Signant Two Holdings Ltd.

Minutes of 2016 Annual General Meeting

November 19, 2016

Sheila’s Castle

Lunch @ noon; Meeting 12:50

AGENDA

Meeting called to order

Proxies

Proxies for Carson and Brenna from last year are in effect until further notice.

Decision regarding length of meeting

Sheila called meeting to order, nominates Duane as timekeeper

Meeting time one and a half hours maximum

Vic and Duane: add motion to approve the agenda. Sheila moves to approve the agenda. Sharyn seconds. All in favour.

Minutes of previous meeting, Signant Two AGM Nov. 16, 2015

Sheila: New business 4b, point 3. Strike reference to uncertainty about water between underground valve and cabin. Sheila is certain that there is no water between the valve and the cabin. Cody updated 2015 minutes to reflect this.

Duane makes a motion to approve minutes, seconded by Vic, all in favour.

Matters arising from previous meeting

Transfer of Dale’s shares to Cody, Carson & Brenna

Complete and noted

Purchase of Rhonda’s shares

Complete and noted

Winterizing the Cabin
(Sheila, update regarding main water valve)

Sheila sent out an updated copy of the winterization procedures that Sheila will enter into the cabin manual

Monitoring of cabin during the winter (Meloche Monex Ins. Requirements; Melanie to contact Sam Sanderson)

Melanie has contacted Sam Sanderson. Requirement is that cabin is monitored once per month when water and power are turned off. Sam will do this. Will let Sam know when the cabin will be occupied so that she can suspend monitoring. Melanie: Sam will monitor every second week. Vic: there is a spare set of keys to the west of the fireplace ash access under the cabin behind a turquoise board (west end of the board, ceiling height).

Ants

Sheila wanted to touch base with the group about incidence of ants in the cabin. Sheila only found a few in the summer. Nobody had a problem with ants. Sheila put ant traps on window sill of each bedroom in October.

Carpets and Laminate Flooring

Replacing carpets with laminate flooring was approved in previous AGM and budget established. Sheila: where does this fall in terms of priority? The roof needs to be replaced, siding restained and windowsills painted as well.

Vic: Who will do the roofs? Hiring contractors is preferable because they will do it right, cart away the waste, and report any structural issues.

Duane: Need to get estimates to determine cost. Estimates should be similar, we should be weary of anyone who lowballs significantly. Melanie will look for quotes if given a detailed description of the work that needs to be done.

Sharyn: Is there someone local? Contractors don’t seem to want to come out to Fintry.

Duane: Carpet removal still ok’d but action should be delayed until after floors and roofs are dealt with.

Vic: Easter would be an opportune time to do some of this work. As per the USA, two workers should be sent per shareholder. Vic could go out and oversee the work party. Easter: April 14-17.

Duane: Could we do this in a couple of shifts? Retired people could work a normal weekend and working people could work the long weekend.

General agreement that we need to limit the number of workers because things become unmanageable when there are too many hands.

Duane: would need scaffolding or something for one side of the cabin. Uncle Jim might have something.

Vic: Proposed Easter weekend for staining

Melanie: People can stay at her house if there is overflow at the cabin

Cody, Vic, Sheila, Melanie, Duane would be open for that weekend. Duane may go the next weekend or the weekend afterward to do another coat.

Duane: Planning can be done outside of this meeting.

Replacing carpets with laminate flooring was approved in previous AGM and budget established. Sheila: where does this fall in terms of priority? The roof needs to be replaced, siding restained and windowsills painted as well.

New beds and night tables

General agreement that this will be placed on hold until major repairs are concluded.

Filterqueen “Defender” Air Purifiers (Sheila)

Sheila: these would be installed when laminate flooring is installed and pets are allowed in the cabin. The cost would be $150 each plus charcoal wraps ($60 for each filter).

Vic: Why don’t we purchase them now? Sheila agreed and will bring them out this summer.

User Fee (monitoring of payments)

Sheila: Can we agree on a date by which summer user fees will be payed by?

