0:00:00 Sunday Folayan: Can we please take our seats so we can resume business? May I appeal to those who are still outside to please come in, so that we do not waste time. We have quorum. Quorum is formed, and I'll like to pick off the agenda where we left off and... [background conversation] 0:00:50 Sunday Folayan: So, I would like to pick off the agenda so that we'll go on to Q&A now, questions and answer. I see Seun at the back and then I'll come to Mike in front. Seun? 0:01:02 Seun Ojedeji: Mr. Chair, I think you said we should come back at 2:00? 0:01:08 Sunday Folayan: 1:30 was the time. We are 10 minutes late. 0:01:12 Seun Ojedeji: Okay, thank you. 0:01:13 Sunday Folayan: Mike? 0:01:15 Mike Silber: Chair, thank you. I had two questions. The first is, I didn't see the audit fees indicated as a line item in the current drop financials. I also didn't see audit fees in the budget that's published. Now, I was just wondering what the current fees are and what the projected fees are for Deloitte as the auditors for the upcoming year? The second question I had was with regard the budget, and I just had a question regarding the revenue projections because we seem to be projecting a slight drop in revenue from allocations and I was just wondering what the modeling is that explains that slight differentiation? I would have thought that we'd actually see a slight increase in number allocations for the current financial year. 0:02:08 Sunday Folayan: Thank you very much. Before I call those who would respond to the question, let me say that the announcement we made earlier is that ballots can be collected till lunchtime. If you recollect, we're extending it to the end of Q&A. So end of Q&A officially would be the time that we would close the ballot shop. So, I don't know how long Q&A will run. We have 10 minutes on the agenda, so I would think in another 10, 15 minutes we can close the ballot shop. So, I would call on Patrisse to answer Mike's question. Or would you prefer we take all questions? I think we should answer the ones asked already. Patrisse? [background conversation] 0:03:21 Patrisse Deesse: With regard to the audit fees, the audit fees that has been collected and approved last year was $10,000, which is $10,000 including the IT audit and the financial audit. That is included in the line of professional fees together with other consultancies and professional fees. We don't have a one liner which shows audit fees on its own. I think we have the second question was, the drop-in... [background conversation] 0:03:57 Patrisse Deesse: Right. Yeah, I think when during the budget for this year I think in the past what has happened is we've extended... We've based our expenses, operating expenses, on a projected increase in membership which seems to have been a little bit over ambitious. So what we've done this time, we've maintained it at the same level as the previous year and then review as we go forward. This is I think during Mark's presentation was, we mentioned... We tried to be as conservative as possible so that we don't over inflate and then we get to six months down the line, we realize we're not gonna make this membership and by that time we would have committed all the expenses and it may be difficult for us to go back. Yeah? 0:04:51 Sunday Folayan: Thank you very much. Professor Quaynor. 0:04:58 Nii Quaynor: Thank you, Mr. Chair. I have a series of questions related to finance and audit Committee's reports, if I may? First set, is it normal... 0:05:11 Sunday Folayan: Please, can you just increase the decibels a bit. Sorry, old man. Sorry, old man. 0:05:17 Nii Quaynor: Okay, okay. I'll get young. Mr. Chairman, I have a series of questions relating to Finance and Audit Committee reports, so if you bear with me. The first is, is it normal practice for alternate members to chair both committees? Why not have the CEO assisted by finance director presenting budget? Regarding KPMG, what criterias were used to select KPMG in the first place, and why did we have unsatisfactory job? And how do we select the new or external auditor such that we don't have the same? What makes us think that the new auditor will resolve the issues and the question here is KPMG can react. Why do we continue to spend all income? Can finance and audit committee meetings be open, so that members will... The appreciation of their work will be increased? Thank you very much sir. 0:06:31 Sunday Folayan: Thank you very much. Still related? 0:06:37 Fiona Asonga: Yes. 0:06:38 Sunday Folayan: Okay. So we can take all questions together. Fiona? 0:06:42 Fiona Asonga: Mine is related to finance. Fiona Asonga. A question, referring back to my proposal during the last AGM in Djibouti, I recommended, we have a governance committee, that still hasn't been done. I'm seeing a lot of challenges we're facing right now, I think as a result of the absence of that, we have gone through the report from the Board on the audit and financial report, what you circulated on email with the final financials, and I think a lot of the issues that you raised there would have been put in check if you put in some time to just put together a governance committee that would help streamline all that coordination that needed to have been done. 0:07:31 Fiona Asonga: Second is a question on operational best practices that goes to both the budget, the finance committee, the audit committee, and CFO for AFRINIC staff. Best practices have it that operationally, you need to have your budget or your financials generally expensed in a particular manner. When an organization has more than 30% of its expenses on HR, we're in the red. That should be a red flag that we need to look at that. We've seen a budget presentation of... Showing a 25% coverage on HR, I would like to understand what is AFRINIC planning to do to reduce that HR from where it is at about 56% down to 25%, because that has an implication on staff and either the remunerations of their continuity with the organization it's good, that we know whether there's going to be retrenchment, if staff are going to leave, so that we can also as a community figure out how we're going to absorb them, so that there is no panic and there is no transition. 0:08:49 Fiona Asonga: Finally, I would like to ask for the rationale, for the Board, in feeling that they had to send out the report they sent out, and what does the Board plan to do, if KPMG come back with a law suit, are we in a position to handle that? And the repercussions of that. How... What is the management of risk in as far as the bad reporting is done? And finally, this is the second time we have auditors, we're saying they're not doing a good job, I think we need to look internally. We cannot keep saying all the best auditors, Ernest and Young, KPMG, we're not going to go to look at Price Water House or someone that big again and we still keep saying, they don't know their work. I think we need to look internally and figure out whether there is something wrong with the way we're working, and stop pointing the finger outward, and let us sort the problems out internally. 