Treasury and Resources
Ministerial/Treasurer’s Decision Report
THE JERSEY ELECTRICITY COMPANY LTD ANNUAL GENERAL MEETING 4 MARCH 2010
- Purpose of Report
To consider the resolutions put forward for Jersey Electricity Company Ltd (JEC) Annual General Meeting on Thursday 4 March 2010.
- Background
The States of Jersey is the holder of all the ordinary shares of the JEC which represents 86.4% of the total voting rights. The directors of the company have proposed 5 ordinary resolutions and 1 special resolution to be considered at the AGM, these are outlined below and in the Form of Proxy (Appendix C). The Annual General Meeting will be held on Thursday 4 March 2010.
- Resolutions
The following resolutions have been put forward for consideration at the AGM.
3.1 Ordinary Resolution 1 -To receive the Directors’ Report, the Annual Accounts and Auditors’ Report of the Jersey Electricity Company Ltd (JEC) for 2009
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 revenue for the year to 30 September 2009 was £93.6m, 13.8% higher than the previous year. The Energy business contributed £73.1m of this turnover being £11.0m above last year due mainly due to the impact of their 24% tariff rise in January 2009 but also from a 1% rise in unit sales of electricity.
Turnover in other businesses is summarised below:
- Retail £13.0m – decrease of 1.3% on the previous year, due to fall in sales level of traditional white/brown goods offering being largely offset by gains in the toys/hobbies and e -retailing internet businesses.
- Property £2.5m – increase of 8% on the previous year due to improved rental yields from tenants.
- Building Services £3.6m – increase of 5% on previous year
- Other businesses £2.1m – increase of 8% on previous year due to rises in Jersey Energy and Jendev.
The cost of sales rose by 19.5% to £66.9m with higher importation costs in the Energy business due to extreme volatility in energy markets in the second half of the 2008 calendar year, being the main driver. Operating expenses at £17.8m were at the similar level to that in 2008.
Profit before tax, for the year ended 30 September 2009, fell by 10% to £9.3m with lower interest received due to falling interest rates and profit upside from property gains/revaluation not repeated in 2009.
Interest received on deposits in 2009 was £0.6m for the year against £1.1m of the prior year, due primarily to lower interest rates associated with the UK base rate falling substantially during this period.
The taxation charge for the year, at £2.0m, was substantially higher than in 2008. As indicated in the 2008 accounts, this was as a result of the transitional rules introduced in Jersey and as a prelude to the changes in the corporate tax regime, the effective rate of tax for 2007 and 2008 was lower but reverted to 20% again from 2009 onwards.
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 2009 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 Ordinary Resolution 2 - To Declare Dividends
86.4% of the total voting rights are owned by the States of Jersey with the remaining 13.6% held by other shareholders via a full listing on the London Stock Exchange. Of the other listed shareholders there is one large institution, Utilico Investment Trust Ltd, which represents 5.23% of the total voting rights.
Dividends paid, net of tax, rose by 28% from £1.48 per share in 2008 to £1.89 per share in 2009. The proposed final dividend for this year is £1.18 per share, a 5.4% rise on the previous year.
The total 2009 dividend receivable by the States is £1.9m.
- Ordinary Resolutions 3 & 4 - To Re-elect Directors of the Company
In accordance with Article 115 of the Articles of the Company, John Stares retires at the Annual General Meeting and in accordance with Article 127 of the Memorandum of the Company, Jeremy Arnold retires by rotation and, being eligible, both directors offer themselves for re-election.
Re-elect John Stares as a Director of the Company
J Stares is the Managing Director of Guernsey Enterprise Agency and a non – Executive Director/Advisor to four other Channel Island headquartered groups of companies. He is a fellow of the Institute of Chartered Accountants of England and Wales (ICAEW), a member of the Worshipful Company of Management Consultants and a member and former President of Rotary Guernesiais. Prior to moving to Guernsey in 2001, John was with Accenture for 23 years. During that period, he worked as a strategic, financial, change and IT consultant with major clients in most industry sectors and held a variety of leadership roles in Accenture’s Canadian, European & Global consulting businesses.
Re-elect Jeremy Arnold as a Director of the Company
J Arnold joined the Board in 1997. He trained as a Chartered Accountant and spent 37 years in public practice. His career was mostly with Arthur Andersen, for whom, he worked in London, Birmingham, Toronto and Brussels. His experience as a partner was with clients in a wide range of industries such as manufacturing, consumer products, film and music production and advertising. At present he serves on the Boards of a number of Jersey companies and is Chairman of the Audit Committee and also Senior Independent Director.
3.4 Ordinary Resolution 5 - To re-appoint the Auditors and authorise the Directors to agree their remuneration
It is proposed to re-appoint Deloitte LLP as the auditors.
3.5 Special Resolution - To Change the name of the Company to Jersey Electricity plc.
Following recent changes to the Companies (Jersey) Law 1991, the Board has decided that it wishes to seek shareholder approval for changing the Company’s name to ‘Jersey Electricity plc’. The Board believes that this change will better reflect the public nature of the Company, particularly in view of its listing on the London Stock Exchange.
- Recommendation
The Treasurer of the States and Greffier of the States are instructed to vote, by proxy, in favour of the resolutions outlined above.
- Reason for Decision
To fulfil the States’ role as shareholder of the Jersey Electricity Company Ltd by exercising voting rights at the Annual General Meeting.
- Resource Implications
This decision has no resource implications.
Report author : Accountant | Document date : 12 February 2010 |
Quality Assurance / Review : Strategic Investments Manager | File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2010-0027 - JEC AGM voting instructions - DTR\WR - JEC AGM voting instructions - DTR.doc |
MD sponsor : Deputy Treasurer |
Appendix A – Directors’ Remuneration
Appendix B – Summary of Key Performance Indicators
Appendix C – Notice of Annual General Meeting
Appendix C – Proxy form for JEC Annual General Meeting
Page of 7 Printed: 10/2/2010
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