Thank you for giving our firm the opportunity to provide you with accounting services.

The purpose of this letter is to confirm and/or update our understanding of the scope & terms of engagement and the nature of our continuing appointment to perform accounting and administration services for you.

CPA Australia, the professional body we belong to, requires us to record and communicate the nature of the work that we do for you as well as our terms of business in accordance with APES 305 Terms of Engagement issued by CPA Australia.

We have set out the basics below and the detail in appendices and further in our Terms of engagement. Please check that what we have set down here agrees with your understanding and then sign the copy letter on page 5 in the space provided.

This work will be conducted in accordance with the relevant professional and ethical standards issued by the Accounting Professional and Ethical Standard Board Limited (APESB).

Tax Returns

IRD has introduced self-assessment rules for the processing of tax returns. These rules place greater reliance on the taxpayer to provide full disclosure of all income. http://www.ird.govt.nz/technical-tax/questions/questions-general/qwba-taa1994-and-self-assessment.html

The responsibility for the accuracy and completeness of the information provided by you the clients rests with you the client. Any advice that we may give to you is only an opinion based on our knowledge of your circumstances. You the taxpayer have obligations under the self-assessment rules to keep full and proper records in order to facilitate the preparation of tax returns.

Kinghans Limited terms and conditions of business

The terms and conditions in relation to our engagement are detailed on our website www.kinghan.co. If there is any conflict then the terms of this engagement letter apply. This Engagement Letter, together with these Kinghans terms and conditions of business (together called “this Agreement”) will apply to all work Kinghans Limited undertakes for you with respect to this engagement. Please read this engagement letter carefully.

Confirmation

It is appreciated that from time to time you may desire a change in the scope of work to be undertaken by us, in which case your timely advice would be appreciated.

The arrangements outlined in this letter will continue in effect from year to year unless we agree to change them. Any alteration to these terms will be confirmed in writing.

It is our requirement that the owners/directors of the business personally guarantee the payment of all accounts for professional fees, including out-of-pocket expenses rendered by us from time to time.

Timetable for completion

We will provide you with an efficient and timely service and a completion date can be discussed if required. We may require you to bring in information at certain times of the year, but we will work with you if you require your accounts earlier.

Future changes in the law and interpretation of the law

Advice provided by Kinghans Limited is limited to New Zealand accounting and income tax matters. Unless specifically requested to do so, we will not specially consider other legislative or commercial implications that may arise from the proposal discussed.

Our income tax advice is provided on the basis of current taxation law. This view of the income tax law may differ from the view ultimately adopted by the Inland Revenue Department and the Courts.

Unless instructed by you, advice will not be updated to take account of subsequent changes or even potentially retrospective application of tax reforms. Further advice should be obtained from us prior to the finalization of the matters contained in this advice.

Tax advise and accounting assistance provided pursuant to a request from you will be provided for the use of yourself only. Accordingly, neither Kinghans Limited nor any member or employee of Kinghans Limited will undertake responsibility in any way whatsoever to any person or company other than yourself for any errors or omissions in the advice or assistance given.

Any advice given to you is only an opinion based on our knowledge of your particular circumstances.

Authority to Act

We require the attached authorities to be signed by all parties in order to act as tax agent for all taxpayers associated with your affairs.

Involvement of Others

Where, as part of our engagement, the services of an external consultant or expert are required, an estimated cost and timeframe and involvement will be provided to you for your approval.

Period of Engagement

We will not deal with earlier periods unless you specifically ask us to do so and we agree.

This engagement document will be effective for future years unless we issue an amended one to you.

Please sign and return the attached copy of this letter to indicate that it is in accordance with your understanding of the arrangements.

If you would like to discuss any matters in relation to the terms of our engagement or the contents of this letter, please do not hesitate to contact me on 09 5759873.

Guarantee

You are the judge of our performance. If you think the fee is excessive for the work done or if you are dissatisfied with our work we invite you to contact any partner of the firm, who will investigate without cost to you and suggest a remedy. If upon review or remedy you are still not happy you may also lay a complaint with the CPA Australia.

Appendix 1: Our Services

Set Up

There are several time-consuming activities we need to attend to before we even commence working together. We will update you on this progress:

§ Write to your previous accountant and request your files and records

§ Review those files when they arrive, particularly for any outstanding taxation issues

§ Review the structure of the ownership of your business. It may well be that there are tax savings opportunities sitting under our very noses

§ Set your various entities up on our Tax Agency list with IRD

§ Make any changes necessary to your existing Xero account for you

1. What we will do

1.1 We will use our professional skills to do the work you have requested based on information supplied by you. This work will be performed in accordance with APES 305 Terms of Engagement issued by CPA Australia.

1.2 Annual accounts for companies will be prepared in accordance with the Financial Reporting Act 1993 (2013 applies from 01/04/14). Other than for exempt companies, these are general purpose reports and must be prepared in accordance with generally accepted accounting practice in New Zealand. If necessary, additional explanations will be added to ensure that a true and fair view is given.

1.3 Annual accounts for exempt companies may be prepared either in accordance with generally accepted accounting practice in New Zealand as described above or in accordance with the simpler format of the Financial Reporting Order 1994.

1.4 Other accounts will be prepared in accordance with any applicable legislation. For partnerships, trusts, sole traders and other entities where the format of accounts is not dictated by legislation, we will prepare special purpose annual financial statements according to the principles contained in the Income Tax Act 2007. Periodic accounts for management are not governed by legislation and will be prepared on the basis requested by management.

