Annual General Meeting 2012

To be held at: Lawrence Graham Solicitors 4 More London Riverside London SE1 2AU

Thursday 22nd November 2012 2012 Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 46th ANNUAL GENERAL MEETING (“AGM”) of THE DIRECT SELLING ASSOCIATION will be held at 12.00 midday, on Thursday 22nd November 2012 at the offices of LG (Lawrence Graham) Solicitors, 4 More London Riverside, London SE1 2AU for the following purposes:-

Vision Statement Agenda

“To create a meaningful image of our Association, credibility and 1. To receive the Chairman’s report. delivery in support of all our members and external opinion formers.” 2. To receive and adopt the Report and Accounts for the year ended 30th June 2012.

3. To elect Council Members.

4. To re-appoint auditors to the company and authorise the Directors to fix their remuneration.

5. To consider any other business.

Dated 31st October 2012

By Order of the Council

Contents PAUL SOUTHWORTH Director General 3 2012 Notice of Annual General Meeting

4 Governance and Membership Election to Council

5 Chairman’s Report 1. Under the DSA Constitution, one third of Council retires annually by rotation. This year Lorna Hunt and Helen van Wengen resigned and do not wish to stand. Ric Hobby offers himself for re-election, which 6 Director’s Report Council recommends.

8 Code Administrator’s Report Also this year the Council decided to fill not only the two resignation posts as above but also two vacancies. Following several nominations received, the Council recommends the appointment of Penny Farish, Mike 10 Financial Statement Roberts, Simon Burke and Tony Chaplin.

14 History of the DSA 2. Under the DSA Constitution, the Chairman shall be elected each year. This year Jamie Stewart will stand down and we thank him for his contribution as Chair over the last two years. Council recommends 15 List of Members the appointment of Andy Smith as Chair for the coming year.

2 3 2012 Direct Selling Association 2012 Direct Selling Association Governance and Membership 2012 Chairman’s Report

Governance

The Council is elected annually by members to control and manage the business and affairs of the Association. It is comprised of a Chairman, a Vice-Chairman and not more than 15 members. The Board is assisted in its role through the appointment and delegation of authority to the Director General and the contribution of member advisory committees. The Board adopts modern governance standards in its contribution to Association business. As this year, my last year as Chairman, comes to an end I wanted to express my thanks for your continued support of our Association. Today, more than ever, it is important we stay strong and stick together to combat the many challenges we face. Council Members and Advisors During this long and tough recession here in the UK we all have the same demands and issues to solve, be it Jamie Stewart Limited Chairman recruitment, retention or average order we have to find answers and new ways in which to grow our sales. Bob Parker (UK) Limited Vice Chairman The more we can work together, sharing experiences and ensuring best practices then the more we can rely Chris Fenna The (UK) Limited on strengthening our industry overall, which ultimately benefits every company. Ric Hobby Herbalife Europe Limited Mimi Marchant Captain Tortue Group In spite of all these challenges however, our Association has gone from strength to strength over the last year. Andy Smith (UK) Limited New faces on the Council have brought added vigour and drive to our strategies and I thank all the Council Lorna Hunt Usborne Books at Home Members for the contribution they have given. Shaun Charity Neways Scott Schlackman Avon Paul and his great team at the DSA office continue to lift our profile as an industry and have provided real Clive Norton Cambridge Weight Plan added value to membership of the DSA. Their efforts and support are most appreciated along with those of our Eric McClenaghan Oriflame Code Administrator, Paul Dobson and Treasurer, Joanne Stevens. Helen van Wengen Cosmetics Paul Southworth Director General, DSA Finally I must say how much I have enjoyed and benefited from my term as your Chairman and I look forward to remaining and serving on the Council. I leave you in good hands as I hand the baton over to Andy Smith and Allan Bell Allan Bell Consulting Supplier Chairman (non-voting) wish him well during his term as Chairman.

I wish you all every success in the coming year.

