was more to do with CAs assessing the competence of their surveyors before they performed examinations.  Mark added that SCMS had now started to perform vertical audits whereby an auditor assessed complete vessel examinations.  This process would eventually be applied to all examiners, probably on a regular basis.  Nick Gladwell added that he had been trying to perform one vertical audit per month but this had proved to be difficult while the office relocation was being organised.  The timetable would be reinstated for all code surveyors after the move.

This is an internal process, which has started with the examiners that have the most vessels.  Nick explained that one difficulty in organising vertical audits was the very limited notice period that vessel owners were usually able to give before an examination was required.

Steve Clarke asked for clarification on the status of the certification codes.  Mark Lockie explained that the four coloured codes – Blue, Yellow, Brown and Red were legally operational.  MGN280 has never been formally issued; the only part that is operational is the stability section but the code can also be used as an alternative construction standard.  The survey regime cannot technically be used.  The new workboat code can be used for the construction of new vessels from June 2014 although an amendment is expected shortly.  Steve suggested that SCMS publish this information as a matrix for use by examiners.  Only forty copies of the new workboat code were ever printed and parts of it are of questionable relevance to RIBs, for example.  A matrix/checklist would do much to clarify the position as it could then be submitted to the MCA for approval.  Mark Lockie expressed the view that a formal reply from the MCA would not be forthcoming.  Steve Clarke further suggested that the SCMS should take a stance on the matrix to the extent that it would be used formally as the definitive position unless the MCA instructed otherwise.

Bob Barnes pointed out that the examiners website already includes a notice to the effect that MGN280 is not recommended for use, except for stability. 

Nick Gladwell agreed with the principle of a matrix and undertook to discuss the issue with Paul Johnson with a view to producing a document.

Ian Anderson expressed the opinion that the subject of code applicability should be an agenda item (as opposed to being brought up under AOB) at the next CA/MCA meeting.  He noted that many SCMS members were also members of other societies and that each CA interpreted the code differently.  He expressed the strong opinion that a joint view was essential although Mark Lockie doubted this could be achieved.

Norman Finlay stated that the Workboat Association were working very hard to get the Workboat Code finalised.  If this is not achieved and printed before October the assessment process will need to be repeated and this will defer the publication for up to eight months (i.e. until April 2017).

Close of AGM

There being no further business the President closed the meeting at 19:12 hours.

Peter Mansbridge

Interim Joint CEO (Certification)

PRESIDENT’S REPORT TO AGM 14TH June 2016

Firstly may I thank Bob Barnes for his efforts and hard work as President of the Society over the last two and a bit years, the latter part of which became increasingly difficult due to the problems with the MCA audit and other matters.

Paul Owen retired as our Secretary in August 2015 and Peter Mansbridge took over as Interim CEO (Certification) on 1st September while we reorganised.  We wish Paul well in his work in other fields.

In October 2015 Bob Barnes called an emergency Council meeting at which he resigned his presidency and nominated myself as President and Mark Lockie as Vice President.  This was confirmed at the meeting subject to ratification at the AGM (today).

As some of you know I am a man of few words so please don’t be too surprised if this report is very brief.

My first involvement with the Society was about 45 years ago when my uncle, Trevor Eckles was President.  I joined the Society in 1986 and since taking over from Bob I am honoured to be President at what has been to date a very interesting time in the Society’s long history.

As most of you know, at the time of the last AGM we were unable to take on new vessels for coding.  Since then under the Certification Authority Chairman Paul Johnson and with extensive effort by him and Nick Gladwell in auditing files, by Christine Gladwell in making updates to the Quality Procedures and with considerable support from other members we passed the MCA audit of 15th-16th February and are now once again permitted to take on new business.  My thanks go to all concerned with this concentrated effort, including Linda Plastow and the office staff.  Without their determination and industry we may not have been sitting here today.

As you were presumably aware we had been operating from Lambeth Road for about two years waiting to be given notice to quit the premises and in January this was finally received.

