UPDATE DIRECTOR OF ADMINISTRATION Constitution of Karting (NSW) Inc. KA/KNSW Memorandum of Understanding (MOU) Establishment of Sub-Committees:- Audit, Risk and Governance Committee Infrastructure & Grants Committee

1. Review of the constitution The KNSW Constitution is generally based on the NSW Fair Trading Model Constitution, but also includes numerous clauses relating to KNSW matters specifically:- Membership Board Composition Powers of the board and other governance and committee matters This is consistent with the approach generally taken by associations and is permitted by the Associations Incorporation Act 2009 (NSW) and NSW Fair Trading.  The KNSW Constitution is compliant with those specific requirements in Schedule 1 of the Act (which if not included would be implied into the Constitution).

It is worth noting the following clauses from the Model Constitution are not included in the KNSW Constitution.   I suspect that these were intentionally left out given they aren’t mandatory under the Act - but thought these were worth pointing out to you so that you are aware of them:-   Clause 3 (Application for membership) – the existing constitution does not include references to email or electronic means; Clause 7(7) (Register of members) – the existing constitution does not include that the register of members being kept in electronic form;  Clause 12 (Right of appeal of disciplined member); Clause 17 (Treasurer); Clause 21 (Appointment of association members as committee members to constitute quorum); Clause 22 (Use of technology at committee meetings); Clause 24 (Voting and decisions);   Clause 37 (Use of technology at general meetings); and Clause 41 (Association is non-profit).

It is also worth noting the following:- Clause 13 The Board is made up by up to 8 Directors – and currently excludes the Chairman The following positions are for a period of 2 years: Director of Administration Director of Financial Services One of the Directors of Group Welfare & Karting Operations (3) The following positions are up for re-election (for a further 2 year term) at the end of this year:- Director of Member Training & Education Director of Competition Director of Promotion, Marketing and Media Director of Group Welfare & Karting Operations (1) and (2) No Director can serve for more than 2 consecutive terms in the same position Clause 19 The Chairman is appointed for only 12 months The Constitution is silent on re-election OR whether the Chairman can service for more than 12 months

Clause 15 – Re-Election of Board Members Currently states that KNSW MUST appoint a HR/Recruitment Organisation to present a list of recommended nominees to the AGM for election to the Board. Total cost of this process in 2017 was $27,225.00 incl. GST This is also the case to fill casual vacancies at Clause 16. This is also the case for filling the CEO role at Clause 27. Lets discuss this further…

Suggested next steps… Under both the existing Constitution and the NSW Fair Trading rules (which governs incorporated associations), a constitution may be changed by passing a special resolution. A special resolution is defined as at least three-quarters of such members of the association being entitled to vote in person or by proxy of which at least 21 days’ written notice was given. Circulate a marked-up version to the Members for consideration/comment by 30 March 2018 Final version to be put to Members to vote in May 2018 Constitution to then be reviewed on a 3-yearly cycle – to ensure it reflects current legislation and current operating requirements

2. UPDATE ON KA/KNSW MOU We wrote to KA on 24 January 2017 – no formal response received We have been advised KA have reviewed their Constitution – which will replace the concept of the MOU. This will be voted upon at the upcoming KA AGM. NOTE: Quorum requirements for KA AGM QLD; NSW; VIC; NT; SA; TAS; WA 20% of 7 = 1.4 (2) Members is a Quorum Therefore to pass a special resolution – 7 Members Attend – 5.25 (6) Members to Vote Yes 6 Members Attend – 4.5 (5) Members to Vote Yes 5 Members Attend – 3.75 (4) Members to Vote Yes 4 Members Attend – 3 Members to Vote Yes 3 Members Attend – 2.25 (3) Members to Vote Yes 2 Members Attend – 1.5 (2) Members to Vote Yes

3. ESTABLISHMENT OF SUB-COMMITTEES Board has authority to establish Sub-Committees (Clause 23) Audit Risk & Governance Committee Members: Administration Director (Chair) Finance Director (Deputy Chair) David Filepetto + 2 Others Timetable Infrastructure & Grants Committee Director of Training & Education (Chair) Director of Promotion, Marketing & Media (Deputy Chair) Bob Baker AM Peter O’Neill +1 Other