Advisors Jamie Stewart DSA Chairman Joanne Stevens Treasurer Paul Dobson Independent Code Administrator

Legal Affairs Committee

Paul Dobson Chairman Claudine Olney Secretary Forever Living Products

4 5 2012 Direct Selling Association Director’s Report

Tempus Fugit Website/Social Media They say time flies when you are having fun and last year really has been a helter skelter, roller coaster kind of Our website continues to develop and become a stronger communication and information tool than ever year, but we have also had a lot of fun and success along the way. before. Now attracting on average over 350 visits per day it is essential we always ensure it is current and delivers the needs of our visitors, both members and non-members. I have been blessed with an outstanding support team here at the DSA office and cannot thank them enough for their contribution. Kathy, Lynda, Chris and Wendy have a passion for this great industry of ours and it shows Added to this has been our ever increasing use of Social Media through Linked In, Facebook and Twitter and in the work they produce. Unfortunately though we have lost Kathy to retirement recently and we wish her our followers increase weekly. every happiness. Covering Kathy’s website and social media role will be our new team member, Ashley Riley, Consultant, of Ashley Riley Communication. Our internet communication has come a long way and we will continue to develop this crucially important channel. Highlights of the year Lobbying Education We continued to get our message across to Government that our industry is the one that is delivering their We have been strengthening our relationships with Universities and deliver Direct Selling presentations and agenda of getting people back into employment, skills training, entrepreneurship and micro businesses and that attend their Job Fairs. Interest is growing and if we have the resources we plan to continue to develop this we do this on a daily basis. This culminated in the DSA hosting a reception at the House of Commons, attended activity. by Ministers and MPs.

Conference/Seminars Through Seldia (previously FEDSA) we continue to lobby against legislation that may adversely affect our Our Annual Conference and Awards, with an Olympic theme, proved to be a major success this year with over industry such as the Consumer Rights Directive. It is important we maintain pressure at European level in 200 attendees. The new format was appreciated by Members and content and keynote speakers received Brussels as we are here in the UK Parliament. high marks in the evaluation feedback.

PR Next year’s conference will be held on 9th May at the Hinckley Island Hotel and will be entitled ‘We are the Our PR agency, Cuban Eight, have continued their excellent work on our behalf and we continue to achieve Future’, when we shall focus on the needs and challenges ahead along with exciting new technology advances a high profile across all media channels. Over 150 positive articles have appeared, many featuring Member and how we can attract more ‘Gen Y’ into our industry. Make a date to be there. companies, and we have now established strong relationships with many key journalists. Positive PR is an essential strand in our efforts with Government, the OFT, Trading Standards and HMRC. Through the year we also ran training seminars on Social Media, Sales Support and the launch of the DSA OFT / TSI Rewards Programme. Also, our first ever ‘Round Table Discussions’ Seminar was held in October and, given its The Office of Fair Trading have officially given notice that they will cease to be involved in Consumer Code initial success, will certainly be repeated next year. approvals from 31st March 2013. All Members need to review literature quantities and reprints as the OFT logo must not be displayed after that date. The Coming Year Another challenging year ahead but one we face with optimism and renewed endeavour to continue to deliver It is envisaged that the Trading Standards Institute will take over this role from that date and we are currently value of membership, protection and support to all members and continue to position our industry in a positive in negotiations with them regarding future involvement in the scheme. light to all our target audiences.

HMRC May I again offer my thanks to the DSA team I have the honour of leading, for the support of the Council and Recently the Revenue and Customs announced they were going to target Direct Sellers and several of our most of all for your continued support and involvement in the Direct Selling Association. Members have already been contacted requesting information. My best wishes for your continued success. Here at the DSA we are working closely with both HMRC and Members to ensure cooperation and hopefully mitigate the impact. A working group has been formed and we will keep members fully in the Paul Southworth picture as we progress. Director General

