SCOTTISH RUGBY ANNUAL REPORT SCOTTISH RUGBY ANNUAL REPORT WHERE OUR MONEY COMES FROM WHERE OUR MONEY IS INVESTED
International & professional rugby Club support & development The investment in international and professional rugby in 2012/13 Direct Club support and related development expenditure of £1.9m increased by £1.8m from £19.1m to £20.9m. This was as a result of for 2012/13 was slightly increased on the previous year. This continues increased National Team cost relating to the 6 Nations performance, to reflect the ongoing funding of joint development officers and direct together with increased pro team investment. support to clubs including payment of club accident insurance premiums, club participation monies, travel support and match officials’ expenses for Community & performance rugby club games. Investment in community and performance rugby increased to £4.7m from £4.5m in 2011/12 reflecting additional development and support expenditure. *which include national stadium running costs, marketing and commercial Stadium, commercial & operational expenditure and all other support services These costs* fell from £9.2m to £8.9m, as funding was directed towards areas of rugby investment.
£39,275k £38,417k International & professional rugby & professional International & Community Rugby Performance & Commercial Stadium, Operational Support & Club Development Depreciation Interest Net Broadcasting Broadcasting Revenues Income Other Operating Ticket Income Ticket Source of income of Source Area of investment of Area 926 8,874 4,701 1,932 1,100 £000 9,400 12,568
17,307 £000 20,884
Other expenditure Borrowings and cash flow Income Interest costs of £0.9m were broadly similar to 2011/12 costs. Depreciation Average borrowings during financial year 2012/13 were £11.1m compared Income of £39.3m for 2012/13 is £1.1m higher than 2011/12, mainly as a of £1.1m is also generally in line with the previous year. Average to the previous year’s average of £12.9m. Year end debt of £11.2m is result of the attendances at Scotland’s home international matches and employee numbers for the year were 303, an increase of 8 on 2011/12. £2.2m below the previous year level of £13.4m. This cash movement increased broadcasting revenues. Increases in these areas are partly The notes to the financial statements include a detailed analysis of is generally as a result of the surplus for the year, controlled capital offset by lower other revenue, primarily as additional IRB grant income employees, showing where these changes have been. investment and various working capital movements. was received in the prior year, relating to the Rugby World Cup. Capital expenditure Capital expenditure in the year amounted to £0.5m and involved a number of improvement works around Murrayfield Stadium, IT infrastructure upgrades and improvements, some capital projects at Scotstoun stadium, and other miscellaneous equipment purchases.
58 59 SCOTTISH RUGBY ANNUAL REPORT 2012/13 REPORT ANNUAL RUGBY SCOTTISH STATEMENTS FINANCIAL
60 61 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Independent auditors report to the members of Opinion on financial statements Principal Accounting Policies to the Income and Expenditure Account on an annual basis over the minimum period remaining until the redemption of the associated the Scottish Rugby Union In our opinion the financial statements: The financial statements have been prepared under the historical cost instrument. • give a true and fair view of the state of the Union’s affairs as at convention and in accordance with applicable Accounting Standards Pension costs 30 April 2013 and of its surplus and cash flows for the year then in the United Kingdom. A summary of the more important accounting We have audited the financial statements of the Scottish Rugby Contributions are made by the Union to money purchase scheme ended; policies, which have been applied consistently, is set out below. Union for the year ended 30 April 2013 which comprise the Principal pension arrangements for certain employees. Amounts due to Accounting Policies, the Consolidated Income and Expenditure • have been properly prepared in accordance with United Basis of Consolidation assurance companies are charged against the profit and loss Account, the Consolidated Balance Sheet, the Consolidated Cash Kingdom Generally Accepted Accounting Practice; and The consolidated financial statements cover the year to 30 April account in the year in which they become payable. The Union 2013 and include the Scottish Rugby Union, a mutual organisation, Flow Statement and the related notes. The financial reporting • have been prepared in accordance