Terms of engagement

1. Who may instruct us

You confirm that you, and any other person you nominate in writing from time to time (provided we have acknowledged such nomination), are authorised to give us instructions and information on behalf of all persons we are acting for and to receive our advice and documents on their behalf.

If we are acting for a business, and we receive conflicting advice, information or instructions from different persons, we may refer the matter to the board of directors, partners or proprietors (as applicable) and act only as requested by them.

2. Associated individuals and entities

Where we act for a group of associated individuals and entities (such as closely-held companies, family trusts, and their principals) we will generally advise on the basis that they have shared interests. We may discuss the affairs of any one with any other within the group, and may deal with and act on instructions from any authorised person within that group. If at any time you wish to change these arrangements for any particular entity or individual within the group, please let us know.

3. Know your customer

From 1 October 2018, all New Zealand accounting practices became subject to New Zealand's Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Where we are required to conduct customer due diligence, this Act does not allow us to act, or continue to act, for our clients unless we have conducted that due diligence.

Accordingly, we may be required to verify your identity for the purposes of the anti-money laundering laws. We may request from you such information as we require for these purposes and make searches of appropriate databases.

4. Your responsibilities

You must provide us with all information necessary for dealing with your affairs including information which we reasonably request, in sufficient time to enable our services to be completed before any applicable deadline. We will rely on such information being true, correct and complete and will not audit the information.

You authorise us to approach such third parties as may be appropriate for information that we consider necessary to deal with your affairs.

You must keep us informed on a timely basis of changes in your circumstances that may affect our services.

5. Qualifications on our services

To the extent our services involve the performance of services established by law, nothing in the engagement letter or these terms reduce our obligations under such law.

You must not act on advice given by us on an earlier occasion without first confirming with us that the advice is still valid.

Our services are limited exclusively to those you have engaged us to perform. Unless otherwise specified in the engagement letter, our services cannot be relied upon to disclose irregularities and errors, including fraud and other illegal acts, in your affairs. Unless specified in the engagement letter, neither an audit nor a review will be conducted and, accordingly, no assurance will be expressed.

Where our engagement is recurring, we may amend our engagement letter and these terms where we consider it is necessary or appropriate to do so. If you do not accept such amendments, you must notify us promptly in which case you may terminate our engagement in accordance with section 18 below and those amendments will not apply prior to such termination.

6. Reliance on advice

We will endeavour to record all advice on important matters in writing. Advice given verbally is not intended to be relied upon unless confirmed in writing. If we provide verbal advice (for example during a meeting or telephone conversation) that you wish to rely on, you must ask us to confirm the advice in writing.

7. Investment and financial advisory advice

We are prohibited from providing you with investment or financial advice regulated under the Financial Markets Conduct Act 2013, as amended by the Financial Services Legislation Amendment Act 2019.

8. Professional obligations and confidentiality

We are required to comply with all applicable by-laws, rules, regulations, professional and ethical standards and guidelines of Chartered Accountants Australia and New Zealand and the New Zealand Institute of Chartered Accountants (NZICA).

These requirements include the NZICA Code of Ethics, which among other things contains confidentiality requirements. In accordance with these requirements, we will not disclose information we obtain in the course of this engagement to other parties, without your express consent, except as required by:

• laws and regulations (for example, disclosures required under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (including to a third party auditor) and as required by the Common Reporting Standard)
• professional obligations including:
  • the provisions of the NZICA Code of Ethics that apply if we become aware of actual or potential ‘non-compliance with laws and regulations’ (NOCLAR). Where any such non-compliance poses substantial harm (such as adverse consequences to investors, creditors, employees or the public), we may be required to disclose the matter to an appropriate level of management or those charged with governance and/or an appropriate authority.
  • the provisions of the NZICA Rules and Professional Standards that subject us to practice review, trust account audits, investigations and disciplinary procedures. These rules require us to disclose to NZICA, its practice reviewers and/or its disciplinary bodies our files and workpapers including client information. In accepting this engagement you acknowledge that, if requested, our files related to this engagement, may be made available to NZICA, its practice reviewers and/or its disciplinary bodies. Employees and contractors of NZICA are also bound by confidentiality under contract and by the NZICA Code of Ethics.

9. Conflicts of interest

We will inform you if we become aware of any conflict of interest in our relationship with you (including between the various persons this engagement letter covers) or in our relationship with you and another client. Where conflicts are identified which cannot be managed in a way that protects your interests or you do not consent to the way in which we propose to manage the conflict then we will be unable to provide further services to some or all of the persons to whom this engagement applies. If this arises, we will inform you promptly.

We may act for other clients whose interests are not the same as or are adverse to yours, subject to the obligations of conflicts of interest and confidentiality referred to above.

10. Fees and payment

Our fees will be charged on the basis set out in the engagement letter and have been set based on the level of skill, responsibility, importance and value of the advice, as well as the level of risk.

Currently our standard hourly rates are:

Hourly rates are reviewed annually.

