Annual General Meeting 2012

To be held at:

Lawrence Graham Solicitors4 More London Riverside

London SE1 2AU

Thursday 22nd November 2012

Vision Statement“To create a meaningful image of our Association, credibility and delivery in support of all our members and external opinion formers.”

Contents3 2012 Notice of Annual General Meeting

4 Governance and Membership

5 Chairman’s Report

6 Director’s Report

8 Code Administrator’s Report

10 Financial Statement

14 History of the DSA

15 List of Members

2012 Notice of Annual General MeetingNOTICE 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:-

Agenda

1. To receive the Chairman’s report.

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

PAUL SOUTHWORTH

Director General

Election to Council

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

Council recommends.

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

Roberts, Simon Burke and Tony Chaplin.

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

the appointment of Andy Smith as Chair for the coming year.

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2012 Direct Selling AssociationGovernance and Membership 2012

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.

Council Members and Advisors

Jamie Stewart Kleeneze Limited Chairman

Bob Parker Forever Living Products (UK) Limited Vice Chairman

Chris Fenna The Pampered Chef (UK) Limited

Ric Hobby Herbalife Europe Limited

Mimi Marchant Captain Tortue Group

Andy Smith Amway (UK) Limited

Lorna Hunt Usborne Books at Home

Shaun Charity Neways

Scott Schlackman Avon

Clive Norton Cambridge Weight Plan

Eric McClenaghan Oriflame

Helen van Wengen Mary Kay Cosmetics

Paul Southworth Director General, DSA

Allan Bell Allan Bell Consulting Supplier Chairman (non-voting)

Advisors

Joanne Stevens Treasurer

Paul Dobson Independent Code Administrator

Legal Affairs Committee

Paul Dobson Chairman

Claudine Olney Secretary Forever Living Products

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2012 Direct Selling AssociationChairman’s Report

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.

During this long and tough recession here in the UK we all have the same demands and issues to solve, be it

recruitment, retention or average order we have to find answers and new ways in which to grow our sales.

The more we can work together, sharing experiences and ensuring best practices then the more we can rely

on strengthening our industry overall, which ultimately benefits every company.

In spite of all these challenges however, our Association has gone from strength to strength over the last year.

New faces on the Council have brought added vigour and drive to our strategies and I thank all the Council

Members for the contribution they have given.

Paul and his great team at the DSA office continue to lift our profile as an industry and have provided real

added value to membership of the DSA. Their efforts and support are most appreciated along with those of our

Code Administrator, Paul Dobson and Treasurer, Joanne Stevens.

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

wish him well during his term as Chairman.

I wish you all every success in the coming year.

Jamie StewartDSA Chairman

2012 Direct Selling AssociationDirector’s Report

Tempus FugitThey say time flies when you are having fun and last year really has been a helter skelter, roller coaster kind of year, but we have also had a lot of fun and success along the way.

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 in the work they produce. Unfortunately though we have lost Kathy to retirement recently and we wish her every happiness. Covering Kathy’s website and social media role will be our new team member, Ashley Riley, Consultant, of Ashley Riley Communication.

Highlights of the yearLobbyingWe continued to get our message across to Government that our industry is the one that is delivering their agenda of getting people back into employment, skills training, entrepreneurship and micro businesses and that we do this on a daily basis. This culminated in the DSA hosting a reception at the House of Commons, attended by Ministers and MPs.

Through Seldia (previously FEDSA) we continue to lobby against legislation that may adversely affect our industry such as the Consumer Rights Directive. It is important we maintain pressure at European level in Brussels as we are here in the UK Parliament.

PROur PR agency, Cuban Eight, have continued their excellent work on our behalf and we continue to achieve a high profile across all media channels. Over 150 positive articles have appeared, many featuring Member 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.

OFT / TSIThe Office of Fair Trading have officially given notice that they will cease to be involved in Consumer Code 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.

It is envisaged that the Trading Standards Institute will take over this role from that date and we are currently in negotiations with them regarding future involvement in the scheme.

HMRCRecently the Revenue and Customs announced they were going to target Direct Sellers and several of our Members have already been contacted requesting information.

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 picture as we progress.

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Website/Social MediaOur website continues to develop and become a stronger communication and information tool than ever

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.

Added to this has been our ever increasing use of Social Media through Linked In, Facebook and Twitter and

our followers increase weekly.

