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Minutes of the EGM, 13 December 2018

Drayton Park Golf Club Ltd

An Extraordinary General Meeting was held in the Clubhouse on Thursday, 13 December 2018 at 6.00pm.

There were 43 voting members in attendance.  All Ordinary Members were required to give their names.

Apologies were received from the following members:
 
Malcolm Burt
Terry Lamb
Malcom Walker
Rob Bott
Wal Stich
Janet Clark
Rex Clark
Fred Meddes
Clive Duckitt
David Brown
 
Graham Young, Chair of the Board of Directors, welcomed everyone to the EGM and thanked them for their attendance. He explained that the purpose of the meeting was to seek approval to a Board Resolution to proceed with a capital investment project for the replacement of the irrigation system, at an estimated cost of £300,000.

The Chair reported that due diligence for the irrigation project had commenced 12 months ago following the former Chairman’s report to the 2017 Annual General Meeting. He confirmed that in accordance with the Club’s Articles of Association, a single capital investment project exceeding £50,000 would require the prior agreement of a two thirds majority of the ordinary Members who vote.

 
The Chair reported that following the feedback from members’ focus groups meetings, a subsequent meeting had taken place with the Club’s bank to discuss the terms and conditions of a loan.  Arising from that meeting, a competitive variable rate of 2.75% had been agreed involving no early settlement penalties. This rate had been discounted from the original rate of 3% and at any time in the future a fixed rate could be sought, also without penalty. It was confirmed that, subject to the signature of a facility letter, the loan had been fully approved by the Bank’s underwriters.
 
The Chair reiterated the Board’s commitment to improving the level of engagement across the Club’s broader membership and to this end, a number of focus groups had been held about the proposed scheme during evenings, weekends and daytime slots. However, whilst every effort had been made, it was recognised that a proportion of the Club’s membership had been unable to attend and, therefore, a number of members may not have felt well-informed.   Feedback had been received prior to the EGM recommending that the Club’s website should be used in the future to provide greater awareness of such initiatives which, of course, the Board would support.  

The Chair expressed the Board’s confidence that an investment in a new irrigation system was the right decision for the Club to make.  He confirmed that should the motion be carried, the terms and conditions would be finalised with the preferred contractor who he felt sure would commence with the project in earnest.  He also explained that the Board was in talks with a member of the Club who had offered to oversee the project from the outset. This would result in a professional approach and prevent the Greens’ Staff from becoming distracted from their day jobs.

The Chair indicated that whilst it was not the specific purpose of the EGM to elaborate further on the detail of the scheme, members of the Board were available if required to provide further clarification. 

A number of questions were then raised by members in attendance at the meeting, and the following responses were given:

In response to a request made by John Lander, the Chair confirmed that he would arrange for a copy of the Consultant’s report on the proposals for the irrigation project to be posted on the club’s website.
Bob Nason (Course Director) confirmed that the latest ‘Course Report’ had been circulated before the meeting and would also be published on the Club’s website.  The report contained information on the condition of the fairways together with proposed remedies but did not include an agronomist’s report as the Club was no longer in this arrangement. He reported that whilst the current irrigation scheme was focussed on greens and tees, the proposed system could easily be developed to cover other parts of the course, subject to the installation of an additional pump. He also reported that a full Bill of Quantities existed for the proposed scheme and, with the exception of a new pumphouse which would be built by one of the Club’s members, all other aspects of the work would be undertaken by the preferred contractor.

Graham Young explained that when the irrigation proposal was discussed at the Board’s meeting in November, he had abstained from voting.  He said that this was partly because he wanted to remain impartial on the matter but also, in a ‘business world’ environment where profitability is the key factor, it was questionable whether there would be a sufficient return on investment. However, he recognised that the Club was not profit-oriented and that there were undeniable reasons for making the investment both in terms of the direct benefit to existing members and the Club’s ability to attract new members.

Paul Murrall (co-opted Treasurer) explained that he had voted against the proposed scheme at the Board’s November meeting, primarily because he would have preferred a deferral of the decision for a further 12 months to allow more time to assess the Club’s ongoing profitabilty. However, he also recognised that the Club’s principal asset is its golf course and that it would be irresponsible of the Board to allow that asset to deteriorate. Since the meeting in November, he was now more confident that the investment could be financially justified; firstly, because the Club had been able to achieve a break-even in its 2017/18 accounts by making significant overhead savings and; secondly, because it had been able to restructure its overall borrowing meaning that the irrigation scheme’s implications were effectively cost neutral and would not impact negatively upon cash-flow.

Greg Elton (Communications Director) indicated that had it not proved possible to fund the irrigation scheme by negotiating a preferential loan agreement with the Club’s bankers, the Board would have then considered the option of seeking secured loans from Club members.  However, the bank loan agreement which would be over a 20 years term, guaranteed that the scheme could be funded whereas obtaining secured loans from members would have been a far less certain way forward.

Adrian Cooper (General Manager) added that the Board had also considered the possibility of offering different forms of membership as a mechanism for funding the irrigation scheme but none of these had proved sufficiently reliable. 

There being no further questions by members in attendance, the meeting was briefly adjourned to allow for voting to take place and for counting to be carried out of all votes cast on the evening together votes cast prior to the meeting either by paper ballot or by the Club’s online voting system.

Upon resumption of the meeting, the Chair announced that 149 votes were in favour of the Board’s Resolution and 22 votes were against (a majority of 87% of Ordinary Members in favour).  It was therefore:

RESOLVED: 

That approval be given to proceed with a capital investment project to install a new irrigation system at an estimated system at an estimated cost of £300,000.

The Chair thanked everyone for their attendance and closed the meeting at 6.47pm