The Shareholder of
Hydro Ottawa Holding Inc. /
L’Actionnaire de la Société de portefeuille
d’Hydro Ottawa Inc.
Submitted by/Soumis par : Pierre Richard, Q.C.,
ICD.D., Chair, Hydro Ottawa Holding Inc. / c.r.,
IAS.A., Président du Conseil d’administration de la Société de portefeuille d’Hydro Ottawa
Inc.
and
/ et
Alan
Hoverd, Acting President and Chief Executive Officer, Hydro Ottawa Holding Inc.
/ Président et chef de la direction intérimaire de la société de portefeuille
Hydro Ottawa Inc.
Contact Person/Personne ressource : Alan Hoverd, Acting President and
Chief Executive Officer, Hydro Ottawa Holding Inc. / Président et chef de la
direction intérimaire de la société de portefeuille Hydro Ottawa Inc.
(613)
738-5499 x 207, AlanHoverd@hydroottawa.com
SUBJECT:
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OBJET :
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RAPPORT ANNUEL DE 2010 DE
L’ACTIONNAIRE DE LA SOCIÉTÉ DE PORTEFEUILLE D’HYDRO OTTAWA INC. |
That Council:
1. Receive the Audited Consolidated Financial Statements of Hydro Ottawa Holding Inc. for the Year 2010 as set out in the Annual Report at Document 1 (issued separately and held on file with the City Clerk);
Que le Conseil :
1. Reçoive les états financiers consolidés vérifiés de la Société de portefeuille d'Hydro Ottawa Inc. pour l'année 2010 tels que présentés dans le Rapport Annuel ci-joint au Document 1 (distribué séparément et tenu sur dossier par le greffier de la Ville) ;
2. Approuve que la société à responsabilité limitée Ernst and Young soit désignée vérificatrice de la Société de portefeuille d’Hydro Ottawa Inc. pour l’année 2011 ;
3. Approuve la recommandation du Président du conseil d’administration et du comité de gouvernance et des ressources de la gestion du conseil d’administration de la Société de portefeuille d’Hydro Ottawa Inc., en particulier, que le Conseil renouvelle le mandat des personnes dont il est question dans le document n° 2 pour qu’elles puissent faire fonction de membre des conseils d’administration de la Société de portefeuille d’Hydro Ottawa Inc. et d’Hydro Ottawa Limitée pour le mandat correspondant précisé ; et
4. Approuve que le maire et le greffier municipal soient autorisés à signer, au nom de la Ville d’Ottawa à titre d’actionnaire de la Société de portefeuille d’Hydro Ottawa Inc., une résolution écrite énonçant les résolutions approuvées par le Conseil municipal.
Hydro Ottawa Holding Inc. was created as a result of the Electricity Act, 1998, which required all hydro utilities to operate as business corporations. Under this new structure, Hydro Ottawa Holding Inc. is a for-profit company that continues to be wholly owned by the City of Ottawa, and is governed by an independent Board of Directors appointed by its shareholder. Under the Ontario Business Corporations Act (“the Act”) and the terms of the Shareholder Declaration issued by the City of Ottawa, Hydro Ottawa Holding Inc. (“the corporation”) is required to place before its shareholder, the City of Ottawa, annual financial statements relating to the corporation.
The 2010 audited financial statements consolidate financial information relating to Hydro Ottawa Holding Inc. and its subsidiaries. These financial statements were approved by the Board of Directors of Hydro Ottawa Holding Inc. at its meeting on March 31, 2011. Ernst and Young (E&Y), the corporation’s independent, external auditors, have provided an unqualified opinion on the corporation’s statements. E&Y’s opinion states the consolidated financial statements present fairly, in all material respects, the financial position of the company as at December 31, 2010 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles.
