PRESIDENT’S REPORT
Welcome to the March 2020 Groundswell Report. I trust you have enjoyed your summer and the facilities offered at the Club. Set out below are some of the current issues the Board is considering. 1. CYCSA Youth Sailing Foundation The Board is currently exploring the establishment of the CYCSA Youth Sailing Foundation. The purpose of the foundation is to introduce the next generation of sailors to the sport of sailing and to foster, and where possible, develop their progression into sailing champions of the future. At the time of writing a business case has been developed by management for board discussion. The plan shows that if expectations are met, the Youth Foundation will be self-funding and indeed may make a positive financial contribution to the Club through its trading activities. As part of the benchmarking of our Club with other preimminent yacht clubs across Australia, we noted that all of them have a fleet of small training keel boats as part of their overall operations. The business requires more exploratory work and we are planning a trip to Sydney by two Board members (at their own cost) together with CYCSA management to review the operations of similar foundations operating in Sydney. The current view of the Board is that to progress this proposal to the next stage we must be satisfied this Youth Foundation will be cost neutral to the Club in a very short period of time. I will keep you posted as to the progress of our work on this matter. 2. Investment Committee/Sinking Fund Since our last report the Investment Committee has undertaken a comprehensive review of the funding requirements to maintain or replace overwater assets over the Club’s lease obligations with berth owners. This review determined that a net return of 4.1% above inflation on the Sinking Fund assets is required as a bare minimum. The Committee has determined in order to meet the desired long term return of 4.1% above inflation the funds should be invested in a growth orientated portfolio which would typically comprise between 60-80% in growth assets and 20-40% in defensive assets. Based on the above analysis and recognising that, whilst the Board and Investment Committee currently has access to expertise necessary to manage the Sinking Fund, that may well change in the future. It is our belief that the current process of dealing directly with the broker puts an unreasonable expectation and responsibility on both the Board and the Investment Committee. The Board, after receiving a recommendation from the Investment Committee, resolved that 100% of the Club’s Sinking Fund portfolio be formally put to tender by the Treasurer and four quotations be called from qualified investment advisers/firms. The investment these firms would manage include products that meet the above risk profile. The Treasurer is currently undertaking that tender process and once the selection of advisers is complete it is the view of the Board there will be no need for an Investment Committee going forward. The investment firm or firms would report the audited performance of the fund directly to the Board on a timely and periodic basis. The latest results of the Sinking Fund’s performance are as follows:
31/12/2019 YTD PORTFOLIO: Shares @ market value
4,375,687
72%
5,237,884
89%
701,193
12%
310,460
5%
Cash/Term Deposits
1,015,276
17%
315,792
5%
Total value of Sinking Fund
6,092,156
Preference Shares
5,864,136
Original investment
Return on investment to date
5,450,377 11%
5,450,377 7%
INCOME GENERATED: Dividends received
166,228
161,311
Profit from sale of shares
61,099
22,514
227,327 183,825 Notes: 1. Cash is held in a separate Sinking Fund bank account 2. All income received from the Sinking Fund to date has been reinvested 3. Bushfire Appeal Whilst many of our members have been enjoying summer on their boats and at the Club, our heart goes out to those affected by the devastation the fires have caused on Kangaroo Island and the Adelaide Hills. On behalf of the CYCSA members I would like to let all those who have lost loved ones, their livelihoods, homes, businesses and properties that our sincere thoughts are with you. Our Club is committed to raise funds for the SA Bushfire Appeal on two fronts 1. In conjunction with Coopers Breweries we are providing $10 per Chicken Parmy promotion sold to the bushfire appeal. 2. We are arranging a bushfire appeal cabaret function. Entertainment on the night will be by Jus-Fa-Fun who will be donating their time and playing for no fee.We have also had food donated to the Club to assist in minimising the cost. All profits generated by the evening, together with profits from the Parmy promotion, will be distributed to the SA Bushfire Appeal for the ultimate distribution to people directly affected by bushfires on Kangaroo Island and Cuddlee Creek. 4. New Crane I can report our engineers have finally created an engineering solution which allows us to not have to replace the wharf in order to acquire the new crane. The crane has now been ordered and is scheduled to arrive and be installed ready for use prior to next season. 5. New Boat The Marine Academy has previously announced that a new Marine Academy training yacht has been acquired to replace Academy 1. Academy 1 has served the Club extremely well over an 11 year period but in recent years the running and maintenance costs to ensure the vessel remains in AMSA survey has become prohibitive.The new boat is a Beneteau Cyclades 43.3’. This boat is perfectly designed for training and will be enjoyed by those with full cruising aspirations together with those whose ultimate objective is to race. An official launch of the new boat will be held soon and we will advise members accordingly. Please continue to enjoy the remainder of the boating season. See you at the Club. Dominic Rinaldi
4
31/05/2019 FY
