TREASURY AND RESOURCES
THE JERSEY ELECTRICITY COMPANY LTD
ANNUAL GENERAL MEETING 5 TH MARCH 2008
1. Purpose of Report
To consider the resolutions put forward for at Jersey Electricity Company Ltd (JEC) Annual General Meeting on 5th March 2009.
2. Background
The States of Jersey is the holder of all the ordinary shares of the JEC which represents 62% of the company’s equity share capital. The directors of the company have proposed 7 resolutions to be considered at the AGM, these are outlined in the Form of Proxy at Appendix C. The Annual General Meeting will be held on 5th March 2009.
3. Resolutions
The following resolutions have been put forward for consideration at the AGM.
3.1 To receive the Directors’ Report, the Annual Accounts and Auditors’ Report of the Jersey Electricity Company Ltd (JEC) for 2008
The company’s Annual Report and Accounts contains the full Directors’ Report, Accounts and Auditors Report. The following paragraphs summarise the key financial matters.
Group turnover for the year to 30 September 2008 was £81.9m, 8% higher than the previous year. The Energy business contributed £61.8m of this turnover being £4.8m above last year due to a 5% rise in unit sales of electricity following the mild winter in 2006/7 and the residual impact of the January 2007 tariff rise. Turnover in other businesses is summarised below:
- Retail £13.1m – increase of 10% on the previous year
- Property £2.3m – increase of 3% on the previous year
- Building Services £3.4m – increase of 6% on previous year
- Other businesses £2.0m – decrease of 10% on previous year, reflecting a large one off contract in 2007
The cost of sales rose by 7% to £56.0m with higher importation costs in the energy business and increased sales in retail being the main drivers. Operating expenses at £17.8m were £0.8m (4.7%) higher with the rise being primarily associated with a £0.5m contribution toward the Jersey Energy Trust whose aim is to promote energy efficiency.
Profit before tax for the year rose by 14% to £10.0m as the energy business recovered to the level of profitability achieved in 2005 prior to absorbing cost increases in 2006 and 2007. The performance on non core businesses also contributed towards the increase in profits.
The opinion provided in the Auditors’ Report, signed by Deloitte LLP, is that:
“In our opinion the financial statements give a true and fair view, in accordance with IFRSs as adopted for use in the European Union, of the state of affairs of the Company and the Group as at 30 September 2008 and of the profit of the Group for the year then ended; and the financial statements have been properly prepared in accordance with the Companies (Jersey) Law 1991.
Appendix A details Directors’ remuneration for the year and Appendix B provides a summary of the key performance figures.
3.2 To Declare Dividends
62% of the ordinary share capital of the Company is owned by the States of Jersey with the remaining 38% held by around 300 shareholders via a full listing on the London Stock Exchange. Of the listed shareholders there is one large institution, Utilico Investment Trust Ltd, which own just over 20% of the total ordinary share capital.
Dividends paid, net of tax, rose by 27% from £1.17 in 2007 to £1.48 in 2008. The proposed final dividend for this year is £1.12, a 49% rise on the previous year.
The total 2008 dividend receivable by the States is £1.8m.
3.3 To Re-elect Directors of the Company
In accordance with Article 115 of the company’s articles, Chris Ambler retires at the AGM and in accordance with Article 127 of the memorandum of the Company, Messers Grime and Chaplin retire by rotation and being eligible, all these directors offer themselves for re-election. Mr Liston who ceased to be an executive Director at 31 December 2008, but who remained on the Board as a Non-Executive Director, has also offered himself for re-election.
- Re-elect Mr C Ambler, Chief Executive
Mr Ambler was appointed to the Board as Chief Executive on 1st October 2008. He previously held a number of positions in the global utility, chemicals and industrial sectors for major corporations including Centrica/British Gas, The BOC Group and ICI/Zeneca as well as corporate finance and strategic consulting roles. He is Chairman of Foreshore Limited and a Director of Channel Island Electricity Grid Limited. Mr Ambler is a Chartered Engineer with the Institute of Mechanical Engineers and has a First Class Honours Degree from Queens’ College, Cambridge and a MBA from Insead.
- Re-elect Mr C Chaplin, Non-Executive Director
Mr Chaplin joined the Board in 2003. He trained as a solicitor in London qualifying in 1977 and moved to Jersey in 1979. He was admitted as a solicitor of the Royal Court, Jersey, in 1985 and has been a partner of Ogier since 1994. With effect from 1st February 2009 he became Chairman of Ogier Group. He is a director of a number of other companies operating in the financial sector and is also a member of the Jersey Law Commission. He is Chairman of the Remuneration Committee.
- Re-elect Mr G Grime, Chairman
Mr Grime joined the Board in 2003. He retired in 1999 as Chairman of Abacus Financial Services, a leading offshore trust company in which he played an instrumental role as one of its founders. A Chartered Accountant, his career in Jersey commenced in 1969 with Coopers Brothers & Co. and progressed to his appointment as Channel Islands Senior Partner of Coopers and Lybrand in 1990. He is currently Chairman of Computer Patent Annuities Holdings Limited and EFG Offshore Limited and also holds many other professional appointments as both director and trustee. In November 2002 he was elected as a Deputy in the States and he retired from that position in December 2005.
- Re-elect Mr M Liston, Non-Executive Director
Mr Liston joined Jersey Electricity in 1986 as Chief Engineer and became Managing Director in 1993. He previously held a number of senior posts in the UK Electricity Supply Industry. He is Chairman of AIM listed, Renewable Energy Generation Limited and executive Chairman of Jersey Post. Mr Liston is a fellow of the Royal Academy of Engineering, a Fellow of the Institution of Engineering and Technology and a Member of its Audit and Disciplinary Committees. He is a companion of the Chartered Management Institute and past Chairman of its Jersey branch. He was appointed by the States in 2002 as Chairman of the Jersey appointments Commission. Mike retired as Chief Executive on 31 December 2008. He is Chairman of the Nominations Committee.
3.4 To re-appoint the Auditors and authorise the Directors to agree their remuneration
On 1st December 2008 Deloitte & Touche LLP changed its name to Deloitte LLP. It is proposed to re-appoint Deloitte LLP as auditors.
4. Recommendation
The Treasurer of the States and Greffier of the States be instructed to vote, by proxy, in favour of the resolutions outlined above.
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