Annual Report and Accounts 2015
St Andrews Links Trust: Scottish Charity No. SC006161
Contents
1 Contents
2 Chairmen’s Statement
3 - 7 Chief Executive’s Report
8 - 12 Trustees’ Report
13 Independent Auditor’s Report
14 - 29 Financial Statements for the year ended 31 December 2015
14 Consolidated Statement of Financial Activities 15 Balance Sheets 16 Cash Flow Statements 17 - 29 Notes to the Accounts
30 - 33 Reference and Administrative Information
34 - 36 Unaudited Statistical Analysis
1 | St Andrews Links Trust: Scottish Charity No. SC006161 Chairmen’s Statement for the year ended 31 December 2015
R D Muckart S G Race Chairman of Trustees Chairman of Links Management Committee
As we reflect on a successful 2015 we do so with pride care recognised with the retention of Visit Scotland’s and gratitude for the endeavours of everyone associated 5-star Visitor Attraction status and as recipients of with St Andrews Links Trust. Visit Scotland’s “Tourism Everyone’s Business” Award for Tayside, Fife and Perth. This award recognised the In recent years the commitment to delivering memorable true team effort at the Links and is testament to the experiences for every golfer at St Andrews has been at commitment of all colleagues to deliver unique and the forefront of what we do. The Trustees have sought memorable experiences to our customers. It is the first to support the objective of meeting and, where possible, time we have been in receipt of this award and combined exceeding people’s expectations; an objective that applies with the retention of our 5-star Visitor Attraction status, not just to the world’s greatest professional and amateur we are delighted to see our collective work being players but also golfers of all ages and abilities who play recognised within Scotland at the national level. on the Links courses. We are also pleased to see our commitment to managing This commitment came under real scrutiny in 2015, our golf courses and facilities in an environmentally not least because of the huge amount of planning, and economically sustainable way going from strength preparation and the physical effects on the living to strength. In 2015 this was recognised by the Sports landscape -that is St Andrews Links- before, during Turf Research Institute (STRI), who presented the Links and after our opportunity to be the host venue of the Trust with a “Highly Commended” award in their 144th Open. Regardless of the challenge put in front Golf Environment Awards and this builds on our Golf of staff at the Links, their attitude and effort showcased Environment Organisation (GEO) certification. We are also the remarkable combination of talent, passion and glad to see sustainability and waste recycling continuing commitment to success that we are blessed with across to be integrated into our daily operations. the board at the Home of Golf. The year in which The Open is played on St Andrews Links As the start of the 144th Open approached, many were always presents additional financial challenges and 2015 anticipating a great test not least because of the fantastic was no different. Despite the considerable reduction condition the Old Course was presented in. It would in green fee income in 2015 we were pleased to see not only challenge the world’s best but also the staff turnover increase. This reflects ambition, enterprise and across the Links, as unprecedented weather conditions professionalism on the part of all our members of staff, prompted only the second Monday finish in the history particularly those on the financial and commercial side of of the championship. In front of a global TV audience our activities; success in these areas provides the enabling the greenkeeping staff produced a truly herculean element of long term development, as well as assisting in effort, fittingly recognised a few months later as they the delivery of our day to day operations. received the British and International Golf Greenkeeper’s Association Championship Team of the Year Award. R D Muckart S G Race Chairman of Trustees Chairman of Links Such efforts are not reserved to those who are responsible Management Committee for the presentation, appearance and condition of the Old Course. Just a matter of hours after Zach Johnson was 27 May 2016 crowned Champion Golfer, many aspects of our famous Links were operational and available to every golfer. This would not have been possible without a collective effort from those at the forefront of customer service, as well as the support of the many dedicated teams, often working behind the scenes.
We are fortunate that our famous Links is revered by golfers around the world but it is particularly pleasing to see working practices and our standards of customer
2 | St Andrews Links Trust: Annual Report and Accounts 2015 Chief Executive’s Report for the year ended 31 December 2015
Fast forward to the end of September and the 2015 Alfred Dunhill Links Championship was played against the backdrop of one of the most remarkable Indian summers in living memory. Practice rounds and the first three days of the Tournament were blessed with unbelievable sunshine and the Home of Golf was showcased in W E B Loudon CBE wonderful condition, despite the event being staged just Chief Executive weeks after the infrastructure of the 144th Open had departed. As has been the case in recent years, the Dunhill has become something of a redemption story for the victor and so it would prove with Denmark’s Thorbjørn Olesen, who overcame a troubled 12 months contending I am pleased to report that 2015 was as memorable a with injury and form to be crowned champion. It was year as we all hoped for, with success both on and off a fantastic advert for autumnal golf in St Andrews and the courses. There was no shortage of drama on the across Scotland and I hope it will encourage many more Links, as the championship golf we hosted witnessed golfers, both from home and abroad, to continue the weather conditions which tested our staff to the limit. trend of extending the golfing season long into October. However, in the face of, at times, extremely challenging conditions across the board I was delighted to see how dynamic and enterprising our workforce truly is, adapting and responding to every eventuality. The main event was undoubtedly the 144th Open played over the Old Course and I will return to this in a moment but first I want to reflect on events either side of July.
In June, Italy’s Federico Zucchetti lifted the St Andrews Links Trophy, the tournament reduced to 54 holes due to winds gusting in excess of 56mph on the second day’s play. The cancellation of an entire day’s play on the Jubilee Course was the subject of much deliberation for the Tournament Committee but they were left with little choice. The team of Links staff and hardy volunteers responsible for planning, preparing and marshalling the international field of 144 golfers did a fantastic job managing the dislocated expectations of the many golfers who saw their hopes of lifting the trophy dashed. A by- product of the decision was a bunched field competing Thorbjørn Olesen on the Old Course over 36 holes on the final day. Federico emerged from the pack to claim Italy’s first victory in a competition which has been contested by his compatriots Eduardo and Federico Molinari in recent years. This prestigious amateur tournament continues to attract a stellar field and we hope Federico, a student at the University of Central Florida, will help to enhance further its reputation on the international stage.
3 | St Andrews Links Trust: Scottish Charity No. SC006161 Chief Executive’s Report continued for the year ended 31 December 2015
What our colleagues in the R&A would have given to being closed for four weeks is, in itself, an excellent have had those sunkissed days of September when we achievement. Our strong operating performance in 2015 hosted the 144th Open in July at the Home of Golf! was in part thanks to our sustained effort to become The world’s oldest Major played at St Andrews is a truly less dependent on green fee income, primarily through unique event. Despite years of planning and months of diversification in other income streams such as retail intense preparation, the 29th Open to be staged on the and licensing and the continuing development of our Old Course was greeted with some of the most extreme partnership programme. weather conditions witnessed at the Links. Unseasonal cold temperatures, record rainfall and gusting winds This work is represented within our commercial pyramid combined to force the event into a fifth day for only led, at the highest level, by our global partner Allianz, the second time in its history. Despite such adversity the and I am very pleased that we have now renewed our event was a resounding success and produced a worthy agreement with them for a further three years. Since we champion in Zach Johnson. The American showed first forged this relationship in 2009 it has grown into remarkable stamina and skill to lift the Claret Jug. a celebration of shared values, not least trust, integrity, quality and sustainability. Six years ago both parties Such commendable qualities were replicated by the entered into the relationship with real ambition but with efforts of the Trust’s greenkeeping teams before, during unanswered questions about what the partnership would and after the event. Their work, and in fact that of the represent above and beyond the terms and conditions entire team across the Links, did not stop after the 144th found in legal agreements. We are delighted that it has Open and a matter of hours after its conclusion a massive now established a real foundation and platform to help effort was underway to reopen the courses and to present raise awareness of the partnership as well as the unique them to the expected standard, despite the disruption nature of St Andrews. The relationship continues to evolve caused by the dismantling of the many grandstands, and I was pleased to see this work deliver the first-ever scoreboards and substantial television and media Allianz Old Course Tournament in April, the continued complexes, not to mention the tented village in the weeks Allianz Golf Camp in August and some TV filming in that followed. June which saw St Andrews Links feature prominently alongside Formula One World Champion Lewis Hamilton, While the focus of the 144th Open was centred largely world renowned pianist Lang Lang, FC Bayern Munich around one week on the Old Course, its reach and and the Paralympic movement in a new Allianz global impact was felt far wider on the Links, in the town of St campaign. Andrews and in Scotland as a whole. That we can reflect on a good 12 months of trading despite the Old Course
4 | St Andrews Links Trust: Annual Report and Accounts 2015 Raising awareness of what St Andrews means to golf on a global stage is important to us and with the support of partners we aired a series of St Andrews Links TV commercials in and around the 144th Open in July. These commercials reached a potential viewing audience of 641 million people, in territories around the world and on platforms such as CNN, ESPN, CANAL+ and Sky Sports Germany. They celebrated not just the Old Course and the Links but also the uniqueness of St Andrews as a destination for golf, heritage and hospitality. Operating under the banner “Write Your Own History” the campaign captured the imagination of the viewing public and gained real-time support through our digital platforms. It took a tremendous amount of effort to complete the commercials, we are proud of the finished product and we hope they will continue to play a part in promoting St Andrews in the short to medium term.
We have an exceptional core product: our golf courses and their history but we would not be able to undertake projects such as the TV Commercial were it not for the global recognition and knowledge many have of the world’s most famous Links. In helping to sustain that reputation I acknowledge the expertise and assistance of the valued partnership programme we have with Allianz, Rolex, Callaway and Brooks Brothers.
Zach Johnson
5 | St Andrews Links Trust: Scottish Charity No. SC006161 Chief Executive’s Report continued for the year ended 31 December 2015
Our own retail operations, primarily through the Trust’s subsidiary company St Andrews Links Golf Shops Limited, once again made a strong contribution to the Trust’s turnover. Although retail sales were relatively poor after the Old Course closed for play on 20 June, sales during the 144th Open week itself and for the remainder of the year were strong. Such is the nature of buying and selling cycles that this work does not fit neatly into the window of the golfing season and requires a year round commitment to ensuring we continue to deliver the right variety and quality of products the consumer demands.
