Relationship with QMJ Publishing Ltd

History

The Institute was founded as The Quarry Managers’ Association in 1917. As initial interest in membership was somewhat limited, one of the founding members, Simon McPherson started The Quarry Managers’ Journal the following year because he believed the organisation could not survive without regular publicity. Fortunately, as the Journal became more widely circulated membership steadily increased and, by the end of 1919, the total had reached 150 and local branches were starting to be formed.

Once the Journal became established advertising volumes also increased at a healthy rate; however, by 1923 Council members had become concerned at the large amount of money owing in this regard, and, as liability was unlimited, in the event of the Journal getting into financial difficulties, the President and Hon. Secretary would have been held personally responsible for the debts.

In the years after the first world war the industry was quite used to the fluctuations of commercial fortune and, since it was apparent the Journal might lose as well as make money, Council decided that risk-taking activities of a commercial nature were not appropriate for a membership body whose remit was to promote the advancement and sharing of knowledge and that such activities would be better handled by a separate trading company.

Consequently, in 1924, the Journal was formed into a limited company and shares were sold to raise the capital necessary to establish an office in Caernarfon and employ Simon McPherson as the first full-time staff member of what was now known as The Institution of Quarry Managers and the Journal company.

Over the next 30 years, as well as acting as General Secretary of The Institute of Quarrying (final name change in 1927), Simon McPherson started a number of magazines and related small businesses of which The Quarry Managers’ Journal Ltd was the holding company, including - Cement, Lime and Gravel, Good Roads, Monumental Journal, Master Builder, Stone Trades Journal, The Elite Process Engraving Company and The McPherson Publicity Bureau.

Additional capital to finance these ventures was raised from McPherson’s business associates (mainly private quarry owners) at various times during the 1920s and 1930s and by 1939 the Institute’s shareholding in the Journal company stood at just under 30%, which remains the situation today.

Simon McPherson died in 1957 and was succeeded by his son John, who, unfortunately, died three years later. The McPherson family, however, still retain the largest private shareholding (21%) in the company. The remainder of the shares are held either by descendants of the original shareholders, or by directors and staff, past and present.

In 1966, to take advantage of favourable tax concessions the Institute became a registered charity and since that time its powers of investment have been controlled by the Trustee Investment Act. This legislation specifies both the type of investment charities are allowed to invest in (gilts, building societies, certain classes of equities etc) and the proportions which must be maintained within the portfolio. Although the rules were amended in 1996 to provide charities with more flexible powers of investment, the Institute is not able to increase its holding in QMJ because, with a share capital of less than £1million, the company does not meet the minimum criteria currently specified in the Act.

Liaison Committee

The original concept of operating the two separately constituted organisations ‘under one roof’ with shared staff and overheads has not really changed since 1924. The freehold of the office building in Nottingham is owned by QMJ and the Institute’s rent is subject to assessment by independent professional advisors. Two members of the senior staff continue to have dual-employment and their salary and related costs are divided in the following proportions:

Executive/Managing Director 20% IQ - 80% QMJ
Treasurer/Accountant 25% IQ - 75% QMJ

In 1960 the IQ/QMJ Liaison Committee was established to deal with matters of joint interest, such as senior staff appointments, salary reviews etc. This is comprised of two representatives from each side, currently Stuart Manson and Phil Hutchins for IQ and John Hopkins (Chairman of QMJ) and one of the other two non executive directors, David Tidmarsh or Peter Fuchs. As there is no regular agenda, meetings are convened on an ad hoc basis whenever an issue needs to be addressed.

Safeguards and Reporting Procedure

The main reason for the cost-sharing arrangement between the two organisations is that it provides a critical mass to allow economies of scale in the operation of the Nottingham office which would be either difficult (QMJ), or impossible (IQ), to afford on a stand-alone basis. The arrangement also necessarily involves safeguards and a degree of compromise on both sides.

The Institute’s position is safeguarded by a clause in the company’s Articles of Association which requires a majority of directors of the company to be corporate members of the Institute. Similarly, in line with the protection afforded to small businesses under company law (small companies normally file abbreviated accounts at Companies House), the directors of QMJ Publishing have requested that a degree of confidentiality is maintained in respect of the distribution of the company’s accounts so that commercially sensitive financial information is not readily available to major customers, competitors or to other publishing companies.

In order to comply with statutory requirements, details of the Related Party Transactions which take place between IQ and QMJ are detailed in Note 19 of the Institute’s annual report and accounts. Also, extracts from QMJ’s balance sheet are included under Note 8, which identifies the number of shares held by IQ, the proportion of the total equity this represents, dividends received, retained profit for the year and the aggregate amount of capital and reserves. The full QMJ Report and Accounts are circulated for consideration to the Liaison Committee members and those senior officers with direct responsibility for overseeing the Institute’s finances (President, Chairman and Chairman of Finance & General Purposes Committee) who have direct access to the board should they wish to raise any matter on behalf of the Institute.