ANNUAL REPORT 2018 ADRODDIAD BLYNYDDOL THE WELSH LIMITED – ANNUAL REPORT 2018 contents

PRESIDENT’S MESSAGE ...... 4

CHAIRMAN’S STATEMENT ...... 6

GROUP CHIEF EXECUTIVE’S SUMMARY ...... 8

STRATEGIC REPORT ...... 12

REPORT FROM THE HEAD OF RUGBY PARTICIPATION ...... 20

REPORT FROM THE HEAD OF RUGBY PERFORMANCE ...... 24

REPORT FROM THE HEAD OF RUGBY OPERATIONS ...... 30

REPORT FROM THE NATIONAL HEAD COACH ...... 34

DIRECTORS’ REPORT ...... 36

CONSOLIDATED INCOME STATEMENT ...... 40

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ...... 41

CONSOLIDATED AND COMPANY BALANCE SHEETS ...... 42

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ...... 43

COMPANY STATEMENT OF CHANGES IN EQUITY ...... 44

CONSOLIDATED STATEMENT OF CASH FLOWS ...... 45

NOTES TO THE FINANCIAL STATEMENTS ...... 46

INDEPENDENT AUDITORS’ REPORT ...... 64

WELSH RUGBY UNION GOVERNANCE ...... 67

REGISTERED OFFICE ...... 69

BOARD OF DIRECTORS ...... 70

EXECUTIVE BOARD ...... 74

OBITUARIES ...... 76

COMMERCIAL PARTNERS ...... 78

THE LIMITED – ANNUAL REPORT 2018

3 President’s message

nother successful season in Congratulations are also due to AWelsh rugby saw our men’s Merthyr who lifted the Principality national side finish a creditable Premiership trophy, setting themselves up to bid for an historic second place in the Six Nations hat-trick in the year ahead after table and notch up eight wins winning the title for the second from twelve matches across the successive time. Well done too, to year - including a tough two- who lifted the Test tour to Argentina and a Championship title and to all the other club, schools, teams and third straight win over South dennis gethin individuals who won accolades Africa in the summer. throughout the year. I was particularly pleased to see a personal tribute to all of the players, 's decision to retire new crop of fresh young talent coaching staff and team from rugby at the relatively young represent in such a positive management who are such age of 29 was one that caught the light during the summer tour victories marvellous ambassadors for Wales attention of us all. When you over the Pumas in Argentina and the and for Welsh rugby on the global consider what he has achieved as Springboks, in Washington DC. stage. Wales’ most decorated captain (of his Presenting new caps is one of the The Blues and the 74 appearances he led his country on highlights of any President’s year, were our leading lights on the 48 of them) and with the British & especially when they have been won European stage with our capital Irish Lions, it is perhaps greedy of us in such impressive circumstances, and region lifting the European Rugby to want more from him, but he will the year ahead, as we build up to the Challenge Cup for the second time in be much missed. He was a truly RWC19 in Japan, is made all the their history – one of just six sides to superb player, a man of huge more exciting as a consequence. have done so - and the Scarlets integrity, an outstanding leader and an individual with a worldwide now has a selection entertaining us all with extended reputation in the game. We all dilemma I know he will relish. Very campaigns on two fronts. recognise it was a difficult decision, rarely has Wales produced such a glut The Scarlets reached the semi-finals though undoubtedly the right one of rugby talent of such potential in so of the European Rugby Champions for both him and his family. many positions. We can look forward Cup, emulating their best previous with confidence and keen run in Europe’s premier tournament My work with the Welsh Rugby anticipation and I would like to pay of 2007, and mounted their Charitable Trust (“Trust”) brings me Guinness PRO12 title defence in style, into regular contact with a small but falling only at the last hurdle against Leinster after reaching the final of the PRO14 competition in . Elsewhere we hosted the inaugural U18 Six Nations festival in Wales, with Sardis Road, and Ystrad Mynach all featuring matches and, just as importantly, more than 1,000 community club players around South Wales took part in coaching sessions aligned to the festivals. Our U20 side picked up good wins over and in the U20 Six Nations and defeated Australia, Italy and Japan during their Junior World Championship campaign.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

4 extremely important part of the part of the wider rugby family and home nations in providing these Welsh rugby family, those who have we are grateful to all the clubs and important social opportunities. suffered life changing injuries. individuals who have made Finally, we said goodbye this year to Thankfully, this a rare group of donations over the past year. I must five former internationals in Graham individuals but it must be noted that also pay tribute to our Patron, the George Hale, Haydn John Davies, there is continual fundraising for this Duke of Cambridge, who does an Trevor Brewer, Gareth Williams and great cause to support 33 who are enormous amount of work behind Haydn Morgan. I know there are permanently wheelchair-bound, the scenes in raising money for this fitting tributes to each included in the others who have lifelong mobility cause and we are delighted that he obituaries section of this report, but problems and those whose injuries has announced his intention to my sincere condolences are extended may heal over time, but who need extend his patronage for a further on behalf of the Group to the close our support during their five-year term. The group come friends and family of five wonderful recuperation. The Trust seeks to together at regular intervals, to enjoy servants of our game. provides a safety net of support to watching international matches at help them and their families Principality Stadium, and to spend To continue on a personal note, it is overcome the hardships and it is some quality time with family and also time for me to give notice of my lifelong commitment we make to all friends at functions hosted there. intention to step down as President of them. They are a very important The WRU is unique amongst the in 2019 when I will have served for 12 years. This year's Annual General Meeting is all about embracing change. It also feels right for me to vacate my position at the same time that our longest serving national coach Warren Gatland will leave us and we welcome some new faces and a fresh approach to provide the best platform possible to take Welsh rugby forward into a new decade. Yours in rugby

Dennis Gethin OBE President The Welsh Rugby Union Limited

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

5 chairman’s statement

e are currently under- with an ambition to achieve at least Wgoing an important one third female representation period of evolutionary change achieved after 17 new roles were taken by women on their 49-strong within Welsh rugby. board. A lot of hard work has already been Whilst on the subject of corporate undertaken to consolidate those governance, I’d like to formally relationships at the performance end record my personal gratitude to of the game – between ourselves and Gareth Williams, who has recently each of our four regional sides, the stepped down to take up the position , , and gareth davies of Chairman of County Scarlets – which not only sustain Cricket Club. Gareth has been a great professional rugby in Wales long into The modernisation has particularly servant to Welsh rugby for over 25 the future but will also ensure it benefitted the community game, years and Company Secretary since flourishes and there is much more to with a new forum dedicated solely to 2010, a man of great integrity, with come on this subject. grass roots rugby for the first time. business acumen and gravitas, and These sub-boards meet regularly, Off the pitch our commitment to we wish him all the very best for the while the WRU Board now meets in modernising governance structure future. its entirety four times a year instead has been widely discussed and, whilst of 12 and each discusses their We have a responsibility to be agile important new proposals will be specific areas - meaning WRU Board and inclusive and we will implement heard at our Annual General Meeting meetings don’t need to be held as the right governance systems, with in October, we have already made regularly and are more productive suitably qualified individuals reflective great strides in this area. and focussed. of modern society as we move to Already, underneath WRU Board, we improve our own structures. In the context of board have streamlined the decision- modernisation, I was particularly We will also continue with our making process and have been pleased to welcome our Head of commitment to drive re-investment running four sub-boards for the past Rugby Operations, Julie Paterson, of any profits made back into the year, which look specifically at the onto the World Rugby Council earlier game in Wales and have a plan and community game, performance this year alongside myself and strategy in place to ensure that this rugby, commercial and Anthony Buchanan. World Rugby investment is not only sustained but communications activity and finance. have led where others should follow, is continually improved.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

6 chairman’s statement

Important changes have already moved quickly and decisively by result of a long and sustained effort taken place within our domestic appointing Warren’s post-RWC19 and many months of research and competitions in terms of the successor more than a year ahead of hard work. We have avoided the Principality Premiership and the him vacating the post he has served feeding frenzy for national coaches introduction of the new so well. which is a regular occurrence after a competition. The Celtic Cup will World Cup and secured the services In we know we have heavily feature players from the U23 of a coach who is not only held in secured the very best man to take on age group affiliated to our four high regard around the globe but the job when Warren leaves. regional sides. A positive effect of this would also have been much sought Wayne’s appointment, and the move will mean a new vibrant and after elsewhere had we not got there succession planning it now enables competitive edge for our top tier club first. for both us and the Scarlets, is the league, with their explicit Finally, I would like to pass on my responsibilities for player best wishes to Sam Warburton in his development met by the Celtic Cup. retirement. At 29 years of age he has We have established a level playing achieved far beyond what many can field for our clubs and, with the only dream of in Welsh rugby, not return of promotion and relegation at least leading his country on a record the season’s climax, there is a new 48 occasions. He is an impressive dynamic offering at this level and a individual both on and off the pitch clear aspirational path to the top of and has always been a wonderful the club game for all. ambassador for our national game on the world stage. Thank you Sam. For Wales, we have a huge season ahead with the Rugby World Cup in Yours in rugby Japan now looming large on the horizon and with the well laid plans of Warren Gatland and his management team beginning to bear their fruit. Gareth Davies Planning is a vital part of success at Chairman international level and we have The Welsh Rugby Union Limited

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

7 grouP chief executive’s summary

e have experienced gives me great satisfaction that we Wanother busy and have once again been able to rewarding year in Welsh rugby increase our re-investment into the game from £36.6m in YE17 to as the speed of change gathers £42.8m in YE18. pace. Most of our work focuses Rugby Participation on laying long term At Community level, and foundations to deliver a his team have once again had a sustainable future for the game successful year. The highlight for me was the “Road to Principality”, which in Wales. It is therefore pleasing martyn Phillips to be able to report a strong saw 50 teams playing across 30 events. These included our first mixed financial performance, community base. Additionally, record ability festival, schools, youth, senior alongside significant progress revenues have been delivered clubs, girls’ rugby and touch. in making the game more through effective marketing of We have been delighted to continue inclusive for the wide and Principality Stadium as a multi- purpose venue and multiple our partnership with the Urdd and diverse range of individuals successes with event execution. have a new partnership with who interact with Welsh rugby Girlguiding Cymru which has As always, there are challenges in all its forms. included the creation of a new rugby ahead. Notable among them are: the badge for the young members of The amount of change has been need to stay relevant as a sport for Girlguiding Cymru. We know that we significant. I am delighted to report consumers who have more choice cannot maximise participation that certain transformational change than ever; the quickly changing without these partnerships and we projects have made good progress. broadcasting and digital landscape; are grateful that mutual benefit is We are closing in on a fundamental and a shift in how commercial being delivered. shift in how we lead the professional partners invest in sport. game in Wales alongside the Our girls’ clusters continue to go We are constantly balancing the need from strength to strength. As we Regions. We are seeking to devolve for short term funding with a the responsibility for professional and grow, we continue to add new determination to make the right, if policies and processes to ensure we community club rugby to two sometimes unpopular, decisions to separate sub-boards of the WRU have the right support and ensure the long-term health of the safeguards in place. It is now beyond Board and we are also well underway game. with the process of making our great question that the women’s and girls’ game more inclusive for our diverse Our primary purpose is to grow the game in Wales is going to flourish game and to get more people and has a positive future. interacting with rugby – whether that be playing, supporting, coaching, refereeing or volunteering in any capacity – on a more regular basis. We are also working hard to ensure our game continues to increase its appeal and reaches out to everyone in Wales. We are conscious that some clubs are flourishing whilst others are struggling. We will be relentless in aiming to ensure that all clubs are healthy and sustainable. Very often our success in growing rugby in Wales has a direct correlation to the amount of money we are able to invest in the game. It

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

8 We are now trialling moving mini Our summer tour to Washington and The women’s team, under the rugby to the summer where our Argentina proved to be a huge leadership of Rowland Phillips, are research suggests that players and success. Our decision to rest our very much in transition. The coaching parents will have a better experience. British & Irish Lions players meant team and squad have seen a degree This is being trialled in 60 clubs and that not only were we able to give of change in personnel and initial feedback is positive. There have some of our most experienced approach. There has been an been some concerns expressed that players a well-earned rest, but emphasis on putting future the move will stifle more traditional importantly, it enabled some of our foundations in place, alongside summer sports, but we believe there emerging international players to driving for performances on the is a multi-sport experience available excel. pitch. There are some big strategic to children in the long summer questions for us to continue to work The Rugby World Cup is always our months and will do all we can to through – largely based around how primary focus from a planning collaborate with other sports. we fund the game appropriately – as perspective. We now begin the final the game becomes more global in International rugby run-in to Japan in autumn 2019 and nature and more professional in Internationally, the men beat World I am pleased to report that Warren outlook. Cup group opponents, Georgia, and Gatland and the team are on plan. claimed a third consecutive home win against South Africa in the Under Armour Series during the autumn – we also narrowly lost to Australia and New Zealand. During the Six Nations we were pleased with a second place finish, achieved courtesy of home victories over Scotland, France and Italy. Despite losing narrowly to England at Twickenham it was the loss to Ireland in Dublin which proved to be a tournament decider where, despite coming second best from a territory and possession perspective, our dangerous attack almost saw us take the spoils.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

9 grouP chief executive’s summary

Regional rugby There has been welcome progress on the pitch at Regional level. The Scarlets once again excelled in reaching the semi-finals of the European Rugby Champions Cup and the final of the Guinness Pro14. Their progress in both competitions was impressive and highlighted the importance of squad depth balancing their needs in two premier competitions. Cardiff Blues also brought home silverware, winning the European Rugby Challenge Cup. Again, this was a remarkable achievement with a hard-fought and brave fightback to Club rugby win in Bilbao capping a strong believe that the answer lies in Significant effort went into the club second half to the season. clarifying what should be worked on competition review which, at its core, The Dragons, now part of the WRU together and, conversely, what is best will allow those sides at the summit Group albeit run as an independent achieved independently. We will of the club game in Wales to subsidiary with its own board, started collaborate effectively and find a way compete for top spot. Alongside this the rebuilding process on and off the to work more closely whilst still achievement is the separation of the pitch at the Region. The key focus preserving the identity and tribalism professional game, where emerging has been to put the right foundations necessary. The challenge will be to professional players are principally in place, either through coach and preserve the fundamental elements under the jurisdiction of the Regions. squad strengthening or reviewing of our sport - which pit us, This is an area of the game that has overall management and necessarily, against each other in been reviewed multiple times and has infrastructure. With this work largely competition at different times – almost always resulted in a form of complete, next season will be about during this collaboration process, but unacceptable compromise. We are continued evolution, resulting in I am confident this can be achieved. optimistic that we have found a improved performance on the pitch We are also very conscious that we sound basis upon which to go and improved commercial need to improve the connection forward and will work closely now performance off it. between community and for the foreseeable future to implement and sustain the We have been engaged in ‘Project recommended direction. Reset’ for much of the year. The purpose of the project is to I would like to congratulate all of the implement a strategy whereby the clubs on winning their respective five professional entities (Wales and competitions. the four Regions) work together to Our clubs are the lifeblood of our ensure that, to borrow from Aristotle, game and we very much hope that ‘the whole is greater than the sum of investments such as “game on”, its parts’. rugby festivals and our focus on In effect, we are five interdependent women and girls’ rugby will see our entities and, the project is yet to clubs busy all the year round. conclude but, the key principles are With the above, alongside a increased collaboration from a rugby continued focus on our core 15-a- and commercial perspective and to side game, we are confident we will share to drive productivity see participation numbers grow. improvements. Whilst we have explored multiple methods, we

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

10 professional rugby at a local level – Principality Stadium events has proved to be a particular this is a key ambition of this project. We have had a very strong year from highlight, with our digital reach through social media in particular Coach development a stadium event perspective. Concerts have always been part of growing by c.50% in the year. Our search for the next Welsh coach our proposition, but this has been a has served to highlight the Financial performance for the record year for non-rugby event importance of our own coach year ahead revenue. This year’s highlight was Ed development programme. We will Pleased as we are with our financial Sheeran, who drew some 240,000 always look to appoint the best performance this year, we are people to his concerts across four coaches possible and ideally those conscious that, for a number of consecutive evenings. This event coaches will be Welsh. We have in factors, our revenue will decrease in eclipsed all previous records and place a programme where we have YE19. Anthony Joshua has already brought significant additional income increased our focus and investment signed a two-fight deal with into Wales. We were also able to in continuing professional Wembley; we have a narrower attract two Anthony Joshua world development for Welsh coaches. In window for concerts due to World title fights which, in addition to the addition, we recognise that there are Cup warm-up fixtures; and we will c.160,000 people who attended, put a range of coaching positions in not be hosting the All Blacks in the Principality Stadium and Wales on the Welsh professional and age-grade Autumn window. All this means that global stage. rugby that afford development our income will decrease next year, opportunities. We also want to We will continue to drive this side of but we have, of course, planned for continue to expose Welsh qualified our business with new event formats this eventuality. coaches to positions outside Wales, being explored. Finally, I would l like to thank where we know there are Digital everyone in Welsh rugby for your opportunities to grow and learn in We chose to put additional tireless commitment and passion for new environments. investment into our digital strategy the game in Wales. That said, there is no overnight fix. this year. Priorities include a focus on We forecast that it will take seven to Customer Relationship Management, ten years for this programme to bear which has improved our ability to fruit. In the meantime, I would like to price and market our events congratulate Wayne Pivac on his successfully, the launch of a new appointment as Welsh Coach to online player registration portal and succeed Warren Gatland in 2019 and a significant push to improve our I look forward to working with both digital content. Our ‘Behind the Wayne and Warren to affect a Scenes’ footage of our men’s Martyn Phillips smooth transition. national squad campaigns and tours Group Chief Executive