An important area of ongoing and future partnership Over the course of 2015 Tom Morris International is our relationship with suppliers of turf maintenance Limited (TMI) explored possible licensing opportunities machinery. Our official equipment supplier for the last with several new entities. After many constructive 16 years has been Toro but in April 2015 we published an conversations and rigorous analysis, the board of TMI Invitation to Tender asking the three main manufacturers decided to alter its business model, shifting away from of turf care equipment to make offers for the future wholesale to pursue other licensing opportunities through provision of greenkeeping machinery to St Andrews Links St Andrews Links Limited. These opportunities could not Trust. The evaluation stage of this process is nearing have been contemplated had TMI not been set up to completion and we will enter commercial discussions in develop the Tom Morris brand and the Board of Trustees August 2016 with the aim of announcing our preferred believe that the investment in TMI, combined with this future greenkeeping partner by the end of 2016. exciting new licensing opportunity, will bring significant benefits in the years to come. Successful partnership arrangements require integrity within brands and this involves degrees of protection In December we announced that we would assume which are aimed at enhancing the reputation and responsibility for the distribution of all commercial Old heritage of St Andrews. In the early stages of this work Course tee times for the season commencing April 2018. there was some apprehension and misunderstanding The decision by Trustees will bring to an end our long- about our objectives but we believe there is far greater standing contractual arrangement with partners Old understanding and support today. We were delighted Course Experience in 2017. We would like to put on to host the first-ever Champions Charity Golf Day in July. record our gratitude to the entire team at Old Course Organised by St Andrews Links and Auchterlonies of St Experience in St Andrews, London and New York for all Andrews, the monies raised will be split 50:50, in the their hard work, support and assistance over the past names of two of St Andrews’ greatest sons, Tom Morris 20 years. The relationship with OCE has been successful and Willie Auchterlonie, to support sport and the arts in and they have helped to enhance the visiting golfer’s St Andrews and in the Scottish Borders. experience at the Home of Golf with their commitment
6 | St Andrews Links Trust: Annual Report and Accounts 2015 to high levels of customer service as well as their passion, although there have been in-year financial challenges for not just for our golf courses and facilities but also the the Trust, it is pleasing to see that the underlying trading town as a whole. results have shown consistency and resilience. There is, however, no room for complacency and it is important This decision has prompted us to reflect on the landscape for us to be alive to the wider risks facing the game 20 years ago compared to that which we occupy now. of golf and how these work through into the market Much has changed and today our service and conditions affecting the Trust. With one eye on the commitment to customer care strives to match our future this will involve more investment in infrastructure, historical importance. In 2015 we continued to invest communications and digital platforms but we must not in our people with our Learning and Development lose sight of the expectations of our core customers: programmes and we were delighted to be recognised the local and visiting golfer. The strategy -which has nationally in the Visit Scotland tourism awards, lifting the been in place for four years now- of investing in quality, “Tourism Everyone’s Business” award for the Fife, Tayside developing our pre-eminent position and maintaining and Perth region, as well as through our retention of our unique reputation has delivered success and will Visit Scotland’s 5-star Visitor Attraction rating. Achieving be continued for the foreseeable future. Ambition such this status for the first time two years ago marked the as this enables the creation and delivery of memorable culmination of a long held ambition for many at the Links. experiences to current customers and sustains the viability However, we could not rest on our laurels and assessors of the organisation which has been entrusted to look after at Visit Scotland advised us that experience suggested and to protect the world’s most famous golf links. that, having achieved 5-star status, many found it hard to retain the award. It is particularly pleasing to have done so and I commend everyone at the Links for playing a part in retaining our status in 2015. Euan Loudon CBE Chief Executive It is always a privilege for the Links and the town of St Andrews to host The Open; in the words of a BBC 27 May 2016 sports journalist, it is a moment in time “when the Old Course transforms itself into one of the greatest sporting venues in the world”. The positive economic impact of this phenomenon is felt throughout Fife and beyond and
7 | St Andrews Links Trust: Scottish Charity No. SC006161 Trustees’ Report for the year ended 31 December 2015
Introduction The Audit and Risk Committee is responsible for agreeing The Trustees of St Andrews Links Trust present their the planning for and discussing the outcome of the Annual Report and Accounts for the year ended 31 annual audit, approving the draft Annual Report & December 2015. This report is prepared in compliance Accounts for submission to Trustees and for reviewing the with the Charities Accounts (Scotland) Regulations, 2006 Trust’s risk register. The Finance Committee is responsible (as amended), FRS102 and the Charities SORP (FRS102) for reviewing and approving draft budgets and pricing (referred to as SORP). recommendations prior to their submission to Trustees for approval. A Governance Sub-Committee is tasked Reference and Administrative Information with ensuring the Trust’s governance practices remain Reference and administrative information is shown on appropriate for an organisation of the Trust’s size and pages 30 to 33. complexity. A Remuneration Sub-Committee sets the pay and remuneration of the key management personnel Structure, Governance and Management having regard to various factors including the movement Governing legislation and appointment of Trustees in RPI and CPI indices. The Trust was established by the St Andrews Links Order Confirmation Act, 1974 (the “Links Act”), a private Act The Trustees have overall responsibility for ensuring that of Parliament. The principal objective of the Trust is to appropriate systems of internal control, both financial “hold and maintain the Links as a public park and place and otherwise, exist. The systems of internal control of public resort and recreation for the residents of St are designed to provide reasonable, but not absolute, Andrews and others resorting thereto”. assurance against material misstatement or loss. They include;- The Links Act provides for the appointment of eight • annual budgets approved in advance by Trustees, Trustees, three nominated by the ‘local authority’ (Fife • strategic plans, periodically updated and approved by Council), three by The R&A and one by the Scottish Trustees, Government. The eighth Trustee is the Member of • regular consideration of financial performance by Parliament in whose constituency the Links are situated. the Trustees through management accounts and With the exception of the MP, Trustees are appointed for trading performance reports, a three year term and are eligible for reappointment at • delegation of authority and segregation of duties, and the end of that term. • identification and management of risks.
At their first meeting each year, Trustees elect a The Trustees are of the opinion that the major risks to chairperson and are reminded of their duties and which the Trust is exposed have been identified and responsibilities under the Links Act and other charities evaluated and that systems are in place to manage those legislation. Trustees are not representatives or delegates risks and identify any new risks to which the Trust may of their appointing body and must have regard only for become exposed. The principal risks identified by the the best interests of the Trust. Trustees are discussed in more detail in the Financial Review section of this report. Trustee Induction and Training Newly appointed Trustees participate in an induction Charitable Purpose programme. They are provided with the latest Annual The Trust benefits from charitable status and is Report and Accounts, copies of past minutes and other therefore exempt from income and corporation taxes background information and receive briefings on all areas on its charitable activities. Trading activities which are of the Trust’s operations from senior management. considered to be outwith the Trust’s charitable purposes are carried out by subsidiary companies, and their profits Governance are remitted to the Trust under Gift Aid arrangements. Day to day management of the Trust and its subsidiary companies is carried out by a management team, headed Related Parties by a Chief Executive, which reports to the Trustees at Information on transactions with related parties is given in regular formal meetings, the minutes of which are Note 22 to the accounts. published. Objectives and Activities Several sub-committees and working parties exist to As stated above, the Trust’s principal objective is to facilitate more detailed consideration of key aspects of the “hold and maintain the Links as a public park and place Trust’s operations and each of the subsidiary companies of public resort and recreation for the residents of St has a Board of Directors which include a mixture of Andrews and others resorting thereto”. Trustees, members of the management team and, where beneficial, independent non-executive directors. The sub-committees, working parties and Boards report to the Trustees at their formal meetings.
8 | St Andrews Links Trust: Annual Report and Accounts 2015 St Andrews is widely recognised as the “Home of Golf” Achievements and Performance as it is where the game began and largely evolved into its The most visible achievement in 2015 was the successful current form. It is home to the Old Course- the oldest and hosting of the 144th Open. Despite extremely challenging most famous golf course in the world- and is recognised weather conditions, which forced the event into a fifth internationally for its golfing connections. day for only the second time in its history, the event was a resounding success. The efforts of the Trust’s This historic background raises the expectations of the greenkeeping teams before, during and after the event thousands of visitors who flock to St Andrews, many deserve special mention. of them to fulfil a lifelong dream. The Trustees are acutely aware that only the highest standards of course Construction work on the grandstands and event presentation, facilities and service will suffice and it is their infrastructure began several months before the vision to develop St Andrews Links as the most renowned championship. Although the Old Course became the public golf complex in the world, delivering unique and focus of the golfing world’s attention during the event, memorable experiences for golfers to play, learn, shop a massive effort was required in the aftermath to reopen and relax. the courses and to present them to the expected standard despite the disruption caused by the dismantling of the In addition to this international perspective, the Links many grandstands, scoreboards and substantial television play an important role in the everyday life of the town. and media complexes, not to mention the 30,000 square This is recognised in the Links Act which extends certain metres of tented village. privileges to residents of the town and to Ordinary and Life members of the R&A. The town is home to several The 144th Open had a significant effect on play, as the long-established golf clubs and the Trust works closely Old Course closed for just over four weeks, with shorter with those clubs to facilitate their access to the courses closures affecting all except The Castle Course. In addition, for fixtures and competitions. Pricing and access privileges Golf Academy operations were curtailed between mid- have been extended to holders of yearly tickets, the May and the end of August because of the tented village. majority of whom are members of these local golf clubs. It is worth recording that the impact of the Old Course on Scottish golf tourism is such that most leading Scottish R&A Members, yearly ticket holders and residents of St golfing venues suffer a decline in demand during the Old Andrews play approximately 50% of all golf played on the Course closure. Trust’s courses yet only a small proportion of the Trust’s income is derived from these sources. The Trust therefore It is therefore very satisfying that the Trustees can report has a heavy dependence on visitors for its golfing and on a strong operating performance in 2015, which is other revenues, supplemented by royalties earned from analysed in more detail below. the Trust’s intellectual property portfolio. Recognition of the Trust’s service levels came in the Retail activities through the Trust’s subsidiary St Andrews retention of Visit Scotland’s 5-star Visitor Attraction Links Golf Shops Limited (Golf Shops), make a strong rating, following an inspection during 2015. This award is contribution to the Trust’s turnover and surplus. tangible evidence of the delivery of the Trustees’ ambition The profits earned from these retail activities help to to deliver unique and memorable experiences to its underwrite the Trust’s ability to keep yearly ticket prices as customers. low as possible. The ecological and sustainability focus of the Trust’s Income earned by St Andrews Links Limited (Links greenkeeping activities was recognised by the Sports Turf Ltd), the subsidiary company which exploits the Trust’s Research Institute (STRI), who gave the Trust a “Highly intellectual properties, does not depend on customers Commended” award in their Golf Environment Awards. physically travelling to St Andrews and therefore provides This builds on the Trust’s Golf Environment Organisation a degree of diversification to offset circumstances which (GEO) certification. could result in a fall in visitor numbers. The Trust’s retail activities through Golf Shops continue Through a contract with the St Andrews Community to thrive, achieving record turnover in 2015. This success Council, Links Ltd pays a royalty to the St Andrews demonstrates the recognition achieved by the “St Community Trust which applies those royalties towards Andrews Links” brand, which is further evidenced by the projects of public benefit to St Andrews and the steady growth over the past decade in royalty income. surrounding area. This ensures that the wider public can benefit from the Trust’s success in building and commercialising its intellectual properties. In 2015 royalties of £88,000 accrued to the benefit of the Community Trust, bringing the total amount of royalties since the Community Trust was established in 2010 to more than £400,000.
