Jersey New Waterworks Company Limited Annual General Meeting Voting Instructions.

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A decision made (14/05/2009) regarding: Jersey New Waterworks Company Limited Annual General Meeting Voting Instructions.

Decision Reference: MD-TR-2009-0072
Decision Summary Title:	Jersey New Waterworks Company Ltd Annual General Meeting Voting Instructions		Date of Decision Summary:	11 May 2009
Decision Summary Author:	Nick Collins Finance Manager, Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Jersey New Waterworks Company Ltd Annual General Meeting 22 May 2009		Date of Written Report:	11 May 2009
Written Report Author:	Nick Collins Finance Manager, Decision Support		Written Report : Public or Exempt?	Public
Subject: Jersey New Waterworks Company Ltd Annual General Meeting Voting Instructions.
Decision(s): The Minister decided to instruct the Treasurer and the Greffier of the States to vote in favour of the resolutions to be put before the Annual General Meeting of The Jersey New Waterworks Company Ltd to be held 22 May 2009.
Reason(s) for decision: To fulfil the States’ role as shareholder of the Jersey New Waterworks Company Ltd by exercising voting rights at the Annual General Meeting.
Resource Implications: Other than those detailed in the report there are no further financial or manpower Implications.
Action required: The Treasurer and Greffier of the States are requested to vote their nominee shares in favour of each of the resolutions by completing their proxy forms.
Signature:		Position: Senator P. F.C. Ozouf, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Jersey New Waterworks Company Limited Annual General Meeting Voting Instructions.

TREASURY AND RESOURCES

THE JERSEY NEW WATERWORKS COMPANY LTD

ANNUAL GENERAL MEETING 22 MAY 2009

1. Purpose of Report

To consider the resolutions put forward at The Jersey New Waterworks Company Ltd (JNW) Annual General Meeting to be held 22 May 2009.

2. Background

The States of Jersey hold all of the issued ‘A’ ordinary shares, 50 percent of the issued ordinary shares and all of the 10% cumulative fifth preference shares in the JNW. The directors of the company have proposed 6 resolutions to be considered at the AGM, these are outlined in the Notes in the Form of Appointment of Proxy. The Annual General Meeting will be held on 22 May 2009. It should be noted that Kevin Keen, Deputy Chairman is due to replace David Norman as Company Chairman upon his retirement.

3. Resolutions

The following resolutions have been put forward for consideration at the AGM.

3.1 To receive the Financial Statements for the year ended 31 December 2008 of the JNW.

The Company’s Annual Report and Financial Statements contain the full Directors’ Report, Accounts and Auditors Report. The following paragraphs summarise the key financial matters.

Turnover for 2008 was £14.4 million, an increase of 4 percent on the prior year figure of £13.8 million. Turnover is made up of:

Measured water charges £6.5m – increase of 8.6% on the previous year.
Unmeasured water charges £6.4m – increase of 1% on the previous year (expected to fall in future years due to the transition of customers to the measured water charges).
Service and other water charges £0.6m – no movement on previous year.

Cost of sales for 2008 was £5.1 million, an increase of 6 percent on the prior year figure of £4.8 million. Cost of sales is made up of:

Pumping expenses £0.7m – increase of 4% on the previous year.
Operation of reservoirs and works £2.2m – increase of 9% on the previous year.
Distribution and analysis of water £1.7m – increase of 3% on the previous year.
Desalination and station expenses £0.14m – increase of 79% on the previous year due to the running of the desalination plant for three weeks at an additional cost in order to test the new control system.
Miscellaneous £0.32m – decrease of 7% on the previous year.

Operating profit for 2008 was £4.47 million, a fall of 0.6 percent on the prior year figure of £4.5 million. The fall is mainly due to the increase in cost of sales (see above), administration costs of £2.6 million in 2008, an increase of 8 percent, and additional completed works depreciation of £0.128 million to increase depreciation costs to £2.2 million in 2008 which is an increase of 6 percent.

Profit before tax for the year rose by 14% to £4.5m. The main reasons for the increase were:-

Profit on disposal of fixed assets £0.49m – an increase of 182% which included two areas of land, sundry plant and vehicles.
Interest receivable £0.18m – an increase of 296% on the previous year.

Overall profit for 2008 was £4 million, an increase of 24 percent on the previous year leaving an earnings per share of £8.34 compared to £6.73 in 2007. JNW had deferred tax of £0.23 million leaving the tax charge for 2008 at £4,000 compared to the £273,000 charge in 2007.

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 United Kingdom accounting standards, of the state of the Company’s affairs as at 31 December 2008 and of its profit for the year then ended and have been properly prepared in accordance with the Companies (Jersey) Law 1991.”

3.2 To Declare Dividends

The States own 100 percent of the issued ordinary ‘A’ shares, 50 percent of the issued ordinary shares with a final proposed dividend net of tax of £1.94 which is an 18% increase over the £1.64 final dividend proposed in the previous year.

The States also own 100 percent of the 10% cumulative fifth preference shares. A total sum of £0.381 million is to be paid to all non preference shares in 2008 which matches the amount paid in 2007.

The total 2008 dividend receivable by the States is £1.07m as follows:

This income is in line with Treasury forecasting.

3.3 Re-elect Mr Carlyle Hinault, the Director retiring by rotation

In accordance with Articles 74 and 75 of the Company’s articles, Carlyle Hinault retires by rotation and being eligible offers himself for re-election. Carlyle Hinault joined the Board as a Non Executive States of Jersey nominated Director in March 2000 and was re-elected to the Board in 2002 following the removal of the requirement for States of Jersey nominated Directors. Mr Hinault, a retired grower, was Connetable of the Parish of St John for six years until December 2000 and prior to that served as Deputy of St John for 12 years; he was also Procureur du Bien Public for the Parish of St John for a number of years.

To elect Mr Peter Yates as a Director of the Company

In accordance with Article 77 of the Company’s articles, Mr Yates will be seeking election as a Director in order to fill the vacancy left by Kevin Keen as Mr Keen takes over from David Norman who will retire as a Director for the Company at the AGM. Mr Yates was recruited by Mr Norman as a prospective Director. Mr Yates is a recently retired partner of PricewaterhouseCoopers and if elected will take over from Kevin Keen as Chairman of the Audit Committee.

To approve Directors’ fees for 2009 of £20,000 for the Chairman and £12,000 for other Directors

Fees approved in 2008 were £18,000 for the Chairman and £10,000 for the other Directors representing an 11% and 20% increase respectively.

Re-appoint Ernest & Young LLP as auditors at a fee to be agreed by the Directors

In accordance with Article 115(a) of the Company’s articles, a resolution to re-appoint Ernest & Young LPP as the Company’s auditor will be proposed at the forthcoming AGM. Under Article 116 of the Company’s articles the remuneration of any Auditor appointed by the Directors shall be fixed by the Directors at the AGM.

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.