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

11 strategic rePort YEAR ENDED 30 JUNE 2018

The Group’s business and Rugby performance objectives • Success of the National Squads – men and women Group activities The Welsh Rugby Union Limited’s • Performance of the four Welsh (“Company”) purpose and principal Regions activity is to promote rugby to • Performance of the Group’s age- encourage more people to engage grade teams with the game, more often with more enjoyment and more success. The An analysis of the Group’s Company majority owns Millennium steve Phillips performance against these measures Stadium plc (“MS”), Millennium is shown in the reports from the Stadium Experience Limited (“MSEL”), National Head Coach and the Head of WRU National Centre of Excellence Ltd (“WRUNCE”), Rugby Performance in this Annual WRU Gwent Region Limited (and its subsidiaries) and WRU Report. Supporters Club Ltd (“WRUSC”). Collectively, the Financial performance Company and these subsidiaries are referred to as the • Generation of sufficient earnings before interest, Group. depreciation, amortisation, allocations and exceptional WRU Gwent Region Limited (including its subsidiaries: items (“EBITDA”), over the medium term, to fulfil the WRU Gwent Rugby Limited; and WRU Gwent Stadium Group’s principal activity and primary objective Limited) own and manage the professional rugby team • Number of and attendances at international rugby known as the Dragons and the land and other assets at matches featuring the Welsh team at Principality Stadium (collectively “WRU Gwent”). • Provision of consistent and affordable levels of funding Key performance indicators (“KPIs”) to clubs and affiliated organisations to allow them to The KPIs of the Group are: implement long term plans to fulfil their objectives Participation in rugby An analysis of the Group’s performance against these financial measures is shown below. • Participation levels in Community Rugby, including men, women and junior numbers Financial strategy An analysis of the Group’s performance against these As a result of the re-financing in June 2015, the net assets measures is shown in the report from the Head of Rugby of the Group significantly increased and the financial Participation in this Annual Report. covenants of the new arrangement were improved in favour of the Group. Given these changes, the Group’s strategy is typically to annually seek to re-invest more into the game rather than retaining any profits to enhance net assets. However, in YE18, the Group has retained profits in order to allow it to re-invest more into the game in YE19 in excess of its earnings and therefore record a loss. Net assets have therefore increased in the current year to £30.1m but it is expected these net assets will reduce in YE19. WRU Gwent On 28 June 2017, the Group acquired the trade and assets necessary to operate the professional rugby team known as the Dragons and all of the land and other assets at Rodney Parade. Together with the allowance for the existing pitch to be maintained and for certain stadium maintenance, stamp duty and professional fees, this amounted to a final cost of c.£5.5m which was reflected

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

12 strategic rePort YEAR ENDED 30 JUNE 2018

3. Group share of profits retained in expectation of a loss in YE19; and 4. Reduction in bank debt, partly due to retention of profits in year. Dynamics of the business The activities, both operational and financial, of each company in the Group are so intrinsically linked that there is little merit in assessing individual performance. Whilst they are all separate legal entities and are obliged to prepare separate financial statements, it is the Group’s performance that is the only meaningful measure. The Group must deliver on its commercial activities to allow re-investment in community rugby, performance rugby and Principality Stadium. Accordingly, the Group’s income generation is paramount to delivering on its principal activity and primary objective. The key economic income driver of the Group’s business is the hosting of events at Principality Stadium; particularly, the hosting of international rugby events featuring the Welsh team and especially a winning Welsh team. The more matches that are played, the greater the Group’s revenues that are available for re-investment in Welsh rugby. The Group welcomed 482,000 (2017: 377,000) rugby spectators to Principality Stadium for the Under Armour Autumn Series and the , analysed as follows: 2018 2018 2017 2017 No. of ‘000 No. of ‘000 in the Group’s balance sheet as at 30 June 2017. YE18 home home include for the first time, the trading results of WRU Gwent matches matches within the Group results. Autumn Series 4 270 4 230 Headlines of the financial performance – YE18 v YE17 Six Nations 3 212 2 147 Given the financial strategy changes outlined above, the 7 482 6 377 following demonstrate the resulting outcomes: Note 2018 2017 The average attendance per match was 69,000 (2017: 63,000) and equated to an average of 93% (2017: 85%) £’m £’m when expressed as a measure of capacity attendance. The Turnover 1 97.0 74.9 primary reason that the overall attendance increased in Re-investment in the game 2 42.8 36.6 YE18 was due to playing seven home fixtures compared Group share of retained 3 2.3 0.1 to six in YE17. profit for the year The average ticket income per attendee at matches held Net bank debt 4 6.1 9.4 at Principality Stadium in YE18 was £46 (2017: £45). Within reason, the Group’s operational cost base is Note: relatively fixed; albeit there are incremental costs if more 1. Increased turnover due to more international matches Group controlled events are staged. As a consequence, and third party events held at Principality Stadium incremental events should mean incremental revenue, costs and ultimately incremental profits which can be 2. Increased turnover reinvested in the game, including reinvested into the game across all levels. amounts invested by WRU Gwent.

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13 strategic rePort YEAR ENDED 30 JUNE 2018

Financial performance Overview of performance The Group generates income from its international matches (including sponsorship and broadcast rights) and incremental revenue from the use of Principality Stadium. This income meets the operating costs of the Group to allow the majority of the surplus to be “invested” in “Welsh rugby”, as follows: 2018 2017 £’m £’m Group income 97.0 74.9 Less: operational business costs • Business and administration (8.6) (7.3) • Hospitality and catering costs (9.8) (5.3) • Direct costs (21.2) (16.2) • Stadia costs (6.2) (4.7) Total (45.8) (33.5) income includes the gross value of food and beverage Surplus 51.2 41.4 sales, together with conference and banqueting income. Other event income increased to £4.8m due to more non- Group income is analysed as follows: Group events at Principality Stadium including boxing and concert events. Other event income represents events 2018 2017 staged at Principality Stadium apart from rugby matches £’m £’m featuring the Senior Men National Squad - including, in Match income 44.9 35.0 the two years indicated above, music concerts, boxing and Competition income 11.7 9.2 motorsport. Commercial income 14.2 12.8 Competition income represents the income from Hospitality and catering income 18.0 10.9 competitions including the Champions Cup, the Challenge Other event income 4.8 2.1 Cup and the Guinness Pro14 (see Note 2 for further Other income 3.4 4.9 details). 97.0 74.9 The remaining income arises from ancillary activities, The Group earned some £97.0m (2017: £74.9m) various grant sources and income derived from the British predominantly from international rugby matches staged at and Irish Lions tour. During YE18, the Group received Principality Stadium. These matches generated 46% £0.9m (2017: £1.0m) of grant funding from Sport Wales. (2017: 47%) of the Group’s overall income. Operational business costs Match income increased by £9.9m predominantly due to The business and administration costs represent the costs one more home fixture, higher average ticket prices, of managing the Group; the direct costs represent the higher average attendances, income from WRU Gwent costs of staging both international rugby matches and and increased broadcast income. other events held at Principality Stadium and Rodney Parade; the stadia costs represent the costs of managing Commercial income increased by £1.4m to £14.2m, the stadia other than those directly attributable to events. primarily due to higher sponsorship income and income from WRU Gwent of £0.7m. Commercial income The Group’s operational business costs have increased contributes 15% (2017: 17%) of the Group’s overall during the year to £45.8m (2017: £33.5m) and include in income. YE18, for the first time, the costs of WRU Gwent of £2.7m. Hospitality and catering income amounted to £18.0m Business and administration costs have increased by 18% (2017: £10.9m) with the increase largely driven by to £8.6m due mainly to the costs of WRU Gwent of increased events in Principality Stadium, contributing 19% £0.7m, increased investment in website and similar, and (2017: 14%) of overall income. Hospitality and catering inflationary increases.

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14 strategic rePort YEAR ENDED 30 JUNE 2018

Surplus invested in rugby The surplus of £51.2m (2017: £41.4m) made by the Group which is invested in “Welsh rugby” can be analysed as follows: 2018 2017 £’m £’m Operational costs - Performance rugby 5.5 5.2 - Community rugby 4.6 4.3 - WRU Gwent – regional rugby 6.0 - 16.1 9.5

Allocations to affiliates - Regions (Professional) 20.5 21.0 - Clubs (Semi - professional) 1.7 1.7 - Community rugby 4.5 4.4 26.7 27.1

Total investment in “Welsh rugby” 42.8 36.6

The balance is analysed as follows: Surplus 51.2 41.4 Total investment in “Welsh rugby” (42.8) (36.6) Direct costs are costs incurred directly in relation to 8.4 4.8 attaining revenues and will include all National Squad costs and third party costs incurred in delivering events at Principality Stadium and Rodney Parade. These costs have Depreciation and amortisation 3.9 3.7 increased by £5.0m mainly as a result of: (net of grants) • the direct costs arising from Rodney Parade of £0.8m Exceptional items (see Note 4) 0.1 (0.4) Interest costs 0.6 0.8 • an increase in event costs from hosting additional events Non-controlling interests 0.4 0.1 at Principality Stadium, including increased security costs Tax charge 1.1 0.5 at all events Transferred to reserves 2.3 0.1 • an increase in international player costs of £1.6m; and 8.4 4.8 • an increase in match costs due to hosting more Wales home matches at Principality Stadium Investment in “Welsh rugby” The Group’s investment in “Welsh rugby” has increased The increase in the player costs shown above is driven by during the year to £42.8m (2017: £36.6m) and include in (i) an increased bonus payment as a result of a being YE18, for the first time, the investment in WRU Gwent of placed second in the Six Nations 2018 as compared to fifth £6.0m. These costs represent the investment in rugby in the Six Nations 2017 and (ii) the costs of the three match related activities in the Dragons rugby team. tour against South Africa and Argentina compared to the two match tour fixtures against Samoa and Tonga in YE17. The costs in respect of performance rugby have increased by 7% to £5.5m and include managing the age-grade Hospitality and catering costs increased to £9.8m (2017: structures, the national 7s sides, player development, £5.3m). The increase year on year is due to the increased referee costs, National Centre of Excellence and insurance number of home matches and the number of other events which collectively amount to some 69% (2017: 69%) of in the year and is in line with the increased turnover. the total with the balance of the 31% (2017: 31%) Stadia costs have increased by some £1.5m to £6.2m comprising staff costs. mainly due to the costs of WRU Gwent of £0.7m, The costs in respect of community rugby have increased increased utility costs, inflationary increases and increased by 7% to £4.6m. Community rugby costs include coach stadia maintenance costs.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

15 strategic rePort YEAR ENDED 30 JUNE 2018

EBITDA and net result One of the key measures of the Group is the earnings before interest, tax, depreciation, amortisation, exceptional items and allocations to affiliates (“EBITDA”). This is a key measure as it is the best proxy for cash generated from the Group’s operational activities. This provides the cash to fund the Group’s primary objective. The Group’s EBITDA was £35.1m (2017: £31.9m). The Group’s pre-exceptional profit before tax and non- controlling interests was £3.9m (2017: £0.3m); after exceptional items, a profit before tax and non-controlling interests of £3.8m (2017: £0.7m). This can be analysed as follows: 2018 2017 £’m £’m Company 26.3 25.7 MSEL 6.1 3.8 WRUNCE 0.2 0.2 WRUSC 0.2 0.1 MS 3.1 2.1 WRU Gwent (0.8) - development, referee costs, school club hub costs, digital Group EBITDA 35.1 31.9 strategy investment and insurance which amount to some 58% (2017: 61%) of the total with the balance of the Allocations to affiliated organisations (26.7) (27.1) 42% (2017: 39%) comprising staff costs. The increase in Exceptional items (0.1) 0.4 the year is due to additional staff costs focused on Depreciation and amortisation (3.9) (3.7) delivering community programmes. (net of grant release) The allocations to the three Regions not within the Group Operating profit 4.4 1.5 are £20.5m (2017: £21.0m (to four Regions)). The Net interest (0.6) (0.8) reduction is due to the amounts attributable to WRU Profit before tax 3.8 0.7 Gwent not being shown within the £20.5m given it is now Tax (1.1) (0.5) part of the Group. The allocations in YE18 include £2.4m Non-controlling interests (0.4) (0.1) (2017: £1.0m) of additional investment in the Regions, Retained profit 2.3 0.1 which are in excess of the amounts stipulated in the Rugby Services Agreement (“RSA”). The RSA payments cover all On a pre-exceptional basis, the Group generated an international player release and provide financial support operating profit of £4.5m (2017: £1.1m) from which net for the four Regions in accordance with the RSA that was debt service of £0.6m (2017: £0.8m) is deducted resulting signed in August 2014. in a profit before exceptional items, non-controlling interests and tax of £3.9m (2017: £0.3m). The allocation to the Group’s semi-professional league has remained in line with the prior year at £1.7m. Net interest expense The Group’s net interest expense is analysed as follows: The allocations to the Group’s community clubs have increased by £0.1m to £4.5m. The total investment in the 2018 2017 community game is: £’m £’m 2018 2017 Bank interest payable 0.4 0.6 £’m £’m Bank charges 0.2 0.2 Total 0.6 0.8 Operational costs 4.6 4.3 Allocations 4.5 4.4 The reduction in interest charges shown above is largely 9.1 8.7 due to the lower net debt position over the course of the year and a reduction in the interest margin paid.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

16 strategic rePort YEAR ENDED 30 JUNE 2018

Cashflow The Group’s net cash inflows from operating activities were as follows: 2018 2017 £’m £’m EBITDA 35.1 31.9 Allocations to affiliated organisations (26.7) (27.1) Exceptional items (0.1) 0.4 Working capital movements (0.9) 3.6 Net cash inflows from operating activities 7.4 8.8

From this amount in YE18, the Group paid net interest costs of £0.7m, paid £1.8m in respect of fixed assets, repaid a grant of £0.1m, paid dividends to non-controlling interests of £0.6m, received an investment of £0.1m from a non-controlling interest and paid tax of £0.9m leaving a net cash increase of £3.4m. Net debt Net debt, which is defined as bank loans, debenture loans, less cash balances, as at 30 June 2018 was £43.6m (2017: £47.0m). Net bank debt, which is bank loans less cash balances, was £6.1m (2017: £9.4m). The net bank debt position of the Group is as follows:

The Group has derivative instruments that hedge the 30 June 2018 30 June 2017 majority of the Group’s debt, as shown in Note 14. These £’m £’m instruments ensure that, for a proportion of the Group’s Loans: debt, the rate of interest paid will not exceed a defined Term loan 1.3 2.5 interest rate. Regions loan 2.4 3.6 Exceptional items Revolving credit facility (“RCF”) 2.5 3.9 During YE18 and YE17, the Group incurred charges that 6.2 10.0 due to their size and nature were considered Cash (0.1) (0.6) “exceptional”. The Group’s definition of exceptional items Net bank debt 6.1 9.4 includes the identification of significant non-recurring items that enable the “normal” financial performance of The decrease in net bank debt during the year of £3.3m the Group to be better understood. As shown in Note 4, includes (i) a £1.2m reduction in the term loan, (ii) a £1.4m the exceptional items in YE18 arose from some decrease in the RCF, (iii) a reduction in the Regions loan of restructuring costs mainly following the integration of £1.2m due to repayments from the Regions (iv) offset by WRU Gwent. The exceptional items in YE17 arose from a the decrease in cash balances of £0.5m. The loans to the dividend received from the liquidation of a historical Regions were secured to further their ambitions in creditor and a refund of historical bank charges. conjunction with the RSA; further details of the amounts due from the Regions are set out in Note 11. 2018 2017 £’m £’m The RCF was £2.5m drawn as at 30 June 2018, £3.9m drawn as at 30 June 2017 and had a maximum draw of Restructuring costs (0.1) - £11.3m during the year. The RCF was also fully repaid at Dividend from historical creditor - 0.2 certain points during the year. Refunds of bank charges - 0.2 Total (0.1) 0.4 As at 30 June 2018, the Group had unutilised facilities of £16.5m (2017: £15.1m).