9 | St Andrews Links Trust: Scottish Charity No. SC006161 Trustees’ Report continued for the year ended 31 December 2015
The Trust has continued to develop its brands throughout Expenditure, after allowing for the impact of the FRS102 the world and, following a strategic review, it has been adjustment in respect of the defined benefit pension decided to route all retail activities through Golf Shops scheme, was slightly higher in 2015 than in 2014. and all licensing activities through Links Ltd. To facilitate Expenditure on charitable activities- basically the Links this, all intellectual properties, including those purchased Trust and Castle Course combined- increased, with the with Tom Morris Limited, will be held and exploited main components of the rise being in catering costs, legal by Links Ltd and all retail and merchandising activities, & professional fees and development expenditure and including those hitherto carried out by Tom Morris the impact on payroll and notional interest charges of the International Limited, will be carried out by Golf Shops. FRS102 adjustment.
Links Ltd will work with strategic partners to continue Expenditure on raising funds- effectively the costs of the the development of the Trust’s intellectual properties other subsidiary companies- reduced mainly due to the in different regions of the world. The consolidation of change of focus to licencing of the “Tom Morris” marks, intellectual properties within a single entity is expected to which enabled savings in payroll and operating costs to reduce legal and trademark protection costs and provide be achieved. greater clarity to partners, official suppliers and licensees. Payroll costs remain the largest component of total This refocussing of roles means that, having achieved its expenditure. Total payroll costs increased in 2015 mainly objective of developing a marketable “Tom Morris” range due to adjustments required to comply with FRS102, of products, Tom Morris International Limited will no with the actual cash cost of payroll, ignoring the FRS102 longer generate income in its own name. TMI’s directors adjustments, increasing by 1% to £9,018,692 (2014 - will make a recommendation to the Trustees as to the £8,926,598). future direction of the company during 2016. In the interim, Trustees believe it is appropriate for the Trust to Cost of sales and catering costs increased due to a make full provision against the carrying value of TMI, and combination of higher sales volumes and, in the case of the intra-group loan account balance as at 31 December catering costs, the need to hire in some equipment to 2015. cover functions during the 144th Open.
Financial Review Depreciation charges reduced slightly as some shop Presentation of the accounts fittings and other equipment became fully depreciated The accounts have been prepared in compliance with during the year. Further intellectual properties were the Charities SORP (FRS102), which became effective for registered or acquired during the year, resulting in an accounting periods beginning on or after 1 January 2015. increase in amortisation charges.
Consolidated accounts are presented, with the results Payments under operating leases reduced significantly of the Trust and its subsidiary companies combined as if because a lease for warehouse space at Slotline House in they were a single entity. Intra-group trading is eliminated St Andrews came to an end in December 2015 but, as the from income and expenditure in the Consolidated property was not going to be used during 2015 the rent Statement of Financial Activities and intra-group balances payable in 2015 was written off in the 2014 accounts as are eliminated from the Consolidated Balance Sheet. an onerous lease. Consequently, the 2015 accounts do not include the rent for Slotline House within operating Commentary on the Accounts lease costs. The year in which The Open is played in St Andrews always presents additional challenges and 2015 was no The total cost of legal and professional fees reduced in different, with golfing income depressed as a result of 2015, continuing a trend over the past few years. The course closures to facilitate the event. Catering income strengthening of the Trust’s trademark portfolio has increased, however, due to a combination of additional helped to reduce legal costs, as it has made it easier, and marketing efforts to promote The Castle Course outwith therefore less expensive, to tackle infringements. There high season, increased sales at The Old Pavilion and the was also a reduction in non-trademark related legal work. provision of some corporate hospitality to partners and official suppliers during the 144th Open itself. Development expenditure was considerably higher in 2015. The main project is the replacement of all on- Although retail sales were relatively poor after the Old course shelters and the provision of additional shelters. Course closed for play on 20 June, sales during the This represents a considerable undertaking which will 144th Open week and for the remainder of the year continue into 2016. The Trust has continued to update were strong, reaching new record levels. Royalties the greenkeeping centres and, after the additional wear receivable increased due to the renewal of some licensing and tear of the 144th Open, replaced and extended some agreements, particularly for computer games and of the internal roads and paths. simulators, together with further payments received from our licenced golf academy in China.
10 | St Andrews Links Trust: Annual Report and Accounts 2015 Interest charges decreased as £600,000 of the fixed rate balances repayable over the next four years the Trust has element of the 2008 term loan was repaid and the Trust’s net debts payable of £1,190,398 (2014 - £4,121,891). positive cash flow minimised the overdraft requirement. Irrecoverable VAT was very slightly higher than in 2014 The Audit & Risk Committee has highlighted to the with the difference being attributable to an increase in the Trustees that the Trust is vulnerable to major events proportion of input tax which could not be recovered. outwith its control which affect visitor numbers and, over the longer term, Trustees aim to accumulate free cash Capital expenditure on tangible fixed assets was just over reserves appropriate to the Trust’s needs. half that incurred in 2014 and for the first time in many years depreciation charges exceeded new fixed asset Principal Risks to the Trust’s Activities purchases. As a result, the net book value of tangible During 2015 the Audit & Risk Committee updated the fixed assets reduced slightly over the year. Expenditure on Trust’s risk register and presented it to Trustees for intangible fixed assets increased in 2015 resulting in an discussion and approval. increase in both amortisation charges and net book value. Given the Trust’s dependence on visiting golfers for the Following the exceptional level of merchandise sales in the majority of its income, the principal risks are connected year, stock levels have decreased slightly. Debtors were with the ability to attract and accommodate sufficient relatively little changed, but there has been a substantial visitors to generate that income. Not all of these risks can reduction in creditors due within one year. This can be controlled or influenced by the Trustees. be attributed to the repayment of the overdraft and a reduction in trade creditors and accruals, offset by an For example, a major disruption to air travel, if for a increase in the VAT liability at December 2015. prolonged period, could have a serious impact on the number of overseas visitors to St Andrews and it is The increase in deferred income at December 2015 unlikely that they could be wholly replaced by domestic generated substantial cash which was applied to visitors. It is not viable to insure against such a risk but it extinguish the overdraft and to repay the £500,000 term can be offset to some extent by developing other sources loan taken out in January 2014. The scale of the increase of income, e.g., royalties from the Trust’s intellectual highlights one of the financial impacts of the 144th Open property portfolio. as the number of advance reservations which could be taken in 2014 for play in 2015 was very much lower than One set of risks which can be mitigated to some extent, in a normal year. is the availability of the courses for play. The Trust’s greenkeeping staff have a wealth of experience in course As well as repaying the 2014 term loan, repayments of maintenance and are therefore well placed to prevent £640,000 were made on the original 2008 term loan and plant diseases or inappropriate maintenance procedures one element of the historic interest-free loans received from causing course closures. The utilisation of the from the R&A was fully repaid. The remaining loan is best available greenkeeping equipment and supplies, in repayable over four years instead of five and the long- combination with an active training programme for all term balance due to the R&A has reduced by £250,000. greenkeeping staff, help to mitigate this risk.
The Cash Flow Statements emphasise the strength of the The failure of the Trust’s coastal defences is another Trust’s underlying cash flow, which has been used to critical risk which is not entirely controllable by the fund the Trust’s major developments over the past two Trustees. Parts of the Links are designated as a Site of decades. Nearly £4 million was generated by the Trust’s Special Scientific Interest (SSSI) and there are numerous operations, most of which was used to invest in additional regulatory hurdles to be surmounted before significant fixed assets and to service and repay borrowings, leaving engineering or protection works can take place. A a net positive cash inflow of over £1.5 million. monitoring programme of existing coastal defences is in place with the aim of providing early warning of potential Reserves Policy trouble spots. Although the 2015 accounts show a total reserves figure of £21,454,772 (2014 - £17,804,088) and the cash Plans for Future Periods flow statements demonstrate strong cash generation, it The Trustees continually review the adequacy of the is important to put this into context. The reserves figure Trust’s facilities and will continue to invest in them and represents the aggregate total of all surpluses earned by in the equipment used on the Links in pursuit of their the Trust since its inception in 1974. This figure bears no objective of delivering unique and memorable experiences relation to the cash and bank facilities available to the for all. Trust.
Although the Trust traditionally enjoys strong positive cash flows, continued investment in the courses and facilities means that there has been no opportunity to build up free cash reserves and after allowing for loan
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The greenkeeping squads have throughout 2015, in a while improving and conserving it for the future. The process which will continue in 2016, been conducting Council will retain responsibility for the beach, toilets, extensive trials of turfcare equipment from three major litter collection and West Sands Road. manufacturers to ensure that when the Trust’s existing equipment supply contract with Toro ends in 2017 any Since the start of the 1996 season, the Trust has new contract ensures that the Trust will continue to have channelled commercial advance reservations for the access to the best available machinery and support. Old Course through ‘The Old Course Experience’, a subsidiary of Compass Group, on an exclusive basis. A review of the facilities serving the western side of That arrangement has been highly beneficial to the the Links, primarily the Eden, Strathtyrum and Balgove Trust, generating enhanced cash flow which has played Courses and the Golf Academy is being undertaken. a material part in the development of the Links over The Trust’s operations, and public expectations, have the past two decades. After lengthy consideration, changed very considerably since Pilmour House and the Trustees decided to end the exclusivity enjoyed the Eden Clubhouse were opened in 2000 and some by Compass Group, with effect from the start of the redevelopment of that area may reap both operational 2018 season, to deal directly with tour operators in the efficiencies and improved facilities for customers. The commercial allocation of Old Course tee times. Trust is currently working with architects to identify sympathetic and cost effective plans, although actual Trustees would like to place on record their appreciation work on any redevelopment project is unlikely to begin in of the important contribution made by Compass Group the short term. and, in particular, their locally-based staff to the golf tourism market as well as to the Trust’s financial stability. As Fife Council struggles to balance its budget, discussions have been held regarding the maintenance of the West Sands area between the beach and the boundary of the Jubilee Course. With effect from April 2016 the Trust agreed to undertake additional maintenance works on the grassed areas. The Trust will work with existing bodies R D Muckart including the Fife Coast & Countryside Trust and the West Chairman of Trustees Sands Partnership to maintain public access to this area 27 May 2016
12 | St Andrews Links Trust: Annual Report and Accounts 2015 Independent Auditor’s Report to the Trustees of St Andrews Links Trust for the year ended 31 December 2015
We have audited the accounts of St Andrews Links Trust Opinion for the year ended 31 December 2015 which comprise In our opinion the accounts: the group Statement of Financial Activities, the charity and group Balance Sheets, the charity and group Cash • give a true and fair view of the state of the charity’s Flow Statements and the related notes. The financial and group’s affairs as at 31 December 2015 and reporting framework that has been applied in their of the charity’s and group’s incoming resources and preparation is applicable law and United Kingdom application of resources, for the year then ended; Accounting Standards (United Kingdom Generally Accepted Accounting Practice). • have been properly prepared in accordance with United Kingdom Generally Accepted Accounting This report is made solely to the charity’s Trustees, as Practice; and a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 • have been prepared in accordance with the and regulation 10 of the Charities Accounts (Scotland) requirements of the Charities and Trustee Investment Regulations 2006. Our audit work has been undertaken (Scotland) Act 2005 and regulation 8 of the Charities so that we might state to the charity’s Trustees Accounts (Scotland) Regulations 2006 (as amended). those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest Matters on which we are required to report by extent permitted by law, we do not accept or assume exception responsibility to anyone other than the charity and its We have nothing to report in respect of the following Trustees as a body, for our audit work, for this report, or matters where the Charity Accounts (Scotland) for the opinions we have formed. Regulations 2006 (as amended) requires us to report to you if, in our opinion: Respective responsibilities of Trustees and auditor As explained more fully in the Statement of Trustees’ • the information given in the Report of the Trustees Responsibilities set out on page 32, the Trustees are is inconsistent in any material respect with the responsible for preparation of accounts which give a true accounts; or and fair view. • proper accounting records have not been kept; or We have been appointed as auditor under Section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act • the accounts are not in agreement with the 2005 and report in accordance with regulations made accounting records and returns; or under that Act. Our responsibility is to audit and express an opinion on the accounts in accordance with applicable • we have not received all the information and law and International Standards on Auditing (UK and explanations we require for our audit. Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’S) Ethical Standards for Auditors.