with the requirements of the provides no other post retirement benefits to its employees. framework that has been applied in their preparation is applicable its subsidiary undertakings Scottish Rugby Union plc and The Companies Act 2006. Finance and operating leases law and United Kingdom Accounting Standards (United Kingdom Murrayfield Experience Limited, and a related body, the Thistle Costs in respect of operating leases are charged on a straight line Generally Accepted Accounting Practice). Opinion on other matter prescribed by the Companies Act 2006 Rugby Trust. The parent body, the Scottish Rugby Union, has not In our opinion the information given in the Scottish Rugby Board traded during either the current or previous year and its only assets basis over the lease term. Respective responsibilities of directors and auditors Report for the financial year for which the financial statements are and liabilities are its investment in, and loans from, Scottish Rugby Leasing and hire purchase agreements which transfer substantially all As explained more fully in the Directors’ Responsibilities Statement set prepared is consistent with the financial statements. Union plc of £50,000. the benefits and risks of ownership of an asset are treated as if the out on page 52, the directors are responsible for the preparation asset had been purchased outright. The assets are included in fixed of the financial statements and for being satisfied that they give Matters on which we are required to report by exception Turnover assets and the capital element of the leasing commitment is shown as a true and fair view. Our responsibility is to audit and express an We have nothing to report in respect of the following matters where Turnover represents ticket sales, broadcasting revenue and all other an obligation under finance leases. The lease rentals are treated as opinion on the financial statements in accordance with applicable the Companies Act 2006 requires us to report to you if, in our income and is stated net of VAT. Revenue is recognised based on the consisting of capital and interest elements, with the capital element law and International Standards on Auditing (UK and Ireland). Those opinion: relevant contractual terms or in accordance with the occurrence of the relevant event. Where consideration is received in kind, income and applied to reduce the outstanding obligation and the interest element standards require us to comply with the Auditing Practices Board’s • adequate accounting records have not been kept, or returns expenditure are grossed up on the basis of arms length commercial charged against the profit or loss for the period on a straight line basis. Ethical Standards for Auditors. adequate for our audit have not been received from branches rates. Assets held under finance leases are depreciated over the shorter of not visited by us; or This report, including the opinions, has been prepared for and only the lease term and the useful lives of equivalent owned assets. Tangible Fixed Assets for the Union’s members as a body in accordance with Chapter 3 • the financial statements are not in agreement with the The cost of tangible fixed assets is their purchase cost, together Grants of Part 16 of the Companies Act 2006 and for no other purpose. accounting records and returns; or Revenue grants are credited to the income and expenditure account We do not, in giving these opinions, accept or assume responsibility with any incidental costs of acquisition. Significant sums are spent • certain disclosures of directors’ remuneration specified by law in the same period as the related expenses. for any other purpose or to any other person to whom this report on maintenance of the Union’s main asset, Murrayfield Stadium, are not made; or is shown or into whose hands it may come save where expressly therefore the de-minimus level for capitalisation of assets has been Taxation agreed by our prior consent in writing. • we have not received all the information and explanations we set at £10,000 for the first three asset categories below and at The Union has mutual trading status for taxation purposes as regards require for our audit. £5,000 for Other equipment. Depreciation is calculated so as its trading activities with its own members and pays tax only on the Scope of the audit of the financial statements to write off the cost of tangible fixed assets, less their estimated profit derived from trading with non members. Deferred taxation is An audit involves obtaining evidence about the amounts and residual values, over the expected useful economic lives of the assets recognised on all timing differences