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

17 STRATEGIC REPORT YEAR ENDED 30 JUNE 2018

As part of its banking agreements, the Group has to Renewal: comply with bank covenants which require the Group to, • Principality Building Society to continue their long-term inter alia, meet certain levels of cashflows and surpluses. support of the Principality Premiership This enforces normal business practices on the Group, but limits the extent to which the Group can invest, make • Gilbert to continue providing rugby balls across the allocations to affiliated organisations and access the whole game in Wales facilities above. • Heineken, Pro Athlete Supplementation and Gullivers These bank covenants are typical of those applying to partnerships commercial businesses. It is in the Group’s best interests • BBC domestic broadcast agreement which includes to comply with these covenants as a breach would be a increased commitment for live broadcast of Principality default of the loan agreements. The Group’s financial Premiership matches for next season. management and controls are structured so that the Group complies with these covenants. Capital expenditure The Group continues to work in accordance with its Welsh Language Policy. Where possible, the Group will ensure During YE18, the Group invested in some £0.5m of capital that the Welsh language is widely used in its operations expenditure; the main categories of investment were as and continually considers whether it can do more through follows: the medium of Welsh. £’m Principal risks and mitigation strategies Catering equipment 0.3 As outlined earlier in this report, the Group’s primary Other capital expenditure 0.2 objective is to promote rugby to encourage more people 0.5 to engage with the game, more often with more enjoyment and more success, which is achieved by re- Balance sheet and reserves investment in community rugby, performance rugby and The Group's reserves attributable to the Company have Principality Stadium. increased by £2.5m to £27.8m. This increase arises from The Directors’ assessment of the principal risks to the retained profit for the year and the movement on the delivering this objective, their potential effect and the steps hedging reserve. taken by the Group to mitigate these risks are set out The fixed assets of the Group decreased by some £4.9m, below: reflecting the capital expenditure of £0.5m offset by the Income generation – the ability to generate income dictates depreciation charged in the year of £5.4m. the level of re-investment the Group is able to make in all Operating working capital fluctuates from year to year forms of rugby. A sustained fall in income would lead to a depending upon the timing of events arising immediately reduction in financial resource available for re-investment prior to the year end. in rugby. Commercial activity Throughout the year, a series of significant commercial agreements were achieved or renewed by the Group. These include: New: • Channel 4 broadcasting Wales’ summer tour matches • Expanded the reach of Welsh Rugby with a match played in USA against South Africa • RWC19 legacy activity underway with an innovative partnership with the city of Kitakyushu in Japan including successful player, coach and referee coaching initiatives • A ten-year agreement with Fanatics, the global leader in licensed sports merchandise.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

18 Some 79% (2017: 78%) of the Group’s income is financial covenants forms a key part of all policy and predominantly derived from staging international matches strategy and the Group has a rigorous annual budgeting featuring the Welsh team and the commercial activities process that is focused on covenant compliance. The associated with the Welsh team. Given its significance, the Group reviews performance against this budget mitigation of income risk is therefore focused on match throughout the year in order to identify any potential risks and commercial incomes. to compliance. The Group continually communicates with its bankers, in respect of the Group’s activities and The Group seeks to mitigate risk to income by, where performance. Given that the Group’s existing banking possible, entering into long term arrangements with its facilities are due to expire in October 2019, the Group shall broadcasters, sponsors and other commercial partners. shortly commence discussions in respect of re-financing The Group’s ticket pricing strategy is focused on these facilities to align with the Group’s requirements over maintaining a balance between the highest possible the next financing cycle. attendances and strong financial returns. The Group’s ticket prices are reviewed annually with reference to The maintenance, physical security and insurance of its market conditions and the opposition faced. main assets, primarily Principality Stadium – the majority of the Group’s income is derived from the staging of As noted above, 79% (2017: 78%) of the Group’s income international matches at Principality Stadium and should is derived from activities associated with the Welsh team. Principality Stadium not be available to host matches the The performance of the Welsh team will have an impact Group would have to seek alternative venues, which on the Group’s ability to generate income, particularly over would likely incur significant costs and may not have the medium to long term. The Group aims to ensure the similar capacity. Loss of or restricted access to the Group’s success of the Welsh team by recruiting a world class other assets, such as the National Centre of Excellence coaching and medical team to provide the best possible (“NCE”), would also have a severely detrimental impact on support to its international players, securing additional the Group. The training facilities at the NCE are amongst preparation time for the Welsh team and extensive the best in the world and National Squad performance investment in training facilities, to ensure the Welsh team may suffer as a result of loss of access to these facilities. has the best possible environment in which to train. The Group takes extensive measures to safeguard its The provision of adequate banking facilities - the Group is assets. The Group employs a team of maintenance and financed by a mixture of bank and debenture debt. The facility management staff who undertake a thorough continued availability of the bank debt facilities, at preventative maintenance programme at all of the Group’s competitive rates, is crucial to the future prospects of the facilities. The Group procures comprehensive insurance Group. The Group’s banking facilities are subject to policies that, in the event of damage to assets, provide compliance with financial covenants and non-compliance recompense for rectification of damage and for loss of of these covenants could significantly impact on the earnings due to business interruption. Group’s banking facilities. Ensuring adherence to the

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

19 rePort from the head of rugby ParticiPation

he army of volunteers This initiative is about removing Tinvolved in community barriers which may have traditionally rugby at all levels is absolutely prevented individuals from participating in the game and sits critical to the health of the neatly alongside District 2nd XV game in Wales. leagues and ‘Game On’ – a fully From the impact of junior coaches, sanctioned and flexible set of rules parents, carers and teachers which enable matches to take place influencing children and young at community level in a variety of people, to the referees - without circumstances (for example, with less whom there would be no matches - ryan Jones than 15-a-side). team managers and administrators Road to Principality who are the unsung heroes of There is a place for everyone - Principality Stadium opened its doors grassroots rugby - the value of each whether you’re ‘mam or dad’s taxi’, to more than 50 school, college, club contribution is undeniable. volunteer, club stalwart, supporter, turnstile operator, pitch-marker, and representative teams in a series It is vital these individuals are of 30 community finals and matches supported and inspired - to be the marketeer or medic, just the person who makes rugby happen, a as part of the most comprehensive best they can be so they, in turn, can end of season celebration to date. pass on their love of the game and combination of some or all of the provide positive rugby experiences to above, or you take on a role we’ve U18 teams were the first to take the next generation. omitted to mention - rugby really can centre stage with boys' school teams be all things to all people and it is our competing for the National Vase, We want everyone in Wales to mission to show you how. Plate and Cup trophies before an engage with rugby at some point, in Emerging Wales Women faced an some way and we will do this by 2nd XV Rugby tapping into when, how and where The inaugural season of the new 2nd England U18 development XV in a they wish to do so. XV Conference saw ten teams first fixture of its kind. compete in both a new league and Youth rugby followed with the Youth Everything we do in Rugby the WRU National Bowl competition Bowl, Plate and Cup Finals, then Participation is about encouraging (Rhiwbina, Bargoed, Penallta, Pill Touch Rugby was the name of the more people to be involved in rugby, Harriers, Risca Athletic, game with 20 winning teams from more often, with more enjoyment Athletic, Crymych, Llandovery, and more success. Narberth and Newcastle Emlyn). structured Touch Leagues from across Wales coming together for a National Finals event. Senior rugby, with the pinnacle of Welsh club rugby on National Finals Day, saw the National Cup, Bowl and Plate provide opportunities for community clubs to enjoy a day to remember Junior teams returned in the DC Thomas Cup Final and Year 8 and Year 9 finals were followed by a Mixed Ability Festival. The series closed with U15 rugby - the district boys’ finals and the final of the girls' schools U15 competition completed a rugby extravaganza in the capital.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

20 Disability Strategy partnership now enables around in both the private and public sectors The first WRU Disability Strategy was 12,000 young people annually to as we continue to progress and we launched alongside the appointment participate in school-based tag, will be moving to a more of the first WRU Disability Lead sevens or beach rugby festivals and collaborative community provision Officer, Darren Carew. Work is being tournaments across Wales. alongside our partners in the regional game. carried out in four main sections – Our Girlguiding Cymru partnership community-based mixed ability rugby has had a fantastic first year. Beach Summer Rugby for all ages, inclusive opportunities Girlguiding leaders and ambassadors Through many partners including the within schools and colleges, have taken WRU Tag Leader courses Urdd, Community Regional Teams wheelchair rugby and community and delivered rugby in local Rainbow, and Local Authorities Sport deaf rugby. Brownie and Girlguiding units. Development Teams, we have Partnerships Together we have produced WRU conducted 15 Beach Rugby Events Our partnership with Urdd Gobaith Girl Guiding badges and large this summer (2018). Predominately Cymru has gone from strength to participation events have occurred in primary school age playing a fun tag strength. The national Urdd WRU 7s Cardiff and Builth Wells, with up to rugby format across beautiful was held in Cardiff and is becoming 1,000 young girls participating at beaches in Wales. Approximately an annual showpiece event. The each event. We will be working more 3,000 young children participated in and more closely with new partners the events.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

21 rePort from the head of rugby ParticiPation

Seasonal Repositioning coaching, refereeing or other to translate into improved standards Elsewhere in mini rugby, we have volunteering roles within mini rugby at the performance end of the game trialled ‘seasonal repositioning’ across and other benefits could include over the next four to eight years. increased revenue for clubs due to some 60 clubs throughout Wales, What the future holds involving more than 4,500 players the year-round usage of their facilities We will continue to try new things as (U7s-U11s) at more than 5,000 and less need for clubs to hire indoor we endeavour to lead the rugby matches and festivals over the or all-weather pitches for training in world in ensuring our game summer. the winter months. We await, and continues, and grows in stature, as a look forward to, the results of this Following consultation with selected sport that is truly inclusive and trial. clubs and mini rugby volunteers, the appealing to all. move seeks to gauge whether this Cluster centres Alternative Rugby Strategy will lead to an increase in playing and Women and girls’ rugby in Wales has We will continue to focus our efforts volunteer numbers but, more enjoyed a fantastic upturn in players, on diversifying our rugby offer importantly, an improved outdoor profile and interest. through many partners. We will be experience, may make rugby a more With the latest season of girls-only working hard on our Alternative attractive and inclusive option for rugby at the new cluster centres Rugby Strategy to make sure there players and their busy families. around Wales, now at 33 venues, this are lots of opportunities for many Mini rugby during British Summer is another area of success with diverse communities to participate in Time seeks to allow for more thousands of girls now regularly our great game, in different formats. flexibility in scheduling, enabling taking part in rugby outside of the In this area, the ‘Game On’ initiative training, matches and some festivals school environment. and 2nd XV conference rugby remain to be played during the longer We have plans to continue to grow a key priority for us as we seek to weekday evenings, which could free and strengthen these structures and maximise the numbers participating up some weekends. opportunities in order to cater for the in the game in Wales. The lighter evenings could encourage increased demand from girls to play The results of the seasonal more parent engagement in rugby and allow that influx of players repositioning trial will be assessed

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

22 and if there are indications that an strategy and we are trying to increase needs and desires of school, local expansion or even a full roll-out our coverage of Wales through this community and rugby club or would be beneficial, then we will be programme. ‘cluster’ (girls only summer rugby) seeking further consultation at all environments. The programme has More than 19,000 girls participated levels but hope to act quickly so we provided some fantastic results for in various forms of the game at one can reap the rewards of this exciting us. Rugby in education is really of the 95 schools, colleges or new development. important as we can and will play a universities within the WRU Hub significant role in the health and well- Hubs Programme last year (season 17/18). being of school populations. Our Hub Programme enters a new We continue to seek out new schools Our aim is to engage with all children three-year cycle and the hub officers to broaden our rugby footprint and throughout their education in new continue their good work in aligning we have worked really hard on ways ensuring they have an schools and community rugby. This is developing the role of the Hub appropriate positive experience of the single biggest financial Officer to now be reflective of the commitment of the participation our game, whether that be at the primary, secondary, college or at university stage. Women’s rugby In the women’s game we have an exciting year ahead, with the appointment of Charlotte Wathan as our new Women and Girls Engagement Manager. Charlotte will be focussing on people development, the game itself and resource and governance in the year ahead. We are committed to growing and developing Women’s rugby; giving every female, when they choose, the opportunity to engage with our game across a variety of formats and locations whilst working to provide all females with a positive rugby experience.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

23 rePort from the head of rugby Performance

ur aim is to constantly Ostrive to help Wales, the Regions and Premiership clubs plus all our other National Teams, both men and women, to be as successful as possible. We are creating modern, world leading and sustainable programmes so that success can be achieved in the geraint John short term, but also long into the future. At the World Cup we wanted a top four finish and aimed to beat a top Some key achievements during the Southern Hemisphere side along the year would include: way. We achieved the latter ambition Age Grade Pathway with an important 21-26 victory over Programmes Australia on the opening night of the tournament, but, ultimately, a U20s seventh place finish in the U18s, Regional Age Grade, We want to see as many players as competition left us wanting more, Schools and Colleges possible develop to their full but in terms of development we are Another successful season at this potential, but also identify those who in good shape for the year ahead. level saw many new players identified are able to thrive in a performance and assimilated into the player environment quickly and efficiently Many of the squad are set to remain in the U20 age bracket next season pathway. Our U18s side completed a and ensure they progress through the tour to South Africa, which will be pathway. and it was also another huge plus for us to be able to support a number of hugely positive towards their future Last year over 40 players played at the regional coaches during the year, development both on the field and U20 level and this was a key objective with the likes of Dai Flanagan and off it, and also competed in a new 6 achieved for us in preparation for the Richard Kelly from the Scarlets in Nations festival. It has been our policy U20s Rugby World Cup, to increase particular making important to ensure that all players in the squad our selection pool. contributions to the programme. participate in some form and the 6

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

24 Nations festival, in particular, saw medal, but this performance against development at key events in Hong every squad player start at least one one of the world’s most renowned Kong and in Singapore. game. ’ nations was one to be Women proud of. A healthy and vibrant regional U18 A key achievement for our senior and U16 schedule and Schools and With the likes of , James women was to finish in the top seven College League proved to be a Benjamin and Jared Rosser out there at the World Cup in Ireland, allowing successful platform for both player on the pitch showing the transferable them to qualify automatically for the and coach development and skills that exist between the 15-man tournament in 2020. This, in turn, provided both excitement and good and 7-man game; the mutual means that a greater emphasis can skill levels throughout the season. As development potential for the co- be put into development in the lead ever we are extremely grateful to the existing formats is there for all to see. up to 2020, with qualification not at staff, coaches, principals and To have an individual of Justin’s risk. headmasters that give up their time calibre – a senior Welsh international to support this hugely important and Test British & Irish Lion – not only aspect of our rugby pathway. lifts the other members of the squad, Sevens but also encourages his own Although we did not gain the development even further, with the successes we desired on the pitch core skills that are important in both from a result perspective during the aspects of the game on display. World Series we have worked closely ’s elevation from the with the four Regions and the Sevens programme to full National Squad to strengthen our international honours last autumn is sevens offering and a tough another great example of the Commonwealth Games campaign in programme in action and the sevens April was one of the highlights of the programme has also allowed regional year. This was a targeted event and coaches the chance to exchange one which the Regions kindly ideas and develop their own supported the sevens programme. experiences. Both Richie Rees (Cardiff A last gasp 21-17 loss to put the Blues) and Shaun Connor (Dragons) opposition through to a semi-final were brought into the programme as and left us out of contention for a part of their ongoing coach

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

25 rePort from the head of rugby Performance

A further highlight was the success of winners Leinster stood in the way so in style with a dramatic 31-30 the sevens team at Rugby Europe, with a 38-16 defeat at the Aviva victory over in Bilbao. The participating at the World Series Stadium in Dublin. Leinster would Blues also remain the only Welsh side Qualifier and also taking part on the repeat the feat in the Guinness to have won a European trophy. World Series itself in . PRO14 Final, also at the Aviva, preventing the Scarlets from The women’s game remains a key successfully defending their PRO12 strategic priority for us with new title of the season before in the programmes to increase participation expanded competition. The winning in the community game linked to margin was smaller, 40-32, but developing participation at silverware remained elusive at the performance level as well. Alongside end of what was by any standard a this drive to further increasing hugely successful season for the participation in the women’s game Scarlets. there are more exciting changes coming for player development and Cardiff Blues experienced mixed a renewed emphasis on coaching. fortunes in the PRO14, but their achievement in winning the Regions European Rugby Challenge Cup lifted The Scarlets delighted us all with a their entire season and was huge European Rugby Champions Cup run boost for Welsh rugby. It is now the which matched their 2007 trip to the second time they have won that semi-finals of club rugby’s flagship competition, (only Harlequins have competition, unfortunately eventual done better with 3 wins) and they did

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

26 THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

27 rePort from the head of rugby Performance

Much has been said already, both in Competitions Principality Premiership public and elsewhere in this report, Off the pitch, we completed our Congratulations to Merthyr on lifting about the four Regions and Wales as competitions review and announced the Principality Premiership trophy for five professional entities doing more the introduction of a new the second season running, setting to work together for a common development competition and new up the exciting prospect of an cause. Real evidence of this approach ambitions and priorities across the amazing hat-trick if they can do it could be seen on the summer tour of club game. again this season - with the added Argentina when the strength in prospect of promotion from the The new competition, the Celtic Cup, depth in Warren Gatland’s Championship and relegation now in developed alongside our friends in international squad was there for all place at the other end of the table Ireland will be a breeding ground for to see. Each of the Regions should be adding further intrigue to the players aged between 18 and 23 given their due credit for working so challenge ahead. We fully appreciate fulfilling a need which was explicitly hard with the players alongside our that there have been a couple of identified by the review and freeing national coaching team to ensure years of change at this level, but the up clubs in our Premiership to that they are ‘international ready’ competition review was a concentrate on being the very best when the National Head Coach comprehensive project and we are club sides they can be. This new comes to call. This does not just confident we have a clear direction competition will be extremely happen by accident and it is part of that will establish this competition as beneficial for developing both our collective effort to work together for the pinnacle of club rugby in Wales players and coaches for the future in the mutual benefit of all involved in for many years to come. We will also relation to all of our performance Welsh rugby – and there is much continue to support our coaches and teams in Wales. more of this to come. match officials with a full programme