Vic: It would be good to have a reminder so that everyone knows where they stand, as it is easy to lose track of what has been paid. Jennifer could send out individual reminders by start of October so that payment can be included with end of October fee payment.

Common Items Needed at the Cabin

List: Common Items Needed at the Cabin (Assessment; Note – storage of liquid items by Melanie over winter. Inventory report – Sheila)

Duane purchased supplies last summer because he was the first out. Duane suggests checking inventory levels at the end of the summer to see which supplies were used. How did the procedure work? General agreement that it went well.

Sheila: The first visitor in the summer will top up supplies that are low. Sheila brought all of the liquid supplies to Vernon so that they could be stored at Melanie’s to avoid freezing over the winter.

Sharyn: what about batteries? Should these be brought in as well?

Vic: This should be added to the list for closing down the cabin.

Sheila: Asks Melanie to ask Sam to take the lantern or lantern batteries to Sam’s to avoid them freezing. Melanie will do this. Sheila will add this to the closing down the cabin list.

Vic: First person out should buy batteries as well (or bring them back from Melanie’s). Is the list going to be posted somewhere so the first person out knows what to replenish.

Duane and Sharyn: Should we mandate that the first family out replenishes the supplies? List should be posted inside the cupboard in the kitchen and in the cabin manual.

Fruit Trees

(Pruning of Apricot Tree – Assessment)

This item was deferred for time

Minute Book

Documents showing updated share status of Shareholders

This item was deferred for time

Annual Assessment Fees

(Annual Assessment Fees: $125 per year per share. Option of two installments: May 31st and Oct 31st)

Sharyn, Vic, Dale’s family, Sheila – 15 shares each – $1875 per year or $937.50 for each of 2 installments

Duane – 12 shares – $1500 per year or $750 per installment

This item was deferred for time

Other  _______________________

New Business

Telephone landline

Still needed? Yearly cost $281.64 (Sharyn)

Unanimous agreement to cancel. Sharyn will take responsibility for this.

Culling boathouse (Sheila)

Sheila: this summer can each family go through the inflatables etc. that belong to them. Throw out what they don’t want, deflate and keep everything else in their locker.

Purchase of New Fridge (Paulette and Sharyn)

Sharyn: the upstairs fridge is substandard, should we replace? Melanie to look into refurbished fridges in Vernon.

Possible Purchase of Generator

For times of power outage (Sheila)

Sheila: power outages happen, when power is lost perishable food spoils. Generator would be there to power fridges in case of emergencies. Sheila has identified a model with four plugs (could power the fridge and freezer) and would run for 9 hours on 2.5 gallons of gas. Sheila recommends the corporation purchase a generator from wholesale warehouse ($337.49).

Duane: power does seem to be going off more and more. If we had a generator we would be able to mitigate this.

Unanimous: Sheila will purchase.

Disposal of old boat and stove (in yard)

This item was deferred for time

Insulating utility room

Insulating utility room to enable winter stays at cabin (raised by Duane previously, raised by Sheila now)

This item was deferred for time

CIBC error

Misdirected Sharyn’s payment of cabin taxes June 29, 2016 (report by Sharyn)

Sharyn received an overdue Fintry tax statement in October. Dock tax had been sent to the wrong folio number. This has since been straightened out.

Cabin Manual (Vic)

Updating procedures for Opening up and Closing down cabin

Digital Copy

This item was deferred for time

Legal Fees 

Responsibility for Legal Fees for Repurchase of Rhonda’s Shares (Vic)

Vic: this is business of the company, the company should be paying for legal fees. The reality of running a business is that sometimes legal fees are incurred and these fees are to the benefit of some shareholders and not others. One option is to divide the costs four ways instead of five, or the fees could be divided by share. This sets a precedent for the future, so it should be discussed. Another option would be to treat the fees as a corporate bill, to be paid out of the reserve fund. This would not be a special assessment, but would deplete the amount of money in the capital account.

Duane: this makes it disadvantageous to not purchase shares. What is the cost going to be? Total fees were approximately $2000.

