There were no declarations of interest.

Councillor Fry (as the Chair) and Councillor Henwood (as a member) of the Companies Scrutiny Panel attended for this item. 

Councillor Fry briefed the Shareholder on the content of the discussion at the Companies Scrutiny Panel meeting held on 14 December 2017 which had resulted in the submission of eight recommendations to the Shareholder.  The Shareholder confirmed that it would accept all of the recommendations for the reasons stated in the supplementary report as detailed below:

The proposed terms of reference for Oxford Direct Services Limited and Oxford Direct Services Trading Limited  are set out in the attached document.

Recommendation: that the Shareholder Group resolves to:

Approve the terms of reference.

The Company Secretary presented the proposed terms of reference for the Shareholder of Oxford Direct Services Limited and Oxford Direct Services Trading Limited.  He suggested that the document should be expanded to include an appendix detailing the actual corporate values and objectives as set out in the Business Plan and that had been agreed by the Shareholder and the Trading Companies.

In addition to the above suggestion the following amendments to the document were agreed:

·         In the Overview section paragraph 1, 2^nd sentence insert the word “largely” or “predominantly” after the abbreviated names of each company and before the word “responsible”

·         In the section ODSL and ODSTL Shareholder Groups terms of reference (item 4) delete as shown:

Appoint (at least annually) and remove Company Directors and ensure that Company Directors operate in accordance with the Company objectives.

·         In the section ODSL and ODSTL Shareholder Groups meetings arrangements (item 2) the frequency of Shareholder meetings should be increased to “at least bi-annually”.

·         The appendices would be updated to include the Shareholder Consent Matters as detailed in section 7 of the relevant Shareholder Agreement.

The Shareholder resolved to:

Approve the terms of reference subject to the amendments detailed above.

Simon Howick joined the meeting during this item.

Attached are:

·         Articles of Association (common to both companies)

·         Resolutions to confirm agreement to the Articles  (one for each company)

Recommendation: that the Shareholder Group resolves to:

Agree the resolutions to adopt the Articles of Association for both Oxford Direct Services Limited and Oxford Direct Services Trading Limited and that Councillor Bob Price be authorised to sign them on behalf of the Shareholder.

The Company Secretary presented this item.

It was noted that a written resolution to approve the adoption of new articles of association of the Trading Companies ("New Articles") (the “Written Resolution”) had been submitted to the Shareholder meeting.

Following careful consideration, including consideration of the matters referred to in section 172(1) of the Companies Act 2006 (“the Act”), it was RESOLVED that the New Articles and the Written Resolution be approved for signature subject to the following amendment:

5.2: the Board  Shareholder may admit any other Local Authority membership on receiving….

The Board Meeting was then adjourned to allow the Written Resolution and New Articles to be signed by the Shareholder of the Company.

ADJOURNMENT

Upon resumption, it was noted that the Written Resolution had been duly signed by the Shareholder of the Company and that the New Articles had been adopted as the articles of association of the Company and a copy of the proposed new articles of association would be initialled by a Director on behalf of the Company.

The Shareholder resolved to:

Instruct the Company Secretary to file the Special Resolution and the adopted  Articles of Association  at Companies House.

On 29 November 2017 the Board of Directors of Oxford Direct Services Limited and Oxford Direct Services Trading Limited resolved that the  attached Shareholder Agreements be put to the  Shareholder Group for its consideration and, if appropriate,  approval, following which the agreements will be signed on behalf of both  parties.

Recommendation: that the Shareholder Group resolves to:

1.    Agree the City Council’s entry into the Shareholder Agreements and nominate Cllr Price to sign on its behalf; and

2.    Note that Tim Sadler will sign the agreements behalf ofOxford Direct Services Limited and Oxford Direct Services Trading Limited.  

The Company Secretary presented separate Shareholder Agreements for Oxford Direct Services Limited and Oxford Direct Services Trading Limited (the Trading Companies). He explained that the Shareholder Agreements had been refined from a standard model and were fairly typical for companies of this nature.  They had been tailored to meet the specific operational needs of the two Trading Companies. The objective was to establish a balance which allowed the Trading Companies to operate with reasonable autonomy while providing adequate safeguards for the Council.

The Shareholder expressed the view that Members of the Council needed to be regularly sighted on the decisions taken by the Board of Directors without imposing undue reporting demands on the Trading Companies.  To achieve this objective the Shareholder instructed the Board of Directors to make available to the Shareholder the minutes of the Board meetings of the Trading Companies.