Scope of the audit of the accounts An audit involves obtaining evidence about the amounts and disclosures in the accounts sufficient to Henderson Loggie give reasonable assurance that the accounts are free Statutory Auditor from material misstatement, whether caused by fraud (Eligible to act as an auditor in terms of Section 1212 of or error. This includes an assessment of: whether the the Companies Act 2006) accounting policies are appropriate to the group’s and The Vision Building parent charity’s circumstances and have been consistently 20 Greenmarket applied and adequately disclosed; the reasonableness of Dundee significant accounting estimates made by the Trustees; DD1 4QB and the overall presentation of the accounts. In addition, we read all the financial and non-financial information in 27 May 2016 the Trustees’ Report to identify material inconsistencies with the audited accounts and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
13 | St Andrews Links Trust: Scottish Charity No. SC006161 Consolidated Statement of Financial Activities for the year ended 31 December 2015
2014 2015 as restated INCOME Notes £ £ £ INCOME FROM CHARITABLE ACTIVITIES Golfing income 2 11,524,094 11,949,818 Catering income 2,197,657 2,072,139 Rents receivable 8,174 7,729 13,729,925 14,029,686 INCOME FROM OTHER TRADING ACTIVITIES Merchandise income 5,126,582 4,845,269 Royalties 1,566,782 1,323,382 Other income 134,831 71,281 6,828,195 6,239,932
INVESTMENT INCOME Bank interest 1,210 863
OTHER INCOME Gain on disposal of fixed assets 40,560 29,329
TOTAL INCOME 20,599,890 20,299,810
EXPENDITURE Expenditure on raising funds 5,776,015 6,234,731 Expenditure on charitable activities 13,831,191 13,165,573 TOTAL EXPENDITURE 3 19,607,206 19,400,304
NET INCOME £992,684 £899,506
OTHER RECOGNISED GAINS / (LOSSES) Remeasurement gain / (loss) on defined benefit pension scheme 18 2,658,000 (1,932,000)
NET MOVEMENT IN FUNDS IN THE YEAR 3,650,684 (1,032,494)
RECONCILIATION OF FUNDS Balance brought forward 17,804,088 18,836,582
BALANCE CARRIED FORWARD 13 £21,454,772 £17,804,088
All funds are unrestricted.
AUDITOR’S REPORT - Page 13 THE NOTES ON PAGES 17 TO 29 FORM PART OF THESE ACCOUNTS
14 | St Andrews Links Trust: Annual Report and Accounts 2015 Balance Sheets as at 31 December 2015
Consolidated Trust Only
2015 2014 2015 2014 Notes £ £ £ £ FIXED ASSETS Tangible assets 5 24,791,738 25,259,987 24,064,901 24,432,129 Intangible fixed assets 6 2,291,079 2,259,047 - - Investment in subsidiary companies 7 - - 2,949,666 2,949,741 Goodwill arising on consolidation 8 408,928 493,535 - - TOTAL FIXED ASSETS 27,491,745 28,012,569 27,014,567 27,381,870
CURRENT ASSETS Stocks 2,357,424 2,463,366 160,936 155,036 Debtors- due within one year 9 a. 662,226 780,609 3,698,210 1,918,583 Debtors- due after more than one year 9 b. - - - 3,809,000 Cash at bank and in hand 729,602 72,296 646,533 31,624 3,749,252 3,316,271 4,505,679 5,914,243
CREDITORS Amounts falling due within one year 10 1,915,842 3,119,133 2,206,290 3,689,513 Deferred income 11 3,039,383 2,308,594 2,640,951 2,044,922 4,955,225 5,427,727 4,847,241 5,734,435
NET CURRENT ASSETS / (LIABILITIES) (1,205,973) (2,111,456) (341,562) 179,808
TOTAL ASSETS LESS CURRENT LIABILITIES 26,285,772 25,901,113 26,673,005 27,561,678
CREDITORS DUE AFTER MORE THAN ONE YEAR 12 (1,150,000) (2,420,000) (1,150,000) (2,420,000)
NET ASSETS EXCLUDING PENSION SCHEME LIABILITY 25,135,772 23,481,113 25,523,005 25,141,678
PENSION SCHEME LIABILITY 18 (3,681,000) (5,677,000) (3,681,000) (5,677,000)
NET ASSETS £21,454,772 £17,804,113 £21,842,005 £19,464,678
REPRESENTED BY UNRESTRICTED RESERVES 13 21,454,772 17,804,088 21,842,005 19,464,678
MINORITY INTEREST 7 - 25 - -
£21,454,772 £17,804,113 £21,842,005 £19,464,678
These accounts were approved by the Trustees at their meeting on 27th May 2016 and are signed on their behalf by:
R D Muckart Chairman of Trustees
AUDITOR’S REPORT - Page 13 THE NOTES ON PAGES 17 TO 29 FORM PART OF THESE ACCOUNTS
15 | St Andrews Links Trust: Scottish Charity No. SC006161 Cash Flow Statements for the year ended 31 December 2015
Consolidated Trust Only
2015 2014 2015 2014 £ £ £ £ Cash flows from operating activities Net cash provided by operating activities (Note a. below) 3,962,278 1,412,600 3,271,898 1,009,323
Cash flows from investing activities Interest received on bank deposits 1,210 863 1,135 255 Interest received on intra-group loan accounts - - 163,294 191,136 Payments to acquire tangible fixed assets (834,230) (1,651,531) (676,955) (1,483,001) Payments to acquire intangible fixed assets (354,522) (301,057) - - Receipts from sales of tangible fixed assets 86,757 106,770 59,724 86,700
Net cash used in investing activities (1,100,785) (1,844,955) (452,802) (1,204,910)
Cash flows from financing activities Term loans from Royal Bank of Scotland- decrease in long-term balance (520,000) (640,000) (520,000) (640,000) new facility (repaid) / advanced (500,000) 500,000 (500,000) 500,000 R&A Foundation- decrease in long-term balance (250,000) (200,000) (250,000) (200,000)
Net cash used in financing activities (1,270,000) (340,000) (1,270,000) (340,000)
Change in cash and cash equivalents during the year 1,591,493 (772,355) 1,549,096 (535,587)
Cash and cash equivalents at 1 January (861,891) (89,536) (902,563) (366,976)
Cash and cash equivalents at 31 December 729,602 (861,891) 646,533 (902,563)
NOTES TO THE CASH FLOW STATEMENT a. Reconciliation of net movement in funds to net cash flows from operating activities Net incoming resources before other recognised losses 992,684 899,506 1,507,876 1,368,275 Add back: Depreciation charges net of gain/(loss) on sale 1,215,722 1,258,625 984,459 927,929 Add back: Amortisation of intangible assets 322,490 305,974 - - Add back: Amortisation of Goodwill Arising on Consolidation 84,607 84,607 - - Non-cash movements associated with FRS102 Retirement Benefits adjustments 662,000 379,000 662,000 379,000 Write off minority interest in Tom Morris International Limited, relinquished during the year (25) - (25) - Deduct: Interest income shown in investing activities (1,210) (863) (164,429) (191,391) Decrease / (Increase) in stocks 105,942 (673,878) (5,900) (2,573) Decrease / (Increase) in debtors due within one year 118,383 18,035 (1,779,627) (85,022) Decrease / (Increase) in debtors due after more than one year - - 2,020,551 (1,671,800) Increase / (Decrease) in creditors and deferred income 461,685 (858,406) 46,993 284,905
Net cash inflow from operating activities 3,962,278 1,412,600 3,271,898 1,009,323 b. Analysis of the balances of cash and cash equivalents as shown in the balance sheet Cash in bank and on hand 729,602 72,296 646,533 31,624 Bank overdraft - (934,187) - (934,187)
729,602 (861,891) 646,533 (902,563)
AUDITOR’S REPORT - Page 13 THE NOTES ON PAGES 17 TO 29 FORM PART OF THESE ACCOUNTS
16 | St Andrews Links Trust: Annual Report and Accounts 2015 Notes to the Accounts for the year ended 31 December 2015
1. ACCOUNTING POLICIES h) Development expenditure: expenditure on projects carried out on land not owned by the Trust is treated a) Accounting convention: the accounts are prepared as development expenditure unless the projects have under the historical cost convention. income earning potential, in which case expenditure is capitalised as tenant’s improvements. Capital b) Basis of preparation of accounts: the Trust constitutes expenditure incurred on land and buildings owned by a public benefit entity as defined by FRS102. The the Trust is capitalised and included in fixed assets. accounts are prepared in accordance with the Charities and Trustee Investment (Scotland) Act, i) Tangible fixed assets: tangible fixed assets are stated 2005, the Charities Accounts (Scotland) Regulations at original historic cost including, where appropriate, 2006 (as amended), FRS102 and the Charities SORP the cost of irrecoverable VAT. Depreciation is provided (FRS102) (referred to as SORP). as described more fully in note 1 k) below. Items with an original cost of less than £500 (excluding VAT) are c) FRS102 first time adoption: the accounts for the year not capitalised unless they are part of a larger pattern ended 31 December 2015 are the first accounts of St of expenditure. Andrews Links Trust prepared in accordance with FRS102, the Financial Reporting Standard applicable j) Tenant’s improvements: in the Trust’s accounts, in the UK and Republic of Ireland. The date of tenant’s improvements are defined as expenditure of transition for FRS102 was 1 January 2014. The a capital nature and with income generating potential effects on the reported financial position and financial undertaken on land not owned by the Trust, for performance for the previous period of adopting example, the Links Clubhouse. Where wholly-owned FRS102 are explained in Note 14 below. companies incur expenditure of a capital nature on land and buildings not owned by them, that d) Basis of consolidation: the consolidated accounts expenditure is also capitalised as tenant’s consist of St Andrews Links Trust and its subsidiary improvements. companies, St Andrews Links Limited, St Andrews Links Golf Shops Limited, The Castle Course St k) Depreciation: depreciation is provided on tangible Andrews Limited, Tom Morris Limited and Tom fixed assets at rates calculated to write off the Morris International Limited. With the exception of cost, less estimated residual value, of each asset over golfing activities, the gross turnover and expenditure its expected useful life. Depreciation on buildings of the subsidiary companies are treated as Income and tenant’s improvements is charged from the from Other Trading Activities within the Consolidated date the underlying assets are first brought into use. Statement of Financial Activities. Gross turnover and Depreciation is charged on a straight line basis using expenditure of The Castle Course St Andrews the following rates: Limited are included within Charitable Activities in the • Vehicles, plant and equipment 20% Consolidated Statement of Financial Activities. The • Office furniture and equipment between assets and liabilities of the subsidiary companies are 20% and 33% included on a line-by-line basis within the • Heritable property, including alterations 2% Consolidated Balance Sheet. Where St Andrews Links • Tenant’s improvements 2% Trust owns less than 100% of the issued share capital of a company, third party interests are shown in these No depreciation is provided on freehold land or golf accounts as Minority Interests. courses. No depreciation is charged on assets under construction until such time as they are e) Turnover: turnover is stated net of Value Added Tax. brought into use at which point depreciation is charged at the appropriate rate. f) Incoming resources: income is generally recognised on a receivable basis where the amount is reasonably l) Intangible fixed assets: expenditure incurred to certain and there is adequate certainty of receipt, and register or protect trademarks or other intellectual is stated gross of related expenditure. properties which, in the opinion of the Trustees or the Directors of the company concerned, have a g) Resources expended: expenditure is accounted for on reasonable probability of generating income is an accruals basis capitalised as intangible fixed assets. These assets are • Expenditure on raising funds includes the expenses of amortised over a ten year period on the straight line non-charitable trading activities basis. The Trustees believe that amortising intangible • Charitable activities comprise direct expenditure fixed assets over ten years is reasonable because including direct staff costs attributable to it can take several years to negotiate agreements to charitable activities • Governance costs include costs associated with constitutional and statutory requirements • Support costs are allocated against the above categories on a basis consistent with the use of resources