Sharyn: I would be ok covering my own costs.

Sheila: My understanding was that we would all cover our share of the legal fees and was surprised when Vic brought up this issue.

The consensus emerged that treating this as a corporate expense will make the process smoother in the future.

Resolved: responsibilities for the fees lies with the corporation.

Annual Assessment

Question Regarding Amount of 2016 Signant Two Annual Assessment Fees Due for Repurchased Shares

Sharyn: what’s the amount for the 2016 first instalment, given that shares have been acquired.

March 21, 2016: date when the corporation entered into share repurchase agreement with Rhonda.

April 28, 2016: effective this date, shareholders signed resolution to consent to purchase Rhonda’s shares

September 30, 2016: new shares acquired, two resolutions sent out which ratified the purchase of the shares and the new distribution of the shares (transaction completed on this date)

Sheila: however, we had already benefited from using Rhonda’s time in summers 2015 and 2016. We were acting as if the purchase had already happened, so it makes sense that we would pay the fees for all of 2016.

Vic: All financial obligations taken over when the deal is complete. This also sets precedence for the future. Rhonda maintains financial responsibility until the deal is closed but did not pay fees over this time.

Sharyn: First payment shouldn’t change; second payment should be the one that changes.

Sheila: we used the cabin during Rhonda’s time for two summers, so we should be obligated to cover expenses for this time. Decided at AGM in 2014 to treat as if shares were transferred.

Resolved: higher payment to start October 2016 as per point M of part 3.

Cabin Users’ Ongoing Maintenance Checklist 2016

This item was deferred for time

Accounting Advice

(Direction by Shareholders to get accounting advice regarding how the company should treat the repurchase of Rhonda’s shares, for tax purposes. (Sheila)

Vic: this is Rhonda’s problem, not ours. There is no ramification for the corporation. If Rhonda reports this as a capital gain (which she has to by law), was the transaction done at fair market value (it was not; Rhonda was paid a little more than 50% of the value of her shares), revenue Canada would tax her on the difference between the actual value and the value she received. This will probably not come up regardless.

Anyone who sells shares will trigger a capital gain

The delcared value of the property was $150,000 when purchased in 1994 (value of the land and cabin: ~$50,000 cabin, ~$100,000 land; it is possible to look at the tax assessment from 1994 to determine the exact proportions; 2016 for Dale’s children)

Taxed on half of increase from this point.

Sheila: can we locate this tax assessment so we know? Sharyn will look into this.

Maintenance, Improvements & Additions 2016

Duane: Sheila should post her list, we could list off what has been done.

Cabin Users’ Ongoing Maintenance Checklist (Sheila 2016 summary)

Improvements and Additions (thanks and feedback):

new table and chairs

new carpeting at entrance

new pots and pans

Cuisinart knife set

Cleaning products and paper products in bulk

new sheet sets (coming soon, Melanie)

new pillows

5 Ton log splitter

shimmying up of dock cribbings

Duane did some of these but dock will need major repairs soon. Boards have rotted away. This would be a good thing to do in the spring.

repair of picnic table

boathouse roof – front facer boards

pruning above both roofs

main water valve underground behind cabin (Thanks to Cam for his work which revealed that the valve was not broken.)

Vic replaced screen and handle on side door and wad of duct tape on screen of main door.

Vic and Kathleen installed new carpet at front entrance

Long-term Maintenance Timeline (Sheila)

-Priority: replacement of roofs (cabin and boathouse. Plan needed.)

-Discuss timeline for other items

Booking Procedure 2017 and Schedule

(Summer and out-of-summer)

(See attached document: Signant Two Summer Booking Procedure 2017)

Year-end Review and Synopsis

Financials

2016 Financial Statements

Directors’ Resolutions

(Great thanks to Jennifer for preparation of all Financial and Directors’ Resolution docs.)

Sheila will continue as president, Cody will continue as secretary.

Other  __________________

Next Meeting set for  __________________

Sheila moved to adjourn at 2:35