Consideration was given to potential new offices in London, Southampton and further north including Hull and Liverpool.  At a previous Council meeting it had been suggested by some Council members that Southampton would be an ideal location.  This was initially rejected due to its relative inaccessibility compared to London.  The north of England, though inexpensive, would hardly have been viable – according to some members being north of Watford was the same as a foreign country.

When future operating costs were considered together with accessibility to other CAs and the MCA for meetings and the fact that Southampton is a maritime centre it was agreed that Southampton was the preferred area.

Mark Lockie investigated office space and costings in London and Southampton.  After inspection it was eventually agreed that the Ocean Village office offered the best all round facilities.

I should also like to thank Norman Finlay and Jacqui Bruce who assisted in the investigation.

Whilst all this was going on we appointed Warner Goodman as solicitors to the Society and Peter Mansbridge has been liaising with them regarding the relocation and staff changes.

As a result of the move the London staff Linda, Lesley, Avril and Beverley were offered the opportunity to move as their jobs in London became redundant.  All declined the offer but have continued to work diligently throughout the relocation planning period and I would like to thank them for their efforts.

When the move to Southampton became evident, Nick Gladwell’s son Stuart applied for the post of CEO.  Stuart Gladwell is a MCA qualified sea going engineer with 13 years experience on chemical tankers.  He did his HND at Warsash in 2006 and spent his last leave at SCMS doing vessel file reviews and sorting out the missing paperwork in preparation for the MCA audit in February.  He therefore has a good understanding of the Society and how it works.

I had a brief interview with him near the London office and intended to arrange for him to meet other Council members before returning to his vessel, which was at sea.  This was not to be as he was recalled earlier than expected but after discussions with other members of the management team including Paul Johnson, Mark Lockie and Peter Mansbridge it was agreed to offer Stuart the opportunity in his absence.

Negotiations by proxy were held with Nick regarding the way forward and it was agreed that Stuart be appointed Office Manager in Southampton while Nick became temporary Joint CEO with Peter.  This solution fitted well as Peter also wanted to gradually withdraw from his interim position.  The intention is that after a satisfactory induction period Stuart will become the CEO.

Thus Nick and Peter were joint CEOs throughout the move with Nick ably assisted by his wife Christine in setting up the new office in Southampton.  Stuart returned from his voyage and started work on 4th June.  Two new office staff members have also joined the team, namely Peter Spence as Senior Administrator who joins us from the MCA and Petar Andreev as Financial Administrator.  The new office will be open from 09:00 to 17:00 which I am sure will make life easier for all of us.  All are welcome to visit the new office and team while (or whenever) you are in the Southampton area.

As some of you are aware there have been some problems with invoicing and in some cases fees invoiced to owners have not been paid.  We now have a new accountancy package installed, which with considerable assistance from Paul Johnson enables us to see our financial position at a glance.  Following a few teething problems the finances should soon be brought into line. 

There have been issues with the IT and Paul Owen has been very helpful in supporting computer and systems operations by frequent visits to the London office and in providing prompt responses to questions by phone and text.

As you will note from the accounts for last year, all of the above has come at a considerable cost and this will also be seen in the accounts for this year when published.  However with the step change I envisage that the Society will once again be in a position to develop.  When matters have settled down we should be in a position to recruit more members.  To support this it proposed that Bob Barnes looks after membership as Honorary Membership Secretary.  We also plan to organise more talks and discussion groups, and Mark Lockie as Vice President for Membership Services has already started preparations for this.

With regard to Seawork I would like to thank Norman Finlay and more specifically Jacqui Bruce for organising the stand for us.

Finally I would like to thank the staff that are leaving us for their support over the years, namely Linda Plastow, Lesley Plastow, Avril Mallon, Beverley Gallehawk and Peter Hicks – to whom I wish a happy second retirement.

Mike Eckles, FCMS