0:09:47 Sunday Folayan: Thank you very much Fiona. Yes sir? [French] 0:09:53 Kitifolo KIGNAMAN-SORO: Thank you. I have a motion. There is a problem in my view, I felt frustrated in the way some of the colleagues were treated. My motion is the following. In order to continue the work we need this motion. There is a problem of trust and there is the feeling of frustrated amongst of the participants here. 0:10:29 Sunday Folayan: Thank you for that. I understand the feeling of frustration and I did apologize earlier on for going to the extent of trying to say that I'd ask security to ask the gentleman that would not sit down to leave the room. I'd like to again apologize. I thought since I apologized, the issue is resolved. Or may I request the gentleman that raised the motion of privilege to please come back and let me know if my apology was not accepted when I made it? This is without prejudice to the fact that we were discussing an issue and this is an issue being introduced that is not what was... Is on the table. But I'd like to make that exception so that we can make progress. Ideally, we should dispense with the financial report before introducing another business. I just want peace to reign without any member feeling marginalized in the meeting. So if the gentleman will please clarify whether my apology was not accepted, but I did make an apology earlier on. [background conversation] 0:12:01 Kitifolo KIGNAMAN-SORO : I think you have to ask the question to the assembly. I expressed my frustration and I firmly believe that many others of my colleagues have the same feeling. 0:12:15 Sunday Folayan: What makes it easy is for you to talk about yourself instead of talking about the others. It is the Chair that speaks for everybody, so please, it's your privilege. I would then gauge the mood of others based on what you say about yourself. If I did hurt your ability to contribute effectively, I once again want to apologize for that and to all other members who feel the same way you feel. May I then know if my apology is accepted by you? Okay. 0:12:51 Kitifolo KIGNAMAN-SORO : Okay. You're apology is accepted Mr. Chair. 0:12:56 Sunday Folayan: Thank you very much. May I also once again apologize to every other member seated who feels the Chair's name was sounding like "Mobutu Sese Sunday". [laughter] 0:13:10 Sunday Folayan: So, I would like to just apologize once again so that we move on. 0:13:20 Vymala Thuron: I have some question from the jabber room. Chair, may I? 0:13:25 Sunday Folayan: Yes please. Go ahead. 0:13:27 Vymala Thuron: Okay. First question is for the CEO of AFRINIC. [pause] 0:13:41 Vymala Thuron: I would like to know... It's from Saul Stein, eNetworks, South Africa. So I would like to know why such a high staff turnover of almost 25%, what is the reason? Has it been looked into resolve? If not, why not? Do you still have the other two? Oh, that was the other question. I'm sorry. So do I state the other two questions? 0:14:07 Sunday Folayan: Yes please, go ahead. 0:14:09 Vymala Thuron: Okay. Other question is for finance. For the past several years, there has been invoicing issues. That is invoice have incorrect amounts, one isn't able to pay when the invoice is received and then the discount is not reflected. We have had these issues repeatedly. This exasperates the issue of members not paying. What is being done to resolve this? Second question, same person. Third question is to the audit committee. Is there any penalty to poor performance of the auditors and then I second Fiona's comment, perhaps there is an internal issue. Thank you. 0:15:00 Sunday Folayan: Thank you. Boubakar? [French] 0:15:05 Boubakar Barry: Thank you, chair. I thought that you could ask several questions but I understood that only on finance. The questions that I had have already been asked by my predecessors, however, I would like to support what Fiona just said that is we should look seriously what we are doing within AFRINIC in terms of financial organization because we cannot have one year after the other auditors who are the most known in the world, be changed in 2013 for performance and then this year we are gonna go for another one. These are the three enterprises that the most known in the world, so we have a serious problem we have to look at. [French] 0:16:10 Ousmane Moussa Tessa: Good morning. Now, I am Ousmane from ____. I would like to thank those who made the presentations, but it's the fifth time regarding the finance presentation. I always had the same impression which is the following: We know more or less what we have in terms of income and we try do everything to spend as much as possible, and these spending is done in areas of consumption mainly human resources. What I would like to ask you and the Board, the members of the community, is it possible within the framework of the strategic plan, to see to what extent the money collected could serve more so that the aim of the association be strengthened. So far we have always talked that their IP addresses that are not consumed, but by using them we increase the financial capacity of the association. Is it possible in the future to see to it, so that we can have levels or tiers and say that we cannot go beyond such and such percentage of the budget for such and such activity. 0:18:03 Ousmane Moussa Tessa: This was done everywhere else, including the state budgets, and we cannot take all of the spending and then allocate 40%-50% of personnel, while the element that will allow the institution to live is not... we always complain about that we cannot use those sources of our IP addresses which could reinforce our community. Thank you again. 0:18:37 Sunday Folayan: Thank you very much. So many questions have been asked, but I just want to reinforce a little clarification that seems to encompass everything. I'll ask specific people who are addressed to respond to those parts, but as Chair I just want to clear some things, so that members will understand from the perspective of the Board, that that's what we have done. 0:19:10 Sunday Folayan: The first is that for some time we have based our budget on what we collect, the revenue for existing members and also some projections for membership growth. So we make a projection at the beginning of the year to say, "This is the growth in membership that we want, or that we will get." Most often we miss the mark. We don't really get those new members as we plan. So what the Board has done, beginning form AFRINIC-21, in Mauritius, is to say that, moving forward, we want to move from that method of budgeting to the one that only budgets for the next year from the collections we made in the previous year so that we're not budgeting on anticipated income, we're budgeting on the actual membership that we have. 0:20:14 Sunday Folayan: We then deduct from that actual