1.5 The general basis of accounting used to compile the accounts will be described in the notes to the financial statements together with any significant departures from that basis. Significant departures will also be referred to in our compilation report (see 1.7 below).

1.6 We understand that an audit of the Financial Accounts is not required, and therefore we will not be expressing an opinion as to the truth and fairness of those statements. However, we will inform you of any such matters that come to our attention. We will inform you of any suspicions of omissions or irregularities that come to our notice.

1.7 We will provide a compilation report on all annual accounts that include a balance sheet. An example of a typical report, not specific to your circumstances, is attached.

1.8 The final Financial Statements, Income Tax Returns and any other documents which we are specifically engaged to prepare, together with any original documents given to us by you shall be the property of you. Any other documents brought into existence by us including general journals, working papers, the general ledger, draft financial statements and copies of tax returns, will remain our property at all times.

1.9 In relation to any subsequent termination of our services, you are advised that we shall be entitled to retain all documents belonging to you and any related parties we act for until payment is received in full for outstanding fees.

1.10 We will explain or redraft any element of these terms to ensure that you understand them and think they are reasonable.

1.11 Any information acquired by us in the course of our engagement, including any information relating to your affairs whether it belongs to you or not or is provided by you or not, is subject to strict confidentiality requirements. Information will not be disclosed by us to other parties except as required or allowed for by law or professional standards, or with your express consent. Our files may, however, be subject to review as part of the quality control review program of CPA Australia which monitors compliance with professional standards by its members. We advise you that by signing this letter you acknowledge that, if requested, our files relating to this engagement will be made available under this program. The same strict confidentiality requirements apply under this program as apply to us.

1.12 We may collect Personal Information about you, your representatives, your clients and others when we provide services to you. If we do, you agree to work with us to ensure that we both meet the obligations that we each may have under the Privacy Act 1993 NZ (as amended) (Privacy Act). The obligations may include notifying the relevant person to whom the personal information relates who we are and how we propose to use their personal information. Where you have collected personal information, you confirm that you have collected the personal information in accordance with the Privacy Act, that you are entitled to provide this personal information to us and that we may use and disclose the personal information for the purpose/s we provide our services to you. We will handle personal information in accordance with the Privacy Act.

1.13 The Directors are solely responsible for the information contained in the financial statements and have determined that the Special Purpose Reporting Framework used is appropriate to meet your needs and for the purpose that the financial statements were prepared.

The financial statements will be prepared exclusively for your benefit. We do not accept responsibility to any other person for the contents of the financial statements.

Our procedures use accounting expertise to undertake the compilation of the financial statements from information you provided. Our procedures do not include verification or validation procedures. No audit or review engagement has been performed and accordingly no assurance is expressed.

The following Compilation Report and Disclaimer will appear on the financial information we prepare

COMPILATION REPORT AND DISCLAIMER TO

Scope

On the basis of information provided and in accordance with APES 315 Compilation of Financial Information.

In addition, we have complied with the relevant ethical requirements of APES 110: Code of Ethics for Professional Accountants. we have compiled the financial statements of Sample Limited for the year ended 31 March 2017.

These have been prepared in accordance with generally accepted accounting practice in New Zealand.

Responsibilities

You, the client, are solely responsible for the information contained in the financial statements/report and have determined that the basis of accounting policies used as described above are appropriate to meet your needs and for the purpose that the financial statements were prepared.

The financial statements were prepared exclusively for your benefit. Neither we, nor any of our employees, accept responsibility to any other person for the contents of the financial statements.

No audit or review engagement undertaken

Our procedures use accounting expertise to undertake the compilation of the financial statements from the information you provided. Our procedures do not include verification or validation of that information. No audit or review engagement has been performed and accordingly no assurance is expressed.

Departure from reporting framework (if required)

We draw attention to Note [Note Number] of the financial statements. There is a departure from the identified financial reporting framework in that [Describe departure].

Independence

We have no involvement with this client, other than the preparation of Financial Statements and Reports.

Disclaimer

We have compiled these financial statements based on information provided which has not been subject to an audit or review engagement. Accordingly, we do not accept any responsibility for the reliability, accuracy or completeness of the compiled financial information contained in these financial statements. Nor do we accept any liability of any kind whatsoever, including liability by reason of negligence, to any person for losses incurred as a result of placing reliance on these financial statements.

Kinghans Limited

Certified Practising Accountants

GST Audit Protection

You may incur professional costs from us if you are selected for a GST audit. There is insurance that covers tax audits that we are happy to discuss with you.

Year-end Tax Planning Review

We agree no one likes paying taxes. We will do everything within the guidelines to legally minimise your tax.

Financial Statements and Tax Returns

We will complete your Annual Financial Statements plus all associated tax returns and attend to any queries from Inland Revenue re your returns and taxes. In addition, we will remind you of your upcoming tax payments.

Annual Company Return

We will file this annually with the Ministry of Economic Development. The current cost for this is $120 pa, plus Companies Office fees. (as stated in cover letter). We do not take responsibility for company office records or requirements, though we may allow you to use our address as the registered office it is your responsibility to maintain your company office records and share registry.

Annual Consulting Service

You can phone us at any time for advice on ad hoc matters in the knowledge that we will not be charging you for that advice. Our services are designed around fixed prices as opposed to hourly rates, and offer you access to the accumulated wisdom of this firm. If your question or issue requires additional research and analysis beyond the consultation, that will be subject to an additional price negotiation, and a change order will be issued, with payment terms agreed to in advance.