17 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015
generate income from registered marks. An s) Stocks: stocks are valued at the lower of original impairment review of all intangible fixed assets is invoice cost or net realisable value. carried out annually at the balance sheet date. Further information on intangible fixed assets is shown t) Value Added Tax: the Trust is partially exempt for in Note 6 below. All other expenditure on trademark VAT purposes and is therefore unable to recover all of registrations and intellectual properties is written the input VAT it incurs on its purchases. Irrecoverable off when incurred on the basis that future revenues VAT relating to the purchase of fixed assets is are uncertain. capitalised and written off at the same rate and over the same period as the underlying asset. m) Goodwill arising on consolidation: where a wholly- owned company is acquired at a price in excess of u) Taxation: the Trust is exempt from income and the fair value of its underlying assets and liabilities, the corporation taxes by virtue of its charitable status. difference between that fair value and the purchase The wholly-owned companies are liable to corporation price is treated as goodwill arising on consolidation. tax but no taxation liability arose for the year ended Goodwill arising on consolidation is amortised 31 December 2015. over ten years on a straight line basis from the date of acquisition. v) Foreign currency transactions: assets and liabilities denominated in foreign currencies are translated at n) Debtors: trade and other debtors are recognised the rate of exchange ruling at the balance sheet at the settlement amount due after any trade discount date. Transactions in foreign currencies are recorded offered. Prepayments are valued at the amount at the exchange rate applicable at the transaction prepaid net of any trade discounts due. date. All differences on exchange are taken to the Statement of Financial Activities. o) Creditors and provisions: creditors and provisions are recognised where the charity has a present obligation w) Pensions: retirement benefits to employees are resulting from a past event that will probably result provided primarily through the Fife Council in the transfer of funds to a third party and the superannuation scheme. This is a defined benefit amount due to settle the obligation can be measured scheme which is externally funded and contracted or estimated reliably. Creditors and provisions are out of the State Earnings Related Pension Scheme. normally recognised at their settlement amount after Note 18 below gives further information regarding allowing for any trade discounts due. pension arrangements. p) Grants receivable: grants receivable in respect of x) Support costs: support costs on activities for capital projects are offset against the cost of the generating funds are charged to those activities relevant project; depreciation is calculated on the by means of invoices raised by the Trust to the wholly- project cost net of grants, thereby amortising the owned companies. The amount charged for the year grant over the expected useful life of the underlying was £247,000 (2014 - £199,000). Support costs asset. Grants of a revenue or non-capital nature are relating to governance are allocated on the basis credited to general reserve as income when received. described in Note 3 below. All other costs are regarded as directly related to the delivery of the q) Operating leases: rentals applicable to operating charitable activity. leases are charged on a time basis over the lease term. y) Going concern: at the time of approving the r) Donations: donations received are credited to the accounts, the Trustees have a reasonable expectation Statement of Financial Activities as received. that the Trust has adequate resources to continue in Donations made are included within operating operational existence for the foreseeable future. expenses.
Consolidated 2. ANALYSIS OF GOLFING INCOME 2015 2014 Golfing income can be analysed as follows: £ £
Visitor green fees and Old Course premium 7,695,282 8,987,577 Yearly ticket revenue and annual contribution from The Royal and Ancient Golf Club 1,401,461 1,303,537 Other golfing income 2,427,351 1,658,704 £11,524,094 £11,949,818
18 | St Andrews Links Trust: Annual Report and Accounts 2015 3. ANALYSIS OF TOTAL RESOURCES EXPENDED
Expenditure Expenditure Basis of on raising on charitable Total Total apportionment funds activities 2015 2014 £ £ £ £
Payroll costs (note 17) Usage 947,879 8,519,813 9,467,692 9,145,598 Cost of goods sold and catering non-payroll expenses Usage 2,638,555 992,676 3,631,231 3,426,696 Operating expenses Usage 1,421,619 2,470,054 3,891,673 4,175,533 Depreciation Usage 159,578 1,096,704 1,256,282 1,287,954 Amortisation and impairment of intangible fixed assets Usage 322,490 - 322,490 305,974 Amortisation of Goodwill Arising on Consolidation Usage - 84,607 84,607 84,607 Payments under operating leases land and buildings Usage 152,300 5,375 157,675 206,117 Legal & professional fees Usage 117,515 61,349 178,864 198,960 Auditor’s remuneration non-audit services Usage 2,925 6,552 9,477 6,055 Bad debts written off Usage - - - 10,204 Development expenditure (note 4) Usage - 134,753 134,753 89,872 Bank interest Usage 4 82,322 82,326 132,700 Notional net interest cost on FRS102 calculation on pension scheme liability Usage - 213,000 213,000 160,000 VAT not recoverable (note 1 t) Usage - 149,886 149,886 142,734 Governance costs (see table below) Usage 13,150 14,100 27,250 27,300 £5,776,015 £13,831,191 £19,607,206 £19,400,304
GOVERNANCE COSTS Expenditure Expenditure Basis of on raising on charitable Total Total apportionment funds activities 2015 2014 £ £ £ £
Auditor’s remuneration audit work Usage 13,150 14,100 27,250 27,300 £13,150 £14,100 £27,250 £27,300
4. DEVELOPMENT EXPENDITURE
All development expenditure is incurred by St Andrews Links Trust. The subsidiary companies have no expenditure of this nature. Expenditure can be analysed as follows:
2015 2014 £ £
On-course shelters 59,394 31,361 Greenkeeping Centre improvements 35,061 33,817 Road and pathways improvements 27,904 972 Irrigation system extensions 6,746 9,778 Coastal protection works 252 5,293 Old Course first tee area improvements - 8,273 General development work 5,396 378 £134,753 £89,872
19 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015
5. FIXED ASSETS
i) CONSOLIDATED Vehicles, Office Land and Tenant’s plant and furniture & Assets under buildings improvements equipment equipment construction Total £ £ £ £ £ £ COST At 1 January 2015 19,224,371 6,384,009 5,000,402 4,605,214 - 35,213,996 Additions 5,834 18,198 526,189 206,491 77,518 834,230 Disposals - - (334,464) (148,332) - (482,796) At 31 December 2015 £19,230,205 £6,402,207 £5,192,127 £4,663,373 £77,518 £35,565,430
DEPRECIATION At 1 January 2015 1,230,054 1,714,046 3,420,508 3,589,401 - 9,954,009 Charge for year 187,131 124,752 578,840 365,559 - 1,256,282 Disposals - - (311,963) (124,636) - (436,599) At 31 December 2015 £1,417,185 £1,838,798 £3,687,385 £3,830,324 £- £10,773,692
NET BOOK VALUE At 31 December 2015 £17,813,020 £4,563,409 £1,504,742 £833,049 £77,518 £24,791,738
At 31 December 2014 £17,994,317 £4,669,963 £1,579,894 £1,015,813 £- £25,259,987
ii) LINKS TRUST ONLY Vehicles, Office Land and Tenant’s plant and furniture & Assets under buildings improvements equipment equipment construction Total £ £ £ £ £ £ COST At 1 January 2015 19,224,371 6,108,323 4,018,341 2,830,399 - 32,181,434 Additions 5,834 18,198 447,132 151,893 53,898 676,955 Intra-group transfers - - (32,735) 22,067 - (10,668) Disposals - - (263,042) (57,951) - (320,993) At 31 December 2015 £19,230,205 £6,126,521 £4,169,696 £2,946,408 £53,898 £32,526,728
DEPRECIATION At 1 January 2015 1,230,054 1,678,207 2,648,679 2,192,365 - 7,749,305 Charge for year 187,131 119,238 496,323 231,564 - 1,034,256 Intra-group transfers - - (32,427) 6,620 - (25,807) Disposals - - (245,005) (50,922) - (295,927) At 31 December 2015 £1,417,185 £1,797,445 £2,867,570 £2,379,627 £- £8,461,827
NET BOOK VALUE At 31 December 2015 £17,813,020 £4,329,076 £1,302,126 £566,781 £53,898 £24,064,901
At 31 December 2014 £17,994,317 £4,430,116 £1,369,662 £638,034 £- £24,432,129
20 | St Andrews Links Trust: Annual Report and Accounts 2015 6. INTANGIBLE FIXED ASSETS During the year St Andrews Links Limited and Tom Morris Limited incurred expenditure to acquire or develop trademarks and other intellectual properties. Where this expenditure is likely to result in the successful registration of a mark with revenue earning potential that expenditure is capitalised as an intangible fixed asset and amortised, on a straight line basis, over ten years.
Tom Morris Limited, which was acquired by the Trust in October 2010, owned certain intellectual properties which, in the opinion of the Trustees, had revenue earning potential. No value had been attributed to these properties in the accounts of Tom Morris Limited but an estimated fair value of £750,000 was attributed to them by the Trustees as at the date of acquisition.