6 7 2012 Direct Selling Association Code Administrator’s Report

The Role The year ahead A large part of my role is compliance related. It includes: Significant issues are likely to include: (i) Responding to requests from Members for advice on compliance issues; • Engagement with the TSI, trying to ensure that it is desirable and also financially viable for the DSA to (ii) Carrying out each year a number of compliance audits of Members and Prospective Members remain within the Consumer Code Approvals Scheme after that scheme migrates from the OFT to the (iii) Adjudicating on complaints which the DSA has been unable to get resolved; TSI in April 2013. (iv) Issuing compliance advice following applicable changes in the law; • Continued monitoring and lobbying regarding the proposed Directive on ADR. (v) Chairing the DSA’s Legal Affairs Committee. The OFT Approved Codes logo Written Advice and Guidance for DSA Members DSA member companies must, by 1st April 2013, remove (from their documentation, websites etc) both My notes of Advice for Members, on a wide range of legal and code issues, are obtainable from the Members’ the OFT approved codes logo and also all references to the OFT approval of the DSA Consumer Code. DSA area of the DSA website or direct from me. They include the following: members will be reminded again of this in coming months. • Customer order forms • Recruitment Advertisements Extended legal rights of cancellation etc • Direct Seller Agreements The Consumer Rights Directive increases information-giving requirements. It also introduces longer cooling- • Online sign-up off periods for consumers. It applies to both direct selling and distance selling (e.g. online) to consumers. The • Websites of companies and direct sellers Directive will be implemented to come into effect in the UK in 2014. As a result, during 2013, DSA member • Social Networking Media – specimen Advice for Direct Sellers companies will need: • No Cold Calling Zones – DSA Position paper • To plan for the introduction in 2014 of revised customer order forms; During this reporting year, the following have been added: • To review their returns policy in order to ensure compliance with the new rules. • Model UK Direct Seller Agreement (MLM) • To review the information given to consumers placing orders online. • Outline of legal environment in UK for direct selling (useful to new start-ups and to overseas companies Advice will be circulated to DSA members on these issues. looking to expand into the UK) Also available in the Members’ area of the DSA website are: Prospective Member companies • Annotated versions of the two DSA Codes (which contain extensive notes on legal and compliance issues) A new Member of the DSA will join initially as a ‘Prospective Member’. This status is intended to last, normally, The annotations to the two Codes are extensive, including amongst a lot of other matters: no more than one year. In the case of some companies, it has already lasted several years. As stated above, • Specimen Guidance for direct sellers on booking an appointment for a visit to a consumer’s home and on four Prospective Members made it to Full Member status during last year. I wish to encourage all Prospective carrying out the visit. Members to engage with and complete my compliance audit which is required before elevation to full • Specimen Guidance for direct sellers on safeguarding personal data of consumers and downlines. membership. It is not a demanding or time consuming process. • Notes on ‘poaching’ of direct sellers. • If you are a Prospective Member and we are not already in discussion, do please make contact with me. With a little effort, progress is easy. The past year • If you have already engaged with the process, it surely cannot be much trouble at all to complete the My full annual report for the year July 2011 to June 2012 will be available in the Members’ area of the DSA process. You will have my support and encouragement. website. Significant features of the past year were: • Completion of the compliance process by four prospective members which thus became full members of the DSA. Paul Dobson • Confirmation from the government that the OFT is to be abolished and its Consumer Codes Approval Code Administrator for the Direct Selling Association Scheme is to be transferred, with effect from 1st April 2013, to TSI (the Trading Standards Institute). [email protected] • The recent DSA response to the UK government regarding the implementation in the UK of the Consumer November 2012 Rights Directive – requesting a six month transitional period. • Lobbying regarding the EU’s proposed Directive on ADR (Alternative Dispute Resolution), which will affect the operation of the complaint handling arrangements of the DSA and the Code Administrator.

