Saturday, 13 May Ben Reid, Group Chief Executive Edward Parker, Secretary & Head of Governance The Executive Team

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1 The Midcounties Co-operative Limited Minutes of the Annual General Meeting of Members held at Chateau Impney Hotel & Exhibition Centre, Droitwich Spa Worcestershire, WR9 0BN Saturday, 13 May 2017 Directors present: Ruth FitzJohn President Patrick Gray Vice President Helen Wiseman Vice President Steve Allsopp Olivia Birch Clive Booker Bernadette Connor Judith Feeney Ellie Freeman Irene Kirkman Matthew Lane Donald Morrison Jean Nunn-Price Louise Pevreal Barbara Rainford Vivian Woodell 585 members present (including Directors & Officers) 108 members attending by webcast Society Officers present: Ben Reid, Group Chief Executive Edward Parker, Secretary & Head of Governance The Executive Team 17/01 Welcome Ruth FitzJohn welcomed members to the meeting. She introduced members of the Board, the Membership Strategy Committee and the Executive team. An overview of the day was given.

2 17/02 Forums Presentation and discussion sessions were held on Co-op Energy and Branding. The Energy Forum focused on Co-op Energy s activities over the past year, and provided members with an overview of planned developments as the business looked to continue its growth and strengthen its co-operative difference. The Brand Forum built on the discussions from the Society s 2016 Half Year Meetings, providing members with an update on the Co-op Group s new branding and a number of the choices available to the Society by way of response. Annual General Meeting Formal Business 17/03 Agenda The President opened the formal Annual General Meeting of the Society. She ran through the agenda for the day. 17/04 Voting and tellers Electronic handsets were to be used for the purposes of voting. Each member entitled to vote had been provided with a handset. Edward Parker advised members how the handsets worked and a number of practice votes were taken. A list of 12 tellers was handed to the President for noting. Members were informed that the tellers would be used to count votes cast if the handset system failed. 17/05 Special Meeting The meeting adjourned while a Special Meeting was held to consider and approve a revision to the Society s Rules. 17/06 Approval of minutes The minutes of the Annual General Meeting held on 7 May 2016 were approved:

3 The minutes of the Special Meeting of Members held on 7 May 2016 were approved: The minutes of the Half Year Meetings held during October 2016 were noted. Formal approval of these minutes would be sought at the Half Year Meetings in October /10 Matters arising There were no matters arising. 17/11 Annual Report Ruth FitzJohn introduced the Society s Annual Report for the financial year ended 28 January She made some introductory remarks. There were a number of unexpected events during the year, in particular, the Brexit referendum, the election of Donald Trump as US President and the forthcoming general election, none of which felt in the best interests of the Society. However, the majority of the Society s businesses had performed well and the Society had continued to make good progress with its co-operative agenda, in particular, developing its Regional Communities programme, recruiting a record number of members and engaging with over 32k members at scheduled events and member meetings. Additionally, Ruth advised that Ben Reid had relinquished his full-time position as Chief Executive and moved to a new, part-time role as Group Chief Executive. She was pleased to thank Ben, on behalf of the Board and members, for his dedication and commitment to the Society over the years and his flexibility in taking on the part-time role as the Society looked to transition to new senior management arrangements..1 Overview Ben Reid presented an overview of the Society s results and performance for the year.

4 Gross sales had increased by 7.9% to 1.35 billion and the Society had achieved a profit before significant items of 11.4 million, in line with expectations albeit lower than 2015/16. Despite facing challenging trading conditions, most businesses had produced good results the Travel group had performed exceptionally well, doubling its profits on a 15% increase in sales. The Food business had also performed strongly, achieving its fifth successive quarter of like-for-like sales growth and enjoying a particularly good Christmas period. The Funeral and Flexible Benefits businesses had come in well ahead of expectations, and Childcare had performed to plan. However, reductions in government funding had impacted the Healthcare business, and a very difficult trading environment over the winter months had had a significant impact on the Energy business, although it was pleasing that Co-op Energy had been selected by Ofgem as supplier of last resort to take on GB Energy s customers contributing to an 86% increase in customer numbers by the year end, a very positive sign for the future. Ben Reid presented the Society s key financial and non-financial metrics for the year. Key financial metrics - Sales up 7.9% to 1.35bn - Operating profit 11.4m ( 15.5m last year) - Net assets before pension deficit 172m ( 212m last year) - Capital expenditure 29.8m ( 18.5m last year) - Borrowings 18m ( 36m last year) Key non-financial metrics - Customer Loyalty Index 80 points (75 points last year) - percentage of trade with members 41% (42% last year) - percentage of colleagues with NVQ2 equivalent or above 78% (87% last year) - percentage of waste recycled 91% (85% last year). The Society had performed strongly in the co-operative arena. Over 100,000 new members had been recruited and good progress had been made with the Regional Community programme. Colleagues had contributed 36,000 volunteering hours (26,500 in 2015/16) and over 32,000 members had engaged with the Society at local events and meetings. 390,000 had been donated to over 500 good causes chosen by the members across the Regional Communities. Customers had donated over 70,000 products to food banks. The Society had been re-accredited with the Fair Tax mark, having achieved the highest score by a UK-based business.