The table below analyses intangible fixed assets:
Tom Morris Registrations Ltd at Fair etc. acquired Value Total £ £ £ COST At 1 January 2015 2,354,458 750,000 3,104,458 Additions 354,522 - 354,522 Written off following impairment review as at 31 December (1,495) - (1,495) At 31 December 2015 £2,707,485 £750,000 £3,457,485
AMORTISATION At 1 January 2015 532,911 312,500 845,411 Charge for year 246,037 75,000 321,037 Written off following impairment review as at 31 December (42) - (42) At 31 December 2015 £778,906 £387,500 £1,166,406
NET BOOK VALUE At 31 December 2015 £1,928,579 £362,500 £2,291,079
At 31 December 2014 £1,821,547 £437,500 £2,259,047
As at 31 December each year, impairment reviews are performed on all intangible fixed assets in accordance with accounting standards. If, in the opinion of the Directors or Trustees, any of the capitalised items no longer have reasonable prospects of generating future revenues, the remaining net book value of those items is written off.
Following the impairment review carried out at 31 December 2015 intangible fixed assets with a net book value of £1,453 (2014 - £14,188) were written off.
As at 31 December 2015, all intellectual properties registered to Tom Morris Limited were transferred to St Andrews Links Limited thereby placing all intellectual properties within a single company.
7. INVESTMENT IN SUBSIDIARY COMPANIES The table below lists the Trust’s subsidiary companies. As at 31 December 2015 the Trust owned 100% of the issued share capital in each company. During the year, the 25% shareholding in Tom Morris International Limited held by TPD International Limited as at 31 December 2014 was transferred to the Trust.
Unless otherwise stated, the value attributed to each company in the Trust’s accounts is equal to the nominal value of the issued share capital. The results of the subsidiary companies are included in the consolidated accounts. Any taxable profits of the companies are remitted to the Trust through Gift Aid arrangements.
21 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015
%age 2015 2014 owned £ £ Name St Andrews Links Limited 100% 150,000 150,000 The Castle Course St Andrews Limited 100% 500,000 500,000 St Andrews Links Golf Shops Limited 100% 500,000 500,000 Tom Morris Limited 100% 1,799,666 1,799,666 Tom Morris International Limited 100% 100 75 Deduct provision against the carrying value of Tom Morris International Limited (100) - £2,949,666 £2,949,741
The following notes describe the activities of each subsidiary company. i. St Andrews Links Limited (Links Ltd): The company receives royalties and other income derived from the exploitation of trademarks and other intellectual properties and bears the costs associated with protecting those intellectual properties. As at 31 December 2015 the company’s aggregate assets and liabilities were £190,346 and it reported a profit on ordinary activities of £5,366 (2014 - £79,902) after making payments to the Trust under Gift Aid of £313,578 (2014 - £nil). ii. The Castle Course St Andrews Limited: The company was formed in 2005 to operate an 18-hole golf course- The Castle Course. As at December 2015 the company’s aggregate assets and liabilities were £686,492 and it reported a profit on ordinary activities of £67,755 (2014 - £72,508). No Gift Aid payments were made to the Trust in either 2015 or 2014. iii. St Andrews Links Golf Shops Limited (Golf Shops): The company was formed in 1999 to sell clothing and other memorabilia and merchandise bearing the Trust’s brands. As at 31 December 2015 the company’s aggregate assets and liabilities were £1,906,307 and it reported a loss on ordinary activities of £47,406 (2014 – profit of £825,823) after making payments to the Trust under Gift Aid of £857,324 (2014 - £nil). iv. Tom Morris Limited: The company was acquired by the Trust in October 2010 and its carrying value in these accounts represents the purchase price together with additional ordinary shares subscribed for by the Trust. Prior to acquisition the company had registered various ‘Old Course’ and ‘St Andrews’ trademarks, primarily in the United States, the acquisition of which materially improved the strength of the Group’s trademark portfolio. Since acquisition, the company acquired various ‘Tom Morris’ marks which produce income for the Group.
During the year the company incurred expenditure relating to these marks and, as a result, incurred a loss of £27,439 (2014 - £19,280). As at 31 December 2015 the company’s intellectual properties were transferred to St Andrews Links Limited at book value and, from that date, that company assumed responsibility for all costs and revenues connected with the intellectual properties.
Although the company will have limited activity in 2016, the Trustees have confirmed their ongoing support for the company and are of the opinion that the carrying value in these accounts is represented by the value of the assets now held by St Andrews Links Ltd. v. Tom Morris International Limited (TMI): The company was formed to develop and market products bearing the “Tom Morris” brand and began trading in 2012. A trading history has since been established behind the brand through the achievement of sales to wholesale customers and to retail customers via the internet and the Tom Morris Shop in St Andrews. During 2015, the Board of TMI decided that building on the establishment of the brand, a licensing model offered more scope for long term development of the registered “Tom Morris” trademarks.
In line with the strategic review discussed in the Trustees’ Report, all merchandise stocks have been transferred to St Andrews Links Golf Shops Ltd for future sale through that company’s existing retail outlets. Intellectual properties relating to “Tom Morris” are now included in the portfolio managed by St Andrews Links Ltd.
As a result, future income generated from the sale of merchandise and the licensing of the “Tom Morris” marks will be received by other group entities and not by TMI. As an example, during May 2016 St Andrews Links Ltd entered in to a licensing contract with a major overseas corporation guaranteeing revenue attributable to the “Tom Morris” brand and other St Andrews marks over a number of years. The Trustees have therefore decided to make a provision against the carrying value of the investment in TMI. The provision recognised in the Trust’s own accounts of £1,788,549 comprises £100 in respect of the share capital and £1,788,449 in respect of the intra-group loan account balance as at 31 December 2015.
22 | St Andrews Links Trust: Annual Report and Accounts 2015 8. GOODWILL ARISING ON CONSOLIDATION The goodwill arising on consolidation relates to the acquisition in 2010 of Tom Morris Limited and represents the difference between the estimated fair value of the company’s assets and the purchase price paid. Goodwill is being amortised over ten years on a straight line basis and the following table analyses the figure in the accounts.
£
Original goodwill arising on consolidation 846,063
Amortisation As at 1 January 2015 352,528 Charge for the year ended 31 December 2015 84,607 437,135
Book Value as at 31 December 2015 £408,928
Book value as at 31 December 2014 £493,535
9. DEBTORS Consolidated Trust Only
2015 2014 2015 2014 £ £ £ £ a. Amounts due within one year Trade debtors 135,633 201,317 100,591 165,702 Amounts due by wholly-owned companies - - 3,485,227 1,618,656 Prepayments 526,593 579,205 112,392 134,138 Taxation and Social Security - 87 - 87 £662,226 £780,609 £3,698,210 £1,918,583 b. Amounts due after more than one year Loans to Tom Morris International Limited £- £- £- £3,809,000
As explained in Note 7 v. above, the Trustees have made full provision in these accounts against the carrying value of the investment in TMI and the intra-group loan account balance with the company as at 31 December 2015.
10. CREDITORS: Amounts falling due within one year Consolidated Trust Only
2015 2014 2015 2014 £ £ £ £
Trade creditors 432,728 529,437 359,590 356,736 Bank overdrafts - 934,187 - 934,187 Current portion of bank Term Loans 520,000 640,000 520,000 640,000 Current portion of R&A Trust Company (No. 1) Limited loan 250,000 - 250,000 - Current portion of R&A Foundation loan - 200,000 - 200,000 Amounts due to wholly-owned companies - - 588,246 1,116,577 Taxation and Social Security 376,588 296,479 370,251 288,173 Accruals 336,526 519,030 118,203 153,840 £1,915,842 £3,119,133 £2,206,290 £3,689,513
23 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015
11. DEFERRED INCOME The following items are treated as deferred income: i. payments received in advance to confirm reservations for play in the following year ii. the unexpired portion of yearly ticket revenues and the annual contribution from the R&A iii. tournament and championship facility fees received in advance iv. liability in respect of unredeemed gift cards v. payments recieved in advance for golf academy tuition
The total of deferred income on the Links Trust’s balance sheet at 31 December 2015 was £2,640,951 (2014 - £2,044,922). On a consolidated basis, deferred income at 31 December 2015 was £3,039,383 (2014 - £2,308,594).
12. CREDITORS DUE AFTER MORE THAN ONE YEAR
Consolidated Trust Only
2015 2014 2015 2014 £ £ £ £ i) Royal Bank of Scotland Term Loan- 2008 400,000 920,000 400,000 920,000 ii) Royal Bank of Scotland Term Loan- 2014 - 500,000 - 500,000 iii) R&A Trust Company (No. 1) Limited 750,000 1,000,000 750,000 1,000,000 £1,150,000 £2,420,000 £1,150,000 £2,420,000 i) Royal Bank of Scotland Term Loan – 2008 On 31 May 2008 a development loan was converted to a Term Loan, repayable in thirty-six quarterly instalments and with a principal sum of £5,400,000. Repayments began on 31 March 2009 and the final repayment is due on 31 December 2017. All of the £400,000 shown above bears interest at 1.5% over RBS LIBOR rate. ii) Royal Bank of Scotland Term Loan – 2014 In January 2014 an additional term loan of £500,000 was agreed with RBS. The loan bore interest at 2% over RBS LIBOR rate and was repayable at any time prior to 31 July 2018. Trustees decided to repay this loan in full in December 2015. iii) R&A Trust Company (No. 1) Limited During 1994 and 1996 the Royal and Ancient Golf Club advanced interest-free loans in the aggregate amount of £1 million. These loans were subsequently assigned to R&A Trust Company (No. 1) Limited and are due to be repaid in four equal annual instalments, the first of which is due in July 2016. The instalments due for repayment between July 2017 and July 2019 are shown as long term liabilities.
13. UNRESTRICTED RESERVES (RETAINED SURPLUS) Unrestricted reserves represent the aggregate of all surpluses earned by the Trust or, in the case of the Consolidated Balance Sheet, the Trust and its subsidiary companies. Unrestricted reserves bear no relationship whatsoever to cash or bank facilities available to the Trust.