where the transaction or events disclosures in the financial statements sufficient to give reasonable concerned. The straight line basis is used in respect of all assets and that give rise to an obligation to pay more, or less, tax in the future assurance that the financial statements are free from material the principal annual depreciation rates are: have occurred by the Balance Sheet date. Deferred tax assets are misstatement, whether caused by fraud or error. This includes an recognised when it is probable that they will be recovered. The tax assessment of: whether the accounting policies are appropriate to Kenneth Wilson (Senior Statutory Auditor) % rates in force at the Balance Sheet date are used to calculate the the Union’s circumstances and have been consistently applied and For and on behalf of PricewaterhouseCoopers LLP Land Nil need for any deferred tax provision or asset. adequately disclosed; the reasonableness of significant accounting Chartered Accountants and Statutory Auditors Stands and Heritable property 1-20 estimates made by the directors; and the overall presentation of Edinburgh Financial Instruments the financial statements. In addition, we read all the financial and Fixtures and fittings 4-25 The Union uses interest rate swaps to reduce its exposure to interest 12 June 2013 non-financial information in the annual report to identify material Other equipment 7-50 rate movements. Receipts and payments on these interest rate inconsistencies with the audited financial statements. If we become Deferred Income swaps are recognised on an accruals basis over the life of the swap. aware of any apparent material misstatements or inconsistencies we Capital grants and debenture premiums are transferred to The Union also uses forward sale currency contracts to reduce its consider the implications for our report. deferred income and amortised over the estimated useful life of the exposure to exchange rate movements. The income relating to these associated fixed assets or the life of the debenture, respectively. sales is accounted for at the rate of exchange at which the related contract has been taken out. The Union does not hold or issue Debenture issue costs derivative financial instruments for speculative purposes. The costs associated with the issue of capital instruments are charged
62 6363 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Consolidated Income and Expenditure Account Consolidated Balance Sheet 2 013 2 012 2013 2 012 Notes £000 £000 Notes £000 £000
Income Fixed Assets Ticket income 9,400 5,748 Tangible Fixed Assets 5 39,328 39,894 Broadcasting revenues 12,568 10,004 Investments 6 2 2 Other operating income 17,307 22,474 39,330 39,896 39,275 38,226 Current Assets Expenditure Debtors 7 5,259 6,141 International and Professional Rugby 20,884 19,116 Cash in hand 10 7 Community and Performance Rugby 4,701 4,494 Commercial and Operational 8,874 9,207 5,269 6,148 Club Support and Development 1,932 1,900 Creditors: amounts falling due within one year 8 (10,828 ) (22,826 ) Depreciation 1,100 1,131
Net Current Liabilities (5,559 ) (16,678 ) 37,491 35,848
Provisions for liabilities and charges 9 (42 ) (40 ) Operating Surplus 1,784 2,378 Surplus on sale of Fixed Asset - 121 Total Assets less Current Liabilities and Provisions 33,729 23,178 Surplus on ordinary activities before interest 1,784 2,499 Net Interest 3 (926 ) (919 ) Financed by: Surplus on ordinary activities before taxation 1 858 1,580 Creditors: amounts falling due after one year 8 9,743 292 Taxation 4 - (10 ) Deferred income 10 2,355 2,195 Surplus for the financial year 15 858 1,570 Ten Year Debentures 11 1 1 Murrayfield Debentures 12 31,371 31,289 Irredeemable Debentures 13 97 97 The Union has no recognised gains or losses other than those included in the surplus above and therefore no separate statement of total recognised gains and losses has been presented. All activities are continuing. 43,567 33,874
There is no difference between the surplus on ordinary activities before taxation and the surplus for the years stated above and their General Reserve 15 (9,838 ) (10,696 ) historical cost equivalents. 33,729 23,178 A commentary on the main items included in each of the above categories is appended to the accounts after the Five Year Financial Summary. The Financial Statements on pages 63 to 72 were approved by the Scottish Rugby Board and signed on its behalf on 12 June 2013 by:
Sir Moir Lockhead OBE, Chairman
Mark Dodson, Chief Executive
