Finance Committee Meeting Minutes

4 April 2012

Present: Graham McDonald (chair), Cheryl Langdon -Orr, Kim Heitman, Kartic Srinivasan and Chris Disspain(CEO)

In attendance:   John Higgins (NexiaASR)

A draft budget prepared by John and Chris, with input from Graham and Jo Lim, which had been circulated by John Higgins was reviewed.

Chris and John explained, and the committee accepted, the variations in proposed budgetary items from the amounts allocated in the 2010-11 year.

The Committee noted and approved that the budget adopted a conservative approach with respect to the estimated net growth in domain names for the 2012-13 year. A projected reduction in the net growth figures from above 20% in each of the preceding 4 years to 17% in the coming year was accepted. The reduction takes into account the introduction of the new gTLDs. The Committee noted some uncertainty over the time frame in which any effect of the new gTLDs would become apparent with the expectation that the full effect may not become apparent until the second half of the 2013 year or later.

The Committee noted the following new budgetary items :
AGM and Members meetings: $30,000
Australian IGF: $100,000
external consultants (eg registrar security): $150,000
website development (per Westlake report): $200,000
new staff member: $75,000

Chris explained that the 'staff other' item was to cover the payment of staff bonuses and anticipated salary increases. It was agreed that the figure may need to be reconsidered if the staff salary adjustment and bonus payment negotiations (not extending to the CEO or the COO) had concluded prior to the June Board meeting.

The Committee agreed with the CEO's estimation, made against the background of the legal costs associated with the Bottle cases, that the legal contingency fund had become inadequate and should be increased over an estimated two year period from $.5m to $1m. In order to meet the increase it was agreed to recommend to the Board that a portion of funds in surplus at the conclusion of the 2012-13 financial year should be allocated to the legal contingency fund.

The Committee decided to recommend that the Board provide in principle approval for the draft budget. The final budget (to be puit to the Board at the June meeting) will contain adjustments to take into account domain name movements for April and May 2012 and renegotiated staff salaries.

The Committee acknowledged the Finance Charter circulated by John Higgins. It was agreed to change the title to 'Finance and Audit Committee Charter' and to add the following to the listed Responsibilities of the Committee:

'(e) recommend the appointment of the auditors to the Board'.

Committee Members to notify any other changes for discussion at a future meeting. If none are received the Charter to be adopted and the Board notified.

It was agreed that John Higgins would circulated the financials for the period ending 31 March 2012 and, in the absence of a request by any member, the accounts could be accepted by the committee by email.

The meeting closed at 3pm.