membership how many delinquent members we project we may have before we then allow for some surplus for the year on the basis with which we will budget for the year. That was the resolution the Board took at AFRINIC-21 in Mauritius. But we recognize that the company in the previous year posted a negative result. And if we go ahead to implement that it will further impact the figure, and make what does not look pretty, really look very bad. So the decision we made is that we will roll back that membership projection figure 20% annually for the next five years, so that if we take off 20% every year, at the end of five years, we will be where we want to be, budgeting actually on revenue of the previous year as the basis for budgeting the ensuing year. 0:21:29 Sunday Folayan: That resolution was taken, and as at 2015, we have reduced that 20% on the entire budgets. So that is already implemented for the first year. So by the second year, 40%; third year, 60% until we hit zero. So that way we can budget on actual, and also cut back, to be able to have some reserve. I hope the principle is clear to members. So the Board actually did something by taking a resolution and by applying it on the budget for 2015 that we are in now. Thank you. 0:22:15 Sunday Folayan: The other questions, I believe Paulos took note of all the questions Professor Quaynor asked, as well as the questions, some Fiona asked and the last one from Saul online. When you finish, then... Yes, come and respond now. Then Badru will respond to the HR questions. I would want to shield Alan is barely one month on the seat and I don't want to put him in the spotlight, that would be unfair. [pause] 0:23:08 Paulos Nyirenda: Thank you. Maybe you will correct me if I skip any of the questions. The selection of KPMG, I think I got that question. The selection of KPMG went through an extensive RFP last year. We actually sent out a request for proposals to some 90 organizations in Mauritius that are listed by the Mauritian Finance and Audit Commission, and we got around 32 responses to the RFP. We went through an extensive process for assessing those, and we presented this in great detail to the AGM last year. So, our understanding was that we really did go through the due process in this and we ranked the top four applicants in the RFP assessment. So, due process was followed and we are... Instead of going out to actually do the same thing this year, we thought that we would use that process to select the next auditor and we're simply following up on the same process to recommend to this AGM the appointment of Deloitte as the auditor for 2015. I hope that addresses that issue. 0:25:03 Paulos Nyirenda: There was a question of rationale for sending out the report to the community. This was actually in response to calls from the community to see the financials in good time for this AGM. So, although the audit committee was mindful of the accuracy and process followed, the Board made a decision to release the report that was submitted to us on 25 May, and I think all of you who saw that report will see that quite a few of those pages were still marked "draft" by the auditor. 0:25:57 Paulos Nyirenda: There was a question on internal audit or internal problems that may be leading to the yearly, annual audit. This is probably the case. Again, last year when we were doing the RFP, we did actually raise the issue from the audit committee whether an internal auditor was required for the organization. The assessment and the answers that we got was that an internal auditor was not required, so maybe this needs to be revisited. Maybe we do need an internal auditor. It's a question that probably the Board needs to look at, but in doing that, I think we would benefit from contributions from this AGM. I think those were all the questions on audit. Did I skip anyone? Yes? 0:27:10 Fiona Asonga: I think you misunderstood my question, Fiona here. The question is, you've sent us to to the community a Board report that really is trying to paint KPMG in the negative or to excuse the absence of proper financials being presented and my question is what's the rationale of that? Because really, if the Board is not performing and wants to let us know that they are not performing, then that document helps to explain that. If it is that the problem is KPMG, then like we've done in the past, this was not so necessary, so what's the rationale of this whole six page document which gives us so much detail that truly should be within the premise of the Board, what does the Board expect the community to do? Because from where I sit, on behalf of the Telecommunication Service Providers Association of Kenya, if my Board presented this to our members, the entire Board would be told they've failed to perform, in as far as their financial duties and obligations are concerned. 0:28:26 Paulos Nyirenda: Okay, through you, Mr. Chairman. 0:28:29 Sunday Folayan: Yes, you made this point. 0:28:31 Paulos Nyirenda: I think the issue was... I think that before we wanted... This was extracted from the audit committee report to the Board, and part of the reason for putting it out was to show that due process was followed and to indicate the decisions, the recommendations that we have made at the end. That is to change auditors and to delay the release of the signed financial statement. The financial statement, as is indicated in there, will be delayed until the auditor cleans it up. So, it was just to assist, maybe put out to assist the community to see what we were going through and justify the resolutions of the Board. 0:29:34 Sunday Folayan: Okay. In addition to what Paulos said, two things I would want to emphasize. The first is that we did not have a problem with the initial auditor. We absolutely did not have a problem, but we felt we've had the same auditor for 10 years. There was need for a change. So that was what influenced the first change. It was not because the Board felt that auditor did not perform. But in terms of process, when we made the first change, audit committee insisted that they would not approve the report online without a face-to-face meeting. That was what led to the delay in Djibouti. This is the first time we're having a delay because the auditors brought three sets of figures and it took time for them to synchronize it with what management prepared as an account. I hope I make it now sound clearer because I want to avoid us going deeper because the more we try to answer questions is like digging a pit with your feet in it. It happened because we tried to improve. Okay? And that attempt did not meet with success the first time. I hope, Fiona, you are happy with that. 0:31:04 Fiona Asonga: I think I will have to take that for the time being as we're still discussing, but the truth is, it's leaving a lot to be desired. 0:31:17 Sunday Folayan: Thank you. 0:31:18 Paulos Nyirenda: Time ticking. 