64 6565 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Consolidated Cash Flow Statement Notes to the Financial Statements 2 013 2 012 Notes £000 £000 1. Surplus on ordinary activities before taxation 2 013 2 012 Net cashflow from operating activities 16 3,257 927 The surplus on ordinary activities before taxation is stated after crediting: £000 £000 Amortisation of deferred income 135 181 Return on investments and servicing of finance Barter transaction sponsorship income 230 468 Interest paid on bank overdrafts and loans (853 ) (810 ) And after charging:
Auditors remuneration 25 26 Capital Expenditure and Financial Investment Auditors fees for non-audit services Payments to acquire Tangible Fixed Assets (518 ) (954 ) Tax compliance 7 11 Receipts from sale of Tangible Fixed Assets - 14 8 Tax advisory 9 9 Depreciation charge for the year Financing Owned fixed assets 1,100 1,131 Issue of Debentures 295 - Operating lease rentals Repayment of bank loan (500 ) Plant & machinery 10 46 Increase / (decrease) in cash 1,681 (689 ) Other 235 253 Barter transaction sponsorship costs 230 468 Administrative and management expenses 2,107 2,808
Reconciliation of net cash flow to movement in net debt 2 013 2 012 During the year the Union made donations for charitable purposes of £6k (2012 - £19k). £000 £000
Increase / (decrease) in cash in year 1,681 (689 ) 2. Staff Costs Amortisation of Murrayfield Debentures (82 ) (82 ) The average number of persons employed during the year who are involved in and support the Scottish game was: Repayment of bank loan 500 - Change in net debt 2,099 (771 ) 2013 2013 2012 2012 Opening net debt (44,805 ) (44,034 ) No. No. No. No. Closing net debt 17 (42,706 ) (44,805 ) Rugby Professional Players 89 78 Professional Teams - Coaching & Administration 19 18 National Team - Coaching & Administration 11 12 Elite Development Players & Coaches 25 24 Community & Performance 64 62 Strength & Conditioning 14 17 Medical & Physiotherapy 11 11 233 222 Stadium Operations 32 30 Administration Support 38 43
TOTAL 303 295
Within the above figures: Community & Performance includes Refereeing Staff, Regional Development Managers, General Rugby Support, Regional Academy Coaches, Performance Development, Coach Development and Age Grade & Other Coaches. Stadium Operations includes staff involved in Event Management, Ticketing and Stadium & Pitch Maintenance. Administration Support includes Commercial & Marketing, HR & Communications, Finance & IT, Governance and General Administration.
66 6767 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Notes to the Financial Statements Notes to the Financial Statements
2. Staff Costs (cont) 5. Fixed Assets 2013 2 012 Heritable Fixtures Other Total Total Property & fittings Equipment Total £000 £000 £000 £000 £000 £000 Employment costs: Cost Wages and salaries 18,433 16,862 Opening 45,915 14,463 3,413 63,791 Social security costs 2,043 1,854 Additions 263 93 178 534 Other pension costs 372 328 20,848 19,044 Closing 46,178 14,556 3,591 64,325 At the year end the pension accrual was £141k (2012 - £182k). Depreciation 3. Net Interest Opening 9,393 11,770 2,734 23,897 2 013 2 012 Charge for year 565 410 125 1,100 £000 £000 Closing 9,958 12,180 2,859 24,997 Interest payable on bank borrowings (844 ) (837 ) Amortisation of Debenture issue costs (82 ) (82 ) Net Book Value (926 ) (919 ) Closing 36,220 2,376 732 39,328 The rates of interest on the Union’s term loan borrowings are included in Note 8. Opening 36,522 2,693 679 39,894 4. Taxation 2 013 2 012 6. Investments £000 £000 Current Tax: The Union is the beneficial owner of 1,667 €1.27 ordinary shares in European Rugby Cup Limited (ERC), a company incorporated in the On profits arising from non-mutual trading - 10 Irish Republic. The Union’s holding represents 16.67% of the company’s issued share capital. Deferred: The Union holds one €1.25 ordinary share in British Lions Limited, a company incorporated in the Irish Republic. The Union’s investment Origination and reversal of timing differences 349 8 81 represents a 25% holding in the issued share capital of the company. Movement in deferred tax unprovided (349 ) (881 ) The Union is the beneficial owner of 100 €1.00 ordinary shares in Celtic Rugby Limited, a company incorporated in the Irish Republic. - 10 The Union’s holding represents 33% of the company’s issued share capital. Factors affecting the current tax charge for the year: 2 013 2 012 Given the disposition of the other shareholdings in these companies, and the immateriality of their net surpluses and net assets after £000 £000 receipt of dividends by the Union, the Directors do not believe that these investments fall to be treated as associate companies. Fixed Surplus on ordinary activities before tax 858 1,580 asset investments are stated at the lower of cost and valuation.