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

28 rePort from the head of rugby Performance

Players Player succession planning, which includes creating bespoke plans for individuals, is a major priority which feeds everything we do from competition structure and coaching, mentioned above, to directly supporting our Regions to deliver their own development programmes. It is our aim to ensure the Welsh national coach, whether that be Warren Gatland at RWC19 or Wayne Pivac thereafter, sees a strong base of players with the right skill-sets ready to step up to international level when they sit down to make their own specific succession plans for Wales. Match Officials continues to be one of of continued professional we are ensuring we have the right World Rugby’s very best referees and, development opportunities to ensure systems in place to support his aim. alongside his obvious attributes on a thriving environment at this level. We will also reach out to and support the pitch as a role model for aspiring Coaching those Welsh coaches who are officials in our game, he is also a wonderful ambassador for Welsh A huge part of our focus is coach working outside of our system. There rugby around the globe. development and the Celtic Cup will are numerous coaches who are also be a place for new and young working at the highest level (for We have recently appointed a new coaches to hone their abilities. example, David Young, , performance manager, Paul Adams, , Gareth Baber, to oversee our pathway into We will be placing renewed emphasis Steve Tandy, Jonathan Humphreys refereeing in Wales and we now have on the support we offer our coaches and Leigh Jones) and over the year representation on the international at regional level, with former Wales ahead we will engage closely with circuit at age group and 7s which we coach Kevin Bowring supporting in them and look to provide support. are extremely proud of. this area. In April, we also appointed Dan Clements as Performance Coach Manager, his focus is on the development of coaches across a broad spectrum, including: national and regional age grade; men's and women's national sevens; the new regional U23 competition; Principality Premiership; and National Championship and to develop a programme to support professional players who are looking to transition into coaching. It is a stated ambition for the future that each of our Welsh regional teams will boast coaches developed from within the system in Wales and

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

29 rePort from the head of rugby oPerations

he rugby operations total investment of over £800k with Tdepartment services the over £4.8m secured in match community and professional funding. The Facilities Grant has funded a wide variety of both on and club game in Wales . off field initiatives, including The efforts of the players, coaches, changing rooms maintenance, match officials, administrators and training lights, clubhouse and kitchen volunteers at the 300-plus clubs refurbishments. across the country sustain our Some of the clubs who have secured national game, we never under- funding from a variety of sources estimate this contribution and strive Julie Paterson include: to put in place the necessary support to help these clubs thrive. As no two • Gorseinon: who obtained funding clubs are alike, we have put we have introduced a Player towards an extension to the programmes in place which deliver Development Programme that helps existing clubhouse to benefits regardless of size, geography players plan for their lives after rugby. accommodate their growing mini or stature and, where possible, we We continue to work collaboratively and junior section. The total project use economies of the scale to offer with the regions across the breadth cost was c.£85k with funding from collective services. of competitions the play in. the WRU of c.£25k and a further c.£61k from matched funding. We know our clubs are often the Facilities and investment focal point of the local community In the last three years, some£750k • Bryncoch: who have begun work to and we see this as a major asset, our has been invested in grass pitches - refurbish and reconfigure their clubs are the structure which will supporting 48 projects, with the clubhouse which will provide for a safeguard the future of our game average individual grant awarded of more welcoming and vibrant and we need to not only sustain c.£16k. One notable project - with atmosphere. The total project cost them, but also help them move with improvement works being utilised by was c.£75k with funding from the the times and look to gain new all associated teams including U7 to WRU of c.£25k and a further revenue streams away from the core U16, youth, girls and senior teams - c.£50k from matched funding. was Nant Conwy RFC, who secured weekend business. Six projects were also undertaken in funding from the WRU of £15k and the Principality Premiership, The professional game a further £18k from matched accounting for more than a third of We have focused this year on funding. its clubs, with a total of £144k professional player welfare. On-field, invested via Facilities Grants. this has been led by an Injury In addition, Facilities Grants were Surveillance Programme. Off-field, awarded to 65 clubs this year with a

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

30 The funding associated with the All reduction in CO2 emissions. playing. This process will also see the Wales Artificial Surfaces Independent Buyers, endorsed by the introduction of team sheets within Collaboration Programme will be WRU, visited some 20 clubs to the mini, junior and youth game. fully expended in August 2018. The analyse cost expenditure and this Also included is a new myWRU investment to date of more than £2m research and analysis is being shared Development Grant system, which into rugby specific 3G pitches with clubs throughout Wales. has been updated and re-designed to represents c.70% of the total budget Club development give a modern feel. The new systems available under the Collaboration Through the detailed submissions should significantly lighten Programme. made by our member clubs on an administrative duties for club officials Pitch Maintenance Support for annual basis we have feedback which and offer live data, due to them Clubs illustrates thriving junior sections being completed on a week to week We have launched a new programme across the game in Wales mean that basis. to help community clubs with pitch 107 extra teams have been created in maintenance consisting of a suite of YE18 – with a grand total of 1,392 online resources and tools providing teams in play. guidance, with a comprehensive MyWRU range of educational courses, We now have 100% of clubs utilising materials and tutorials available. our online myWRU resource, which Clubs are able to access advice and allows us to report accurately and support from qualified sports turf target our investment, both in time specialists and contractors including and resource. We have also Principality Stadium’s ground staff, introduced a new fully automated who will undertake pitch inspections online registration in the mini, junior, and provide regular updates on good youth and senior women’s game, practice techniques. alongside online registration for all Club Cost Savings Initiatives our coaches and referees. This Further to a LED switching, energy initiative is set to bring a host of efficiency, pilot project, undertaken efficiencies and benefits in the year by 11 clubs c.£122k of savings were ahead. Amongst those benefits will identified if measured over a 10-year be the ability for clubs to react as late period alongside a significant as on match day and get players

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

31 rePort from the head of rugby oPerations

Welsh Rugby Insurance by the Child Protection in Sport Unit officers have received one to one Portfolio (NSPCC) and we have once again inductions. We have 295 clubs with With another successful year retained the Level 3 NSPCC National nominated Safeguarding Officers, continuing our work with AON, 214 Safeguarding Standard, which is the which represents some 97% of clubs have taken complimentary highest achievable standard. This is member clubs. an achievement we can be proud of insurance cover and ‘player to player Anti-Doping in Welsh rugby in line with our insurance’, with 91 clubs now having Over 600 individuals, including safeguarding strategy. opted to take out the extra players and support staff have temporary total disablement cover. With the aim of developing best received face to face anti-doping First Aid Training practice, we have also developed a training and 74% of clubs have During YE18, a further 856 Policy Review Group which comprises nominated club integrity officers who volunteers were trained in First Aid, of a number of independent educate their club members in this in conjunction with St Johns safeguarding practitioners and area. We have conducted 26 UK Ambulance, taking the total to including representation from the Anti-Doping (UKAD) workshops with 2,548. clubs, young people and other regional, premiership and age grade sports. players and have increased our UKAD Safeguarding Educator workforce with plans to Each year, the WRU is reviewed in line In total, 2,180 volunteers have been DBS checked, 300 volunteers and expand the workforce with further with National Safeguarding staff attending training in the year Standards. The review is conducted staff have received safeguarding training and 81 club safeguarding ahead.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

32 rePort from the head of rugby oPerations

Elsewhere, an online ‘disciplinary module’ was introduced and piloted throughout the season at age grade level. The module educates players about the potential consequences of breaching the laws of the game in a way that does not discourage future participation. This module was deployed throughout the course of the season and, to date, all players who undertook the module are yet to re-offend. WRU Fixtures The completion rate of fixtures compares favourably to the previous season, with only the Youth League Discipline enclosure), are dealt with fairly and and knockout competition showing a slight reduction. Principality The prevailing objective of our independently. Relevant statistics Premiership, Championship, Regional disciplinary department is to maintain demonstrate a downward trend in Age Grade and Women’s regional and promote fair play; protect the disciplinary matters overall in the Championship and league health and welfare of players (and senior game, with a 10% reduction competitions were all at 100%, with others involved in the game); and to in cases from the preceding season. National League fixtures completed ensure that acts of foul play or Similarly, disciplinary cases arising in 98% of cases. misconduct (on and off the playing from age grade fixtures are down 36% from the previous season.

League 2017-2018 Number of fixture Number of results Completion WRU National League 2,802 2,738 98% WRU Championship 132 132 100% Principality Premiership East 56 56 100% Principality Premiership West 56 56 100% Principality Premiership 120 120 100% WRU Cup 2017 - 2018 310 263 85% Principality Youth Leagues 759 627 83% WRU National Women's Leagues 105 90 86% Womens’ Super Cup 27 25 93% WRU Women's Regional Championship 10 10 100% U18 Wednesday League 78 78 100% WRU Youth Knockout Competitions 140 118 84% U18 Women's Regional League 10 10 100% Wynne Lloyd Inter District Cup 12 12 100% WRU RAG U18 Competition 30 30 100% WRU RAG U16 Competition 36 36 100% WRU Conference 72 55 76% National Women's League - Phase 2 82 74 90%

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

33 rePort from the national head coach

eflecting on the past acknowledged step-up in standard Rtwelve months, we have that is required. The 2018 NatWest continued to stick to our Six Nations brought ‘tournament rugby’ and meant the players plan in the build up to the experienced a tournament 2019 Rugby World Cup environment where pressure and (“RWC19”). expectations are different. The 2018 summer tour was an opportunity for Last October we announced the younger leaders to step-up and lead ‘Two-Year Countdown’ plan that will the squad on a difficult three-Test take us through to RWC19 in Japan, Warren gatland campaign against Rugby sharing with supporters, and all Championship opposition. The travel interested parties, details of how we and unfamiliarity of the surroundings would chart our path to the experienced management team and was good preparation for what we tournament and what we were our approach is based on the will experience in Japan. looking to achieve throughout each experience gained at the last two campaign as we progress. World Cups. In the 2017 Under Armour Series, we hosted three of the World’s top five This honesty and openness reflects We approached the YE18 season as ranked sides in Cardiff. We kicked off the confidence we have in our three distinct ‘sections’. The Under the four-Test series with a 21-29 programme and shows our Armour series was about depth we defeat to the Wallabies and followed willingness to communicate what we created within the squad, exposing that up with a much-changed Wales are looking to do. We have an players to Test match rugby and the side claiming victory over RWC19

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

34 Pool D rivals Georgia 13-6. World our continued commitment to give Following the game in Washington Champions, New Zealand, won the Test match experience to younger the tour headed south to Argentina third match 18-33 but we rounded members of the squad. With more to where the Argentina off the campaign with a 24-22 experienced players, including the side (which makes-up the majority of victory over South Africa. That victory majority of our British & Irish Lions the national squad) had returned marked three wins in a row against contingent not included, the from a six match-winning streak in the Springboks in Cardiff, following selection not only allowed for players New Zealand, Australia and South previous autumn campaign successes to gain more experience but also Africa. in 2014 and 2016. encouraged individuals to step up in Two dominant performances resulted a leadership capacity. The NatWest Six Nations kicked off at in back-to-back victories, 10-23 in Principality Stadium against Scotland Co-captains and San Juan and 12-30 in Santa Fe and and we recorded an impressive 34-7 were named to lead the squad which helped move us up from seventh to opening win. Defeats on the road to kicked off the summer tour against third in the World Rugby Rankings. both England (12-6) and eventual South Africa in Washington. The The experience gained and the Champions Ireland (37- match, which was added to the performances the young squad 27) followed. existing two-Test tour to Argentina, delivered put us in a healthy position allowed for additional game time and leading into the next campaign. Back in Cardiff, a much-changed time together as a squad and proved team was given the opportunity to The Rugby World Cup season kicks invaluable. experience tournament rugby and off internationally for us in November they got us back to winning ways The Springboks made a number of when we face Scotland, followed by with a 38-14 victory over Italy. There changes for the match as well, using Australia, Tonga and South Africa in was further success on the final it as an opportunity much in the the Under Armour Series in Cardiff. weekend too as we finished the same way we did. A determined There are just 13 matches left until campaign in second place courtesy of performance in high humidity got us the game’s showpiece tournament in a 14-13 victory against France. off to a 22-20 winning tour start as Japan and each one will be a vital we recorded a third victory in a row step on our journey. True to our word, and as planned, against South Africa. the summer tour selection showed

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

35 directors’ rePort FOR THE YEAR ENDING 30 JUNE 2018

he Directors present their Treport and the Group and the Company’s audited financial statements for the year ended 30 June 2018. Principal activities and review of the business The principal activity of the Group is to promote rugby to encourage more people to engage with the game, rhodri lewis more often, with more enjoyment and more success. This activity, material foreign exchange risk (2017: together with the primary objective £nil). and the likely future development of • Interest rate risk the Group are reviewed in the The Group has interest bearing Chairman’s Statement, the Group liabilities. As shown in Note 15, the Chief Executive’s Summary and the Group’s policy is to hedge against the Strategic Report. majority of any interest risk on Company Secretary Financial risk factors liabilities by using derivative During the year, Gareth Williams The Group is exposed to financial instruments to effectively hedge the retired as Company Secretary. Rhodri risks from interest bearing assets and interest rate risk. The Group has Lewis was appointed Company liabilities and interests in overseas interest bearing assets which are Secretary on 1 August 2018. companies. These expose the Group invested at differing interest rates; to financial risks including foreign these interest rates are fixed at the Donations currency risk, interest rate risk, credit outset of the investment. The Group’s primary charitable risk and liquidity risk. • Credit risk donation was £119,000 (2017: • Foreign exchange risk The Group has no significant £91,000) to the Welsh Rugby Where applicable, the Group concentration of credit risk. The Charitable Trust. This trust, which is mitigates foreign exchange risk with Group has implemented policies that independent from the Group, was set the use of forward contracts. As at require appropriate credit checks on up to provide support to players who 30 June 2018, the Group has no potential credit customers before were injured whilst playing rugby in sales commence. Interest bearing Wales. There were no political assets are only invested with financial donations (2017: £nil). institutions that have excellent credit Corporate social responsibility ratings. The Group recognises its • Liquidity risk responsibility to the communities The Group maintains a balance which are affected by its businesses between continuity of funding and and regularly reviews its policies with flexibility. As at 30 June 2018, only regard to social, ethical and 15% (2017: 22%) of the borrowings environmental matters. Any matters were due to expire within five years. in any of these categories which may materially affect the business of the Directors Group are reviewed as required by The Directors who held office during the Board. the year and up to the date of signing the financial statements are Going concern listed in the ‘Welsh Rugby Union The Directors have reviewed the Governance’ section of the Annual financial position of the Group for Report. the period to 31 October 2019 against the expected recurring

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

36 directors’ rePort FOR THE YEAR ENDING 30 JUNE 2018 operational income, expenditure and Under company law, the Directors explain the Company’s transactions interest costs in conjunction with the must not approve the financial and disclose with reasonable Group’s banking covenants. On this statements unless they are satisfied accuracy at any time the financial basis, the Directors consider that the that they give a true and fair view of position of the Group and the Group has more than sufficient the state of affairs of the Group and Company and enable them to ensure resources to continue in operational the Company and of the profit or loss that the financial statements comply existence for the foreseeable future. of the Group and Company for that with the Companies Act 2006. They For this reason, the Directors period. In preparing these financial are also responsible for safeguarding continue to adopt the going concern statements, the Directors are required the assets of the Group and the basis in preparing the Group’s to: Company and hence for taking financial statements. reasonable steps for the prevention • select suitable accounting policies and detection of fraud and other Statement of Directors’ and then apply them consistently; irregularities. responsibilities • make judgements and accounting The Directors are responsible for the The Directors are responsible for estimates that are reasonable and maintenance and integrity of the preparing the Annual Report and the prudent; financial statements (the “financial Company’s website. Legislation in the statements”) in accordance with • state whether FRS102 “The United Kingdom governing the applicable law and regulations. Financial Reporting Standard preparation and dissemination of Applicable in the UK and Republic financial statements may differ from Company law requires the Directors of Ireland” has been followed, legislation in other jurisdictions. to prepare financial statements for subject to any material departures each financial year. The Directors disclosed and explained in the Disclosure of information to have prepared the financial financial statements; and auditors statements in accordance with (a) So far as the Directors are aware, United Kingdom Accounting • prepare the financial statements on there is no relevant audit Standards, comprising FRS102, “The the going concern basis unless it is information of which the Financial Reporting Standard inappropriate to presume that the Company’s auditors are unaware; Applicable in the UK and Republic of Company will continue in business. and Ireland”, and applicable law (“United The Directors are responsible for (b) The Directors have taken all the Kingdom Generally Accepted keeping adequate accounting records steps that they ought to have Accounting Practice”). that are sufficient to show and taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company’s auditors are aware of that information. Independent auditors A resolution to reappoint PricewaterhouseCoopers LLP will be proposed at the forthcoming Annual General Meeting. By Order of the Board

Rhodri Lewis Company Secretary 7 September 2018

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

37 THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

38 THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

39 consolidated income statement FOR THE YEAR ENDED 30 JUNE 2018

Total Total Note 2018 2017 £’m £’m

Match, commercial, hospitality and other income 85.3 65.7 Competition income 11.7 9.2 Turnover 2 (a) 97.0 74.9

Administrative expenses 2 (b) (92.6) (73.4)

Operating profit before depreciation, exceptional items and allocations to affiliated organisations (“EBITDA”) 35.1 31.9 Allocations to affiliated organisations 2 (d) (26.7) (27.1) Exceptional items 4 (0.1) 0.4 Depreciation and amortisation (net of grant release) 4 (3.9) (3.7)

Operating profit 4.4 1.5

Interest payable and similar charges 3 (0.6) (0.8)

Profit on ordinary activities before tax 4 3.8 0.7

Tax on profit on ordinary activities 6 (1.1) (0.5)

Profit for the financial year 2.7 0.2

Profit attributable to: Company 2.3 0.1 Non-controlling interest 0.4 0.1

2.7 0.2

The turnover and operating profit shown above are derived from continuing operations.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

40 consolidated statement of comPrehensive income FOR THE YEAR ENDED 30 JUNE 2018

Total Total Note 2018 2017 £’m £’m

Profit for the financial year 2.7 0.2 Other comprehensive income: Cash flow hedges • Reclassifications to profit and loss of foreign exchange - 0.3 hedging instruments • Change in value of foreign exchange hedging instruments 14 0.2 0.1 • Deferred tax on components of other comprehensive income 6 - (0.1) Other comprehensive income for the year, net of tax 0.2 0.3 Total comprehensive income for the year 2.9 0.5

Total comprehensive income attributable to: Company 2.5 0.4 Non-controlling interest 0.4 0.1 2.9 0.5

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

41 consolidated and comPany balance sheets AS AT 30 JUNE 2018

2018 2017 2018 2017 Group Group Company Company Note £’m £’m £’m £’m Fixed assets Intangible asset 7 2.1 2.4 - - Tangible assets 8 117.5 122.4 38.5 38.6 Investments 9 - - 22.9 22.0 119.6 124.8 61.4 60.6 Current assets Stock 10 0.3 0.4 - 0.1 Financial assets • Derivative financial instrument 14 0.2 0.1 0.2 0.1 • Debtors 11 13.2 11.0 59.9 57.5 • Cash at bank and in hand 12 0.1 0.6 - 0.6 13.8 12.1 60.1 58.3 Current liabilities Creditors – amounts falling due within one year 13 (31.2) (33.4) (27.5) (27.0)

Net current (liabilities)/assets (17.4) (21.3) 32.6 31.3

Total assets less current liabilities 102.2 103.5 94.0 91.9

Creditors – amounts falling due after more than 13 (39.7) (41.3) (39.7) (41.3) one year Accruals and deferred income 15 (31.6) (33.5) - - Provisions for liabilities 16 (0.8) (1.0) - -

Net assets 30.1 27.7 54.3 50.6

Capital and reserves Other reserves 2.3 2.3 2.6 2.6 Hedging reserve - (0.2) - (0.2) Profit and loss reserve brought forward 23.2 23.1 48.2 46.4 Profit for the year attributable to the Grou p/ Company 2.3 0.1 3.5 1.8 Profit and loss reserve 25.5 23.2 51.7 48.2 Capital and reserves attributable to: Company 27.8 25.3 54.3 50.6 Capital and reserves attributable non-controlling interests 2.3 2.4 - - Total capital and reserves 30.1 27.7 54.3 50.6

These financial statements were approved by the Board of Directors on 7 September 2018 and signed on its behalf by:

Gareth Davies Martyn Phillips Chairman Group Chief Executive Officer

The notes on pages 46 to 63 form an integral part of these financial statements.