0:31:18 Sunday Folayan: Time ticking. Alright, the next person who will be answering some questions is Badru on the HR issues. 0:31:30 Badru Ntege: Thank you. The main issue on HR was two questions. One of them was on the percentage, the ratio, in terms of the ratio of cost on HR and the budget. This is something that has been worked on for the last two or three years. Primarily, it came from our growth a few years back and the Board planned to drive that down to 40%. And we're moving down, they should be more focused on actually bringing it down lower. The other question... The other issue that hits our ratio is the cost of... The nature of our business is we have a lot of expatriates, by nature of the fact that we are a multi-stakeholder regional organization, so we really need to also have full level regional representation on the staff which brings us the need to have a good spread of expatriate staff. 0:32:38 Badru Ntege: So that creates a bit of a difference in terms of cost. So it will not be possible to bring that... It will be very hard to bring that number to the global standard of 40%. By the way, it's not 30, it's usually 40% on head count which is what we're aiming at. We think we'll be able to do 45 and I think that projection was about two or three years to get to that point. The next question was on turnover. The turnover numbers have also gone down a little bit. We've been reducing that by increasing the benefit and making it a bit easier for staff to actually live in Mauritius. Earlier it was a lot harder but HR did quite some work to actually improve the lifestyle, though it's still not where it should be. But there's work towards trying to make sure that staff manage to stay longer in Mauritius. 0:33:41 Sunday Folayan: Thank you very much, Badru. Seun, then Dewale, and who's at the back? Douglas. Then we'll answer those set of questions again. Please, the Q&A we have now is all on the updates, the morning session. All the updates that have been given so far covers the Q&A we're doing now. Seun? 0:34:09 Seun Ojedeji: Okay, thank you Mr. Chairman. My name is Seun Ojedeji, from Nigeria. Some of my questions have been asked. However, I'd like to expand on Fiona's question and I think for me the response that was given may not be sufficient. I'd like to clarify my own question in that line. Based on the report that was sent by the Board, does it mean... I think we may conclude that perhaps KPMG is the problem. However, I want to confirm if there's an agreement between the Board and KPMG on their time of reference. Did you sign an agreement with them and what did the agreement say? When did... Especially don't comply with the timeline because the report actually said a lot about their non-compliance with timeline. Have they been paid? We need to know that. 0:35:22 Seun Ojedeji: My other question is in relation to a section of the report where KPMG was trying to refer to the revenue reserve to not be cash, that is it's not cash but it's assets. And the Board indicated that they have actually thrown a question back to KPMG. I think we need a response on that now. And my question to the Board also will be, what do you understand a revenue reserve to be? Have you actually seen the figure? Did you note if it's actually cash or asset as claimed by KPMG? 0:36:10 Sunday Folayan: Sorry, Seun. I want to understand what you want us to do. Is it to explain what it is, or for KPMG to explain? Bear in mind, KPMG is not here, so if you're asking for an explanation from KPMG, you cannot get it here. So let's be practical with what we ask. 0:36:29 Seun Ojedeji: Yeah, I would like to hear what you think it is, here. 0:36:33 Sunday Folayan: I will tell you that I believe it is not cash. 0:36:37 Seun Ojedeji: Okay. 0:36:38 Sunday Folayan: Revenue reserve is everything when you deduct expenses. That's your reserve. 0:36:43 Seun Ojedeji: Okay, so why did you send... Okay. Based on that, why did you send the request to KPMG? Because section... Page three of number five of the report that was sent, indicated that you required clarification from KPMG as to the way they refer to the revenue reserve. 0:37:14 Sunday Folayan: Okay. Hold on, Alan will clarify for you. 0:37:17 Seun Ojedeji: Okay. 0:37:18 Alan Barrett: Hi, thank you. I am not a member of the audit committee but I do believe I can answer this. What's listed as the revenue reserve on the balance sheet in my understanding, is simply the excess of assets over liabilities. So it's not cash. The cash shows as under assets, the revenue reserve is simply the result of some arithmetic when you subtract the liabilities from the assets. So there's no bank account with that 1.2 million in it. There's no asset with that value. It's simply the result of an arithmetic calculation subtracting two figures. 0:38:00 Seun Ojedeji: Yeah. Correct. 0:38:00 Alan Barrett: The reason we asked... Sorry. The reason the audit committee asked KPMG, is they wanted an explanation along the lines of what I've just given verbally to be included in the notes to the financial statement because the audit committee believed that the term "reserve" was confusing. The people in the community might think that it was cash. 0:38:23 Seun Ojedeji: Okay. Thank you very much. 0:38:27 Sunday Folayan: Thank you. Dewale? 0:38:29 Dewale: Dewale here. Nigeria ICT Forum. I just have a comment responding to the selection of audit companies. It's that, if the process that produced KPMG as the best performer in the previous year might be seen as a little bit questionable since we've not been able to get the best out of them. If we use that same process to take the next best performer, how are we sure that we are going to get good results. So there might be a need for a subsection of the community to take a look at that RFP, take a closer look at it before we jump to taking Deloitte as the next company. One other comment, responding to the Chair saying that there was no problem with the first auditor, I was at the AGMM in Lusaka, and I would excuse you because you were just elected to the Board at that meeting. There was a delay with Ernst & Young at that meeting and we were not able to see some reports, if I remember correctly. 0:39:36 Sunday Folayan: I already addressed that, Dewale. The reason why there was a delay was there was no timeline for them to comply with. So they worked at their own rate. But now, a timeline was created. Part of what then happened when the timeline was created in Djibouti, is that allowance was not made perhaps due to cost for the audit committee to sit in a face-to-face meeting to consider the report before presenting it to the Board. And the audit committee in Djibouti, were I was already sitting on the Board, insisted that they will not process the report online. It will have to be at a face-to-face. That's what led to the delay in Djibouti. So, you are very correct, I was not on the Board in Lusaka. In fact, I was electioneering but I did understood what was going on. Thank you. 0:40:32 Dewale: Okay, noted... 