Corporation Tax at 20% (2012 - 20%) 172 316 7. Debtors Effects of: 2 013 2 012 Net expenses not deductible for tax purposes 15 8 154 Amounts falling due within one year £000 £000 Non-taxable element of surplus on fixed asset disposal - (24 ) Trade debtors 4,650 5,297 Crystallisation of tax losses (281 ) (394 ) Prepayments 406 665 Non-taxable mutual profits (150 ) (125 ) Other debtors 203 179 Depreciation in excess of capital allowances 92 95 5,259 6,141 Capital transactions - 10 Movement in other timing differences 9 (22 ) The Union has entered into a number of forward sale currency contracts to reduce its exposure to exchange rate movements affecting - 10 the income it receives in Euro, from ERC and 6 Nations. At the year end, the contracts held were for a total of €8.9m, with settlement dates between 14 May 2013 and 30 June 2014 at an average rate of £0.87:€1. The notional market value of these contracts at 30 The Union has gross taxable profits arising in the year of £nil (2012 - £48k). April 2013 was £195k. At 30 April 2012, contracts for a total of €12.8m were held, with settlement dates between 14 May 2012 and 17 June 2013 at an average rate of £0.89:€1. The notional market value of these at 30 April 2012 was £866k.
68 6969 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Notes to the Financial Statements Notes to the Financial Statements
8. Creditors 10. Deferred income 2013 2 012 Heritable Property Debenture Premium 2 013 2 012 Amounts falling due within one year £000 £000 £000 £000 £000 £000 Bank overdrafts 1,747 3,425 Opening 1,664 531 2,195 2,376 Advance receipts 2,044 2,512 Issue of Debentures - 295 295 - Trade creditors 1,247 1,219 Amortisation (32 ) (103 ) (135 ) (181 ) Other tax and social security 1,402 939 Closing 1,632 723 2,355 2,195 Corporation tax payable - 10 Accruals 4,388 4,721 11. Ten Year Debentures Bank loans - 10,000 2 013 2 012 10,828 22,826 Debenture Class of Debenture Value Each Max. No. Authorised No. issued No. Issued 2013 2 012 2002 Debentures H £1 1,500 - 198 Amounts falling due after more than one year £000 £000 I £1 1,500 - 408 Bank loans 9,500 - 2009 Debentures J £1 500 90 90 Other creditors 24 3 292 K £1 1,000 429 429 9,743 292 L £1 200 78 78 2012 Debentures N £1 1,000 14 - In the prior year, at 30 April 2012, the term loan was repayable in full on 30 November 2012 and, as such, was classified as “amounts fal ling due O £1 1,000 180 - within one year” rather than “amounts falling due after more than one year”. In May 2012, the Union concluded a re-financing arrangement with the Bank of Scotland and a new term loan of £9.5m was agreed. £0.5m of this loan is repayable annually, with the balance repayable in full on 30 June Debentures issued 791 1,203 2015. Security has been granted to the Union’s bankers by way of a Bond and Floating charge over the assets of Scottish Rugby Union plc. The Union has entered into an interest rate swap with the Bank of Scotland, initially in relation to £9.5m of the new term loan. This has fixed the interest rate on these borrowings, from March 2013, at 4.295%. In the year ended 30 April 2012, the Union had entered into interest rate swaps with the The 2002 Ten Year Debentures were unsecured, interest free and repayable at par on 31 May 2012. The 2009 Debentures are unsecured, Bank of Scotland in relation to £10m of the term loan, which fixed the interest rate on those borrowings at an average of 6.35%. interest free and repayable at par on 31 May 2019. The 2012 Debentures are unsecured, interest free and repayable at par on 31 May The interest