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Board Meetings

Board Meeting January 2014

Minutes of Board Meeting of the Assynt Foundation
16 January 2014, Glencanisp Lodge

1.Present: Stewart Hill, Chair (SH), Brendan O Hanrahan (BOH), Helen Steven (HS), Clive Sheppard (CS), Nigel Goldie (NG), Fergus Stewart (FS).
In attendance: Jane Tulloch, Sarah Corkish, Viv Halcrow, Alex Dickson
Meeting began 4.55pm.
2. Apologies: Andy Summers
3. Declarations of interest: Will be one closed agenda item.
4. Minutes of last meeting: JM proposed, BOH seconded. Minutes approved.
5. Action on matters arising:
BOH and HS action on Drumrunie: ongoing. Action: BOH and HS to get informal pre-planning advice.
6. Financial Report:
Board agreed to further discussions with SIS and RBS.
7. Hydro
Extraordinary General Meeting re Hydro was held in Lochinver on 14 January and was very successful, with a large majority of attendant members voting to go ahead with Gilkes as a partner. Action: AF to now sign Heads of Terms agreement with Gilkes. Stewart Hill was thanked for his hard work on the hydro project.
8. Membership Development and Communication
Nigel gave a short report on ideas for improving member communications.
Notes: AF will commemorate its 10th anniversary next year. AF will have stand at Highland Games.
Action: NG and HS to draft letter for guests inviting them to become Associate members.
9. A9 Report
Action list from A9 discussed as follows:-
Financial performance at AF has been weak in recent years due to shortfalls of income against the significant (and largely fixed) cost base. This could improve going forward but requires better cost control and the recharging of more expenditure to ABiz.
- Addressed by AF.
AF has a strong balance sheet overall due to the value of the estate and it is solvent. However, its cash balance has declined significantly over the past few years and it has been reliant on external loans for funding. It is highly leveraged and liquidity is poor.
- Corrective actions taken by AF.
Trading at ABiz must be improved going forward to shore up the finances of both entities.
- Addressed by Biz
AB’s cash flows have also been depressed by the purchase of new vehicles outright rather than on hire purchase.
- Lesson to be learned.
On a combined basis, the group is solvent and is likely to remain so with total net assets in the region of £4 million. However, liquidity problems are anticipated in FY14. It is therefore essential that the Board clearly focus their efforts on income generating activities and strict cost controls.
- Ongoing.
There may be opportunities to sell some non-core properties or re-negotiate repayment terms on existing loans. Further income opportunities, such as the sale of timber, must be explored and must be exploited at the earliest opportunity.
- Ongoing – some ideas in pipeline.
A number of financial governance issues have been identified including the requirements for:
i) a proper loan agreement and a commercial rate of interest on the loan to ABiz.
- AP and SH to discuss - Action.
ii) improved financial records and cash management.
- Addressed with Sage.
Lack of vehicle mileage log books questioned.
- Action: SH & AP to look at vehicle costs.
iii) transactions with Trustees/Directors to be at full market rates. Better quality forecasting and financial decision-making and focus is required.
- Addressed.
Lodge redevelopment: More than £1 million of grant income has been received to date in relation to the lodge redevelopment. The associated expenditure primarily comprises the depreciation charge on the lodge which was £35K in FY13, and this has been assumed at the same level in FY14. Note that depreciation is not provided for in the management accounts; this means that the management accounts are not accurate and require improvement.
Ongoing – depreciation issues.
Land management: These grants have been provided by the Woodland Grant Scheme and the Scotland Rural Development Programme to assist with the management of the estate. The income increased to £25K in FY13, up from £17K in FY11 and nil in FY12 when there was no grant. Note that the land management grant income is shown gross for FY13 onwards as the draft accounts do not show where the associated costs are. The management information needs improving in this respect to facilitate better decision making by the Board.
- Grant allocations to be reviewed. Action: AP to reprise paperwork done for BOH. AP to liaise with BOH.
Other projects: AF has been involved with a number of different projects over the past few years. The main project being undertaken at the moment is the construction of a log building which will be used for community events. Whilst project costs are covered by grant income, the ongoing running costs and any additional maintenance costs going forward will need to be funded by income generated by AF. As such, the Trustees now have to identify these costs. In addition, there needs to be a re-focusing of management time on income generating activities.
- Log building maintenance and running costs to be laid out. Action: Log build subgroup to put forward likely figures and jobs. Action: NG to devise programme for likely income generation.
Development Management: The Big Lottery Fund and HIE have been providing an annual income grant to help with the salary funding for this. The Board now have to formulate an action plan to cover salary cost as the existing funding will not continue beyond FY14.
- Action: AP and SH to look for staff funding.
A9 Report also recommends that the intercompany recharges to ABiz are spread over 12 months, with an associated direct debit.
- It is felt that AF is now in a position to defend itself in respect of suggestions made by A9.
Second report from A9 now expected.