The Welsh Rugby Union Limited Company Number 3419514

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

42 consolidated statement of changes in equity FOR THE YEAR ENDED 30 JUNE 2018

Other Hedging Profit Non- Total reserves reserve and loss controlling reserve interest Note £'m £'m £'m £'m £'m

Balance as at 1 July 2016 2.3 (0.5) 23.1 2.8 27.7 Profit for the year --0.1 0.1 0.2 Other comprehensive income for the year Fair value gain on foreign exchange derivative 14 - 0.1 --0.1 financial instruments Reclassifications to profit and loss of foreign 14 - 0.3 --0.3 exchange hedging instruments Deferred tax on other comprehensive income 6-(0.1) --(0.1) Total other comprehensive income for the year - 0.3 --0.5 Total comprehensive income for the year - 0.3 0.1 0.1 0.5 Dividends ---(0.5) (0.5) Balance as at 30 June 2017 2.3 (0.2) 23.2 2.4 27.7

Balance as at 1 July 2017 2.3 (0.2) 23.2 2.4 27.7 Profit for the year --2.3 0.4 2.7 Other comprehensive income for the year Fair value gain on foreign exchange derivative 14 - 0.2 --0.2 financial instruments Total other comprehensive income for the year - 0.2 --0.2 Total comprehensive income for the year - 0.2 2.3 0.4 2.9 Investment received from non-controlling ---0.1 0.1 interest Dividends ---(0.6) (0.6) Balance as at 30 June 2018 2.3 - 25.5 2.3 30.1

Other reserves relate to reserves pre-incorporation in 1997.

The hedging reserve is used to record transactions arising from the Group’s cash flow hedging arrangements.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

43 comPany statement of changes in equity FOR THE YEAR ENDED 30 JUNE 2018

Other Hedging Profit Total reserves reserve and loss reserve Note £'m £'m £'m £'m

Balance as at 1 July 2016 2.6 (0.5) 46.4 48.5 Profit for the year --1.8 1.8 Other comprehensive income for the year Fair value gain on foreign exchange derivative 14 - 0.1 - 0.1 financial instruments Reclassifications to profit and loss of foreign 14 - 0.3 - 0.3 exchange hedging instruments Deferred tax on other comprehensive income 6-(0.1) - (0.1) Total other comprehensive income for the year - 0.3 - 0.3 Total comprehensive income for the year - 0.3 1.8 2.1 Balance as at 30 June 2017 2.6 (0.2) 48.2 50.6

Balance as at 1 July 2017 2.6 (0.2) 48.2 50.6 Profit for the year --3.5 3.5 Other comprehensive income for the year Fair value gain on foreign exchange derivative 14 - 0.2 - 0.2 financial instruments Reclassifications to profit and loss of foreign 14 - (0.1) - (0.1) exchange hedging instruments Deferred tax on other comprehensive income 6-0.1 - 0.1 Total other comprehensive income for the year - 0.2 - 0.2 Total comprehensive income for the year - 0.2 3.5 3.7 Balance as at 30 June 2018 2.6 - 51.7 54.3

Other reserves relate to reserves pre-incorporation in 1997.

The hedging reserve is used to record transactions arising from the Company’s cash flow hedging arrangements.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

44 consolidated statement of cash floWs FOR THE YEAR ENDED 30 JUNE 2018

2018 2018 2017 2017 Note £’m £’m £’m £’m

Net cash from operating activities 21 7.4 8.8 Taxation paid (0.9) (0.5) Net cash generated from operating activities 6.5 8.3

Cash flow from investing activities Purchase of tangible fixed assets (0.5) (1.2) Acquisition of tangible fixed assets (1.3) (4.2) Net cash used in investing activities (1.8) (5.4)

Cash flow from financing activities Interest paid (0.7) (0.7) Grant repaid (0.1) (0.1) Drawdown of bank loans 2.5 4.9 Repayment of bank loans (6.4) (6.1) Investment received from non-controlling interest 0.1 - Dividends paid to non-controlling interests (0.6) (0.5) Net cash used in financing activities (5.2) (2.5)

Net (decrease)/increase in cash and cash equivalents 22 (0.5) 0.4 Cash and cash equivalents at the beginning of the year 0.6 0.2 Cash and cash equivalents at the end of the year 0.1 0.6

The notes on pages 46 to 63 form an integral part of these financial statements.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

45 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

1. Accounting policies f. Exemptions for qualifying entities under FRS102 for the separate financial statements a. General information FRS102 allows a qualifying entity certain disclosure The company is limited by guarantee and is incorporated exemptions, subject to certain conditions, which have been in England and Wales and domiciled in the UK. The complied with, including notification of, and no objection address of its registered office is Principality Stadium, to, the use of exemptions by the Company’s board Westgate Street, Cardiff, CF10 1NS. members. b. Statement of compliance The Company has taken advantage of the following The Group and individual financial statements of The exemptions for the separate financial statements: Welsh Rugby Union Limited have been prepared in compliance with United Kingdom Accounting Standards, (i) from preparing a statement of cash flows, on the basis including Financial Reporting Standard 102, ‘‘The Financial that it is a qualifying entity and the consolidated Reporting Standard applicable in the United Kingdom and statement of cash flows, included in these financial the Republic of Ireland’’ (‘‘FRS102’’) and the Companies statements, includes the Company’s cash flows; Act 2006. The Welsh Rugby Union Limited is considered (ii) from the financial instrument disclosures, required by the Directors to be a Public Benefit Entity under the under FRS102 paragraphs 11.41 to 11.48 and definition in FRS102. paragraphs 12.26 to 12.29, as the information is c. Summary of significant accounting policies provided in the consolidated financial statement disclosures; and The principal accounting policies applied in the preparation of these consolidated and separate financial statements (iii) from disclosing the Company key management are set out below. These policies have been consistently personnel compensation, as required by FRS102 applied to all the years presented, unless otherwise stated. paragraph 33.7. d. Basis of preparation g. Basis of consolidation These consolidated and separate financial statements are The consolidated financial statements incorporate the prepared on the going concern basis, under the historical financial statements of The Welsh Rugby Union Limited cost convention, as modified by the recognition of certain and its subsidiaries, plc, WRU financial assets and liabilities measured at fair value. Supporters Club Limited, WRU National Centre of Excellence Limited, WRU Gwent Region Limited, WRU The preparation of financial statements requires the use of Gwent Rugby Limited, WRU Gwent Stadium Limited and certain critical accounting estimates. It also requires Millennium Stadium Experience Limited, all of which are management to exercise its judgement in the process of made up to 30 June 2018 and prepared using consistent applying the Group and Company accounting policies. The accounting policies. All intergroup transactions are areas including a higher degree of judgement or eliminated on consolidation. complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note h. Foreign currency (x) to (y). The Group’s financial statements are presented in pounds The Company has not presented its own income sterling and rounded to the nearest thousand. The Group’s statement, as permitted by section 408 of the Companies functional and presentational currency is pounds sterling. Act 2006. Foreign currency transactions are translated into the e. Going concern functional currency using the exchange rates prevailing at the dates of the transactions or valuation. Where items are The Directors have reviewed the financial position of the re-measured, foreign exchange gains and losses resulting Group for the period to 31 October 2019 against the from the settlement of such transactions and from the expected recurring operational income, expenditure and translation at year end exchange rates of monetary assets interest costs in conjunction with the Group’s banking and liabilities denominated in foreign currencies are covenants. On this basis the Directors consider that the recognised in the income statement, except when deferred Group has more than sufficient resources to continue in in other comprehensive income as qualifying cash flow operational existence for the foreseeable future. For this hedges. reason, the Directors continue to adopt the going concern basis in preparing the Group’s financial statements.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

46 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018 i. Turnover charge which by their size, nature and/or incidence are exceptional to the financial statements for the year. These The Group, when acting as principal, recognises revenue are shown as exceptional within the categories of when (a) the significant risks and rewards of ownership expenditure to which they relate. have been transferred to the buyer; (b) it retains no continuing involvement or control over the goods; (c) the k. Intangible fixed assets amount of revenue can be measured reliably; (d) it is Intangible assets comprise Hospitality Catering Rights. probable that future economic benefits will flow to it and These are initially recognised at fair value and are then (e) when the specific criteria relating to each of its sales amortised on a straight-line basis over the contracted channels have been met, as described below. period of 10 years. The carrying value of intangible assets Turnover represents amounts invoiced, excluding net of is reviewed for impairment when events or changes in returns, discounts and rebates allowed by the Group and circumstances indicate the carrying values may not be value added taxes, in respect of the sale of goods and recoverable. services. Ticket income, sale of hospitality packages, l. Tangible fixed assets competition income and other event income are recognised as revenue when the related event is staged. Tangible fixed assets are stated at historic cost less Revenue determined by commercial agreements, which accumulated depreciation and accumulated impairment makes up the majority of broadcasting revenue, losses. Cost includes the original purchase price of the sponsorship and royalty revenue and lease of hospitality asset and the costs attributable to bringing the asset to its boxes is recognised based on the relevant contractual working condition for its intended use. terms. Where consideration is received in kind, income The tangible fixed assets of the Group, excluding land, are and expenditure are grossed up on the basis of arms’ depreciated on a straight-line basis calculated to write length commercial rates. down their cost to estimated residual values over their Incoming resources from non-exchange transactions, with estimated useful economic lives as follows: the exception of grant income (see note 1.r.), are Stadium Up to 50 years recognised as follows: Other buildings Up to 50 years (a) transactions that do not impose specified future performance-related conditions on the recipient are Centre of Excellence Up to 10 years recognised in income when the resources are received Other fixed assets Up to 10 years or receivable; m. Investments in subsidiaries (b) transactions that do impose specified future performance-related conditions on the recipient are Investments in subsidiaries are included at cost less any recognised in income only when the performance- accumulated impairment losses. In accordance with the related conditions are met; and Companies Act 2006, the Group has taken advantage of the exemption afforded to certain subsidiary companies to (c) where resources are received before the revenue be audited. The Welsh Rugby Union Limited has given a recognition criteria are satisfied, a liability is recognised. guarantee to its subsidiary WRU Supporters Club Limited Incoming resources from non-exchange transactions are under section 479A of the Companies Act 2006. measured as follows: n. Leased assets (a) donated services and facilities that would otherwise Where the Group enters into a lease which entails taking have been purchased are measured at the value to the substantially all the risks and rewards of an asset, the lease entity; and is treated as a “hire purchase arrangement”. The present (b) all other incoming resources from non-exchange value of the minimum lease payments is recorded in the transactions are measured at the fair value of the balance sheet as a tangible fixed asset. Future instalments resources received or receivable. under such leases, net of finance charges, are included within creditors. Rentals payable are apportioned between j. Exceptional items the finance element, which is charged to the income In order to improve the understanding of the financial statement, and the capital element which reduces the statements, the Directors have identified separately, on the outstanding hire purchase liability. face of the income statement, those items of income and

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47 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

All other leases are accounted for as “operating leases” s. Capitalisation of interest and their rentals are charged to the income statement on Interest is capitalised on major development projects and a straight-line basis over the life of the lease. capital works in progress where appropriate. o. Stock Capitalisation ceases when substantially all the activities necessary to get the asset ready for use are completed. Stock is valued at the lower of cost and estimated selling Capitalised interest is amortised to the income statement price less costs to sell and consists of finished goods over the useful economic life of the asset to which it purchased for resale and raw materials for use in the relates. supply of catering services. Where necessary, provision is made for obsolete, slow moving and defective stock. Cost t. Financial instruments is determined on a first in first out basis. The Group has chosen to adopt Sections 11 and 12 of p. Current and deferred tax FRS102 in respect of financial instruments. The tax expense comprises current and deferred tax. The (i) Financial assets current tax charge is calculated on the basis of tax laws Basic financial assets, including trade and other debtors, enacted or substantively enacted at the balance sheet date. cash and bank balances and loans due from Regions and Deferred tax arises from timing differences that are clubs, are initially recognised at transaction price, unless differences between taxable profits and total the arrangement constitutes a financing transaction, comprehensive income as stated in the financial where the transaction is measured at the present value of statements. These timing differences arise from the the future receipts discounted at a market rate of interest. inclusion of income and expenses in tax assessments in Such assets are subsequently carried at amortised cost periods different from those in which they are recognised using the effective interest method. in the financial statements. At the end of each reporting period financial assets Deferred tax is recognised on all timing differences at the measured at amortised cost are assessed for objective reporting date except for certain exceptions. Unrelieved evidence of impairment. They are first assessed individually tax losses and other deferred tax assets are only recognised for impairment, or collectively where the debtors are not when it is probable that they will be recovered against the individually significant. Where there is no objective reversal of deferred tax liabilities or other future taxable evidence of impairment for an individual debtor, it is profits. included in a group of debtors with similar credit risk Deferred tax is measured using tax rates and laws that characteristics and these are assessed collectively for have been enacted or substantively enacted by the period impairment based on their ageing. end and that are expected to apply to the reversal of the If an asset is impaired the impairment loss is the difference timing difference. between the carrying amount and the present value of the q. Pension costs estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in For defined contribution schemes the amount charged to profit or loss. the income statement in respect of pension costs and other post-retirement benefits is the contributions payable If there is a decrease in the impairment loss arising from in the year. Differences between contributions payable in an event occurring after the impairment was recognised, the year and contributions actually paid are shown as the impairment is reversed. The reversal is such that the either accruals or prepayments in the balance sheet. current carrying amount does not exceed what the carrying amount would have been had the impairment not r. Grants previously been recognised. The impairment reversal is Grants receivable in respect of tangible fixed assets are recognised in profit or loss. credited to the income statement over the expected useful Other financial assets, including investments in equity economic lives of the relevant assets to which they relate. instruments which are not subsidiaries, associates or joint Grants received but not yet released to the income ventures, are initially measured at fair value, which is statement are included as deferred income in the balance normally the transaction price. sheet. Revenue grants are released to the income statement in the same year as the related expense Such assets are subsequently carried at fair value and the incurred. changes in fair value are recognised in profit or loss, except