rate swap arrangement has a notional market value, being the net present value of future cash flows due under the swap 2022. Holders of the 2009 and 2012 Debentures have the right to purchase a ticket for any event or match at the stadium for which the compared to current interest rates. The market value of the interest rate swap on 30 April 2013 was (£116k). The market value of the inter est rate Union retains direct control over the allocation of all tickets. In respect of Six Nations matches, the ticket is for a specific seat. swaps in place on 30 April 2012 relating to the £10m term loan was (£431k). 9. Provisions for liabilities and charges 12. Murrayfield Debentures Deferred Tax Tenant Club Fund Total 2 013 2012 £000 £000 £000 Class of Debenture Value Each No. Authorised No. Issued £000 No. Issued £000 Opening - 40 40 A £1,200 9,100 9,092 10,910 9,092 10,910 Transfer during period - 2 2 B £2,200 7,900 7,900 17,380 7,900 17,380 Closing - 42 42 C £3,500 1,000 1,000 3,500 1,000 3,500 2 013 2 012 Thistle £9,900 500 188 1,861 188 1,861 Deferred taxation comprises: £000 £000 Debentures issued 18,180 33,651 18,180 33,651 Accelerated capital allowances 2,040 2,198 Issue Costs: Other timing differences 491 494 Opening 2,362 2,444 Trading losses carried forward (4,412 ) (4,922 ) Amortisation (82 ) (82 ) (1,881 ) (2,230 ) Closing 2,280 2,362 Deferred tax asset not recognised 1,881 2,230 - - Net Issue Proceeds less amortisation 31,371 31,289 Finance Bill 2012 received Royal Assent on 17 July 2012. This enacted a reduction in the main rate of corporation tax from 24% to 23% from 1 April 2013. Accordingly all closing deferred tax balances are now calculated at a rate of 23%, as it is expected that deferred tax balances will be The Murrayfield Debentures are unsecured, rank pari passu and are interest free. Repayment, at par, is at the discretion of the Union realised/settled at these rates in future periods. on or after 1 January 2043 in respect of the A and C Debentures and 1 January 2044 with regard to the B and Thistle Debentures. Following due consideration of future anticipated taxable profits, the residual deferred tax assets on trading losses carried forward has not been Murrayfield Debenture holders have the right to purchase a ticket for any event or match at the stadium for which the Union retains recognised on the basis that it will take some time for them to be fully recovered. The deferred tax asset will be fully recoverable should there be direct control over the allocation of all tickets. In respect of Six Nations matches the ticket is for a specific seat. Thistle and C Debenture appropriate future taxable profits. holders also have the right to purchase certain matchday hospitality packages. Further changes to the UK Corporation tax rates were announced in the 2012 Autumn Statement and the March 2013 Budget. These include further reductions to the main rate to reduce the rate to 21% from 1 April 2014 and to 20% from 1 April 2015. These changes had not been substantively enacted at the balance sheet date and, therefore, are not included in these financial statements.
70 7171 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Notes to the Financial Statements Five Year Financial Summary
2 013 2012 2011 2010 2009 13. Irredeemable Debentures £000 £000 £000 £000 £000 The 972 (2012 - 972) Debentures of £100 each (the 1925 Debentures) entitle the holder to purchase two tickets at Murrayfield for Income 39,275 38,226 35,086 33,556 29,796 each match directly controlled by the Union. The debentures are interest free.