0:40:32 Sunday Folayan: But we'll take what you have suggested about community inputs in evaluating the next choice of auditor, and I have said here that it is noted. We shall comply with that. 0:40:46 Dewale: Okay, thank you, sir. One other comment that might help is to have milestones in addition to the timeline, so that you can track and not wait until the point where deadlines are not met before we start running around. Thank you, sir. 0:41:00 Sunday Folayan: Thank you very much. Douglas? 0:41:04 Douglas Onyango: Alan, just a follow-up question. Earlier when you were making a presentation, you indicated that we have made, I believe foreign exchange gains of about $30,000. However, in the same report that I'm looking at, we've also had some unrealised more than $89,000. For me this means as of the time we actually doing this, I'm trying to put these numbers in context. These actually for me tells me that as of that time, we have a minus, not a plus, as you suggested. The second thing I wanted to point out or which is a follow-up on the appointment of our auditor is, I wanted to query, yes, the Board has pointed out that there was a problem with submission of the audit report, and they would like to have us believe that it has everything to do with the auditor that has been appointed, and they're requesting that we change them. 0:42:13 Douglas Onyango: My question is, do we know this? Do we know this for a fact? And I'm saying this because we all know that our auditor is one of... The auditor we appointed is not exactly some guy from off of the street, and in the way of them having the capabilities to accomplish their job, they actually do have the resources and capabilities. So, the question is, could other factors such as this being their first year, or other factors be playing a part here? And is it possible that maybe changing them may or may not be exactly the right thing to do? Thank you. 0:42:54 Sunday Folayan: Thank you very much Douglas. I can see very clearly that it was observed that the auditors had problems understanding our business. They did have challenges understanding our business. But I don't know if Paulos wants to throw in more light to that, what Douglas has raised. 0:43:22 Douglas Onyango: Can I just... Thank you very much. But I'm sure the previous auditor had the same problem in the first year they did our audits maybe several years ago. Is it possible that, as well, this could be a rushed decision? Thank you. 0:43:41 Sunday Folayan: Paulos? 0:43:42 Paulos Nyirenda: Thank you Chair. I think there are maybe one or two issues before the last speaker but I can start with that. Actually, the audit committee went to a great extend to consult the auditor on why things were happening the way they were. And if you see from the reviews that we made, a way that they actually followed their own process for doing an audit. And the answers we got was that, they didn't actually follow their own process, and unfortunately, the partner who did the audit has resigned from KPMG and moving on to another job. So, continuity will be an issue if we go ahead with KPMG. I think that the issues have been raised in the reviews. If you look at it carefully, all the reasons are in there on why we think that the ultimate decision should be to move on to a new auditor. 0:44:57 Paulos Nyirenda: I think there were a few other things that were raised. Have they been paid? The answer is no, they have not been paid. Is there a penalty? These things are things that we will discuss with them as they proceed to refine the audit. The RFP from last year, it is published online. So, if members want to have a look at what was actually done, the RFP is there, the conditions, the assessment, the evaluation. It's all in there and we did publish the results that we got at the end of assessing the proponents in the RFP, so this is not a hidden fact. You are welcome to assess the RFP. 0:45:52 Sunday Folayan: Thank you very much Paulos. So, members I would request... Oh, sorry. 0:46:02 Boubakar Barry: Can I? 0:46:03 Sunday Folayan: I almost got confused for a split second that you are a camera man. Forgive me. [laughter] 0:46:12 Sunday Folayan: I used to be a camera man. [laughter] 0:46:15 Sunday Folayan: Forgive me Boubakar, you have the floor. [French] 0:46:22 Boubakar Barry: I have a question concerning the Board update. In fact, I expect that the Board adopts a request from the community yesterday, especially that some documents shall be made available. If I'm not wrong, it was for this morning, and if this has not been done, when can we have this document? Thank you. 0:46:47 Sunday Folayan: Thank you very much Boubakar. That's not a difficult one for me to answer. The resolutions up to the end of the year have been approved by the Board and should be put online, but we actually were working on the minutes and indeed were just at the last three or four paragraphs in the minutes when we had to adjourn to be able to sit in this Annual General Meeting of Members. But I would like to report that, we are almost done with it and we shall post it as soon as it is done, probably before tomorrow morning. Yes, Boubakar? [French] 0:47:40 Boubakar Barry: I think there is a problem, because yesterday we spoke about the minutes, we spoke about the resolution, and I think that we agreed that for the minutes it would be a problem to have them now, but there would be no problem to have the resolution ____ today. 0:48:01 Sunday Folayan: I already answered, the resolutions have been posted. We have approved the resolution. In fact, we were almost through with approving the minutes. Just for information, the Board took two resolutions today. The first resolution is that, henceforth all minutes of Board meetings will be published moving forward. The Board took that resolution this morning. [applause] 0:48:41 Sunday Folayan: The details and the wordings will be communicated. We just needed to come for this AGMM. So the Board adjourned from its meeting to come to this AGMM. Indeed, there was a bit of confusion. The confusion was that AGMM was initially listed as 1:30, and then brought forward to 11:00 on the revised agenda. And somehow, I apologize I made that mistake. I was still working by the 1:30 timing without realizing it had been brought forward, so we had to adjourn that Board meeting. The second resolution that passed is that the Board, because all of us sitting here only took our seats in the last one year, we will release all the minutes of the meetings that held in the last one year moving backward. Okay? So those two resolutions were passed this morning by the Board. The exact wordings will be communicated to members. But I just wanted to say from the point of accountability and taking the input of the community, that has been done. Mike? 0:50:02 Mike Silber: Sure, thank you. One question if I might add and I'd like to propose two resolutions. But if I could ask, in terms of approval of the financials, what is the timing and what is the process that we're going to be using seeing as they're not going to be presented to this AGMM? What's the process that we're going to follow around approval of financials? 