Our internet communication has come a long way and we will continue to develop this crucially important

channel.

EducationWe have been strengthening our relationships with Universities and deliver Direct Selling presentations and

attend their Job Fairs. Interest is growing and if we have the resources we plan to continue to develop this

activity.

Conference/SeminarsOur Annual Conference and Awards, with an Olympic theme, proved to be a major success this year with over

200 attendees. The new format was appreciated by Members and content and keynote speakers received

high marks in the evaluation feedback.

Next year’s conference will be held on 9th May at the Hinckley Island Hotel and will be entitled ‘We are the

Future’, when we shall focus on the needs and challenges ahead along with exciting new technology advances

and how we can attract more ‘Gen Y’ into our industry. Make a date to be there.

Through the year we also ran training seminars on Social Media, Sales Support and the launch of the DSA

Rewards Programme. Also, our first ever ‘Round Table Discussions’ Seminar was held in October and, given its

initial success, will certainly be repeated next year.

The Coming YearAnother challenging year ahead but one we face with optimism and renewed endeavour to continue to deliver

value of membership, protection and support to all members and continue to position our industry in a positive

light to all our target audiences.

May I again offer my thanks to the DSA team I have the honour of leading, for the support of the Council and

most of all for your continued support and involvement in the Direct Selling Association.

My best wishes for your continued success.

Paul SouthworthDirector General

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2012 Direct Selling AssociationCode Administrator’s Report

The RoleA large part of my role is compliance related. It includes:

(i) Responding to requests from Members for advice on compliance issues;

(ii) Carrying out each year a number of compliance audits of Members and Prospective Members

(iii) Adjudicating on complaints which the DSA has been unable to get resolved;

(iv) Issuing compliance advice following applicable changes in the law;

(v) Chairing the DSA’s Legal Affairs Committee.

Written Advice and Guidance for DSA MembersMy notes of Advice for Members, on a wide range of legal and code issues, are obtainable from the Members’

area of the DSA website or direct from me. They include the following:

• Customer order forms

• Recruitment Advertisements

• Direct Seller Agreements

• Online sign-up

• Websites of companies and direct sellers

• Social Networking Media – specimen Advice for Direct Sellers

• No Cold Calling Zones – DSA Position paper

During this reporting year, the following have been added:

• Model UK Direct Seller Agreement (MLM)

• Outline of legal environment in UK for direct selling (useful to new start-ups and to overseas companies

looking to expand into the UK)

Also available in the Members’ area of the DSA website are:

• Annotated versions of the two DSA Codes (which contain extensive notes on legal and compliance issues)

The annotations to the two Codes are extensive, including amongst a lot of other matters:

• Specimen Guidance for direct sellers on booking an appointment for a visit to a consumer’s home and on

carrying out the visit.

• Specimen Guidance for direct sellers on safeguarding personal data of consumers and downlines.

• Notes on ‘poaching’ of direct sellers.

The past yearMy full annual report for the year July 2011 to June 2012 will be available in the Members’ area of the DSA

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.

• Confirmation from the government that the OFT is to be abolished and its Consumer Codes Approval

Scheme is to be transferred, with effect from 1st April 2013, to TSI (the Trading Standards Institute).

• The recent DSA response to the UK government regarding the implementation in the UK of the Consumer

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.

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The year aheadSignificant issues are likely to include:

• Engagement with the TSI, trying to ensure that it is desirable and also financially viable for the DSA to

remain within the Consumer Code Approvals Scheme after that scheme migrates from the OFT to the

TSI in April 2013.

• Continued monitoring and lobbying regarding the proposed Directive on ADR.

The OFT Approved Codes logoDSA member companies must, by 1st April 2013, remove (from their documentation, websites etc) both

the OFT approved codes logo and also all references to the OFT approval of the DSA Consumer Code. DSA

members will be reminded again of this in coming months.

Extended legal rights of cancellation etcThe Consumer Rights Directive increases information-giving requirements. It also introduces longer cooling-

off periods for consumers. It applies to both direct selling and distance selling (e.g. online) to consumers. The

Directive will be implemented to come into effect in the UK in 2014. As a result, during 2013, DSA member

companies will need:

• To plan for the introduction in 2014 of revised customer order forms;

• To review their returns policy in order to ensure compliance with the new rules.

• To review the information given to consumers placing orders online.

