Jersey Water Annual Report and Financial Statements 2005

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made (08/05/2006) regarding Jersey Water Annual Report and Financial Statements 2005.

Subject:	Jersey Water Annual Report and Financial Statements 2005
Decision Reference:	MD-TR-2006-0056		Exempt clause(s):	n/a
Type of Report: (oral or written)	Written		Person Giving Report (if oral):	n/a
Telephone or e-mail Meeting?	n/a		Report File ref:	JF/1/8/5/2006
Written report – Title	Jersey Water Annual Report and Financial Statements for the year ended 31st December 2005
Written report – Author	Jeremy Falle
Decision(s): The Minister is asked to agree to vote by proxy in favour of the resolutions
Reason(s) for decision: The resolutions at Appendix A are non-contentious, no new directors have been proposed and the Report and Accounts for the year shows a steady performance and future planning.
Action required: Proxy voting form to be signed by both the Treasurer and the Greffier and then sent to Jersey Water 48 hours before the AGM of Jersey Water, 19th May 2006
Signature: (Minister/ Assistant Minister)		Date of Decision: 8th May 2006

Jersey Water Annual Report and Financial Statements 2005

TREASURY AND RESOURCES MINISTER

jerseywater

annual report and financial statements

FOR THE YEAR ENDED 31st december 2005

1. Purpose of Report

1.0 For the Treasury and Resources Minister to note the results of JerseyWater for the year ended 31st December 2005, to agree to vote by proxy on the resolutions being proposed at the Company’s Annual General Meeting on the 19th May 2006.

2. Background

2.0 The States of Jersey hold half the ordinary shares in JerseyWater and also 100% of the issued ‘A’ ordinary shares and 100% of the issued 7.5%-10% cumulative fifth preference shares. Annually the main details of company performance are reported to the Minister.

2.1 The Annual General Meeting will be held on Friday 19th May 2006 at 9.00am at Hotel De France, St Saviour’s Road, St Helier.

3. Comments

3.1 Company turnover for the year to the 31st December 2005 increased by 2.2% to £12.7m compared with the previous year and profit before tax stood at £2.4m, in line with 2004.

3.2 Total expenditure before interest rose by 3.5% to £9.5m largely due to a 21.4% increase (£0.4m) in the cost of Distribution and Analysis which included an extra £0.3m of spending in conversion to electronic meter reading in line with Company’s policy of extending use of meter reading.

3.3 Capital expenditure at £3.7m was up by £1.0m on 2004 due to a catch up of £0.9m of underspend against the 2004 budget caused by timing differences that year.

3.4 During 2005 the Company paid additional contributions of £0.5m to its defined benefit scheme helping to reduce net pension liability by £0.04m.

3.5 The resolutions for the AGM are as follows;

· To receive the Financial Statements for the year ended 31st December 2005.

· To declare a final gross dividend of 172 pence per share on the ordinary and ‘A’ ordinary share capital.

· To re-elect two directors retiring by rotation ~ Richard Pirouet and Howard Snowden.

· To approve the Directors’ fees for 2006 of £15,000 for the Chairman and £8,000 for other directors.

· To re-appoint Ernst and Young LLP as Auditors at a fee to be agreed by the Directors.

3.6 In line with the dividend policy announced in 2004 the Company shall distribute to ordinary and ‘A’ ordinary shareholders dividends broadly equal to one third of normal operating cash flows after some deductions. A final dividend of 172 pence per ordinary and ‘A’ ordinary share (gross) has been recommended which together with the interim dividend of 100 pence per share makes a total equity dividend of 272 pence. This equates to a total proposed equity dividend of £1,051,000 for 2005, an increase of 5.1% on 2004. The dividend summary below shows the total proposed dividend payable to the States of Jersey for the financial year to 31st December 2005;

Dividend summary 2005	Interim payment 2005	Proposed final payment 2005	Total dividend 2005
	£	£	£
£1 ‘A’ ordinary shares (231,000 shares 100% holding)	231,000	397,320	628,320
£1 ordinary shares (126,000 shares, 50% holding)	126,000	216,720	342,720
71/2%-10% Cum. fifth preference shares (900,000 shares, 100% holding)	225,000	225,000	450,000
Received in year	582,000	839,040	1,421,040

The total dividend received for all three shares for the financial year to 31st December 2004 was £1,374,216.

3.7 During 2003 the company took out a loan with HSBC to fund the ongoing capital programme. The States of Jersey have given unconditional guarantees for the repayment of loans up to a maximum of £16.2m with HSBC and the company currently has the following loans outstanding as at 31 December 2005.

Facilities drawn down	Repayment dates	2005 (£)	2004 (£)
HSBC Bank PLC	2006*	3,650,000	3,650,000
HSBC Bank PLC	2011	5,250,000	5,250,000
HSBC Bank PLC	2013	6,000,000	6,000,000
		14,900,000	14,900,000

*Subsequent to the year end the terms of the £3,650,000 loan due for repayment in 2006 were extended for 4 years. This loan is now due for repayment in 2010.

Attached at Appendix A is a notice of the forthcoming Annual General meeting and the proposed re-elections and resolutions.

4. Recommendation

4.0 The Minister is asked to agree to vote by proxy in favour of the resolutions.

5. Reason for Decision

5.1. The resolutions at Appendix A are non-contentious, no new directors have been proposed and the Report and Accounts for the year shows a steady performance and future planning.

States Treasury Corporate Investments

24 May, 2006 for decision 8th May 2006