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

48 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018 that investments in equity instruments that are not publicly amounts and there is an intention to settle on a net basis traded and whose fair values cannot be measured reliably or to realise the asset and settle the liability simultaneously. are measured at cost less impairment. (iv) Hedging arrangements Financial assets are derecognised when (a) the contractual The Group applies hedge accounting in respect of forward rights to the cash flows from the asset expire or are settled, foreign exchange contracts held to manage the cash flow or (b) substantially all the risks and rewards of the exposures of forecast transactions denominated in foreign ownership of the asset are transferred to another party or, currencies. These foreign exchange hedges have been (c) despite having retained some significant risks and designated as cash flow hedges. rewards of ownership, control of the asset has been transferred to another party who has the practical ability The Group also applies hedge accounting for transactions to unilaterally sell the asset to an unrelated third party entered into to manage the cash flow exposures of without imposing additional restrictions. borrowings. Interest rate swaps are held to manage the interest rate exposures and are designated as cash flow (ii) Financial liabilities hedges of floating rate borrowings. Basic financial liabilities, including trade and other Changes in the fair values of derivatives designated as cash payables, bank loans and loans from fellow Group flow hedges, and which are effective, are recognised companies that are classified as debt, are initially directly in equity. Any ineffectiveness in the hedging recognised at transaction price, unless the arrangement relationship (being the excess of the cumulative change in constitutes a financing transaction, where the debt fair value of the hedging instrument since inception of the instrument is measured at the present value of the future hedge over the cumulative change in the fair value of the payments discounted at a market rate of interest. hedged item since inception of the hedge) is recognised in Debt instruments are subsequently carried at amortised the income statement. cost, using the effective interest rate method. The gain or loss recognised in other comprehensive income Trade creditors are obligations to pay for goods or services is reclassified to the income statement when the hedge that have been acquired in the ordinary course of business relationship ends. Hedge accounting is discontinued when from suppliers. Accounts payable are classified as current the hedging instrument expires, no longer meets the liabilities if payment is due within one year or less. If not, hedging criteria, the forecast transaction is no longer they are presented as non-current liabilities. Trade creditors highly probable, the hedged debt instrument is are recognised initially at transaction price and derecognised, or the hedging instrument is terminated. subsequently measured at amortised cost using the u. Public benefit entity concessionary loans effective interest method. (including debentures) The derivative instruments utilised by the Group are Concessionary loans arrangements, when received for the interest rate swaps and foreign exchange forward purpose of furthering the primary objective of the Group, contracts. which include any debentures or loans received below the Derivatives are initially recognised at fair value on the date prevailing market rate of interest are initially measured at a derivative contract is entered into and are subsequently the amount received or paid. In subsequent years, the re-measured at their fair value on the market price data carrying amount of concessionary loans in the financial from relevant counterparties. Changes in the fair value of statements is adjusted to reflect any accrued interest derivatives are recognised in profit or loss in finance costs payable or receivable. or finance income as appropriate, unless they are included To the extent that a loan that has been made is in a hedging arrangement. irrecoverable, an impairment loss shall be recognised in the Financial liabilities are derecognised when the liability is income statement. extinguished, which is when the contractual obligation is v. Cash and cash equivalents discharged, cancelled or expires. Cash at bank and in hand includes highly liquid (iii) Offsetting investments that are readily convertible into known Financial assets and liabilities are offset and the net amounts of cash and which are subject to an insignificant amounts presented in the financial statements when there risk of change in value. is a legally enforceable right to set off the recognised

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

49 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018 w. Recognition of constructive liabilities respective agreements with the Regions and the competition providers and concluded that its ability to Where an event occurs that creates a constructive or legal establish the commercial returns and to perform its obligation on the Group and it is probable that an outflow contractual commitment to determine the competition of resources, which can be reliably estimated, will be participants provided sufficient evidence that it is the required to settle the obligation a liability is recognised in principal in the transaction with the relevant competition full in the period when the event occurred. provider. Constructive liabilities are measured at the present value y. Key accounting estimates and assumptions of expenditures expected to be required to settle the obligation. In certain circumstances the transfer of cash to The Group makes estimates and assumptions concerning settle the liability may occur in subsequent periods. the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The x. Critical judgments in applying the Group’s Directors consider that there are no key accounting accounting policies estimates and assumptions in the preparation of these (i) Control of MSEL (note 9) financial statements. Assessing whether the Group controls MSEL requires judgment. The Group holds 83.5% of the voting rights of MSEL and has a 75% majority representation on the board but through the shareholders’ agreement there are a number of decisions that require the unanimous consent of all the shareholders. The Directors have assessed that the decisions that require unanimous consent give protective rights only and that the control of the day to day operating decisions and strategic financial decisions is retained by the Group. Therefore, the Directors consider that MSEL is a subsidiary of the Company and the results of MSEL are included in the Group consolidated financial statements. (ii) Qualification of Group as a Public Benefit Entity Assessing whether the Group qualifies as a Public Benefit Entity requires judgment. The Directors have reviewed the definition of a public benefit entity, as provided by the FRS102 Glossary of Terms, and consider that this has been met as the primary objective of the Group is to promote, foster, encourage, control and improve rugby football throughout Wales with any wealth created by the Group, given its legal status, being re-invested back into Welsh Rugby rather than providing a financial return to its members. Therefore, the Directors have adopted the FRS102 public benefit entity standards when preparing the Group consolidated financial statements. (iii) Acting as principal in respect of competition income Assessing whether the Group acts as agent or principal in the receipt of competition incomes requires judgment. The Group receives revenue from the organisers of competitions in which the Regions participate, namely the PRO14, the European Champions Cup and the European Challenge Cup. The net revenue is passed on to the Regions. The Group assessed the factors presented in the

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50 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

2. Business analysis All income is derived from activities within the UK. The information below is provided as additional information.

(a) Turnover 2018 2017 £’m £’m Turnover is analysed as follows: Match income 44.9 35.0 Commercial income 14.2 12.8 Hospitality and catering income 18.0 10.9 Other event income 4.8 2.1 Other income 3.4 4.9 85.3 65.7 Competition income 11.7 9.2 97.0 74.9

Other event income represents amounts receivable in respect of staging fees and other similar income arising within Principality Stadium for events which are not promoted by the Company. Other income includes income derived from the British and Irish Lions tour. Competition income represents amounts received from European Professional Club Rugby, and Celtic Rugby Designated Activity Company in consideration for the participation of teams nominated by the Group in the respective tournaments of those entities. To the extent that the nominated teams have participated in those tournaments there is, under the terms of the participation agreements with the nominated teams, an obligation on the Group to remit any competition income, less any costs incurred by the Group in respect of the competitions, to them.

(b) Total costs are as follows: 2018 2017 £’m £’m

Operational costs (see (c) below) 61.9 43.0 Exceptional items (see note 4) 0.1 (0.4) Depreciation and amortisation – net of grant release 3.9 3.7 Allocations to affiliated organisations (see (d) below) 26.7 27.1 92.6 73.4

(c) Operational costs: 2018 2017 £’m £’m

Business and administration 8.6 7.3 Direct 21.2 16.2 Hospitality and catering costs 9.8 5.3 Stadium 6.2 4.7 Performance rugby 5.5 5.2 Community rugby 4.6 4.3 WRU Gwent – regional rugby 6.0 - 61.9 43.0

(d) Allocations to affiliated organisations 2018 2017 £’m £’m These are analysed as follows: Competition income (see note 2(a)) 11.7 9.2 Competition income due to WRU Gwent (2.9) - Competition income payable external to WRU Group 8.8 9.2 National Dual Contracts (see note 5) 2.6 2.4 Directly from Company 9.1 9.4 Regions – professional rugby 20.5 21.0 Clubs – semi-professional rugby 1.7 1.7 Clubs – community rugby and affiliates 4.5 4.4 26.7 27.1

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51 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

2. Business analysis (continued) In YE17 the allocations to the Regions include amounts paid to Newport Gwent Dragons Limited (“NGDL”) in respect of the Rugby Services Agreement (“RSA”). With effect from 28 June 2017, NGDL was no longer a party to the RSA, having been replaced by WRU Gwent Rugby Limited (“WRUGRL”). As a member of the Group, payments made to WRUGRL are not included within the equivalent Regional allocation total in the current year. The Regions allocations number in YE18 is therefore lower than YE17 as it only includes payments to the three Regions not included within the Group. 3. Financing costs 2018 2017 £’m £’m Interest payable and similar charges Interest payable on bank and similar loans 0.4 0.6 Bank charges 0.2 0.2 Total 0.6 0.8

4. Profit on ordinary activities before tax Profit on ordinary activities before tax is arrived at after charging/(crediting): 2018 2017 £’m £’m Note Depreciation on owned assets 8 5.4 5.2 Amortisation of intangible assets 7 0.3 0.3 Release of deferred income (grant release) (1.8) (1.8) Net charge to the income statement 3.9 3.7 Rental of land and buildings 0.4 0.4

Exceptional items Note Restructuring costs (a) 0.1 - Dividend from historical creditor (b) - (0.2) Refunds of bank charges (c) - (0.2) Total exceptional items 0.1 (0.4)

During the YE18 & YE17, the Group incurred costs and received credits that due to their size and nature were considered “exceptional”. In order to assist in understanding the Group’s results, the Directors believe that it was appropriate to show separately the operating profit of the Group before exceptional items on the face of the income statement as additional information. Detailed commentary is shown below: 2018: (a) The Group incurred restructuring costs that was considered exceptional. 2017: (b) The Group received a dividend from the liquidation of a historical creditor that was considered exceptional. (c) The Group received refunds on historical bank charges that were considered exceptional. During the year, the Group obtained the following services from the Group’s auditor: 2018 2017 £’000 £’000 Fees payable to the Company auditor for the audit of the parent 24 24 company and consolidated financial statements Fees payable to the Company’s auditor for other services: The audit of the Company’s subsidiaries pursuant to legislation 38 23 Taxation compliance services 27 19 Other non-audit services 43 30

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52 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

5. Staff numbers and costs Staff numbers 2018 2017 2018 2017 Group Group Company Company The monthly average number of employees,including directors with a service contract, during the year was: Management and administration 85 77 67 68 Direct 23 24 21 21 Stadium 46 36 - - Performance rugby 39 36 39 36 Community rugby 68 67 66 67 WRU Gwent – regional rugby 80 - - - 341 240 193 192

The above staff numbers do not include any players representing national teams (including those on National Dual Contracts), stewards engaged for events nor do they include the non-executive Directors of the Company. Staff costs 2018 2017 2018 2017 Group Group Company Company The staff costs during the year were as follows: Wages and salaries 14.3 8.9 8.0 7.5 Social security costs 1.6 0.9 0.9 0.8 Pension costs – defined contribution schemes 0.9 0.9 0.7 0.7 16.8 10.7 9.6 9.0

The above numbers do not include costs in respect of National Dual Contracted players. The total costs of these players for the provision of their services (including commercial obligations) amounted to £4.3m (2017: £4.0m), for which a contribution of £1.7m (2017: £1.6m) was received from the Regions. Of the £1.7m contribution, £1.6m (2017: £1.6m) was received from outside the Group. The staff costs for YE18 include the costs of staff employed by WRU Gwent Stadium Limited and WRU Gwent Rugby Limited. In addition to the above amounts, £3.8m (2017: £2.5m) is paid as remuneration to players whilst representing the senior men’s national squad. These costs are included in Direct costs within Operational costs (see Note 2 (c)). Directors’ emoluments 2018 2017 £’000 £’000 The directors’ emoluments, during the year, were as follows: • Aggregate emoluments 403 389 • Benefits 10 9 • Company contributions to defined contribution pension scheme 1 - 414 398

The emoluments above include fees of £66,000 (2017: £65,000) payable to the Chairman. The Group received £16,000 (2017: £15,000) from third parties in respect of these emoluments. There is one director accruing benefits under a defined contribution pension scheme (2017: one). Emoluments of the highest paid director 2018 2017 £’000 £’000 The emoluments of the highest paid director, during the year, were as follows: Aggregate emoluments 336 324 Benefits 10 9 346 333

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53 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

5. Staff numbers and costs (continued) Key management compensation Key management includes certain directors and the Executive Board. The compensation paid or payable to key management, including the amounts shown as Directors’ emoluments above, is shown below: 2018 2017 £’000 £’000 Salaries and other short-term benefits 1,414 1,350 Company contributions to defined contribution pension scheme 153 147 1,567 1,497

6. Income tax 2018 2017 £’m £’m (a) Tax expense included in the income statement Current tax UK corporation tax on result for the year 1.3 0.7 Total current tax charge 1.3 0.7

Deferred tax Origination and reversal of timing differences (0.2) (0.2) Total deferred tax (0.2) (0.2)

Total tax charge on profit on ordinary activities (Note 6(c)) 1.1 0.5

(b) Tax expense included in other comprehensive income Deferred tax Origination and reversal of timing differences - 0.1 Total deferred tax credit in other comprehensive income - 0.1

(c) Reconciliation of tax charge The current tax assessed for the year is higher (2017: higher) than the standard rate of corporation tax in the UK of 19% (2017: 19.75%). The differences are explained below: 2018 2017 £’m £’m Profit on ordinary activities before tax 3.8 0.7 Profit multiplied by standard rate of corporation tax in the UK of 19% (2017: 19.75%) 0.7 0.1 Effects of: Expenses not deductible for tax purposes and income not taxable 0.4 0.4 Total tax charge for year (Note 6(a)) 1.1 0.5

Changes to the UK corporation tax rates were substantively enacted as part of the Finance Bill 2015 on 26 October 2015 and by the Finance Bill 2016 on 15 September 2016. These changes reduce the main corporation tax rate to 19% from 1 April 2017 and to 17% from 1 April 2020. Deferred taxes at the balance sheet date have been calculated at 17% on the basis that the majority of the underlying timing differences are expected to reverse at 17%.

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54 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

7. Intangible fixed assets Hospitality Group Catering Rights Total £’m £’m Cost At 1 July 2017 and 30 June 2018 3.3 3.3

Accumulated amortisation At 1 July 2017 0.9 0.9 Charge for the year 0.3 0.3 At 30 June 2018 1.2 1.2

Net book value At 30 June 2018 2.1 2.1 At 30 June 2017 2.4 2.4

8. Tangible fixed assets Stadium Centre of Other Land Other fixed Group Company Excellence buildings assets Total Total £’m £’m £’m £’m £’m £’m £’m Cost At 1 July 2017 144.3 3.6 1.7 37.6 8.2 195.4 40.6 Transfer (5.5) --4.2 1.3 -- Additions ----0.5 0.5 0.1 At 30 June 2018 138.8 3.6 1.7 41.8 10.0 195.9 40.7

Accumulated depreciation At 1 July 2017 64.6 2.0 1.5 - 4.9 73.0 2.0 Charge for the year 3.9 0.2 0.1 - 1.2 5.4 0.2 At 30 June 2018 68.5 2.2 1.6 - 6.1 78.4 2.2

Net book value At 30 June 2018 70.3 1.4 0.1 41.8 3.9 117.5 38.5 At 30 June 2017 79.7 1.6 0.2 37.6 3.3 122.4 38.6

Included in the cost of the stadium are cumulative capitalised interest costs of £4.6m (2017: £4.6m). The depreciation charge includes an amount of £0.1m (2017: £0.1m) representing the depreciation of interest previously capitalised. Other fixed assets comprise plant and machinery and fixtures and fittings. The tangible fixed assets of the Company predominantly relate to land. All land and buildings held by the Group within tangible fixed assets are freehold assets. On 28 June 2017, the Group acquired the trade and assets necessary to operate the professional Regional Gwent rugby team and all of the land known as Rodney Parade. The total cost amounted to c.£5.5m. In 2017 the full amount of this £5.5m was classified within Stadium. This has now been separated out between Other fixed assets and Land and is shown as a transfer in the table above. The only assets acquired were the land known as Rodney Parade Stadium and associated stadium. The book value of the acquired assets is considered to be equal to the fair value. No intangible assets (including goodwill) arose on acquisition. 9. Investments The Group holds no material investments (2017: £nil). The Company held a £50,000 equity investment in Millennium Stadium plc, a £10,000 equity investment in WRU National Centre of Excellence Limited and a £16,500,000 equity investment in Millennium Stadium Experience Limited at both 30 June 2018 and 30 June 2017. As at 30 June 2018, the Company held a £6,400,000 (2017: £5,475,000) equity investment in WRU Gwent Region Limited. All investments are held at historical cost.

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55 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

9. Investments (continued) Subsidiary and other investments held directly and indirectly by the Company and in which the Company has a beneficial interest as at 30 June 2018 were: Company Principal activity Country of % holding incorporation of ordinary shares Subsidiaries - Direct Millennium Stadium plc Stadium operation United Kingdom 100% Millennium Stadium Experience Limited Hospitality and catering provision United Kingdom 83.5% WRU Supporters Club Limited Marketing United Kingdom 100% WRU National Centre of Excellence Limited Provision of training facilities United Kingdom 100% WRU Gwent Region Limited Holding Company United Kingdom 80% Subsidiaries - Indirect WRU Gwent Rugby Limited Regional Rugby franchise United Kingdom 80% WRU Gwent Stadium Limited Stadium operation United Kingdom 80% The above subsidiaries all have their registered address at: Principality Stadium, Westgate Street, Cardiff. CF10 1NS Other investments Six Nations Rugby Limited: Competition management Republic of Ireland 17% First Floor, Simmonscourt House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland. Celtic Rugby Designated Activity Company: Competition management Republic of Ireland 33% Suite 208 Alexandra House, The Sweepstakes, Ballsbridge, Dublin 4, Ireland British Lions Designated Activity Company: Overseas rugby tours Republic of Ireland 25% First Floor, Simmonscourt House, Simmonscourt Road, Ballsbridge, Dublin 4, Ireland. Great Britain Rugby Sevens Limited: Olympic Sevens competition United Kingdom 33% Rugby House, 200 Whitton Road, Twickenham, , UK. TW2 7BA

The other investments above were the same as at 30 June 2017. In addition to the shareholdings above the Company is one of nine members of European Professional Club Rugby, a Swiss association whose principal activity is managing the relevant European club competitions. Given the disposition of the other investments, the Group’s inability to exercise significant influence over the investments above with less than 100% shareholdings and the immateriality of their net surpluses and net assets after receipt of income by the Group in the other investments above, the Directors do not believe that these investments should be treated as associate companies. Fixed asset investments are stated at the lower of cost and valuation. The Group’s bankers hold one share in Millennium Stadium plc (2017: one share) and this share has the same rights as the shares held by the Company. In addition, Cardiff County Council (“CCC”) holds one share in Millennium Stadium plc (2017: one share); this share grants only certain rights and does not grant CCC any dividends nor any rights to amounts receivable upon winding up. 10. Stock Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Goods for resale 0.2 0.3 - 0.1 Raw materials 0.1 0.1 - - 0.3 0.4 - 0.1

The amount of stock recognised as an expense in the year is £3.7m (2017: £2.3m).