10. CALL & Peat Bog Restoration
VH gave an update on CALL activities and progress. The CALL landscape partnership bid was successful in its first phase, and CALL is now recruiting a development manager and potentially an assistant to develop and take forward stage 2.
The tree nursery is going well, with trees for sale in the first year. A promotional film will be made in February by volunteers and will involve all CALL partners. A Romanian exchange trip is planned. Peat restoration project going ahead, with work having already started in damming ditches. Volunteers for peat depth survey required.
AS sent email requesting permission for a diver hide. Permission granted subject to agreement from John Cullen.
Otter survey also agreed to go ahead.
11. Correspondence
Rural parliament discussed. Agreed to support.
Email from Agnes Dickson has been received by the board pertaining to various AF matters. Agreed reporting papers to appear with minutes.
12. Log Building
See NG’s report at end.
13. Arrangements for AGM
9th AGM of Assynt Foundation will be held in the Village Hall on 13 February at 7pm. SH suggested that a motion should be proposed at that meeting requesting member agreement for an asset sale of either Ledbeg House, Cnocnaneach or ground for housing at Drumrunie. [This was not possible as a formal resolution, due to lack of time for required advance circulation of such a resolution. However, the topic was discussed in the Business Meeting following the formal AGM, and a potential future EGM for this purpose was mentioned. AP]
14. AOCB
Ledbeg grazing lease: applicants have withdrawn due to unauthorised cattle grazing on ground. Fencing requirements discussed.
Ted Matheson: tree now sourced as memorial. Action: AP to liaise with Jane Matheson on plans/date for planting. Action: NG and AP to identify site for tree.
Date of next meeting: AGM 13 February 2014.
Meeting ended 7.10pm.

Log Building Report
AF Board Meeting January 16th 2014: Progress report on the log build project and related matters

The attached report provided to funders for the log build project sets out progress to date. Now that both are nearing completion it is necessary to address some matters over future use of these buildings and the matter of clearing and landscaping the area behind the lodge.
It will be noted there is a request within this report to explore scope for additional funding to complete the build project. The unforeseen additional costs for the foundations for the pole barn have added an extra £15K to overall costs. The current calculation is that we require ad additional £20K to ensure completion, which must be completed within the current financial year.

A brief report on ‘the future use of the arts building was provided to the November AF Board Meeting. This proposed setting up a Community Interest Company to develop a broad range of artistic and creative activity within Assynt, to be known as ‘Creative Assynt’. It was also proposed that this body be leased the arts building and as such manage it on behalf of AF.
On reflection it seems there is some ground work to be done before formally setting up such a body which will require some discussion with others (and learning from other examples in similar sized communities). Meanwhile we have the arts building approaching completion and we need to establish the means within AF for its overall management and that of the Pole Bar. In addition there is the matter of dealing with residual felled timber and general landscaping of the area behind the lodge. The use of the arts building and development of Creative Assynt are two separate developments although they necessarily relate to one another. The Boards of AF and ABiz are asked to approve the following:

1. That the existing sub group of directors (NG, CS, & FS) continue on an interim basis to oversee the use of the CAB and the development of an arts and crafts plan for the Foundation and agree terms of reference as sent round board.

2. This group to set out a plan for the future use of pole barn to ensure it can be used in a flexible manner to accommodate a range of activities and functions.

3. In addition to set out proposals for the clearing of felled and fallen timber with a view to both achieving income and improvements to the landscape within a defined time period.

4. The development of Creative Assynt with AF playing an active part in its development including potential application to Creative Scotland for funding.

This group can be strengthened by both additional director membership and also membership from the wider community. There are many issues raised by both buildings as to future use and these now require some attention. The failure to gain VAT exemption for the arts building was a disappointment, but this decision gives us more freedom over how this facility is used and charged for. There is already interest in the pole barn being used as a venue for weddings and it is important whatever uses are made of the building that flexibility is retained for its adaptation to meet such needs.

The matter of restoring and improving the landscape at the back of the lodge is a critical one which will require additional funding. This will require a plan and worked up proposal with costs.
Nigel Goldie