Rangatira Alpine Sports Club (Inc)

Minutes for Special General Meeting

Held at Remuera Golf Club, on the 20^th April 2011; 6.30pm.

Present: J McPherson, D McPherson, M Fairley, G Rees, G Fairley, S Tabakas, V Papesch, D Papesch, R Wimsett, J Wimsett, B Chambers, R Yallop, D Yallop, J McCurran, B Sullivan, S Trafford, A Haueter, M McGivern, G MacDonald, B Worthington, P Clemow, J Tamis, A Beagley

Apologies: S McGivern, P Niccol

Proxies held: D Rennie, S Cook, A Russell, S Smith, S Waugh, P Boberg, Prue Boberg, R Pring, S Beuvink, and D Yiannoutsos

Agenda

1. Changes to the constitution for audit requirements

2. Discussion and approval for Stage 2 of Iwikau redevelopment

Welcome

V Papesch as president welcomed everyone to the special general meeting and outlined the reason that these two topics had not been covered at the AGM held in March.

Audit

V Papesch outlined the key issue for discussion being the increased costs to engage a chartered accountancy firm to carry out an audit to International Financial Reporting Standards (IFRS); being between $3,500 and $7,000.

Historically, the club has been charged $400-$500 for an audit until IFRS standards came into being. The club changed to IFRS standards in 2009 and KPMG audited the accounts for an agreed sum of $1,000. They have since advised that this fee is not tenable for them going forward.

The committee has spoken to a number of other auditors and, of these, four declined and two was interested in carrying out the work. It was agreed at the AGM that the club would engage Mr McDonald (Vince's father in law) to audit the 2010 accounts at the cost of approx $2,000. Two other auditors provided estimates of approximately $3,500.

The question for the meeting is what value are we actually getting from an audit. The accounts are always tagged with a qualification statement from any auditor, regardless of how much it costs, which is as a consequence of the lack of internal controls around our accounting processes because of our limited admin function.

V Papesch outlined correspondence he received from Chris Lynch of Lynch Phibbs Ltd who advised him that many sports clubs are facing the same issue and opting out of an audit in favour of a financial review because of cost. While it is in our constitution that we have an audit, it is not a requirement of the Incorporated Society Act for us to do so.

V Papesch presented five options:

1. Continue with an IFRS audit costing $7,000+.

2. Reduce the requirement from an audit to a financial review at a lower cost.

3. Reduce the requirement to an audit only on request from the committee or membership at an AGM; which would require a constitution change.

4. Accounting review be carried out on demand of a committee or at the AGM; which would require a constitution change.

5. That we don't have an audit or financial review; requiring a constitution review.

General discussion took place regarding the need for an audit versus a financial review.

V Papesch proposed either option 3 or 4 and there is a provision in the current constitution which allows the committee to request a special audit.

B Chambers asked if we would be impacted in any way by not having an audit should we be looking for funding from either our bankers or a charity. He also reminded the meeting that an audit would not prevent and misappropriation of funds. Vince replied that an auditor's role is not to look for fraud and therefore if this was the purpose the club continued with an audit, it served no purpose. The purpose is to ensure that the accounts presented form a true and fair value and position. Vince also qualified that ASB have been our bank for 50 years and we have demonstrated that we can repay any loans that we may require.

A Beagley raised this issue that should the bank require an audit after we have changed to a financial review; then we may need to bear the cost of auditing previous years as well (to prove the correct opening position).

V Papesch confirmed for the meeting that the 2010 accounts (i.e. year ended 31 December 2010) will be audited and any changes would be from 2011.

V Papesch asked for a show of hands to support option 1; no one presented voted for this.

V Papesch asked for a show of hands to support option 2; general discussion took place around the option of a club member performing the audit however the current constitution doesn't allow it.

The following slide was presented as a recommendation from the committee:

— The removal from the constitution of the requirement that an auditor be appointed under rule 12(c) and that such requirement be substituted by the requirement that an auditor (or accountant) be appointed (to review the accounts) only if the majority of the members at an annual general meeting express concern with the balance sheet and income and expenditure accounts that are presented at the meeting;

— That rule 14(f) of the constitution be deleted and substituted with the following clause:

— "If the Club's accounts shall be audited (reviewed) in accordance with rule 12(c) above, the audited (reviewed) accounts are to be filed with the Registrar of Incorporated Societies no later than 30 June of the year following the year to which they relate and any changes to the Balance Sheet and Income and Expenditure Accounts shall be notified to the members via the Club website or such other appropriate media as may be determined by the Committee. The Committee shall be empowered to arrange for a special audit (or review ) at any time should it think fit."

V Papesch asked for a show of hands for the recommendation of an audit or review on demand by an AGM or committee which can be done by a suitably CA qualified accountant who can be a club member, providing they are outside the committee.

Passed unanimously.

[For clarity, the options outlined on the aforementioned slide essentially took the place of options 2 to 5 and, therefore, these options were not voted on. Ed]

Stage 2 Iwikau Redevelopment

V Papesch outlined the proposal to move forward Stage 2 of Iwikau. Stage 1 was approved at the 2010 AGM to move the water tank and extend/replace the front deck. This has been approved by DOC and engineering drawings are underway with an expected start date of December 2011.

Stage 2 (also approved by DOC) is to extend and replace the front entrance way, move the custodian's room to the downstairs bathroom/laundry area and move/upgrade the drying room & boot lockers. Changing the entrance way improves the fire safety evacuation potential and eliminates the buildup of snow at the entrance. Estimated cost for Stage 2 is $100,000.

V Papesch provided the meeting with working drawings to explain the work proposed.

General discussion took place around the rising building costs and demand for labour as a result of the Christchurch earthquake. V Papesch outlined that we may incur additional cost of up to $20,000 if we don't bring forward Stage 2 due to rising costs and the cost of access, not once but twice, to the lodge for getting building materials on site.

V Papesch provided a summary of the affordability/repayment process for the loan for Stage 2 and a comparison of how we successfully repaid the loan for Turoa extension. For Turoa we took out 10 year term loan for $100,000 which we paid back in 3 years.

V Papesch asked for a vote on the following proposal:

That due to the current market conditions and anticipated savings the committee be given approval to put out to tender the work for the Stage 2 development at Iwikau; being the building of the new entrance way, the moving of the drying room, and the custodian room and that if the tenders received are under the agreed budget of $100,000, that work begin at the end of 2011 in conjunction with Stage 1.

Passed unanimously.

Meeting closed at 7.40pm