Meeting documents

1

DECLARATION OF INTEREST

No declaration of interest was received by any Member or Officer in respect of any item on the Agenda.

2

MINUTES

The minutes of the meeting held on 26 November, 2008 were confirmed and signed as a true record.

Arising thereon-

Item 4 - Effect of the Credit Crunch on the Charitable Trust.

The Treasurer referred members to the £300k awarded to Menter Mon, conditional on match-funding being obtained, under the Rural Development Plan. This matter had been given consideration at the last meeting of the Trust’s Regeneration Committee and he confirmed that the commitment was now in place.

Item 5 - Land at Rhosgoch.

The Treasurer handed out to members a map of the Rhosgoch site showing the boundary and the present public footpath which traversed the site. He was not seeking any decision today but merely informing them of progress since the last meeting.

That meeting had discussed the possibility of attracting grants towards a tree planting scheme around the site. There had been some coniferous landscaping on site since the Shell days. What was now being considered was the planting of deciduous trees as shown on the map which would create an unbroken tree line around the site.

He sought the Committee’s views as to whether or not it wanted to support such a proposal. The Council still hoped to realise the value of this site for a potential development in the future. There was an argument that landscaping would make it more attractive to a potential buyer. On the other hand, it could also shut out certain types of development for the future. Providing trees would be one way of achieving the aims of the Trust since it would be somewhere that the general public could use as a public facility.

There was the possibility of attracting 100% grant funding for such landscaping. The next step would be to go back to the Valuer that was advising the Council in order to ask for an independent opinion as to whether this sort of development would help or hinder a development in the long term.

Members considered it premature to reach a decision today and requested that a written report be provided by the Treasurer once all information was to hand.

RESOLVED to await a further report before reaching a decision thereon.

3

INVESTMENT MANAGEMENT

The Chairman extended a warm welcome to Mr.Gareth Watts, Institutional Client Director, HSBC Global Asset Management(UK)Ltd.

Submitted - the HSBC Global Asset Management (UK) Ltd Quarterly Report for the period up to 31st December, 2008. Mr.Gareth Watts summarised the contents of a presentation document that was handed out at the meeting.

The Client Manager reported that the portfolio showed a return for the period September to December, 2008 of -21.1% against a benchmark of -22.2%. The closing value of the fund on 31st December, 2008 was £11,439,918 compared to £11,726.035 at the end of September. There had therefore been a 1.5% loss during this period. In Quarter 4, the portfolio value was doing quite well against the benchmark. Although down it was not as low as that envisaged.

The Treasurer stated that the portfolio had done better than expected. In view of the fact that the market had gone down substantially, he was pleased to see the figures, in that the Trust had only lost 1.5% of the valuation. The performance for the last quarter and for the last year had been very good in his opinion when compared with what was happening in the money market in general.

Mr.Schofield stated that although the figures were down, the Trust had room to be grateful in that it was quite fortunate compared to some.

Mr.H.Eifion Jones was also satisfied with the figures. The booklet presented gave an explanation as to why this had happened as the portfolio was not based in the banking sector which had experienced a major slump. There were also significant portfolio changes in that it had gone into UK fixed interest bonds. As a charity, the Trust was very interested in the value of its property. However, he felt it important that the Trust did not lose sight of any income being generated. Investment income at this time in 2007 was £85,223 compared to £82,712 in 2008. It was important that this be monitored since at the end of the day the role of the Trust was to undertake its duty to organisations on the Island.

He considered it important to keep an eye on the income and not just on the capital value. He hoped that by the next meeting that there would be more information as regards investment income and that it would also receive projections for this year. Some companies would not be issuing dividends and that was why at the last meeting he considered that the Trust should be looking at Corporate and UK Government Bonds in order to keep the income up.

Mr.Schofield reminded members that the Constitution of the Trust made it clear that priority should be given to trying to keep the value of the investment. With the income coming down to this level and capital naturally being responsible for that, he felt that the Committee required a report to the next meeting in order to provide guidance as to what the priorities should be. Were we still going to be withdrawing money from the portfolio to the degree that the Trust had been doing during this difficult time or should the Trust be looking at its expenditure because it was going to deplete the value of the original capital? He considered that the Committee should be looking at the services it was financing at the moment.

The Treasurer in reply stated that at the last meeting they were looking at the effect of the credit crunch on the investment. The message he gave out at that time was that yes, the capital value of the investment had reduced dramatically and that he would wish it to recover. However, the investment income had not reduced to the same degree. The annual income expenditure was adequate to meet the annual expenditure.

When being advised on the income, the Trust was advised that £400k was a reasonable target to aim towards, which enabled the Trust to finance its annual expenditure. Based on today’s figures, there was no message that the Trust should be cutting back. A meeting of the full Trust would be called in the near future with the aim of setting the budget for 2009/10 and that was where grant allocations would be determined.

Mr.Schofield considered that it would be easier for this Committee to discuss that report in detail prior to it being discussed at full Trust.

Mr.J.V.Owen reiterated what he had said at the last meeting in that he was unhappy to see the Trust fund decreasing and that he had suggested at the time that some of the capital returns should be invested to take advantage of the volatile markets.

The Treasurer stated that the suggestion by Mr.J.V.Owen was that perhaps the Trust did not need to spend all the income in order to go for capital growth for the long term. In the past, the Trust had adopted a policy of not going out to chase income. The reason why part of the portfolio was in overseas markets was because, firstly, the capital growth was bigger there and secondly diversification in spreading the money over more markets. In effect, the current policy foregoes short term income for long term gain. The current policy acknowledged the argument put forward by Mr.J.V.Owen. The Treasurer would attempt to develop that argument for the next special meeting.

Mr.E.Schofield stated that by now the capital was worth less in real terms than the original investment and that it was this point that he sought clarification upon.

RESOLVED that the Treasurer be requested to submit a further report on priorities to this Committee prior to is consideration at the full Trust meeting.