States of Jersey Development Company: 2018 Annual General Meeting: Voting Instructions

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A decision made 4 May 2018:

Decision Reference: MD-TR-2018-0068
Decision Summary Title:	SoJDC 2018 AGM voting instructions.		Date of Decision Summary:	30th April 2018
Decision Summary Author:	Head of Shareholder Relations		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	SoJDC 2018 AGM voting instructions.		Date of Written Report:	30th April 2018
Written Report Author:	Head of Shareholder Relations		Written Report : Public or Exempt?	Public
Subject: States of Jersey Development Company (“SoJDC”) 2018 Annual General Meeting voting instructions.
Decision(s): The Assistant Minister for Treasury and Resources instructed the Greffier of the States and the Treasurer of the States to vote in favour of the resolutions to be put before the Annual General Meeting of the States of Jersey Development Company on 14th May 2018.
Reason(s) for decision: To fulfil the States’ role as shareholder of the SOJDC by exercising voting rights at the 2018 Annual General Meeting.
Resource Implications: This decision has no resource implications.
Action required: The Head of Decision Support to inform the Head of Shareholder Relations that this decision has been approved. The Greffier of the States and Treasurer of the States are instructed to vote in respect of their nominee shareholdings in favour of each of the resolutions.
Signature:		Position: Connetable J M Refault Assistant Minister for Treasury and Resources
Date Signed:		Date of Decision:

States of Jersey Development Company: 2018 Annual General Meeting: Voting Instructions

Treasury and Resources

Ministerial Decision Report

States of Jersey Development Company 2018 Annual General Meeting voting instructions.

Purpose of Report

To enable the Assistant Minister for Treasury and Resources to instruct the Greffier of the States and the Treasurer of the States to vote on the resolutions to be put before the 2018 Annual General Meeting of the States of Jersey Development Company on 14th May 2018.

Background

In 2010 the States Assembly through adopting P.73/2010 approved the establishment of the States of Jersey Development Company (“SoJDC”) as the successor to the Waterfront Enterprise Board Limited. The new company, with a revised remit, came into effect in June 2011 following adoption by the States Assembly of P.32/2011 appointing a new board of Non-executive Directors.

As at 31 December 2017 the Company’s authorised share capital is £20 million, of which 19,999,999 shares are held by the Greffier of the States on behalf of the States of Jersey and 1 share held by the Treasurer of the States.

SoJDC gave notice on 16th April 2018 that the Company will be holding its Annual General Meeting on 14th May 2018. The business is to resolve each item by Ordinary Resolution as follows:-

To receive and approve the content of the minutes of the previous Annual General Meeting.
To appoint new auditors to the Company, Ernst & Young LLP, to hold office until the next annual general meeting at which accounts are laid before the Company and that their remuneration be determined by the directors.
To receive the annual remuneration report of the Remuneration & Nominations Committee and approve the remuneration that was agreed by that Committee (included within the financial statements).
To receive the report of the directors, the annual review and the audited financial statements for the year ended 31 December 2017 together with the report of the auditors and approve the reports and the financial statements.

Resolution 2 – To appoint new auditors to the Company, Ernst & Young LLP, to hold office until the next annual general meeting at which accounts are laid before the Company and that their remuneration be determined by the directors.

The Corporate Governance Report of the Board notes that, “As the fifth anniversary has passed since the last tender process, the Audit & Risk Committee has decided to tender the external audit for 2018 which will be concluded in time for the Annual General Meeting in May.”

As a result of a tender process the Board is recommending the appointment of new auditors being Ernst & Young LLP.

Resolution 3 – To receive the annual remuneration report of the Remuneration & Nominations Committee and approve the remuneration that was agreed by that Committee (included within the financial statements).

During 2017 the first external review of non-executive pay was undertaken since 2011. Following approval by the Shareholder, the annual fee was increased, on a phased basis, to £20k in 2017 with a further increase to £22k scheduled from 1 January 2018. Thereafter, the Remuneration Committee have been requested by the Shareholder to undertake an annual review of NED fees with underlying increases restricted to Jersey RPI where possible.

The report identifies that salaries for executive directors are established by reference to those prevailing in the open market generally for directors of comparable status, responsibility and skills in comparable industries. The Remuneration Committee uses executive remuneration surveys prepared by independent consultants to assist in establishing market levels.

Changes to salaries and remuneration payments are effective from 1 January each year. The 2017 Directors Remuneration Report 2017 shows the following:-

	Salary/Fees £’000	Benefits £’000	Bonus £’000	2017 Total £’000	2016 Total £’000
Executive Directors
Lee Henry	168	2	33	203	207
Simon Neal	135	-	27	162	137

Non – Executive Directors
Nicola Palios	40	-	-	40	38
Ann Santry	20	-	-	20	15
Paul Masterton	20	-	-	20	15
Richard Barnes	20	-	-	20	3
Tom Quigley	23	-	-	23	3
Roger Lewis	-	-	-	-	12
Total	426	2	60	488	430

In addition to the above, the Executive Directors’ received the following pension contributions:

	2017 £’000	2016 £’000
Lee Henry	25	25
Simon Neal	20	18
Total	45	43

Resolution 4 – to receive the report of the directors, the annual review and the audited financial statements for the year ended 31st December 2017 together with the report of the auditors and approve the reports and the financial statements.

The Chairman in her statement notes that, “2017 has seen a real “step change” for the Company. This is in terms of the developments it now has under way and this is reflected in the Accounts.

Total Revenue – has increased from £5.022 million in 2016 to £15.905 million in 2017. This has been driven by Development revenue on College Gardens, Block 4 of £6.48 million (£549k in 2016) and net gain from fair value adjustment on investment property of £ 6.096 million (£1.569 million in 2016).

Profit for the year – has increased from £2.033 million in 2016 to £6.747 million in 2017. A key element of offsetting cost has been a matching cost item of £6.48 million for Development costs on College Gardens.

Total Assets - have increased from £85.4 million in 2016 to £126.0 million in 2017. The Group’s inventory is carried at the lower of cost and net realisable value with cost being the land value at the date of the original acquisition plus subsequent expenditure incurred. As at 31 December 2017 the inventory totalled £102.4 million (2016: £66.4 million).

Borrowings – increased from £23.3 million in 2016 to £55.2 million in 2017. The Company’s finance facilities total £82.5 million (2016: £76.5 million).

Cash and cash equivalents - decreased to £1.951 million from £2.9 million in 2016.

Recommendation

The Assistant Minister is recommended to instruct the Greffier of the States and the Treasurer of the States to vote in respect of their nominee shareholdings in favour of each of the resolutions to be put before the Annual General Meeting of the SoJDC on 14th May 2018.

Reason for Decision

To fulfil the States’ role as shareholder of the SOJDC by exercising voting rights at the 2018 Annual General Meeting.

Resource Implications

This decision has no resource implications.

Report author : Head of Shareholder Relations	Document date : 27th April 2018
Quality Assurance / Review : Head of Decision Support	File name and path: L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DS, WR and SD\2018-0068 - SoJDC - 2018 Annual General Meeting voting instructions
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