0:50:25 Sunday Folayan: Thank you. The financials would be approved at the November meeting, but I believe the audit committee asked to give the auditors 60 days, if I'm correct, to get their acts together. So 60 days to get the figures, but November meeting for the members face-to-face approval of the financials. 0:50:47 MS: Sure. Unless I've got my timing wrong in terms of the bylaws, I think we're out of time in which case I'd like to propose three resolutions. The first resolution is that the time for presentation and approval of the 2014 Annual Financial Statement or Auditor Financial Statements be extended until the November face-to-face meeting. The second resolution is that the appointment of Deloitte as approved... AGMM requesting the appointment of a governance committee be restated by this meeting, and that the Chair of the Board be asked at the next face-to-face meeting or beforehand on the mailing list to report back to the community regarding the implementation of such a committee. 0:51:44 Sunday Folayan: Motion moved. Any seconder? 0:51:49 FA: Fiona Asonga. I will second the resolutions. 0:51:56 Sunday Folayan: You're seconding all the three resolutions? 0:52:00 FA: Yes. 0:52:01 Sunday Folayan: Thank you. Discussions on the resolution? Discussions against, I would want to take. It's been discussed for, any discussions against the resolution? 0:52:23 Douglas Onyango: Permission to speak Chair? 0:52:27 Sunday Folayan: Unfortunately there's a motion on the floor, we have to dispense with it before we take other things. Unless you are against the resolution, you're free to speak, but if you are not against the resolution, it's only someone who's against that can speak now. I apologize, but that's the procedure. 0:52:55 Owen de Long: A point of order? I believe someone can speak in support of the motion as well. 0:53:00 Sunday Folayan: Thank you Owen. I just wanted to save time because the motion was properly moved, it was properly discussed, it was properly seconded. So if there is a support, great, but I would want to take any discussion against so that we will have a balance and we can take the decision. And if you still want to... [background conversation] 0:53:40 Sunday Folayan: Yeah. Let me explain to those on the queue. If what you want to discuss is the financials, once this motion passes, we've finished business with the financials. And if what you want to say is not against it, because basically what Mike has tried to do is to move us forward. So unless there's anything against his motion, if it's all to support you can just say, "We support" and I'm fine. 0:54:13 Emmanuel Adjovi: One question. 0:54:16 Sunday Folayan: Yes. Question. [French] 0:54:20 Emmanuel Adjovi: The question I'd like to ask is about the audit to adopt. You said that we need to wait the month of November. I would like to know whether November would be the general assembly or you're going to summon or to call for an extraordinary general assembly, because according to the bylaw, November is not the AGMM. So I'm just talking about this point from point of view regarding right. 0:55:03 Sunday Folayan: Thank you. From Mike's motion, there will be an extraordinary general meeting in November for the adoption of the financials. That's the second motion I believe. That's the second motion. There were three motions or three resolutions that he tabled which were seconded. Dewale? 0:55:24 Dewale: Thank you Mr. Chair. Thank you Mike for the three resolutions. The only one that I would say we should proceed with caution on, is taking the employment of another auditor as a solution, as a whole solution to the problems that we've seen so far. We should take a closer look. Thank you. 0:55:47 Sunday Folayan: Point taken. Which is the birth of the third resolution. The Governance Committee. That's that's what led to the birth of that third resolution. 0:55:57 Dewale: Okay, because he proposed adoption of Deloitte, if I heard correctly. 0:56:00 Sunday Folayan: "As recommended." That's what he said. 0:56:04 Dewale: Which is, go ahead and take Deloitte? If I'm getting what you're saying now. 0:56:08 Sunday Folayan: That's what the motion is. Mike, you want to clarify? 0:56:12 Dewale: But I thought we were talking about taking a closer look at the RFP to improve it so that we don't make the same mistakes? 0:56:20 Sunday Folayan: Mike? 0:56:21 Mike Silber: Chair. Thank you. I think you're entirely correct, they aim here is to move forward and I was hoping to provoke exactly this reaction. I think we have two courses of action, because we can't be in this situation where we move away from this meeting without at least some direction regarding the appointment of auditors or otherwise we'll risk the possibility of being in conflict of our own... [pause] 0:58:07 Sunday Folayan: For clarification at this point. 0:58:11 Ashok Radhakissoon: Just to say that I concur with the views of Mike regarding leaving the auditors office vacant is against the bylaws and against the Companies Act. Either we keep KPMG for another year or we appoint Deloitte for another year until such time that we finalise, we decide which course of action to follow. Thank you. 0:58:33 Sunday Folayan: So Dewale, in evaluating the RFP and doing everything it is for the 2016 audit. The 2015 audit, Deloitte has recommended and if... Whatever approval we do now is for the one year. The RFP evaluation, etc, is for 2016. So, yes, Professor Quaynor? 0:58:57 Nii Quaynor: Mr. Chairman, I think I can't follow you for the best simple reason that this ____ at the resolution. Maybe you guys are very young and very smart, me I'm older. [pause] 0:59:23 Nii Quaynor: Me, I just ____ now I have to start imagining, it's a little difficult. If it's for me difficult, then I'm sure it's for many people equally difficult. 0:59:31 Sunday Folayan: Thank you. Point taken. Guylaine, would you be able to put all the three resolutions for me one at a time please? Thank you. I see Omo at the mic and I see Adiel. Omo. 0:59:53 Omo Oaiya: Thanks Chair. You just referred to some resolutions being published after your meeting. If you kindly ask staff to write the URL, I can't find them on the website. Thank you. 1:00:10 Sunday Folayan: What I said is that we took the resolutions before adjourning to come to this meeting that they will be published. 1:00:20 Omo Oaiya: Yes Chair, maybe I misunderstood, but I'm referring to the resolutions that we agreed would be made available this morning from yesterday's discussion. 