Advice will be circulated to DSA members on these issues.

Prospective Member companiesA new Member of the DSA will join initially as a ‘Prospective Member’. This status is intended to last, normally,

no more than one year. In the case of some companies, it has already lasted several years. As stated above,

four Prospective Members made it to Full Member status during last year. I wish to encourage all Prospective

Members to engage with and complete my compliance audit which is required before elevation to full

membership. It is not a demanding or time consuming process.

• 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.

• If you have already engaged with the process, it surely cannot be much trouble at all to complete the

process. You will have my support and encouragement.

Paul DobsonCode Administrator for the Direct Selling Association

pauldobson@dsa.org.uk

November 2012

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2012 Direct Selling AssociationFinancial Statement

REGISTERED NUMBER: 0851537 (England and Wales)

Abbreviated Accounts for the year ended 30th June 2012

for The Direct Selling Association Limited

ACCOUNTANTS’ REPORT TO THE BOARD OF DIRECTORS ON THEUNAUDITED FINANCIAL STATEMENTS OF DIRECT SELLING ASSOCIATION LTD

YEAR ENDED 30th JUNE 2012

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.

You consider that the company is exempt from an audit under the Companies Act 2006.

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

explanations supplied to us.

Number Crunchers Accountants11, Cottesbrooke Park, Heartlands Business Park, Daventry, Northants. NN11 8YL

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Financial Statement continued...

The Direct Selling Association Limited

Balance Sheet

30th June 2012

2012 2011

£ £ £ £

FIXED ASSETSTangible assets - 2856

CURRENT ASSETSStocks 347 2911

Debtors 59,586 48,549

Cash at bank and in hand 333,533 413,696

393,466 464,696

CREDITORSAmounts falling due within one year 58,256 133,163

NET CURRENT ASSETS 335,210 331,533

TOTAL ASSETS LESS CURRENT LIABILITIES 335,210 334,389

PROVISIONS FOR LIABILITIES - 902

NET ASSETS 335,210 333,487

RESERVESProfit and loss account 335,210 333,487

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).

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Financial Statement continued...

The Direct Selling Association Limited

Notes to the Abbreviated Accounts

for the year ended 30th June 2012

ACCOUNTING POLICIES

ACCOUNTING CONVENTIONThe financial statements have been prepared under the historical cost convention and in accordance with the Financial Reporting Standard for Smaller Entities (effective April 2008).TURNOVERTurnover represents net invoiced sales of services, excluding value added tax.TANGIBLE FIXED ASSETSDepreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.Equipment - at varying rates on costSTOCKSStocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.DEFERRED TAXDeferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.PENSION COSTS AND OTHER POST-RETIREMENT BENEFITSThe company operates a defined contribution pension scheme. Contributions are payable in respect of one employee’s personal pension scheme. The annual contributions payable are charged to the profit and loss

account in the period to which they relate.

TANGIBLE FIXED ASSETS 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 VALUEAt 30th June 2012 0

At 30th June 2011 2,856

SHARE CAPITALThe 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.

Financial Statement continued...

The Direct Selling Association Limited

Profit and Loss Account

for the year ended 30th June 2012

2012 2011

£ £ £ £

TURNOVER 331,820 325,444

Administrative expenses Establishment costs 16,965 42,003

Administrative expenses 323,838 365,535

Finance costs 139 155

Depreciation 2,856 5,332

343,798 413,025

(11,978) (87,581)

Other operating income 8,076 11,381

OPERATING LOSS (3,902) (76,200)

Finance income 5,625 5,163

PROFIT/(LOSS) ON ORDINARY ACTIVITIESBEFORE TAXATION 1,723 (71,037)

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2012 Direct Selling AssociationA Brief History

Direct Selling Association • 1965 Founded with the name The Direct Sales & Service Association Ltd (DSSA) with an office in Slough.

Founder members: Avon Cosmetics, Beauty Counselors, Betterwear Products &

The Tupperware Company.

• 1966 Supplier membership introduced.

• 1967 Consumer Code introduced.

• 1968 DSSA became founder member of EDSF - the original name of FEDSA.

• 1979 OFT endorsed the DSSA code of practice.

• 1981 Name changed to Direct Selling Association and office moved to London.

• 2005 OFT Consumer Code Approval.

• 2010 Office moved to Northampton.