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56 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

11. Debtors Amounts due within one year: Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Trade debtors 6.1 3.5 4.1 1.9 Loans due from clubs 0.6 0.6 0.6 0.6 Loans due from Regions 0.3 0.3 0.3 0.3 Less: provision for impairment of receivables (1.6) (1.0) (1.2) (0.8) 5.4 3.4 3.8 2.0 Prepayments and other debtors 5.7 5.2 5.3 3.4 11.1 8.6 9.1 5.4

Amounts due after more than one year: Amounts owed by Group undertakings - - 48.7 49.7 Loans due from Regions 2.1 2.4 2.1 2.4

Total debtors 13.2 11.0 59.9 57.5

The amounts due from subsidiary undertakings are unsecured and have no fixed dates of repayment. An interest charge at equivalent rates to the bank loan arrangements is levied on outstanding amounts due from subsidiary undertakings. The carrying amount of debtors is a reasonable approximation of fair value and the carrying amounts of the Group’s debtors are all denominated in pounds sterling (“GBP”). 12. Cash at bank and in hand Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Cash balance at bank 0.1 0.6 - 0.6

13. Creditors Amounts falling due within one year: Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Bank loans 4.1 6.3 4.1 6.3 Trade creditors 3.7 4.6 1.1 1.4 Amounts owed to Group undertakings - - 6.6 2.7 Corporation tax 0.8 0.4 - - Other tax and social security 1.3 0.5 1.1 0.5 Other creditors 0.5 0.5 0.9 1.4 Accruals and deferred income 20.8 21.1 13.7 14.7 31.2 33.4 27.5 27.0

Amounts falling due after more than one year: Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Bank loans 2.1 3.7 2.1 3.7 Debentures 37.6 37.6 37.6 37.6 39.7 41.3 39.7 41.3

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57 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

13. Creditors (continued) Maturity analysis: Bank loans are due: Group Group Company Company 2018 2017 2018 2018 £’m £’m £’m £’m Within one year 4.1 6.3 4.1 6.3 Between one and two years 2.1 2.5 2.1 2.5 Between two and five years - 1.2 - 1.2 6.2 10.0 6.2 10.0

The principal terms of these loans are set out below: Bank loans Interest and capital repayment terms 2018 2017 £’m £’m Revolving credit facility LIBOR plus 1.75%, loan repayable on maturity date 2.5 3.9 Facility A LIBOR plus 1.75%, loan repayment in instalments by 2019 1.3 2.5 Facility B – Loans to Regions LIBOR plus 1.75%, loan repayment in instalments by 2019 2.4 3.6 6.2 10.0

Facility B above is in respect of the loans due from Regions referred to in Note 11 above. The principal terms of the bank loans shown above relate to the primary instrument and do not take account of derivative instruments. Interest on amounts drawn on the revolving credit facility is referenced to the LIBOR rate applicable to the draw period. At 30 June 2018 the revolving credit facility was drawn for a period of 1 month. Interest on the Facility A loan is re-priced every 3 months and referenced to 3-month LIBOR. The carrying amounts of the Group’s borrowings, which include bank loans and debenture loans, approximate their fair value. The carrying amounts of the Group’s borrowings are all denominated in GBP. Debentures have been treated as public benefit entity concessionary loans as they were received below the prevailing market rate of interest and for the purpose of furthering the primary objective of the Group. Security provided on bank loans Bank loans totalling £6.2m (2017: £10.0m) are secured by fixed and floating charges over the assets of the Company and certain of its subsidiaries. Borrowing facilities The Group had £16.5m (2017: £15.1m) of undrawn committed borrowing facilities available at 30 June 2018 in respect of which all conditions precedent had been met at that date. Debenture loans are repayable in: Group Group 2018 2017 £’m £’m 2021 0.4 0.4 2024 9.9 9.9 2026 0.5 0.5 2027 2.4 2.4 2028 0.3 0.3 2030 4.8 4.8 2035 1.8 1.8 2050 17.6 17.6 37.7 37.7 Unamortised issue costs (0.1) (0.1) 37.6 37.6

All debenture loans are unsecured and bear no interest.

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58 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

13. Creditors (continued) Bank and debenture loans repayable by instalments wholly or partly after 5 years Bank loans, with a total value of £6.2m (2017: £10.0m), are repayable wholly or partly from the balance sheet date by instalments. Of these amounts, £nil (2017: £nil) is repayable after five years. Concessionary debenture loans, with a total value of £37.7m (2017: £37.7m), are repayable wholly from the balance sheet date. Of these amounts, £37.3m (2017: £37.3m) is repayable after five years. 14. Financial instruments Treasury policy Treasury activity is focused on monitoring working capital, managing external funding and managing interest rate risk. Treasury activity is not a profit centre and the Group neither enters into transactions of a speculative nature nor trades in financial instruments. Treasury risk management policies are summarised below: • Foreign exchange risk – where applicable, the Group mitigates foreign exchange risk with the use of forward contracts. As at 30 June 2018 the Group had no material foreign exchange risk (2017: £nil). • Interest rate risk – operations are financed through a mixture of bank borrowings and concessionary loans. The Group currently borrows in floating rates of interest and uses derivative financial instruments to generate the desired interest profile and to manage exposure to interest rate fluctuations. • Liquidity risk – the Group’s policy is to maintain a balance between continuity of funding and flexibility. As at 30 June 2018, 15% (2017: 22%) of borrowings were due to mature within five years, some 41% (2017: 37%) were due to mature between five years and fifteen years and some 44% (2017: 41%) were due to mature after fifteen years. The Group has the following financial instruments: Group Group 2018 2017 Note £’m £’m

Financial assets that are debt instruments measured at amortised cost: • Trade debtors 11 4.5 2.5 • Loans due from Regions 11 2.4 2.7 • Loans due from clubs 11 0.6 0.6 • Other debtors 11 1.7 0.6 • Amounts owed by Group undertakings 11 - - 9.2 6.4

Financial assets measured at fair value through other comprehensive income: • Derivative financial instruments 0.2 0.1 Financial liabilities measured at amortised cost: • Bank loans 13 6.2 10.0 • Trade creditors 13 3.7 4.6 • Amounts owed to Group undertakings 13 - - • Capital creditors 13 - 1.4 • Other creditors and accruals 13 23.4 14.8 33.3 30.8

Financial liabilities measured at fair value through other comprehensive income: • Derivative financial instruments - -

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59 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

14. Financial instruments (continued) Derivative financial instruments – forward contracts The Group enters into forward foreign currency contracts to mitigate the exchange rate risk for certain future foreign currency receivables. The forward currency contracts are measured at fair value, which is determined using valuation techniques that utilise observable inputs. The key inputs used in valuing the derivatives are the forward exchange rates. The fair value of the forward-foreign currency contract asset is £0.2m (2017: £0.1m). Cash flows on foreign exchange contracts are received annually. During 2018, a hedging gain of £0.2m (2017: £0.1m) was recognised in other comprehensive income for changes in the fair value of the foreign exchange forward contracts and £nil (2017: £0.3m) was reclassified from the hedge reserve to profit and loss through the Consolidated Income Statement during the year. Derivative financial instruments – interest rate The Group hold interest rate derivatives, which caps the interest rate liability on its debt to 1.25%. The cap is based on a current principal amount of £4.7m, equating to approximately 77% of the principal amount of the Group’s bank debt at 30 June 2018, and matures in 2019. The derivative is used to hedge the Group’s exposure to interest rate movements on the bank debt. The derivative fixes the total interest payable on a proportion of the bank debt at a maximum of 1.25%. The fair value of the interest rate derivative is £nil (2017: nil). Cash flows on interest rate derivatives are paid quarterly until 2019. Cash flows on the Facility A loan are paid quarterly until 2019. Cash flows on Facility B are paid annually. Cash flows on the revolving credit facility are paid in line with the draw period. During 2018, a hedging loss of £nil (2017: £nil) was recognised in other comprehensive income for changes in the fair value of the interest rate derivative and £nil (2017: £nil) was reclassified from the hedge reserve to profit and loss reserve. At 30 June 2018 the notional principal amounts of derivatives were £4.7m and are analysed as follows: Notional Fair market Maturity amount value date £’m £’m Interest rate cap 1.25% 4.7 - 30 June 2019 At 30 June 2017 the notional principal amounts of derivatives were £7.3m and are analysed as follows: Notional Fair market Maturity amount value date £’m £’m Interest rate cap 1.25% 7.3 - 30 June 2019 During the years to 30 June 2018 and 30 June 2017, the Group’s derivatives qualified for hedge accounting under FRS102. These derivatives are carried at fair value which, as at 30 June 2018 and 30 June 2017, was £nil. 15. Accruals and deferred income Grants Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m

At start of year 33.5 35.4 - - Amounts repaid (0.1) (0.1) - - Released to the income statement (1.8) (1.8) - - At end of year 31.6 33.5 - -

During the year, some £1.8m (2017: £1.8m) was released to the income statement from the grants amount shown above.

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60 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

15. Accruals and deferred income (continued) Included within the grants amount above is an amount received from the Big Lottery Fund (formerly the Millennium Commission) amounting to £23.6m (2017: £24.8m). This grant will be released to the income statement as follows: Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Within one year 1.2 1.2 - - Between one and two years 1.2 1.2 - - Between two and five years 3.6 3.6 - - In more than five years 17.6 18.8 - - 23.6 24.8 - -

In certain circumstances, the above grant can become repayable if the Group fails to meet the monitoring requirements of the grant. The Group is currently in full compliance with the monitoring requirements such that no monies are repayable under the terms of the grant. 16. Provisions for liabilities Deferred tax The movement on deferred tax is as follows: Group Group Company Company 2018 2017 2018 2017 £’m £’m £’m £’m Liability/(asset) at start of the year 1.0 1.1 - (0.2) (Charged)/released to the profit and loss account (0.2) (0.2) - 0.1 Tax on components of other comprehensive income - 0.1 - 0.1 At end of the year 0.8 1.0 - -

Deferred tax provided is made up as follows: Accelerated capital allowances 0.8 1.0 - - 0.8 1.0 - -

The Group’s net deferred tax liability expected to reverse in the next 12 months is £0.2m. This primarily relates to the reversal of timing differences on fixed assets offset by expected tax deductions on short term timing differences (including amounts deductible for tax purposes on a paid basis). 17. Company limited by guarantee The liability of the members is limited. Every member of the Company undertakes to contribute such amounts as may be required (not exceeding £1) to the Company’s assets if it should be wound up while the member is a member, or within one year after a member ceases to be a member, for payment of the Company’s liabilities contracted before a member ceased to be a member. At the balance sheet date, the number of members was 329 (2017: 332). 18. Contingent liabilities Group The Group had the following contingent liabilities as at 30 June 2018: • The Group has guaranteed the performance of some member clubs in respect of loans that the member clubs have received from Barclays Bank PLC. The amounts due are £1.2m (2017: £1.2m). • The Group has guaranteed the performance of the three Regions not within the Group in respect of loans that the Regions have received from Barclays Bank PLC. The amounts guaranteed are £0.2m (2017: £nil). • The Group has guaranteed the performance of two Regions in respect of loans that the Regions have received from Barclays Bank PLC. The amounts guaranteed are £2m (2017: £nil). • The Group has guaranteed the performance of Celtic Rugby Designated Activity Company in respect of certain financing received. The amounts guaranteed are €0.1m (2017: €0.1m).

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61 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

18. Contingent liabilities (continued) Company The Company had the following contingent liabilities as at 30 June 2018: • The Company has guaranteed the performance of one of its subsidiaries under the terms of grant arrangements amounting to £31.6m (2017: £33.7m). • The Company has guaranteed the performance of some member clubs in respect of loans that the member clubs have received from Barclays Bank PLC. The amounts due are £1.2m (2017: £1.2m). • The Company has guaranteed the performance of the three Regions not within the Group in respect of loans that the Regions have received from Barclays Bank PLC. The amounts guaranteed are £0.2m (2017: £nil). • The Company has guaranteed the performance of two Regions in respect of loans that the Regions have received from Barclays Bank PLC. The amounts guaranteed are £2m (2017: £nil). • The Company has guaranteed the performance of Celtic Rugby Designated Activity Company in respect of certain financing received. The amounts guaranteed are €0.1m (2017: €0.1m). The Group and Company are dealing with a small number of legal claims. The Directors have reviewed all of these claims and, on the basis of legal advice received, believe that no provision is necessary. Consequently, no provision for these claims has been included in these financial statements. It is currently impracticable to make any additional disclosures in relation to the estimated financial effects, their timing and the possibility of any reimbursement. 19. Commitments The Group and Company had no capital commitments at 30 June 2018 or 30 June 2017. Operating lease commitments: At the balance sheet date, the Group had the following future minimum lease payments, under non-cancellable operating leases for each of the following periods: 2018 2017 £’m £’m Land and buildings; within • One year 0.4 0.4 • One to two years 0.4 0.4 • Two to five years 1.2 1.2 • More than five years 4.1 4.4

20.Pension costs The Group operates defined contribution schemes. The assets of the defined contribution pension schemes are held separately from those of the Group, under independent administration. The pension cost charge for these schemes represents contributions payable by the Group to the schemes in the year amounting to some £0.9m (2017: £0.9m). There are no material amounts included in creditors in respect of these pension costs in 2018 or 2017.

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62 notes to the financial statements FOR THE YEAR ENDED 30 JUNE 2018

21. Reconciliation of operating profit to net cash inflow from operating activities 2018 2017 £’m £’m EBITDA 35.1 31.9 Allocations to affiliated organisations (26.7) (27.1) Exceptional items (0.1) 0.4 Depreciation and amortisation (5.7) (5.5) Release of deferred income 1.8 1.8 Operating profit 4.4 1.5

Non-cash items: Depreciation and amortisation 5.7 5.5 Release of deferred income (1.8) (1.8) 3.9 3.7 Working capital adjustments: Decrease in stock 0.2 0.5 Increase in debtors (2.2) (3.5) Increase in creditors 1.1 6.6 (0.9) 3.6 Net cash inflow from operating activities 7.4 8.8

22. Reconciliation of net cash flow to movement in net debt 2018 2017 £’m £’m (Decrease)/increase in cash in the year (0.5) 0.4 Cash outflow from movement in debt 3.8 1.2 Decrease in net debt during the year 3.3 1.6 Net debt at the beginning of the year (47.0) (48.6) Net debt at the end of the year (43.7) (47.0)

23. Analysis of net debt Cash Bank debt Bank debt Debentures Total due within due after one year one year £’m £’m £’m £’m £’m At 1 July 2017 0.6 (6.3) (3.7) (37.6) (47.0) Cashflow (0.5) 3.8 --3.3 Non-cash changes - (1.6) 1.6 -- At 30 June 2018 0.1 (4.1) (2.1) (37.6) (43.7)

At 1 July 2016 0.2 (6.1) (5.1) (37.6) (48.6) Cashflow 0.4 2.2 (1.0) - 1.6 Non-cash changes - (2.4) 2.4 -- At 30 June 2017 0.6 (6.3) (3.7) (37.6) (47.0)

24. Related party transactions In accordance with the exemption afforded by paragraph 33.1A of FRS102, ‘related party transactions’, there is no disclosure in these financial statements of transactions with entities that are part of the Group. See note 5 for disclosure of the Directors’ remuneration and key management compensation.

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63 indePendent auditors’ rePort TO THE MEMBERS OF THE WELSH RUGBY UNION LIMITED

Report on the audit of the evidence we have obtained is and, accordingly, we do not express financial statements sufficient and appropriate to provide an audit opinion or, except to the a basis for our opinion. extent otherwise explicitly stated in Opinion this report, any form of assurance Independence In our opinion, The Welsh Rugby thereon. Union Limited’s group financial We remained independent of the statements and company financial group in accordance with the ethical In connection with our audit of the statements (the “financial requirements that are relevant to our financial statements, our statements”): audit of the financial statements in responsibility is to read the other the UK, which includes the FRC’s information and, in doing so, • give a true and fair view of the Ethical Standard, and we have consider whether the other state of the group’s and of the fulfilled our other ethical information is materially inconsistent company’s affairs as at 30 June responsibilities in accordance with with the financial statements or our 2018 and of the group’s profit and these requirements. knowledge obtained in the audit, or cash flows for the year then ended; otherwise appears to be materially Conclusions relating to going • have been properly prepared in misstated. If we identify an apparent concern accordance with United Kingdom material inconsistency or material We have nothing to report in respect Generally Accepted Accounting misstatement, we are required to of the following matters in relation to Practice (United Kingdom perform procedures to conclude which ISAs (UK) require us to report Accounting Standards, comprising whether there is a material to you when: FRS 102 “The Financial Reporting misstatement of the financial Standard applicable in the UK and • the directors’ use of the going statements or a material Republic of Ireland”, and applicable concern basis of accounting in the misstatement of the other law); and preparation of the financial information. If, based on the work statements is not appropriate; or we have performed, we conclude • have been prepared in accordance that there is a material misstatement with the requirements of the • the directors have not disclosed in of this other information, we are Companies Act 2006. the financial statements any required to report that fact. We have identified material uncertainties We have audited the financial nothing to report based on these that may cast significant doubt statements, included within the responsibilities. about the group’s and company’s Annual Report, which comprise: the With respect to the Strategic Report ability to continue to adopt the consolidated and company balance and Directors’ Report, we also going concern basis of accounting sheets as at 30 June 2018; the considered whether the disclosures for a period of at least twelve consolidated income statement and required by the UK Companies Act months from the date when the statement of comprehensive income, 2006 have been included. financial statements are authorised the consolidated statement of cash for issue. Based on the responsibilities flows, and the consolidated and described above and our work company statement of changes in However, because not all future undertaken in the course of the equity for the year then ended; and events or conditions can be audit, ISAs (UK) require us also to the notes to the financial statements, predicted, this statement is not a report certain opinions and matters which include a description of the guarantee as to the group’s and as described below. significant accounting policies. company’s ability to continue as a going concern. Strategic Report and Directors’ Basis for opinion Report We conducted our audit in Reporting on other information In our opinion, based on the work accordance with International The other information comprises all undertaken in the course of the Standards on Auditing (UK) (“ISAs of the information in the Annual audit, the information given in the (UK)”) and applicable law. Our Report other than the financial Strategic Report and Directors’ responsibilities under ISAs (UK) are statements and our auditors’ report Report for the year ended 30 June further described in the Auditors’ thereon. The directors are responsible 2018 is consistent with the financial responsibilities for the audit of the for the other information. Our statements and has been prepared in financial statements section of our opinion on the financial statements accordance with applicable legal report. We believe that the audit does not cover the other information requirements.