1:00:30 Sunday Folayan: It's under "Board" on the website. [background conversation] [pause] 1:00:55 Adiel Akplogan: First I want to just confirm the fact that KPMG starting may explain the issue because from my recollection we have the same issue with the other auditor, and the way we solved it was to impose or to make interim audit every year so that the auditor get used to the way we operate and become more effective. Talking about the effectiveness, I will also raise the fact that our auditors, as per AFRINIC bylaw, have always produced their audit report on time. The bylaw has changed. Before that, the official members of the organization were the 12 Board members and the auditor have always provide to the 12 Board members the audit on time. If I remember Lusaka correctly, the chair of the Board said at that time that they, as Board, received the audit report, and the community was not happy with that, which led to the review of the bylaw to extend the membership so that everybody... So that they record is clearly put in the book, that's what happened in the past. Thank you. [pause] 1:02:24 Sunday Folayan: All right, it's getting a bit more challenging for me, but I think I'll just... Yes, Christian? 1:02:40 Christian D. Bope: Yeah, because I would just... I don't know, I would like to propose because even myself, I'm trying to figure out the link you request now for the resolution, I cannot find it. I don't know if we can just put it there for the members to follow. I think it will be better just to avoid confusion. Thank you. 1:03:03 Sunday Folayan: Okay. Guylaine, you will please display the resolution. Members, the legal counsel just drew my attention to a fact and that is the fact that we might have to use KPMG for the next one year. Even if we want to change KPMG now, we cannot because the Mauritian Company Act requires us to give them a notice of 28 days that we are going to fire them, and it is on the basis of their response and non-compliance that we can go ahead and do that. Unfortunately, as a Board, we did not comply with that. So it therefore means that that recommendation that we appoint Deloitte may be not be practicable now. 1:03:58 Sunday Folayan: Now bearing in mind the intervention Adiel just made, even Ernst and Young that audited us for 10 years went through a teething problem until they became comfortable with our business, and therefore, I guess, I would have to appeal to my audit committee to go easy on KPMG. Take this as happenstance, twice would be enemy action, so that whatever decision we would be making will be for 2016. But let us drop the change in auditor off the slate and only request that KPMG be approved as the auditor that would audit to 2015 accounts so that we can move forward. Yeah, Douglas? 1:04:55 Douglas Onyango: I, on this note, would like to table a motion to re-approve KPMG. 1:05:01 Sunday Folayan: Thank you. Seconder? 1:05:04 Nii Quaynor: I second it. 1:05:05 Sunday Folayan: Thank you very much. So, basically, Mike's motion is amended and has amended. Fiona? 1:05:15 Fiona Assonga: Just one thing of concern with everything that we've discussed even though we're passing the resolutions, I am begging the Board now, please put in place a governance committee to handle all this coordination and small things. So that we're not... 1:05:29 Sunday Folayan: Fiona, that was the third motion. That's the third motion. We have three motions, all the three are going to be passed now... 1:05:38 Fiona Assonga: I am just feeling the need to re-emphasize. 1:05:42 Sunday Folayan: Thank you. Thank you very much, Fiona. So that you will really drive home your emphasis, can you do an e-mail with that emphasis to the Chairman, please? 1:05:52 Fiona Assonga: Yes. 1:05:53 Sunday Folayan: Thank you. All right. All in favor of the three resolutions say "KPMG." 1:06:02 Floor: KPMG. [background conversation] 1:06:09 Sunday Folayan: You want me to take those resolutions one by one? 1:06:14 Floor: Yes. 1:06:14 Sunday Folayan: Alright. Can we have the resolutions put up please? One by one. The first one has to do with approving the financials in November. The second one has to do with reappointment of the KPMG as auditors. And the third one has to do with putting in place a governance committee of the Board which would assure that all those bits and pieces are well taken care of. Those are the three resolutions that we are about to vote upon. [background conversation] 1:06:56 Sunday Folayan: Yes? 1:06:58 Isaac Kasana : Isaac from ____. I think with the one of the governance committee, I think we should give an idea of what the TOR would be for that committee, so that we know what it's going to do on our behalf. 1:07:14 Sunday Folayan: Okay. 1:07:15 Issac Kasana: Maybe since you proposed it. 1:07:16 Fiona Assonga: Yes. 1:07:16 Issac: Can you please outline the TOR, so that we know what we are voting? 1:07:23 Sunday Folayan: Okay, thank you. Fiona? 1:07:27 Fiona Assonga: Okay. Basically, I run a Non-Governmental Organization, that's the Telecommunications Service Provider's Association of Kenya, and the function of our Board governance committee is to ensure that anything that falls within the docket of contractual, legal, that would have impact on the organization in terms of things that need coordination, is done by the Board governance committee. That means that, though the Chair is responsible, and the Vice-Chair for that coordination, they have a team of other Board members who help them, with the CEO, to look at on the things that need coordination, and need attention. 1:08:04 Fiona Assonga: So in this case, what would have happened ideally is that there is a finance committee, there is an audit committee. So, the audit committee as it would be doing it's work on ensuring the audit is done, the governance committee is checking on the things that have to do with when that audit should come to the members, what do members expect. What did we put in? What did we request in terms of how reporting should be done during the last meeting? Is it being addressed or not? 'Cause we seem to lump all those things and just throw them to the Board, and we come back to our meeting, and what you have put in place in terms of requests we want to see, are not coming through, because I think also that we need to appreciate the fact that every Board member there has a full time job. They are volunteering. 