14. Leases Expenditure: Non-cancellable commitments under leases to pay rentals in the year following the year of these financial statements are noted below, International and Professional Rugby 20,884 19,116 16,691 16,128 14,998 analysed to the year in which each lease expires. 2 013 2 012 Community and Performance Rugby 4,701 4,494 4,221 3,877 3,477 £000 £000 Commercial and Operational 8,874 9,207 9,121 9,354 8,063 Land & Buildings - Expiring within 2 to 5 years 275 - Land & Buildings - Expiring in more than 5 years - 275 Club Support and Development 1,932 1,900 1,805 1,793 1,334 Plant & Machinery - Expiring within 2 to 5 years 10 7 Depreciation 1,100 1,131 1,037 887 796 285 282 37,491 35,848 32,875 32,039 28,668 15. General Reserve 2 013 2 012 £000 £000 Surplus before exceptional items 1,784 2,378 2,211 1,517 1,128 Opening (10,696 ) (12,266 ) Exceptional Credit - - - 809 - Surplus for the period 858 1,570 Closing (9,838 ) (10,696 ) Operating Surplus 1,784 2,378 2,211 2,326 1,128 16. Reconciliation of operating surplus to net cashflow from operating activities Surplus on sale of Fixed Asset - 121 - - - Total Total Surplus on ordinary activities before interest 1,784 2,499 2,211 2,326 1,128 2013 2 012 £000 £000 Net interest (926 ) (919 ) (923 ) (957 ) (1,072 ) Operating surplus 1,784 2,378 Surplus before taxation 858 1,580 1,288 1,369 56 Depreciation charge 1,100 1,131 Amortisation of deferred income (135 ) (181 ) Taxation - (10 ) - - - Tenant club residual fund 2 2 Surplus for year 858 1,570 1,288 1,369 56 Movement in debtors 882 (944 ) Movement in creditors (376 ) (1,459 ) 3,257 927 Capital Expenditure 534 636 1,008 1,679 707 17. Analysis of changes in net debt 2012 Cash Flows Other Changes 2 013 £000 £000 £000 £000 Cash in hand 7 3 - 10 Overdrafts (3,425 ) 1,678 - (1,747 ) Bank loans (10,000 ) 500 - (9,500 ) Irredeemable Debentures (97 ) - - (97 ) Murrayfield Debentures (31,289 ) - (82 ) (31,371 ) Ten Year Debentures (1 ) - - (1 ) (44,805 ) 2,181 (82 ) (42,706 ) 18. SRU Group The Scottish Rugby Union carries out all of its operations through its wholly owned subsidiary, Scottish Rugby Union plc, the registered office of which is Murrayfield Stadium, Edinburgh, EH12 5PJ. For accounting purposes the group is also deemed to include the Thistle Rugby Trust. The group has taken advantage of the exemption conferred by FRS8 from the need to disclose transactions between group entities that have been eliminated on consolidation in these group financial statements.
72 7373 SCOTTISH RUGBY ANNUAL REPORT FINANCIAL STATEMENTS
Commentary on the Accounts Also included in this area is an Exiles Performance Development Manager and Coach, together with Elite Development Coaches in Glasgow and Edinburgh. The elite development programme, aligned with the Pro Teams, incurs costs from coaching to kit to player salaries and insurance as it strives to improve performance in the age-grade teams and to produce players for the professional teams. Specialist Turnover coaching costs are included here, as are analysis and other rugby operational support costs. Scottish Rugby’s income comes from a number of areas. National team match ticket sales, including the RBS 6 Nations and the EMC Tests, The provision of medical services from physiotherapists and doctors, for cover at various events and matches are included here, as are pro-club match ticket sales and tickets for the Emirates Airline Glasgow 7s, together with related broadcasting revenue provide a significant related strength and conditioning costs. Finally, the support for participation in the British and Irish Cup is included in this category. element of this. Match day income also includes revenue from pitchside advertising boards, match programmes and revenue from hospitality activities. The sale of merchandise is a further important source of income. Scottish Rugby is grateful for funding from its many sponsors including the Royal Bank of Scotland and Canterbury, and for significant grant Commercial & Operational funding from the International Rugby Board, sportscotland and the Cashback for Communities programme. Turnover also includes income Commercial and Operational costs cover various areas of activity in Scottish Rugby. The running costs of the national stadium are included from the Heineken Cup and the RaboDirect PRO12 League, and from other events held in Murrayfield Stadium including dinners, business and these range from pitch repair and preparation to roof and other stadium maintenance, from security to public liability insurance, and conferences, concerts and Christmas party nights. from rates to electricity, gas and water, all of which continue to ensure that Murrayfield remains a suitable, safe, and well maintained venue. Also included are match day and non-match day operational and staff costs, as are other event management and entertainment costs.