5 .2 Questions on the Annual Report In response to questions, the following was noted: - annual report KPMG read through the commentary in the annual report to ensure it represented the trading position fairly - Co-op Energy the business had made a loss for the year, in part as a result of compensation payments made to customers on account of the systems issues encountered in the year; these payments had been treated as significant items in line with standard accounting treatment. Despite the loss, the Society as a whole had performed close to budget. There were no exceptional costs within the Energy business presently which remained a significant asset for the Society - Review and tender of auditor in response to comments made at the 2016 AGM, the Audit & Risk Committee had considered the Society s options; the Committee had agreed the Society would carry out auditor reviews every five years.6 Auditor s Report Reference was made to the auditor s report which was unqualified and therefore taken as read. There were no questions raised in relation to the report..7 Adoption of the Annual Report The Annual Report and Accounts for the year ended 28 January 2017 were adopted /12 Approval of distributions.1 Presentation Peter Dubois, Chief Financial Officer, presented the proposed distributions to be made to the Society s stakeholders..2 Questions In response to questions, the following was noted: - Campaigns Fund the Fund was intended to support campaigning activity

6 by organisations (primarily within the Society s core trading area) that promoted co-operation in the political arena and supported the objectives and priorities of the Society; the application process was published on the Society s website; the bulk of funds available would be granted to the Cooperative Party as agreed at the time the Fund was established although the aim was to reach a position where at least one third of the Fund was allocated to organisations other than the Co-operative Party; the Fund s criteria were to be reviewed by the Board in the autumn - Toad Lane comments on the museum were noted - Colleague distribution the level of distribution was largely determined by the level of profitability, hence was lower than for the 2015/16 year..3 Approval The following distributions of profits earned for the year ended 28 January 2017 were proposed, seconded and approved: - Share of profits payment at 840k, equating to a payment of 0.5 pence per point earned Membership development at 822k Community Support at 221k Developing Young People at 65k Co-operative Development Grants at 194k Campaigns Fund at 50k

7 Colleague Dividend at 447k /13 Remuneration Report.1 Presentation Olivia Birch, Chair of the Remuneration Committee, presented the Society s Remuneration Report for the year ended 28 January The following was highlighted: - the Society s remuneration policy for the Executive sought to reflect the co-operative principles of fairness and equity - while base salaries for members of the Executive were set at around the median, incentive pay was set c % lower than for executives in comparable PLCs - as a result, total pay for members of the Executive was significantly below that found in PLCs..2 Questions In response to questions the following was noted: - Ben Reid s change of role Ben had planned to retire; however, at the request of the Board, he had agreed to continue in a part-time capacity as Group Chief Executive while the Society transitioned to new leadership arrangements; Phil Ponsonby had been appointed as Chief Executive, Trading and David Bird had been appointed as Chief Executive, Energy - Ben Reid s new remuneration arrangements the Group Chief Executive s remuneration reported in the Annual Report and Accounts reflected his new part-time role and took account of the fact that while he had reduced his time commitment he remained ultimately responsible for the performance of the Society - Executive remuneration there were two core components for the remuneration for the Executive basic salary and incentive pay; the Society s policy was to pay basic salary at the median, but significantly lower incentive pay compared to similar roles in comparator organisations.

8 .3 Advisory vote An advisory vote on the Remuneration Report was taken. The report was endorsed by members: /14 Membership Strategy Committee Pat Juby, Chair of the Membership Strategy Committee and Clare Downs, Vice- Chair, gave an update on the activities of the Committee over the year. 17/15 Member Communication Ben Reid gave a short presentation setting out management s wish to communicate the benefits of membership more effectively to members. He noted this was directly in line with the Society s Blueprint we want members to enjoy benefits, because they own us and particularly, because they trade with us. As part of this ambition, it was proposed that members, as owners of the Society, should be made aware of the offers, discounts and other benefits available to them. The meeting was asked to express a view on this approach. The following result was recorded: Do members believe that as owners of the Society they should be made aware of the offers, discounts and other benefits available to them? Yes 245 No 8 17/17 General questions and views from members It was noted that no written questions had been received ahead of the meeting. In response to questions from the floor, the following was noted: - Churchstoke supermarket the 1 shop was to be retained in the refurbished store - Co-op Energy the Society would consider opportunities similar to that provided by GB Energy on a case-by-case basis - Thomas Cook it was possible the Society might be able to acquire

9 branches from Thomas Cook - 5% discount offer the initiative was short term and was to finish at the end of May; it was not felt the offer was unethical - joint buying joint buying with co-operatives in other countries was complex, but could work for some core products; the new CEO at Cooperative Group was interested in the concept, so it was possible it could gain traction in the UK food retail movement - questions outside the AGM members who wished to ask questions of management could contact the Society s Membership department or the Group Chief Executive directly at any time of year - Funeral resomation Co-operative Group had looked into introducing the resomation process, but had terminated its discussions on the matter; the Society had no involvement - FRTS and local sourcing the agreement allowed for 10% of product to be locally sourced - travel to the AGM the Society was aware of the cost of renting coaches to transport members to the AGM, and would be considering the options available - developing young co-operators the Society had a number of initiatives to promote co-operation among the young; the issue was under consideration by the Membership Strategy Committee; the Society sponsored a green pioneers programme in conjunction with Outward Bound and worked with a number of schools; it was not felt appropriate to invite schools to attend the AGM as it was not felt to be the right forum to engage young co-operators - ECO obligation the Society was in discussion with Tesla with a view to installing vehicle charging stations in its larger stores; it was felt that giving away energy efficient light bulbs to customers, a practice that had been adopted by some other suppliers, was not an effective way to discharge the Society s ECO obligations 17/18 Any other business No matters were raised. 17/19 Meeting close Ruth FitzJohn thanked members for attending the meeting. The dates for the forthcoming Member Days and Half Year meetings were noted. The meeting closed.

10 President Date: Dates of next meetings: 2017 Half Year Meeting(s): - 10 October Swindon - 11 October Shropshire - 12 October Gloucester - 17 October Kidderminster - 18 October West Midlands - 19 October Oxford 2018 Annual General Meeting: TBA