We will bill monthly and our invoices are due for payment within 20 days of issue. Our fees are exclusive of GST which will be added to our invoice where it is chargeable (we are GST registered and GST will normally apply). Any disbursements and expenses we incur in the course of performing our services will be added to our invoices where appropriate.

Unless otherwise agreed to the contrary but except outsourcing as referred to in clause 23 below, our fees do not include the costs of any counsel, or other professionals or third parties engaged with your approval.

We may charge interest on late paid invoices at the rate of 3% above the Reserve Bank of New Zealand cash rate.

We may also suspend our services or to cease to act for you on giving written notice if payment of any fees is unduly delayed. We intend to exercise these rights only where it is fair and reasonable to do so.

11. Lien

If permitted by law and not prohibited by professional standards or guidelines, we may exercise a lien over all materials or records in our possession relating to all engagements for you until all outstanding fees and disbursements are paid in full.

12. Client money

We do not maintain a client bank account and do not hold client monies on behalf of clients. If your circumstances require funds to be held on your behalf, we will discuss alternative arrangements with you.

13. Disclosure permissions

In accepting this engagement, you provide us with your express consent to disclose your information to:

• our service providers or regulatory bodies to the extent required to perform our services in respect to this engagement;
• the technology and software providers we use, including the AI tool described in clause 25, to the extent required to perform our services;
• our professional advisors or insurers to the extent required to protect our interests in respect to this engagement; and
• our external peer reviewer to the extent required to review this engagement.

We will take reasonable steps to ensure any such recipient (other than a regulatory body) keeps such information confidential on the same basis we maintain in respect to your information (see clause 8).

We may retain your information during and after our engagement to comply with our legal requirements or as part of our regular IT back-up and archiving practices and also for professional reasons (e.g. to perform the work under this engagement or to comply with our professional and ethical obligations). We will continue to hold such information confidentially.

We may mention that you are a client for promotional purposes.

14. Privacy

We may collect, store, use and disclose your personal information for the purposes of providing the services described in the engagement letter to you and to comply with our obligations in clause 9 above and in accordance with the disclosure exceptions outlined in clause 8 above. We will comply with the Privacy Act 2020 when collecting, storing, using and sharing your personal information. Our Privacy Policy provides further details of our privacy practices and our obligations to you.

Sometimes you will give us personal information about other people, such as shareholders, directors, employees, settlors, beneficiaries, other trustees or family members. Before you do, please let them know that you are sharing it with us and why, and that they can ask us for access to it or to correct it. Showing them our Privacy Policy is an easy way to do this. If that is not practical, please tell us and we will take reasonable steps to let them know ourselves.

15. Ownership of materials

We own the copyright and all other intellectual property rights in everything we create in connection with this engagement. Unless we agree otherwise, anything we create in connection with this agreement may be used by you only for the purpose for which you have engaged us.

All working papers prepared by us (in any form whatsoever, including physical and electronic) remain our property. We will retain these papers in accordance with our normal record keeping practices in accordance with our professional and legal obligations.

If you change accountants we will provide your new accountant with sufficient information, in our view, in electronic format to enable them to interpret our latest engagement product.

16. Limitation of liability

To the maximum extent permitted by law, our maximum aggregate liability (including of all our directors) under or in connection with this engagement letter or its subject matter is limited to $1,000,000. You agree not to bring any claim against any of our directors or employees in their personal capacity.

To the maximum extent permitted by law, we are not liable to you for:

• indirect, special or consequential losses or damages of any kind; or
• liability arising due to the acts or omissions of any other person or circumstances outside our reasonable control, or your breach of these terms.

17. Limitation of third party rights

Our advice and information is for your sole use, and we accept no responsibility to any third party, unless we have expressly agreed in the engagement letter that a specified third party may rely on our work.

Where we compile financial statements (or any other report) for you, those statements (or that report) are prepared for your sole use and benefit. If you distribute the financial statements or any other report we prepare to any third party without attaching our compilation report or other statement disclaiming liability, you agree to indemnify us against all claims, actions, damages, liabilities, costs and expenses (including legal costs and expenses) incurred by us and arising out of or in connection with any claim or proceeding brought by that third party in connection with the services provided by us to you. This clause does not limit our rights under clause 16.

18. Termination

Each of us may terminate this agreement by giving not less than 21 days’ notice in writing to the other party except where a conflict of interest has arisen, you fail to cooperate with us or we have reason to believe that you have provided us or any other person with misleading or factually inaccurate information, in which case we may terminate this agreement immediately. Termination will not affect any accrued rights.

19. Communication

You must advise of any changes to your contact details. We may send any communications to the last contact details you have provided. Unless you instruct us otherwise we may, where appropriate, communicate with you and with third parties via email or by other electronic means. The recipient is responsible for virus checking emails and any attachments. There is a risk of non-receipt, delayed receipt, inadvertent misdirection or interception by third parties in any form of communication, whether electronic, postal or otherwise. We are not responsible for any such matters beyond our control.