Marketing and commercial expenditure is included in this area, where the costs of identifying, partnering with, developing and maintaining International and Professional Rugby Scottish Rugby’s family of sponsors are recorded. The activation costs of marketing campaigns, promotional materials, media events and The expenditure relating to the players, management and medical teams involved in International and Professional rugby is within this other operational activities are also included here. Similarly included are the costs of other support staff and programmes in the areas of category. This includes travel, food and accommodation at venues, salaries, kit, laundry costs, travel insurance, shirt numbering, training ticketing, HR, procurement, IT, finance, governance and other services. Finally, the costs of the communications and public affairs team and facilities, honours caps and team coach hire for all of the Scotland teams playing at international level. related activity across the wide spectra of print, broadcast, web and other social media are part of this category. Pro-club costs, in addition to players’, coaches’ and support staff salaries include kit, travel and other coaching costs, and match day outgoings such as advertising, turnstile staff, ticket printing, venue preparation and entertainment. Club Support and Development Expenditure in the provision of medical services, including physiotherapists, match doctors (for the players), crowd doctors, and the medical To help the sport at grassroots level, clubs are supported through the payment of Participation Monies, Player Accident Insurance, supplies needed for strapping and treating injuries is included in this category. Finally, the investment in the strength and conditioning contributions to cup and league travel costs, the Club Facilities Fund to help with grounds and clubhouse improvements and the payment of personnel who work with the National and Professional teams is also included here. all referees’ travel costs across the country. Ticket commissions which clubs receive for sales of international and sevens tickets are included here as are Player Reward Scheme payments, where clubs’ contributions to the development of players who have gone on to win elite development or professional contracts are acknowledged. The joint funding of Club Development Officers in partnerships with both clubs Community and Performance Rugby and local authorities across the country is also part of Club Support and Development expenditure. Grassroots investment, which is key in helping to develop the players and coaches of the future, as well as maintaining and growing the game, is included in this category. Within Rugby Operations, a Partnership and Projects Manager oversees a team including two lead Regional Development Managers (RDMs) and six RDMs, based in their respective regions, supported by sportscotland, a national post Depreciation assigned to students, women and girls and an Education Manager. Additionally there are two Partnership Projects Development Officers Depreciation is the annual charge in respect of Scottish Rugby’s fixed assets, primarily the redevelopment costs of Murrayfield Stadium. and a Co-ordinator, supported by the Cashback for Communities funding. Other costs include travel, training and the costs of running the programmes of events. The Regional Academy team includes a Senior Regional Academy Manager and six Regional Academy Coaches (RACs), and is part funded by sportscotland and the IRB. The roles are responsible for programmes which identify and develop the best players. Outgoings include Pathway expenditure, kit, balls, travel and the organisation and running of player development events and camps. Referee development, from grassroots to international level, includes the costs of referee coaching, travel to games, kit, and staffing and office expenditure for those employed in this area. Referee costs also include salary, travelling expenses and associated costs for Scotland’s professional referee. In the area of coaching, Scottish Rugby staff deliver United Kingdom Coaching Certificate (UKCC) courses throughout Scotland to ensure that coaches are properly qualified to coach at all levels. Scottish Rugby is grateful for the support of sportscotland who fund the posts of UKCC Coach Development Manager and Coach Development Administrator, as well as supporting the costs of course delivery. Also included are the costs of the Coach Development Officers, and training and facility costs, as well as tutor and registration fees. Scottish Rugby assists in the delivery of the Positive Coaching Scotland programme and the costs associated with this are included here, as are the programme and administration costs of the Are You Ready to Play Rugby safety initiative.
74 7575 scottish Rugby Annual Report PARTNERS & SPONSORS
Front cover Key Rights Partners Henry Pyrgos scoring a try Principal Partner of Scottish Rugby against South Africa. Back cover Cartha QP Minis enjoy a coaching session. Photography PA Images, SNS, Ken Amor, Sponsor of Emirates Airline Sponsor of the HSBC National team Kit Partner Sponsor of EMC Tests Glasgow Sevens Sevens World Series Communities Fund Kevin Jones, Clint Lanyon, Scottish Government, Glasgow Life, Isobel Irvine
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All information correct at time of going to print on 13 June 2013 Official Sponsors
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