In 2010, Hydro Ottawa continued to show excellent progress in the
achievement of its five-year business strategy set out in the 2008-2012 Strategic Direction and Financial
Outlook that was endorsed by City Council in 2008. Hydro Ottawa achieved a normalized net income
from continuing operations of $29.1 million, resulting in dividends of $17.5
million paid to its sole shareholder, the City of Ottawa, on April 6, 2011. Revenues continued to grow, led by our
competitive renewable generation and energy management business lines at 19.8
percent and 12.1 percent growth respectively.
Over the first three years of the five-year business strategy, dividends
have exceeded projections by more than 20 percent.
Reflecting this positive performance and the corporation’s prudent
financial management, both Standard & Poor’s and the Dominion Bond Rating
Service affirmed their A (stable) ratings for Hydro Ottawa in 2010.
Details
on the financial results and business achievements of the Hydro Ottawa Group of
Companies in 2010 are documented in the corporation’s Annual Report, which has
been issued separately and is held on file with the City Clerk as Document 1 to
this submission.
Recommendation 2
Auditor
Selection
Pursuant to
the Ontario Business Corporations Act, the shareholder is also required
to appoint an auditor for the corporation.
In 2007, Hydro Ottawa Holding issued a request for proposals (RFP) for
external audit services for a three-year term (including two additional
one-year options) commencing with the 2007 year-end audit. Ernst & Young was selected by the Board
of Hydro Ottawa Holding Inc. on the basis of the three-year proposal that
included two additional optional years.
Last year, the City of Ottawa approved the appointment of Ernst &
Young LLP as auditors for Hydro Ottawa Holding Inc. for the year 2010. Council is now being requested to approve
the second additional optional year for Ernst & Young LLP as auditors for
Hydro Ottawa Holding Inc. for the year 2011.
Recommendation 3
The Shareholder
Declaration for Hydro Ottawa Holding Inc. approved by City Council requires
that members of the Board of Directors for Hydro Ottawa Holding and its
wholly-owned subsidiaries (including Hydro Ottawa Limited) be appointed by the
City of Ottawa. On June 27, 2006, upon
the restructuring of the Hydro Ottawa Board of Directors to comply with the
Affiliate Relationships Code for Electricity Distributors and Transmitters
issued by the Ontario Energy Board, City Council appointed a number of
directors for terms ranging from two to four years. Profiles of these directors were previously
presented to Council on June 27, 2006 and updated profiles are on file with the
City Clerk.
The terms of two directors of Hydro Ottawa Holding Inc. and one director of Hydro Ottawa Limited are expiring on June 30, 2011. These members have served effectively on the respective boards of directors and have contributed to the continued success of these companies. They have expressed an interest in continuing to serve on the boards of directors for another three-year term. The Chair of the Board and the Governance and Management Resources Committee of the Board of Hydro Ottawa Holding Inc., are recommending to Council that these members be re-appointed for the terms set out at Document 2.
To satisfy
the requirements of the Ontario Business Corporations Act and the terms
of the Shareholder Declaration issued by the City of Ottawa, where an annual
general meeting of the shareholder is not held, a written, signed resolution of the
shareholder is necessary to approve all matters required to be dealt with at
the annual general meeting.
Document 2 – Recommended Re-appointments to the Boards of Hydro Ottawa Holding Inc. and Hydro Ottawa Limited
Document 1
2010 Annual Report
(including Audited Consolidated Financial Statements)
of Hydro Ottawa
Holding Inc.
Issued separately and held on file with the City Clerk
Document 2
Recommended
Re-appointments to the Boards of
Hydro Ottawa
Holding Inc. and Hydro Ottawa Limited
Name
|
Board |
Renewal Term |
Effective Date |
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Hydro Ottawa Holding Inc. |
3 years |
July 1, 2011 |
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Ford Ralph – first appointed July 1, 2006 |
Hydro Ottawa Holding Inc. |
3 years |
July 1, 2011 |
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Duncan Watt – first appointed July 1, 2006 |
Hydro Ottawa Limited |
3 years |
July 1, 2011 |