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Calmac Ferries Limited Minutes of Board Meeting

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Calmac Ferries Limited Minutes of Board Meeting CALMAC FERRIES LIMITED MINUTES OF BOARD MEETING HELD IN THE FERRY TERMINAL BUILDING, GOUROCK ON WEDNESDAY 16 FEBRUARY 2011 ____________________________________________________________________________________ Present Mr P K Timms (Chairman) Mr D C McGibbon Mr C A Robertson Mr I Gillies Mr A M Lynch Mr L B MacLeod Mr P G Preston Mr N L Quirk Ms P Stark Mr G A Taylor In attendance: Mr G W McKenzie (Secretary) Mr W S M Davidson, Managing Director, NorthLink Ferries Ltd Mrs W Allardes, Managing Director, David MacBrayne HR (UK) Ltd Mr D Cannon, Group Public Affairs Manager Mrs J Beckett, Chief Accountant, David MacBrayne Ltd ____________________________________________________________________________________ PRELIMINARIES Welcome On behalf of the Board, the Chairman welcomed Mr Davidson and Mrs Beckett to the Meeting. Declarations of interest There were no further declarations of interest, other than those previously made and known to all Directors. MINUTES/MATTERS ARISING Minutes of previous meeting The Minutes of the Board Meeting held on 17 November 2010 were approved. Matters arising [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)] Manpower information Mrs Allardes advised that the work on improving the information to be presented to the Board is in its final stages. Harbour management Discussions are ongoing with CMAL regarding safety management procedures. A response from CMAL clarifying the role of the Harbour Manager is also awaited. Car deck loading procedures Pre-boarding information provided to customers has been enhanced and a review of turnaround procedures will be undertaken to ascertain whether there is scope to improve procedures. Other matters All other matters have either been closed off or are covered within the Agenda for this Meeting. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)] MATTERS FOR DECISION Proposed dividend to Shareholder Mr Lynch advised that it is proposed that a dividend payment be made to David MacBrayne Ltd. in the current financial year which is in line with the general arrangements relating to operator return under the terms of the CHFS contract. It was noted that Section 177 of the Companies Act 2006 requires each Director to declare the nature and extent of any direct or indirect interest in the proposed transaction under consideration. Mr Gillies, Mr Lynch, Mr MacLeod, Mr McGibbon, Mr Quirk, Mr Robertson, Ms Stark, Mr Taylor and Mr Timms each confirmed that they have an interest in the proposed transaction by virtue of being a Director of David MacBrayne Ltd which is the sole shareholder of all of the Ordinary Shares in the Company. The information presented in support of the proposed dividend comprised the financial statements for the year ended 31 March 2010 showing a retained profit of £3.2m, management accounts for the ten month period to 31 January 2011 showing a profit for the period of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] and current projections of a profit for the financial year to 31 March 2011 of [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)]. Taking due account of the level of the Company’s distributable reserves, it is considered that a dividend of £1.5m is appropriate. The Board considered the information presented and were satisfied that the Company had sufficient distributable reserves to enable the payment of such dividend and, accordingly, it was resolved that such dividend should be paid to the holder(s) of the Ordinary Shares registered as such at close of business on 18 February 2011, with payment of the dividend to be made on 25 February 2011. OPERATIONAL PERFORMANCE REVIEW AND FORWARD LOOK Managing Director’s report The Managing Director’s report was noted and a number of matters were discussed. Carriage of defibrillators Mr Preston explained that the tabled paper set out the background and current position. The regulatory authority governing ships is MCA, and their position on this matter remains unchanged and is contained within Merchant Shipping Notice 1768 – Ship’s Medical Stores. The carriage of defibrillators on board ships is not mandatory, however the Notice sets out recommendations where a defibrillator is carried and, in particular, the need for regular maintenance of the equipment and adequate training arrangements. The estimated costs of providing and maintaining the equipment on board selected Company vessels, as well as ensuring that there are appropriate levels of training to support the facility, were noted. Mr Preston said that a further meeting with MCA will be arranged to discuss the matter in further detail, including the option of the provision of a public access defibrillator facility. The matter remains under ongoing review and the Board will be kept informed of any developments. In addition, legal advice would be sought as a precautionary measure. In relation to the offer which had been made to the Company by a Skye-based charity, Mr Preston emphasised that this was not a free offer as had been reported in the media and that there would be considerable costs implications associated with the offer. [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] Mallaig/South Uist/Barra CNES are conducting a consultation process involving local communities and Company representatives will be meeting with them in late February/early March 2011. Stornoway/Ullapool service Meetings will be held in Stornoway during week commencing 21 February 2011 at which representatives from both the Company and CMAL will be presenting proposals on new vessel provision for the Ullapool/ Stornoway service. Customer facilities The iPhone application has been well received and is proving very popular. Uig/Tarbert Sunday service A low-key approach continues to be taken and a meeting was held with local community representatives in Harris on 1 February 2011. Consultation is ongoing and it is planned that a recommendation relating to the 2011/12 Winter timetable will be put to the Scottish Government in early Summer 2011. [FOISA Status - Exemption under Section 30 (Prejudice to Effective Conduct of Public Affairs)] MV Finlaggan The anticipated timing of the vessel’s introduction on the Islay service remains late May 2011. Once absolute clarity on the timing is available, the detailed arrangements for the associated introduction ceremonies will be firmed up. MV Clansman Once completed, a copy of Lloyds’ investigative report will be passed to a specialist professional adviser for comment. A meeting will thereafter be arranged with the manufacturers and Lloyds’ representatives in attendance to discuss the report. [FOISA Status - Exemption under Section 36 (Confidentiality)] [FOISA Status - Exemption under Section 39 (Health, Safety and the Environment)] Performance review Mr Robertson introduced this new procedure by saying that it would represent a move away from the present structure of Board Meetings, where the content and discussions are largely informative, to one where there the emphasis is on constructive scrutiny of the Company’s executive management, categorised into a number of key topics, leading to the preparation of an appropriate action plan. Safety A number of incident reports were highlighted and considered in detail. [FOISA Status - Exemption under Section 39 (Health, Safety and the Environment)] Analysis of accidents/incidents/operating reports – there has been an increase in the incidence of slips, trips and falls over the Winter 2010/11 period. Preventative measures have been introduced and the safety department are examining the position to consider whether improved control measures can be introduced. The Board re-affirmed its position that safety remains the top priority. [FOISA Status - Exemption under Section 39 (Health, Safety and the Environment)] Contract performance Traffic revenue – following the decrease in revenue experienced as a result of the adverse weather conditions in November and December 2010, there are improvements in traffic levels in January 2011. Advanced bookings show an increase compared with previous year equivalents, however the impact of ever-rising fuel costs for motorists is a concern. Marketing initiatives are ongoing, with a particular emphasis on targeting the North of England. Retail revenue – there is continued improvement in per passenger spend. Output from the project team is awaited. A review of associated on-board signage should be undertaken to ascertain whether improvements can be made. Profit for contract year 4 – it is anticipated that a surplus over and above operator’s return of at least [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] will be delivered. [FOISA Status - Exemption under Section 33 (Commercial Interests and the Economy)] Competitive cost base Timetable considerations – the possibility of reducing timetable frequency, particularly during periods of weather during which members of the public are being advised by the authorities not to travel by road unless absolutely necessary, is being considered in discussion with the Scottish Government. Procurement – greater use of the procurement team’s expertise should be encouraged. Financial statements – consideration should be given to improvements which could be made in the presentation of financial information to provide greater clarity to assist decision-making. Stakeholder/Reputation Promoting the Company’s achievements
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