8 9 2012 Direct Selling Association Financial Statement continued... Financial Statement

The Direct Selling Association Limited Balance Sheet 30th June 2012

REGISTERED NUMBER: 0851537 (England and Wales) Abbreviated Accounts for the year ended 30th June 2012 2012 2011 for The Direct Selling Association Limited £ £ £ £ ACCOUNTANTS’ REPORT TO THE BOARD OF DIRECTORS ON THE FIXED ASSETS UNAUDITED FINANCIAL STATEMENTS OF DIRECT SELLING ASSOCIATION LTD Tangible assets - 2856

YEAR ENDED 30th JUNE 2012 CURRENT ASSETS Stocks 347 2911 Debtors 59,586 48,549 Cash at bank and in hand 333,533 413,696 As described on the balance sheet, the directors of the company are responsible for the preparation of the financial statements for the year ended 30th June 2012. 393,466 464,696

You consider that the company is exempt from an audit under the Companies Act 2006. CREDITORS Amounts falling due within one year 58,256 133,163 In accordance with your instructions we have compiled these unaudited financial statements in order to assist you to fulfil your statutory responsibilities, from the accounting records and information and NET CURRENT ASSETS 335,210 331,533 explanations supplied to us. TOTAL ASSETS LESS CURRENT LIABILITIES 335,210 334,389

PROVISIONS FOR LIABILITIES - 902 Number Crunchers Accountants 11, Cottesbrooke Park, NET ASSETS 335,210 333,487 Heartlands Business Park, Daventry, RESERVES Northants. Profit and loss account 335,210 333,487 NN11 8YL 335,210 333,487

The financial statements have been prepared in accordance with the special provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective April 2008).

10 11 Financial Statement continued... Financial Statement continued...

The Direct Selling Association Limited The Direct Selling Association Limited Notes to the Abbreviated Accounts Profit and Loss Account for the year ended 30th June 2012 for the year ended 30th June 2012

ACCOUNTING POLICIES 2012 2011 ACCOUNTING CONVENTION £ £ £ £ The financial statements have been prepared under the historical cost convention and in accordance with the TURNOVER 331,820 325,444 Financial Reporting Standard for Smaller Entities (effective April 2008). TURNOVER Administrative expenses Turnover represents net invoiced sales of services, excluding value added tax. Establishment costs 16,965 42,003 TANGIBLE FIXED ASSETS Administrative expenses 323,838 365,535 Depreciation is provided at the following annual rates in order to write off each asset over its estimated Finance costs 139 155 useful life. Depreciation 2,856 5,332 Equipment - at varying rates on cost STOCKS 343,798 413,025 Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items. (11,978) (87,581) DEFERRED TAX Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. Other operating income 8,076 11,381 PENSION COSTS AND OTHER POST-RETIREMENT BENEFITS The company operates a defined contribution pension scheme. Contributions are payable in respect of one OPERATING LOSS (3,902) (76,200) employee’s personal pension scheme. The annual contributions payable are charged to the profit and loss account in the period to which they relate. Finance income 5,625 5,163

PROFIT/(LOSS) ON ORDINARY ACTIVITIES TANGIBLE FIXED ASSETS BEFORE TAXATION 1,723 (71,037) Equipment £ COST At 1st July 2011 7,520 Additions - Disposals -

At 30th June 2012 7,520

DEPRECIATION At 1st July 2011 4,664 Charge for the year 2856 On disposals -

At 30th June 2012 7,520

NET BOOK VALUE At 30th June 2012 0

At 30th June 2011 2,856

SHARE CAPITAL The company is limited by guarantee and is a trade association for distributive trades. Each member has undertaken to contribute £50 in the event of the winding up of the company.