Movements on unrestricted reserves can be analysed as follows:
Consolidated Trust Only
2015 2014 2015 2014 £ £ £ £
Unrestricted reserves brought forward at 1 January 17,804,088 18,836,582 19,464,678 20,028,403 Net incoming resources 3,650,684 (1,032,494) 2,377,327 (563,725) Unrestricted reserves carried forward at 31 December £21,454,772 £17,804,088 £21,842,005 £19,464,678
24 | St Andrews Links Trust: Annual Report and Accounts 2015 14. EFFECT OF TRANSITION TO FRS102 i) Defined benefit pension scheme There is a presentation change under FRS102 whereby net interest on the net defined benefit pension liability is presented in the Statement of Financial Activities using the liability discount rate. Under previous UK GAAP the interest in the expected return on net assets was calculated using an expected asset discount rate. This had no impact on the reserves on transition but affects the allocation of interest between net income and other gains/(losses). ii) Reconciliation of net movement in funds for the year ended 31 December 2014
Consolidated Trust £ £
Net income for the year ended 31 December 2014 1,139,506 1,608,275 Adjustment to net interest on net defined pension liability (240,000) (240,000) 899,506 1,368,275
Remeasurement of defined benefit pension liability at 31 December 2014 (2,172,000) (2,172,000) Adjustment to remeasurement of defined pension liability 240,000 240,000 (1,932,000) (1,932,000)
15. FINANCIAL ACTIVITIES OF ST ANDREWS LINKS TRUST (the Charity) The financial activities undertaken by St Andrews Links Trust are analysed in the following table:
2014 2015 as restated £ £
Gross incoming resources 13,787,896 12,976,736 Total expenditure on charitable activities (12,268,820) (11,562,761) Governance costs (11,200) (45,700) Net incoming resources before other recognised gains / (losses) 1,507,876 1,368,275 Remeasurement gain / (loss) on defined benefit pension scheme 2,658,000 (1,932,000) Provision against investment in Tom Morris International Limited (1,788,549) - Net incoming / (outgoing) resources after remeasurement loss on pension scheme 2,377,327 (563,725) Total funds brought forward 19,464,678 20,028,403 Total funds carried forward £21,842,005 £19,464,678
Represented by Unrestricted reserves £21,842,005 £19,464,678
16. ST ANDREWS LINKS JUNIOR GOLF ASSOCIATION St Andrews Links Junior Golf Association (SALJGA) was set up by the Trustees in 2002 to continue and expand existing town initiatives to promote the development of junior golf in St Andrews. Membership is open to any child, aged 5 to 18, residing in or attending a school in St Andrews. Members receive coaching from both professional and trained volunteer coaches, each of whom has received specialist training in golf tuition and child protection. The Trust underwrites the costs of the SALJGA programme, although some funds are generated through membership subscriptions, events and other sponsorships. In 2015 The R&A Foundation made a grant to the Trust of £15,000 (2014 - £15,000), which the Trustees applied against SALJGA costs. In 2015 the net cost to the Trust was £37,138 (2014 - £46,320).
25 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015
17. EMPLOYEES AND THEIR REMUNERATION The average number of employees of the Trust and its subsidiary companies during the year ended 31 December 2015 was 298 (2014 – 288) and their aggregate remuneration, including the cost of pension contributions, employers National Insurance and benefits in kind was £9,467,692 (2014 - £9,145,598).
Payroll costs can be analysed as follows:
2014 2015 as restated £ £
Salaries and benefits in kind 7,358,179 7,295,108 Social Security costs 522,813 540,369 Contributions to Defined Benefit pension schemes 886,979 858,327 Contributions to Defined Contribution pension schemes 189,748 138,512 Other employee benefits 60,973 94,282 FRS102 adjustments 449,000 219,000 £9,467,692 £9,145,598
The numbers of employees whose pay and taxable benefits exceeded £60,000 fell within the following bands:
2015 2014
£60,000 - £69,999 - 1 £80,000 - £89,999 2 3 £90,000 - £99,999 1 - £100,000 - £109,999 2 2 £150,000 - £159,999 1 1 6 7
In 2015 all of the employees (2014 – 6) in the above table participated in the Fife Council defined benefits pension scheme. Contributions of £63,557 (2014 - £58,109) were made to defined contribution schemes in respect of these employees.
The total amount of employee benefits, including salary, benefits in kind and employer’s pension contributions, received by the key management personnel shown in the organisation chart on page 33 was £824,990 (2014 - £808,533).
18. PENSIONS The Trust provides pension benefits in two principal ways.
To meet its obligations to comply with regulations regarding workplace pensions (Automatic Enrolment) the Trust operates a compliant defined contribution scheme with NOW:Pensions. Since 1 August 2014 this scheme has been the Trust’s default pension provision. Trustees decided to enhance pension provision by making employer’s contributions based on 5% of salary rather than the 1% required by law.
During 2015 employer contributions of £126,191 (2014 - £80,653) were made to the NOW:Pensions scheme.
The Trust is an admitted body to the Fife Council Pension Scheme, which is a funded defined benefit scheme providing benefits based on career average earnings. During the year the Trust made employers contributions to the scheme of £894,299 (2014 - £854,741). This scheme closed to new admissions on 1 August 2014.
26 | St Andrews Links Trust: Annual Report and Accounts 2015 The financial year end of the Fife Council Scheme is 31 March and, to meet the requirements of FRS102, the Trustees commissioned a valuation from the Scheme actuaries, Hymans Robertson, of the Trust’s portion of the overall scheme assets and liabilities as at 31 December 2015. That valuation was based on estimated information in some respects rather than detailed information and analysis as at 31 December 2015 and for the year then ended. The following tables summarise the assumptions used by the actuaries and their valuation of the Trust’s share of assets and liabilities. The outcome of their valuation at 31 December 2015 has resulted in a material reduction in the Trust’s theoretical liability from £5,677,000 at 31 December 2014 as restated to £3,681,000 at 31 December 2015. i) Financial assumptions The last actuarial valuation of the scheme was carried out as at 31 March 2014 and the actuary prepared his valuation at 31 December 2015 by projecting the results of that valuation forward using approximate methods. The valuation as at 31 December 2015 used the following principal assumptions:
2015 2014
Pension increase rate 2.4% 2.4% Salary increase rate 3.5% 4.8% Discount rate 3.9% 3.6%
Mortality assumptions are based on SAPS year of birth tables with mortality loadings applied based on membership class. The valuation as at 31 December 2015 used the following assumptions of longevity (in years) following retirement:
Males Females
Current Pensioners 22.0 years 23.7 years Future Pensioners 24.1 years 26.4 years ii) Analysis of assets and expected rates of return The estimated split of assets attributable to the Trust’s portion of the scheme, and the expected return on assets for each category is as follows: 2015 2014
Share of Expected Share of Expected Assets return Assets return
Equities 69% 3.9% 71% 3.6% Bonds 15% 3.9% 16% 3.6% Property 10% 3.9% 9% 3.6% Cash 6% 3.9% 4% 3.6%
iii) Reconciliation to the balance sheet The following table provides the reconciliation of funded status to the balance sheet:
As at 31st December
2015 2014 £’000 £’000
Fair value of Scheme assets 18,282 16,873 Present value of funded Scheme liabilities (21,917) (22,495) Net underfunding in funded plans (3,635) (5,622) Present value of unfunded liabilities (46) (55) Net liability £(3,681) £(5,677)
The actuary expects the Trust to pay employer’s contributions of approximately £884,000 in 2016.
27 | St Andrews Links Trust: Scottish Charity No. SC006161 Notes to the Accounts continued for the year ended 31 December 2015 iv) Changes to the present value of liabilities during the year The following table analyses the component parts of the change during the year in the present value of scheme liabilities attributable to the Trust:
Year ended 31st December
2015 2015 £’000 £’000
Opening defined benefit obligation 22,550 17,982 Current service cost 1,348 1,113 Interest cost 835 852 Contributions by members 276 273 Remeasurement (gains) / losses (2,738) 2,641 Estimated unfunded benefits paid (5) (5) Estimated benefits paid (303) (306) Closing defined benefit obligation £21,963 £22,550
v) Changes to the fair value of assets during the year The following table analyses the component parts of the change during the year in the fair value of scheme assets attributa- ble to the Trust:
Year ended 31st December
2015 2014 £’000 £’000
Opening fair value of assets 16,873 14,616 Expected return on assets 542 932 Contributions by members 276 273 Employer contributions 894 889 Contributions in respect of unfunded benefits 5 5 Remeasurement gains / (losses) 0 469 Estimated unfunded benefits paid (5) (5) Estimated benefits paid (303) (306) Closing fair value of assets £18,282 £16,873
vi) Amounts recognised in net outgoing resources The following table analyses the component parts of amounts recognised in net outgoing resources:
Year ended 31st December
2015 2014 £’000 £’000
Current service cost 1,348 1,113 Net interest cost 213 (80) Remeasurement of return on assets 80 - Total £1,641 £1,033
A separate defined contribution scheme is available to some staff, contributions to which amounted to £63,557 (2014 - £55,859).
28 | St Andrews Links Trust: Annual Report and Accounts 2015 19. TRUSTEE REMUNERATION AND BENEFITS Trustees do not receive any remuneration, nor have any Trustees received any benefits from an employment with St Andrews Links Trust or any of the subsidiary companies. During 2015 accommodation and subsistence expenses of £692 were reim- bursed to one Trustee (2014 - £nil) who represented the Trust at an international championship.
As part of its overall insurance cover, the Trust has Directors and Officers Liability Insurance which provides cover for Trustees, members of the Links Management Committee and staff. The proportion of the cost of this cover attributable to Trustees cannot be ascertained but is immaterial.
20. OBLIGATIONS UNDER OPERATING LEASES Amounts payable over the remaining term of non-cancellable operating leases are analysed below: Land and buildings
2015 2014 i) Links Trust only £ £ Operating leases with expiry date- Within one year - 1,250 Between two and five years 18,810 - More than five years - - £18,810 £1,250
Land and buildings
2014 2015 as restated ii) Consolidated £ £ Operating leases with expiry date- Within one year - 24,343 Between two and five years 18,810 - More than five years 1,217,335 1,397,635 £1,236,145 £1,421,978
21. FUTURE CAPITAL COMMITMENTS AND PLANNED CAPITAL AND DEVELOPMENT EXPENDITURE The following capital expenditure has been authorised or contracted for as at 31 December 2015:
Consolidated Trust
2015 2014 2015 2014 £ £ £ £ a) Contracted for but not yet incurred £76,749 £- £49,065 £- b) Authorised but not yet contracted for £1,016,060 £843,800 £778,044 £551,000
22. RELATED PARTIES The Trustees are aware of the following transactions with individuals or bodies falling within the definition of related parties contained in the Charities and Trustee Investment (Scotland) Act, 2005 or which would require disclosure under the SORP.
TP Dally, a director of Tom Morris International Limited until he resigned on 27 November 2015, was also a director of TPD International Limited.
TPD International Limited provided sales and marketing services to Tom Morris International Limited for which a fee of £92,341 (2014 - £75,000) was paid during the year. In addition, the company was paid £5,174 (2014 - £9,833) for various office, travel and subsistence and other expenses.
As at 31 December 2015 Tom Morris International Limited owed £nil to TPD International Limited (2014 – £5,108).
29 | St Andrews Links Trust: Scottish Charity No. SC006161 Reference and Administrative Information as at 31 December 2015
1. Trustees The following persons served as Trustees during the year. The appointing body for each Trustee is noted below.