1:08:52 Fiona Assonga: And because you are volunteers, and we accept that you have offered yourselves to do all this donkey work for us, we just think you can help yourselves even coordinate better, if you have a governance committee that looks also into operational issues. Where there is procedures that don't make sense that are a bit off, where the bylaws are getting into conflict with some of the proposals on how members want their things, you don't just leave it to one person as the legal person to address it, but you have the legal person as part of the governance committee, and you have other experts. And I think also, maybe the one thing I think we need to be looking at, moving forward, is to see where the Board feels that they are short. Because, this time after this election today, we will have reduced the Board by two individuals. Where the Board feels that they are short, I think later as a community we need to be looking at how do we support them. 1:09:53 Fiona Assonga: If AFRINIC is truly ours, then we need to be coming in to help ensure the systems that need to be in place to reinforce the Board and the staff in delivering their mandate to us are in place. A governance committee really helps to do sort of coordination over side gaps, where things may not be synchronized, and ensuring that every other committee, every other department, everyone is in sync. It keeps things in sync. Which ordinarily would be the work of the Chair, we'll say, "Yeah that's the Chair's role," but the Chair is one person, and may have other responsibilities that they need to carry out as well. I'm sure legally, Mike has something really detailed out on how that works, but I was going to put together a paper and send to the Board on that. 1:10:48 Sunday Folayan: Thank you very much, Fiona. So the first resolution as amended is what you have there. 1:11:05 Mike Silber: Chair, apologies. May I speak to just with regards to Fiona's comments? I think it is premature for this meeting to start setting out the terms of reference for the governance committee. It was voted on in Djibouti and approved. I think it's now up to the Chair of the Board to circulate draft terms of reference to the community, or comment and discussion, but ultimately as a Board committee, it's in the purview of the Board to set up those terms of reference, and I don't think it's now the role of the community. All we're seeking to do is actually implement a resolution of the members that's already been taken six months ago or so. 1:11:48 Sunday Folayan: Thank you. 1:11:48 Mike Silber: With regards to actual comment regarding Section 202 of the Mauritian Companies Act, and the 28 days notice on the representation, we're in a slight quandary with regard that. But section 203 indicates that the auditor may not seek re-appointment, so we're in a potential situation where the auditor may not be seeking re-appointment, in which case we could very well appoint a new auditor and by being bound by a resolution which seeks to re-appoint an auditor that we're not particularly happy with and who may not want to do the work, creates a potential quandary. Can I suggest that we maybe postpone that resolution, and that we try and find some, with ____ guidance, we try and find a mechanism to circumvent, so that we pass a resolution giving the audit committee some leeway regarding auditor appointment, without tying us into an auditor who may not be willing to continue or tying us into a process where the community is not necessarily happy with the ____ that's been run. 1:12:57 Sunday Folayan: Thank you very much. Before I respond to that, the resolutions... Guylaine, the first one is what you have as number two. Number two resolution is to appoint KPMG as auditors. All right, thank you for the advice, Mike. I was actually being cautious, very, very cautious, because what really led to the request for the TOR of the governance committee is because I guess the community wanted to make sure that what would be done would really meet its expectations. Having said that, I think so that we don't put ourselves into a very tight spot, what Mike is again proposing is that instead of expressly saying it should be this auditor or that auditor, that the community members give the Board, through its audit committee, the leeway to appoint... To finalize the appointment of the auditor. 1:14:10 Sunday Folayan: I'm using the word "finalize" because we've made ourselves very clear, because basically what Mike is pointing out is that we may ratify here that KPMG should be appointed, get back to Mauritius, and KPMG says they are not interested in continuing because of all the challenges. So, we don't want a situation where the AGMM would approve the appointment of KPMG, and then we get back to Mauritius, KPMG is not able to, and Deloitte, which will be the next fall-back, was not approved. So we just need to find that balance, agree on it, and move forward. Professor Quaynor, I see you at the mic. 1:14:53 Nii Quaynor: Yes sir. I think we are, instead of being positive, we are anticipating problems. And we seem to be actually trying to put a wedge between ourselves and the accounting community, auditing community. This... 1:15:10 Nii Quaynor: Please, can you just be a bit at the mic? Those of us here can't hear you. Just move a bit closer. Thank you. 1:15:16 Nii Quaynor: Okay. I'm sort of just saying that we need to be avoiding putting a wedge between ourselves and the accounting community. We are working with KPMG, as was explained by Adiel, it does indeed take some time before they get it right, and so we should really just work with them instead of anticipating that they may not accept, and because of that we... I don't think it's a good... If I were KPMG and I heard about the discussion going on, I'm likely to say I feel uncomfortable continuing. And so I rather suggests that we may be driving them away instead of helping them do their job. It may be just better to say that, "Okay, that's the best we've got, so let's make it work," and then do our best effort to make it work, and then when it's not the right thing, you find a recourse. Than... Meaning be optimistic in your algorithms than pessimistic in the algorithms because being pessimistic, you will poison your reputation in the accounting community, and that can be a problem. Thank you. 1:16:37 Sunday Folayan: Thank you. Mike? 1:16:40 Mike Silber: I think Nii raises an interesting question. My experience is auditors go where the money, where the audit fees are, so I don't really think there's a concern about poisoning our reputation. That being said, as I read the Mauritius Companies Act, I think the correct approach is to appoint KPMG to engage within 19052 of the Companies Act allows the Board to fill a casual vacancy, and I think the audit committee needs to be very firm with KPMG that we weren't happy with this year's performance. And if they are going to accept the re-appointment they really need to pull up their socks, and if they're willing to continue we'll work with them... [pause] 1:17:27 Mike Silber: And I think the view of the room is that Deloitte is may be adequate, but the audit committee needs to re-look at what and why and the conditions included, but 19052 of the Companies Act does give the Board that authority to fill a casual vacancy. 1:17:43 Sunday Folayan: Thank you very much. So, on that note we can now put up the three resolutions, and we approve them one after the other. Can I have the first resolution? First one is what is currently numbered as two, so please, number two there should be one. [pause] 1:18:21 Sunday Folayan: And number two would be that the AGMM approves the appointment of KPMG subjects to their engagement by the audit committee and if that fails, Deloitte be appointed. That's the resolution. [pause]