12 13 Full Members ACN European Services Ltd Herbalife (UK) Ltd Phoenix Trading 2012 Direct Selling Association Amway (UK) Ltd Kleeneze Ltd Pro-Ma Systems UK A Brief History Aquasource (UK) Ltd Lifeplus Europe Ltd Reliv UK Arbonne UK Ltd Saladmaster Avon Cosmetics Ltd Mary Kay Cosmetics (UK) Ltd Silpada Design UK Ltd Direct Selling Association Best in Glass Miglio Company Ltd Europe Inc • 1965 Founded with the name The Direct Sales & Service Association Ltd (DSSA) with an office in Slough. Betterware Ltd Nature’s Sunshine Products Inc Tahitian Noni International Founder members: Avon Cosmetics, Beauty Counselors, Betterwear Products & Cambridge Weight Plan NSA (IR.BE.NL.UK) Ltd The The Tupperware Company. Captain Tortue Group Neways International (UK) Ltd The Pampered Chef UK Ltd • 1966 Supplier membership introduced. EllaPure Ltd Nikken UK Ltd • 1967 Consumer Code introduced. Energetix GmbH & Co Nuskin UK & Ireland Truly Madly Baby • 1968 DSSA became founder member of EDSF - the original name of FEDSA. Enjo Ltd NYR Organic Tuttoluxo Ltd • 1979 OFT endorsed the DSSA code of practice. Forever Living Products (UK) Ltd Oriflame (UK) Ltd Usborne Books at Home • 1981 Name changed to Direct Selling Association and office moved to London. GNLD International Ltd PartyLite UK Ltd VK Direct Ltd • 2005 OFT Consumer Code Approval. • 2010 Office moved to Northampton. Prospective Members Barefoot Books Mona Vie The Gold Refinery UK Previous DSA Chairmen BM Beauty MyShowcase Ltd Usana Health Sciences Inc Denis Moon Avon 1965 Dalton & Dalton Tax Consultants Ltd Proto-col World Ventures Marketing LLC John Clifford Beauty Counselors 1970 Energetix Wellness SheerSense Ltd XanGo LLc David Peel Pippa Dee 1979 Healthspan UK Ltd Stella & Dot (Europe) Jim Threlfall World Book 1981 Little Trove Stemtech Richard Berry Kleeneze 1983 Associates Paul Southworth Avon 1985 Stewart Brodie Tupperware 1989 Appco Group Ltd Hillarys Ltd Deon Melck Tupperware 1990 Derek Snoxall Encyclopedia Brittanica 1993 Supplier Members Martin Williams Amway 1995 Able Label eMerit Solutions PRB Accountants LLP Ric Hobby Herbalife 1996 Academy for Direct Sales Training FourFront Ltd Production Support Services Sandy Mountford Avon 1998 Acorn2Oak Ltd Generator Systems Ltd PSI-PAY Janet Hewitt Princess House 2000 Adelante Global Gift Sourcing Ltd PSP Group Jerry McDonald Avon 2003 Allan Bell Consulting Ltd GoBeyondVoice Pacifix Consultants Ltd William Rollason Kleeneze 2006 B-Paid Ltd Go For No Pam Anthony Recruitment Mike Ward Phoenix Trading 2007 Bids Supplies Ltd Gower Ltd PGS Team Ltd Penny Farish Mary Kay 2008 Brio Design & Print Management GT Associates Primo Plc Jamie Stewart Kleeneze 2010 Byedesign Technologies Guanxi Global Direct Selling Ltd Printwell (UK) Ltd Cardsave Group Ltd Hunts People in Print Richard McCann Cashflows IMN Run Print Run Direct Selling Association Carolyn Passey Direct Solutions Insee Sp z.o.o SBR Consulting REGISTERED OFFICE ACCOUNTANTS SOLICITORS Cheltenham Racecourse Inside Event Management Ltd SQR One Ltd Enterprise House Numbers Crunchers Accountants Lawrence Graham LLP Citrus 7 JBP PR & Parliamentary Affairs Stream 30 Billing Road 11, Cottesbrooke Park 4 More London Riverside CMM Jenkon The Black Tomato Agency Northampton Heartlands London Countdown Knill James Transnet Logistics NN1 5DQ Daventry SE1 2AU Cue Media Knowledge is King Towah Members Club Northants Cygnus Associates Lawrence Graham TWD Accountants Ltd NN11 8YL Digital River World Payments Legaleyes Uniqueworld Hotels & Resorts DMH Stallard LLP Marketing Innovations VideoPlus Inc DSL Accounting Ltd Meridian MMi Zibrant EC Group PayPal

14 15 ENTERPRISE HOUSE | 30 BILLING ROAD | NORTHAMPTON | NN1 5DQ T 01604 625700 | www.dsa.org.uk