R D Muckart (Chairman) The Royal and Ancient Golf Club Sir W M Campbell MP for North East Fife (Retired 30 March 2015- see below) S Gethins MP for North East Fife (Elected 7 May 2015- see below) Mrs G G Kirkwood The Scottish Government Councillor J Leishman Fife Council Councillor D F Macgregor Fife Council G D Mackenzie The Royal and Ancient Golf Club Mrs I Morrison Fife Council J C Noble The Royal and Ancient Golf Club
Sir W M Campbell ceased to be a Trustee when Parliament was prorogued on 30 March 2015 prior to the General Election on 7 May 2015. At that election S Gethins was elected as the Member of Parliament for the North East Fife constituency and, accordingly, became a Trustee.
On 31 December 2015 Councillor J Leishman and G D Mackenzie reached the end of their terms of appointment. Both were reappointed to serve a further term.
At the first Trustees’ Meeting of 2016 R D Muckart was re-elected Chairman of Trustees.
(Back Row; L-R) G D Mackenzie, Cllr D Macgregor, S Gethins MP and J Noble (Front Row; L-R) Mrs G Kirkwood, R Muckart (Chairman) and Mrs I Morrison (Inset Above) Cllr J Leishman
30 | St Andrews Links Trust: Annual Report and Accounts 2015 2. Links Management Committee The following persons served on the Links Management Committee during the year. The appointing body for each member is noted below.
S G Race (Chairman) Fife Council Professor J S Forsyth The Royal and Ancient Golf Club Mrs D Kennedy The Royal and Ancient Golf Club (Retired 31 December 2015) I M Marshall The Royal and Ancient Golf Club B Millar Fife Council Councillor D Morrison Fife Council Dr E Thain The Royal and Ancient Golf Club (Retired 31 December 2015) Councillor B Thompson Fife Council
On 31 December 2015 Mrs D Kennedy and Dr E Thain reached the end of their terms of office and retired. They were replaced by Mrs A O White and D A Comb.
At the first Links Management Committee meeting of 2016 S G Race was re-elected Chairman of the Committee.
(Back Row; L-R) D A Comb, Cllr B Thomson, B Millar and I M Marshall (Front Row; L-R) Cllr D Morrison, S G Race (Chairman) and Mrs A O White (Inset Above) Professor J S Forsyth
31 | St Andrews Links Trust: Scottish Charity No. SC006161 Reference and Administrative Information continued as at 31 December 2015
3. Address of Administrative Offices The Trust’s offices are located at: Pilmour House St Andrews Fife, KY16 9SF Telephone 01334 466666 Website www.standrews.com
4. Auditors The Trust’s auditors are: Henderson Loggie The Vision Building 20 Greenmarket Dundee, DD1 4QB
5. Bankers The Trust’s bankers are: Royal Bank of Scotland plc 113-115 South Street St Andrews Fife, KY16 9QB
6. Lawyers The Trust’s lawyers are: Thorntons Law LLP Kinburn Castle St Andrews Fife, KY16 9DR
7. Charity Registration Number St Andrews Links Trust is a registered Scottish charity. The registered charity number is SC006161.
8. Statement of Trustees’ responsibilities in respect of the Financial Statements The Trustees are responsible for preparing the Trustees’ Annual Report and the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
The law applicable to charities in Scotland requires the Trustees to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Trust and the group and of the incoming resources and application of resources of the charity and the group for that period. In preparing these accounts, the Trustees are required to:
• select suitable accounting policies and then apply them consistently;
• observe the methods and principles in the Charities SORP;
• make judgements and estimates that are reasonable and prudent;
• state whether applicable accounting standards have been followed, subject to any material departures disclosed, and explained in the accounts; and
• prepare the accounts on the going concern basis unless it is inappropriate to presume that the charity will continue in business.
The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the charity and enable them to ensure that the financial statements comply with the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the St Andrews Links Order Confirmation Act, 1974. They are also responsible for safeguarding the assets of the charity and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Trustees are responsible for the maintenance and integrity of the charity and financial information included on the charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.
32 | St Andrews Links Trust: Annual Report and Accounts 2015 9. Organisation Chart- key management personnel The day-to-day management of the Trust is carried out by a full-time management team. The members of that team, and their principal areas of responsibility, are shown below.
Chief Executive Euan Loudon
Director of Director of Director of Director of Commercial Operations Finance Greenkeeping Golf Director
Ewen Bowman Euan MacGregor Gordon Moir John Grant Danny Campbell
• Food and Beverage • Accounting • Greenkeepers • Reservations • Retail shops Operations & reporting • Workshop & stores • Players’ assistants & • Partnerships, • Reception • Information Caddie department licensing and brand technology management • Facilities & property • Golf Academy, maintenance • Human resources Practice Centre • External relations & Custom Fitting & media • Training & Development • Junior Golf • Marketing
• Tournaments and Championships
33 | St Andrews Links Trust: Scottish Charity No. SC006161 Unaudited Statistical Analysis prepared from consolidated financial statements
Five year analysis of Consolidated Statement of Financial Activities
2014 2011 2015 as restated 2013 2012 as restated £ £ £ £ £ INCOME Golfing income 11,524,094 11,949,818 11,168,438 10,968,696 10,819,705 Catering income 2,197,657 2,072,139 1,971,555 1,860,554 1,840,933 Merchandise income 5,126,582 4,845,269 4,573,084 3,952,997 4,036,323 Royalties 1,566,782 1,323,382 1,290,265 1,359,773 1,048,605 Other non-golfing income 134,831 71,281 83,500 73,932 31,884 Gain on disposal of fixed assets 40,560 85,950 121,003 76,991 68,717 Rents receivable 8,174 7,729 7,672 8,291 8,741 Interest receivable 1,210 863 4,832 34,463 10,309 20,599,890 20,356,431 19,220,349 18,335,697 17,865,217
EXPENDITURE Payroll 9,467,692 9,145,598 8,071,542 7,332,645 6,995,993 Catering non-payroll costs and goods for resale 3,631,231 3,426,696 3,244,353 2,859,666 2,697,806 General expenses 4,058,825 4,387,705 4,582,307 3,786,196 3,109,450 Depreciation 1,256,282 1,287,954 1,153,871 1,102,713 1,118,480 Loss on disposal of fixed assets - 56,621 - 73 - Amortisation of intangible assets 322,490 305,974 198,346 161,860 132,857 Amortisation of goodwill arising on consolidation 84,607 84,607 84,607 84,607 84,607 Legal & professional fees 178,864 198,960 218,523 220,814 244,316 Audit fees 27,250 27,300 24,050 23,475 22,125 Bad debts written off - 10,204 8,658 - - Interest payable 82,326 132,700 153,334 204,400 250,032 Notional net interest cost on FRS102 calculation on pension scheme liability 213,000 160,000 - - - Development expenditure 134,753 89,872 272,208 53,999 57,794 Irrecoverable VAT 149,886 142,734 143,214 132,570 189,823 19,607,206 19,456,925 18,155,013 15,963,018 14,903,283
Net incoming resources before other £992,684 £899,506 £1,065,336 £2,372,679 £2,961,934 recognised gains / (losses)
OTHER GAINS / (LOSSES) Net incoming resources before other recognised gains/(losses) 992,684 899,506 1,065,336 2,372,679 2,961,934
Other recognised gains/(losses) Remeasurement gain/(loss) on defined 2,658,000 (1,932,000) (106,000) (1,757,000) (349,000) benefit pension scheme
RETAINED SURPLUS / (DEFICIT) £3,650,684 £(1,032,494) £959,336 £615,679 £2,612,934
34 | St Andrews Links Trust: Annual Report and Accounts 2015 Five year Balance Sheet summary
2011 2015 2014 2013 2012 as restated £ £ £ £ £ FIXED ASSETS Tangible fixed assets 24,791,738 25,259,987 24,973,851 23,748,010 21,999,691 Intangible assets 2,291,079 2,259,047 2,263,964 1,428,147 1,315,823 Goodwill arising on consolidation 408,928 493,535 578,142 662,749 747,356 27,491,745 28,012,569 27,815,957 25,838,906 24,062,870
CURRENT ASSETS Stock 2,357,424 2,463,366 1,789,488 1,274,243 877,060 Debtors 662,226 780,609 798,644 726,356 489,419 Cash at bank and in hand 729,602 72,296 303,833 1,055,153 2,627,681 3,749,252 3,316,271 2,891,965 3,055,752 3,994,160
CURRENT LIABILITIES Bank term loan-current repayments 520,000 640,000 640,000 640,000 715,170 Creditors 1,395,842 2,479,133 2,579,241 1,217,542 1,550,901 Deferred income 3,039,383 2,308,594 2,526,074 2,257,845 2,374,392 4,955,225 5,427,727 5,745,315 4,115,387 4,640,463
NET CURRENT LIABILITIES (1,205,973) (2,111,456) (2,853,350) (1,059,635) (646,303)
LONG-TERM LIABILITIES (1,150,000) (2,420,000) (2,760,000) (3,720,000) (4,680,000)
PENSION SCHEME LIABILITY (3,681,000) (5,677,000) (3,366,000) (3,182,000) (1,475,000)
NET ASSETS £21,454,772 £17,804,113 £18,836,607 £17,877,271 £17,261,567
REPRESENTED BY:- Unrestricted reserve 21,454,772 17,804,088 18,836,582 17,877,246 17,261,567 Minority interest - 25 25 25 -
TOTAL RESERVES £21,454,772 £17,804,113 £18,836,607 £17,877,271 £17,261,567
35 | St Andrews Links Trust: Scottish Charity No. SC006161 Unaudited Statistical Analysis continued prepared from consolidated financial statements
Five year analysis of rounds played on the Trust’s golf courses
2015 2014 2013 2012 2011
By local golfers 107,906 115,243 105,061 104,539 110,861
By visiting golfers 101,283 116,929 108,025 111,935 119,306
Total rounds 209,189 232,172 213,086 216,474 230,167
The 144th Open had a major impact on rounds played in 2015. The Old Course closed on 20 June, reopening on Tuesday 21 July after bad weather forced the postponement of the final round until Monday 20 July. With the exception of The Castle Course, which remained open throughout the period, all of the other courses were closed for between one and five weeks. During any Old Course closure, visitor rounds on the other courses tend to fall as, in many cases, it is the potential of gaining access to the Old Course, either through advance reservations, the ballot or as a casual golfer, that brings visitors to the town. Thus, although total play was down by just under 10%, the course closures affected visitor play more than local play. Visitor rounds fell by 13.4% compared to a 6.4% reduction in local play. As a result, and for the first time since 2010, visitor play represented less than 50% of total rounds played.
Analysis of rounds played by course (18-hole courses only)
Proportion of play on 18 hole courses
Old 100% Castle
New 80%
Jubilee 60% Eden
Strathtyrum 40%
20%
0% 2015 2014 2013 2012 2011
36 | St Andrews Links Trust: Annual Report and Accounts 2015
St Andrews Links Trust Pilmour House • St Andrews • Fife • KY16 9SF • Scotland T: +44 (0)1334 466666 E: [email protected] Scottish Charity no. SC006161 standrews.com