The Shareholder agreed that it was particularly important for them to have regular (quarterly) oversight of financial reporting and monitoring (similar to the arrangements for the City Council’s contract with Fusion Lifestyle).

The Shareholder noted that the next Leader of the Council may wish to consider allocating portfolio responsibilities for specific Council owned companies to individual City Executive Board members. 

The Shareholder Group considered both of the Shareholder Agreements.  

In discussion the following points were noted:

·       Paragraph 7 detailed those matters which required the consent of the Shareholder

·       The draft Business Plan was submitted for endorsement not adoption (which is a matter for the company directors) and would be considered in private session

·       Freedom of Information (FOI) regulations:

o   would apply to Oxford Direct Services Limited (as a Teckal company) although commercially confidential matters would be exempt from disclosure under Section 43 of the FOI regulations subject to a public interest test 

o   The presumption was that the FOI regulations would not apply to Oxford Direct Services Trading Limited but specific advice was required on this point

·       Dividends (as detailed in Paragraph 8 and Schedule 4) – the Trading Companies would pursue a range of options to remit funds and return value to the Council prior to paying a Dividend

The Shareholder resolved to:

Agree the Shareholder Agreement on behalf of Oxford City Council and to authorise the Council’s entry into the two Shareholder Agreements.

It was noted that on 29 November 2017 the Board of Directors of the Trading Companies had resolved to authorise the Trading Companies to enter into the two Shareholder Agreements.

To note the present position in respect of the appointment of an auditor to Oxford Direct Services Limited and Oxford Direct Services Trading Limited. The Council’s Head of Financial Services will provide a verbal update.

The Council’s Head of Financial Services (s151 Officer) presented this item and referred the Shareholder to the supplementary report which had been circulated.  He said that the appointment of external auditors was a reserved matter within the Shareholder Agreement and explained that to facilitate the 2017/18 audit it was necessary to procure an external audit service for all the Council’s owned or jointly owned companies including the Trading Companies.

The Shareholder noted that it was essential that the Trading Companies had an auditor in place as this was a requirement for the on-going provision of the Defined Benefit element of the Pension Scheme.

The Shareholder resolved to:

Delegate the award of the contract for the provision of external audit services for the Trading Companies to Oxford City Council’s S151 Officer (Head of Financial Services).

The Group is asked to note that Graham Bourton is retiring  from Oxford City Council on 31 January 2018 and resigned as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited with effect from 31 October 2017.

It is proposed that Simon Howick should be appointed as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited with effect from 18 December 2017.

Recommendation: that the Shareholder Group resolves to:

Approve the appointment of Simon Howick as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited  with effect from 18  December 2017.

The Company Secretary introduced this item.  He explained that Graham Bourton was retiring  from Oxford City Council on 31 January 2018 and that he had resigned as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited with effect from 31 October 2017.

The Company Secretary recommended that Simon Howick should be appointed as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited with effect from 18 December 2017.

The Shareholder resolved to:

Approve the appointment of Simon Howick as a Director of Oxford Direct Services Limited and Oxford Direct Services Trading Limited with effect from 18 December 2017.

Councillor Turner left the meeting at the end of this item.

There being no other business the Shareholder resolved to:

exclude the press and public from the meeting during consideration of the item in the exempt from publication part of the agenda in accordance with the provisions in Paragraph 21(1)(b) of the Local Authorities (Executive Arrangements) (England) Regulations 2000 on the grounds that their presence could involve the likely disclosure of exempt information as described in specific paragraphs of Schedule 12A of the Local Government Act 1972 and that, in all the circumstances of the case, the public interest in maintaining the exemption outweighed the public interest in disclosing the information.

The Board of Directors of Oxford Direct Services and Oxford Direct Services Trading Limited will present the draft business plan to the Shareholder Group.

Recommendation: that the Shareholder Group resolves to:

1.            Note the progress of Oxford Direct Services Limited  and Oxford Direct Services Trading Limited ; and

2.            Endorse, the draft business plan.

The Board of Directors of Oxford Direct Services and Oxford Direct Services Trading Limited presented the draft business plan to the Shareholder.

The Shareholder resolved to:

1.               Note the progress of Oxford Direct Services Limited  and Oxford Direct Services Trading Limited ; and

2.               Endorse the draft business plan.