20. Applicable law

Our engagement is governed by New Zealand law. The New Zealand courts have non-exclusive jurisdiction in relation to any dispute between us.

21. Interpretation

If any provision of the engagement letter or these terms is void, that provision will be severed and the remainder will continue to apply. If there is any conflict between the engagement letter and these terms, these terms prevail.

22. Disputes and complaints

If you have any concerns about our costs or services, please speak to the person responsible for this engagement, who is identified in our engagement letter. To resolve your concerns we have policies and procedures in place to deal appropriately with complaints and will use best endeavours to resolve a complaint or dispute to the mutual satisfaction of the parties involved. We may require you to detail your complaint in writing to allow us to fully investigate any concerns that you raise.

23. Outsourcing

We may utilise from time to time the services of our Auckland based specialist tax advisors and of lawyers to perform services for you. In such instances we may provide our specialist tax advisors and the lawyers with access to your data to the extent it is required to perform those services. We also use other technology providers, including those named below and the AI tool described in clause 25.

Some of your data is stored by these providers in overseas data centres. Specifically: Xero stores New Zealand client data primarily on Amazon Web Services (AWS) servers located in the United States (Xero has received approval from Inland Revenue to hold records for NZ customers offshore); MYOB stores New Zealand client data in data centres in Australia (Sydney and Melbourne) using Amazon Web Services (AWS) and Microsoft Azure platforms; Microsoft stores data in data centres in Australia; Anthropic, which provides the AI tool described in clause 25, processes and stores data in the United States; and our cloud backups with VGrid are stored in data centres in Auckland, New Zealand.

We also utilise the software provided by Xero and MYOB and those providers have access to your data as contained within their product platforms. Where we manage Xero subscriptions on behalf of clients, Xero bills us directly and we on-bill to you at the standard retail rate. Xero may provide us with an administration discount on these charges. We do not retain any such discount for the benefit of the firm — any balance accumulated is donated in full to a nominated charity. By accepting this engagement you acknowledge and consent to this arrangement. Other than as described above, we do not receive any referral fees or commissions in connection with any services or products we recommend or refer to you.

24. Trusteeship

Where we have agreed to act as a trustee, the following applies in addition to the other terms of this engagement letter:

(a) You acknowledge our rights, and the protections and indemnities given to us, under the trust deed and all other related agreements and acknowledgements, and you confirm your understanding that we relied on those rights, protections and indemnities when agreeing to act.

(b) Our role as trustee is distinct from our role as accountant and advisor to the trust. Our duties as trustee are governed by the trust deed and the Trusts Act 2019, and nothing in this engagement letter limits or modifies those duties.

(c) Where we are a signatory on any bank account held in the name of the trust, we will act in accordance with the terms of the trust deed and any resolutions of the trustees. We do not accept any wider responsibility for the day- to-day management of trust funds beyond the specific authorities given to us.

(d) We may resign as trustee in accordance with the trust deed and the Trusts Act 2019. Our resignation as trustee does not of itself terminate this engagement in respect of any other services we provide.

(e) We may decline to act, or cease to act, as trustee if in our opinion a conflict of interest arises that cannot be appropriately managed, or if the settlor, beneficiaries or co-trustees fail to provide information or cooperation reasonably required for us to discharge our duties.

(f) Our fees for trustee services are separate from and in addition to our fees for accounting and advisory services, and will be charged on the basis set out in clause 10.

25. Use of technology and artificial intelligence

We use technology, including artificial intelligence (AI) tools, to help us work efficiently. We currently use Claude, provided by Anthropic, on a business plan. We use it within our firm to help draft documents, summarise information and analyse figures. It does not deal with you directly.

We may also connect it to the accounting software we use or manage for you, such as Xero and MYOB, and to our own email, so it can read information and help prepare work. It cannot send emails or other communications on our behalf. Anything it prepares is reviewed and approved by our team before it is used or sent.

When we use AI:

(a) a member of our team reviews all AI-assisted work before we rely on it or send it to you. We remain fully responsible for our work and advice, as we are for any other work;

(b) we only enter the information needed for the task;

(c) under our provider's business terms, your information is not used to train AI models. Our provider processes and stores information in the United States, and keeps it confidential on the basis set out in clause 13;

(d) AI tools do not make decisions about you or your affairs; we do.

If you would prefer we did not use AI on your work, or want to limit how we use it, please let us know. We will respect that, but the work may take longer and cost more as a result.

If we plan to use AI in a materially different way, for example connecting it to systems you control yourself, or letting it communicate with you directly, we will tell you before we do so.

Complaints

We want to get things right. If you’re unhappy with our work or our fees, please talk to Jack Brian first. We may ask you to put your concerns in writing so we can look into them properly. We’ll acknowledge your complaint promptly, keep you updated and aim to resolve it fairly. If we can’t resolve it with you, you can contact Chartered Accountants Australia and New Zealand at charteredaccountantsanz.com.