Previous DSA ChairmenDenis Moon Avon 1965

John Clifford Beauty Counselors 1970

David Peel Pippa Dee 1979

Jim Threlfall World Book 1981

Richard Berry Kleeneze 1983

Paul Southworth Avon 1985

Stewart Brodie Tupperware 1989

Deon Melck Tupperware 1990

Derek Snoxall Encyclopedia Brittanica 1993

Martin Williams Amway 1995

Ric Hobby Herbalife 1996

Sandy Mountford Avon 1998

Janet Hewitt Princess House 2000

Jerry McDonald Avon 2003

William Rollason Kleeneze 2006

Mike Ward Phoenix Trading 2007

Penny Farish Mary Kay 2008

Jamie Stewart Kleeneze 2010

Direct Selling AssociationREGISTERED OFFICE ACCOUNTANTS SOLICITORS

Enterprise House Numbers Crunchers Accountants Lawrence Graham LLP

30 Billing Road 11, Cottesbrooke Park 4 More London Riverside

Northampton Heartlands London

NN1 5DQ Daventry SE1 2AU

Northants

NN11 8YL

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ACN European Services Ltd

Amway (UK) Ltd

Aquasource (UK) Ltd

Arbonne UK

Avon Cosmetics Ltd

Best in Glass

Betterware Ltd

Cambridge Weight Plan

Captain Tortue Group

EllaPure Ltd

Energetix GmbH & Co

Enjo Ltd

Forever Living Products (UK) Ltd

GNLD International Ltd

Phoenix Trading

Pro-Ma Systems UK

Reliv UK

Saladmaster

Silpada Design UK Ltd

Sunrider Europe Inc

Tahitian Noni International

The Kirby Company

The Pampered Chef UK Ltd

Tiens Group

Truly Madly Baby

Tuttoluxo Ltd

Usborne Books at Home

VK Direct Ltd

Herbalife (UK) Ltd

Kleeneze Ltd

Lifeplus Europe Ltd

Mannatech Ltd

Mary Kay Cosmetics (UK) Ltd

Miglio Company Ltd

Nature’s Sunshine Products Inc

NSA (IR.BE.NL.UK) Ltd

Neways International (UK) Ltd

Nikken UK Ltd

Nuskin UK & Ireland

NYR Organic

Oriflame (UK) Ltd

PartyLite UK Ltd

Full Members

Barefoot Books

BM Beauty

Dalton & Dalton Tax Consultants Ltd

Energetix Wellness

Healthspan UK Ltd

Little Trove

The Gold Refinery UK

Usana Health Sciences Inc

World Ventures Marketing LLC

XanGo LLc

Young Living (Europe)

Mona Vie

MyShowcase Ltd

Proto-col

SheerSense Ltd

Stella & Dot

Stemtech

Prospective Members

AssociatesAppco Group Ltd Hillarys Ltd

Supplier MembersAble Label

Academy for Direct Sales Training

Acorn2Oak Ltd

Adelante

Allan Bell Consulting Ltd

B-Paid Ltd

Bids Supplies Ltd

Brio Design & Print Management

Byedesign Technologies

Cardsave Group Ltd

Cashflows

Carolyn Passey Direct Solutions

Cheltenham Racecourse

Citrus 7

CMM

Countdown

Cue Media

Cygnus Associates

Digital River World Payments

DMH Stallard LLP

DSL Accounting Ltd

EC Group

PRB Accountants LLP

Production Support Services

PSI-PAY

PSP Group

Pacifix Consultants Ltd

Pam Anthony Recruitment

PGS Team Ltd

Primo Plc

Printwell (UK) Ltd

Richard McCann

Run Print Run

SBR Consulting

SQR One Ltd

Stream

The Black Tomato Agency

Transnet Logistics

Towah Members Club

TWD Accountants Ltd

Uniqueworld Hotels & Resorts

VideoPlus Inc

Zibrant

eMerit Solutions

FourFront Ltd

Generator Systems Ltd

Global Gift Sourcing Ltd

GoBeyondVoice

Go For No

Gower Ltd

GT Associates

Guanxi Global Direct Selling Ltd

Hunts People in Print

IMN

Insee Sp z.o.o

Inside Event Management Ltd

JBP PR & Parliamentary Affairs

Jenkon

Knill James

Knowledge is King

Lawrence Graham

Legaleyes

Marketing Innovations

Meridian MMi

PayPal

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