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64 indePendent auditors’ rePort TO THE MEMBERS OF THE WELSH RUGBY UNION LIMITED

In light of the knowledge and detect a material misstatement when • the company financial statements understanding of the group and it exists. Misstatements can arise are not in agreement with the company and their environment from fraud or error and are accounting records and returns. obtained in the course of the audit, considered material if, individually or We have no exceptions to report we did not identify any material in the aggregate, they could arising from this responsibility. misstatements in the Strategic Report reasonably be expected to influence and Directors’ Report. the economic decisions of users taken on the basis of these financial Responsibilities for the financial statements. statements and the audit A further description of our Responsibilities of the directors responsibilities for the audit of the Jason Clarke for the financial statements financial statements is located on the (Senior Statutory Auditor) As explained more fully in the FRC’s website at: www.frc.org.uk/ for and on behalf of Pricewaterhouse Statement of Directors’ auditorsresponsibilities. This Coopers LLP responsibilities set out on page 37, description forms part of our Chartered Accountants and Statutory the directors are responsible for the auditors’ report. Auditors preparation of the financial Cardiff statements in accordance with the Use of this report 7 September 2018 applicable framework and for being This report, including the opinions, satisfied that they give a true and fair has been prepared for and only for view. The directors are also the company’s members as a body in responsible for such internal control accordance with Chapter 3 of Part 16 as they determine is necessary to of the Companies Act 2006 and for enable the preparation of financial no other purpose. We do not, in statements that are free from giving these opinions, accept or material misstatement, whether due assume responsibility for any other to fraud or error. purpose or to any other person to whom this report is shown or into In preparing the financial statements, whose hands it may come save the directors are responsible for where expressly agreed by our prior assessing the group’s and the consent in writing. company’s ability to continue as a going concern, disclosing as Other required reporting applicable, matters related to going Companies Act 2006 exception concern and using the going concern reporting basis of accounting unless the directors either intend to liquidate Under the Companies Act 2006 we the group or the company or to cease are required to report to you if, in our operations, or have no realistic opinion: alternative but to do so. • we have not received all the Auditors’ responsibilities for the information and explanations we audit of the financial statements require for our audit; or Our objectives are to obtain • adequate accounting records have reasonable assurance about whether not been kept by the company, or the financial statements as a whole returns adequate for our audit have are free from material misstatement, not been received from branches whether due to fraud or error, and to not visited by us; or issue an auditors’ report that includes our opinion. Reasonable assurance is • certain disclosures of directors’ a high level of assurance, but is not a remuneration specified by law are guarantee that an audit conducted in not made; or accordance with ISAs (UK) will always

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65 THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

66 Welsh rugby union governance FOR THE YEAR ENDING 30 JUNE 2018

Patron Tim Griffin His Royal Highness The Duke of Cambridge Bryn Parker President Anthony John Dennis Gethin OBE Alwyn Jones Governance of Welsh Rugby Ian Jeffery The principal activity of the Group is to promote rugby, to Chris Morgan encourage more people to engage with the game more Aileen Richards often, with more enjoyment and more success. The Board Phil Thomas of The Welsh Rugby Union Limited (the “Board”) is responsible for ensuring that the principal activity is Ray Wilton managed, which it does through the Executive Board. The David Young Board comprises of nineteen non-executive Directors and Martin Davies, Anthony John and Alwyn Jones have one executive Director. Of the nineteen non-executive indicated that they will not be seeking re-election at the Directors, seventeen are elected and two are appointed by forthcoming AGM. Anthony John will be replaced by Chris the Board. The non-executive Chairman of the Board is Jones and Martin Davies and Alwyn Jones’ replacements elected from the non-executive Directors. will not be known at the date of this annual report. The Board of Directors of The Welsh Rugby Union Company Secretary Limited Rhodri Lewis (appointed 1 August 2018) Non-executive Chairman: Welsh Rugby Union Group – Executive Board Gareth Davies Chairman: Executive: Martyn Phillips (Group Chief Executive) Martyn Phillips (Group Chief Executive) Executive: Non-executive: Geraint John Head of Rugby Performance Alan Jones (non-executive vice Chairman) Ryan Jones Head of Rugby Participation Anthony Buchanan Mark Killingley Head of Digital and Communications Gwyn Bowden Rhodri Lewis Head of Legal Affairs Martin Davies Craig Maxwell Head of Group Sales and Marketing Geraint Edwards Julie Paterson Head of Rugby Operations Gordon Eynon Steve Phillips Group Finance Director Brian Fowler Mark Williams Stadium Manager Robert Butcher

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67 Welsh rugby union governance FOR THE YEAR ENDING 30 JUNE 2018

Development of Corporate “Framework”). In order to consider Company’s Articles of Association Governance how best to implement the Principles that are being proposed at this year’s and Behaviours set out in the Annual General Meeting. The Both the Board and the Executive Framework in a way that best fits the proposals include the establishment Board remain committed to the Group and how it can maintain and of the WRU Council and reducing the continuing development of improve good governance and number of Directors to twelve in governance structures, in order to leadership within the Group, the total. meet the evolving needs of the game Board has established a Governance Sub-Boards of rugby union and acknowledge the Working Group which meets and value of the principles of good reports regularly to the Board on The Board has established the Sub- governance. governance matters. This includes Boards listed below to manage the The Group is committed to adopting recommending appropriate changes business in a more effective manner the principles of best practice in to the Company’s governance with more emphasis on agile corporate governance. The Group structures, to ensure that the Group’s decision-making in areas that were will ensure that each member of the commitment to best practice in considered by the Board as being Board undergoes training in the role corporate governance is met. The strategically important, as identified of the non-executive Director to be Governance Working Group is in the Group’s Strategic Plan. chaired by Gareth Davies and delivered by an appropriate The roles and membership of these comprised Aileen Richards, Robert organisation (such as the Institute of Sub-Boards were as follows: Directors). The Group is committed to Butcher, Gordon Eynon, Martyn further training and development of Phillips and Rhodri Lewis. Commercial and Communications Sub-Board the Board. Following a further consideration of Chaired by Tim Griffin, comprised the Company’s governance In March 2016, the Board committed Gareth Davies, Ian Jeffery, Martin structures, changes recommended to sign-up to the Sport Wales Davies, Alan Jones, Anthony John, and approved by the Board are Governance and Leadership Craig Maxwell, Mark Killingley and reflected in the amendments to the Framework for Wales (the Steve Phillips and included David

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68 Welsh rugby union governance FOR THE YEAR ENDING 30 JUNE 2018

Bryant, Kathryn James and Paul Appointments and Remuneration Vaughan as non-Board members. Committee The Commercial and Chaired by Aileen Richards, Communications Sub-Board is comprised Gareth Davies, Robert responsible for reviewing and Butcher, Alan Jones and Ian Jeffery. considering relevant Commercial and Whilst not a member, Martyn Phillips Digital proposals that apply to the is invited to attend the Committee. Group and makes recommendations The Appointments and on those proposals to the Board. Remuneration Committee Community Game Sub-Board determines, on behalf of the Board, Chaired by Dave Young, comprised the remuneration and terms and Alan Jones, Alwyn Jones, Gwyn conditions of the Group Chief Bowden, Brian Fowler, Geraint Executive and the Executive Board. Edwards, Gordon Eynon, Robert The Committee also reviews Butcher, Phil Thomas, Bryn Parker, performance and succession Aileen Richards, Anthony John, Chris planning for the Executive Board and Morgan, Ryan Jones, Julie Paterson it participates in, reviews and and Anthony Buchanan (representing recommends Executive appointments Group Chief Executive and Executive the Performance Game Sub-Board). to the Board. The Committee relies Board and approval of annual The Community Game Sub-Board is on appropriate independent budgets. In addition, the Board responsible for the strategic professional advice when deemed considers the recommendations of development of community rugby. necessary. the various Sub-Boards and standing Audit and Risk Committee sub-committees, whose respective Finance Sub–Board responsibilities are as explained Chaired by Tim Griffin, comprised Chaired by Ian Jeffery, comprised above. Gareth Davies, Martyn Phillips, Aileen David Young and Alan Jones and Richards, Gordon Eynon, Craig included Dyfrig John and Geraint Remuneration of the Board Davies as non-Board members. The Maxwell and Steve Phillips. The Under the Group’s remuneration Audit and Risk Committee is Finance Sub-Board is responsible for policy, no fees are payable to non- responsible for assisting the Board to all financial matters of the Group, executive Directors, other than the discharge its responsibilities for other than dealing with the Group’s non-executive Chairman who accounting policies, financial auditors. receives an annual fee from the reporting, internal control and risk Group of £50,000. Performance Game Sub-Board management and liaising with the Chaired by Anthony Buchanan, Group’s auditors. In addition, the Board is represented comprised Chris Morgan, Gareth on other rugby bodies including Board and Executive Board Davies, Geraint John, Julie Paterson, World Rugby, Six Nations Rugby Ray Wilton, Robert Butcher, Tim There is a clear division of Limited, European Pro Club Rugby, Griffin, Martyn Phillips, Martin Davies responsibility between the role of British Lions Designated Activity and Dave Young (representing the non-executive Chairman and Group Company and Celtic Rugby Community Game Sub-Board). The Chief Executive. There is a detailed Designated Activity Company, some Performance Game Sub-Board is limit of authority protocol in place for of whom have a policy of financially responsible for strategic development both the Board and the Executive compensating the representatives of rugby within the performance Board. All Executive Board members serving on these bodies. No Executive pathway. have detailed job descriptions in Director or member of the Executive Board Committees addition to limits of authority. Board retains any such compensation from these bodies. The Board meets at least eight times In addition to the Sub-Boards, during annually and considers all matters the year, the Board continued to Registered office under its terms of reference which operate two sub-committees to assist Principality Stadium include the development and in its business. The role and Westgate Street monitoring of the Group’s strategic membership of these sub- Cardiff plan, allocation of financial resources, committees were as follows: CF10 1NS reviewing the performance of the

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

69 Welsh rugby union governance BOARD OF DIRECTORS FOR THE YEAR ENDING 30 JUNE 2018

Non-executive Chairman Executive Non-executive vice Chairman gareth davies martyn Phillips alan Jones Joined the Board in 2014 and was elected Group Chief Executive Joined the Board in 2003. as Chairman in the same year. Joined the Group in 2015. He is a one club man, Bryncoch, where he He is a member of the World Rugby He is a member of the Six Nations Council, has been club captain and was Chairman Council, its Executive Committee, as well as a director of the British Lions Designated for 10 years. Now a life member of the club, being a director of Rugby World Cup Activity Company and Celtic Rugby he has been club secretary for the past 25 Limited, Six Nations Rugby Limited and the Designated Activity Company. years. British Lions Designated Activity Company He was formerly CEO of B&Q and a non- He has a degree in Mathematical Sciences and is on the board of EPCR. executive director of Hydrogen Group plc. from Birmingham University and upon A former international fly-half and British He is Chairman of Global Welsh having graduating he held various Managerial and and Irish Lions tourist in 1980, he earned 21 been appointed in July 2017. Technical positions in IT for Wales Gas, BP caps for his country and captained Wales on and BT. In 2013 he was awarded an Honorary five occasions. Doctorate from Southampton Solent Following his retirement he has carried out He has held senior executive positions with University for services to business. He was volunteer work for the Age Concern charity, the Newport Gwent Dragons, CBI Wales, educated at Fishguard Grammar School and helping elderly people learn IT skills. BBC Wales, Cardiff RFC, S4C, the Sports UWIC in Cardiff, before studying at both Council for Wales, the Royal Mail and the Oxford Brookes College and then Welsh Development Agency – where he Templeton College, Oxford. headed the Sydney, Australia office – and is Whilst at school he won international caps a former Dean of the Carnegie Faculty at at U15 level and was a member of the Leeds Metropolitan University. Welsh Schools U18 squad.

anthony buchanan gwyn bowden martin davies Joined the Board in 2014. Joined the Board in 2015. Joined the Board in 2003. He is a member of the World Rugby He played School and Youth rugby for He is a former player for Cardiff Youth and Council. Whitchurch, before joining Taff's Well Youth Glamorgan Wanderers and is currently A former Wales prop forward, who won five where he went on to play for the first XV treasurer of Crawshays Welsh, having caps, including during the first Rugby World and was later fixture secretary and chairman previously served as secretary. Cup in 1987. He played over 230 times for and is a life member. He also played for He is a retired chartered accountant and , before later becoming team Beddau and Rhiwbina. worked for PriceWaterhouse Coopers, manager in 1991 seeing the club through He became a WRU Referee in 1980 and Standard Chartered Banking Group and the transition from amateur to professional progressed to premier grade before retiring Hillsdown Holdings. He was also director of rugby during over 30 years of service. in 1999, later becoming a referee’s a private manufacturing company. He was He originally worked as a colliery fitter adviser/coach. During this period he was a Cardiff councillor for 29 years. before changing roles for a management also referees appointments officer for position in a chemical company. Cardiff & District. In more recent times, he has officiated as a Citing Commissioner at games in the PRO12, European Cup and internationals. Now retired, he was self-employed in the manufacture of purpose made furniture and was a senior design consultant for a national company.

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70 Welsh rugby union governance BOARD OF DIRECTORS FOR THE YEAR ENDING 30 JUNE 2018

geraint edwards gordon eynon brian fowler Joined the Board in 1993. Joined the Board in 2011. Joined the Board in 2002. He is a life member of Dunvant having been He represented Whitland, Gwernyfed, He played rugby for St Luke’s College Exeter, a member of the club for 55 years. He Breconshire, Quins and Llanelli, Ammanford, Brynamman and played for the club’s youth and senior sides Crymych at senior level. Tycroes. He was later secretary of for 18 seasons before fulfilling the roles of He was head coach at Crymych for three Ammanford for 23 years and is a life fixture secretary for 25 years and chairman years before becoming Club Secretary in member. for 10 years. 1989, a position he still holds today, and is In 2016 he was also awarded life He is a former tool maker with ICI and Ford a life member of the club. He has been a membership of the West Wales Rugby and was part of the production District H committee member since 1995 Union following 21 years of service on its management team at British Leyland for and chaired the district from 2009 to 2011. Management Committee, including 15 over 25 years. He is now retired. Since 2014 he has represented the WRU as years as its Vice Chairman. a delegate to Rugby Europe and has Now retired, he was a local government recently been appointed to its Sevens officer for Carmarthenshire County Council, Commission. having previously worked for the National He is a former schoolmaster and currently Coal Board. runs a farm in Pembrokeshire.

robert butcher tim griffin bryn Parker Joined the Board in 2015. (appointed independent Joined the Board in 2016. He is a one club man having been non-executive director) During a productive playing career, he associated with Bargoed RFC since leaving Joined the Board in 2015. played for Blaenavon, Pontypool, Talywain, school in late 1960's and recently accepted He is currently MD of DCC Technology and Garndiffaith and Croesyceiliog. He has also life membership of the club. He was the Group MD of Exertis. He is a former CEO managed and coached Blaenavon, Talywain, captain for five successive years in the mid of Dell UK and previously worked in Garndiffaith and Croesyceiliog. to late 1970's. Singapore and Australia in a variety of He has been honorary secretary of Once his playing career ended, he joined the senior positions with the company. Cwmbran since 2006 and team manager of club's committee. With an unbroken service His career has spanned senior management Monmouthshire County since 2004. with his beloved Bargoed, in 2015 he roles in a number of major companies He works as a youth mentor/co-ordinator to completed a 20th year as club honorary including PriceWaterhouseCoopers, NCR autistic children at a local school and was secretary. and the BBC. formerly a senior technical process operator On leaving college he took up a teaching He has roots in Wales and played for and training officer. He has also been a post within County Borough Newbridge as well as captaining Cross Keys children’s mentor/co-ordinator for Children Council and enjoyed a career in education and Monmouthshire U23s. He also in Need. until his recent retirement. represented , Welsh He has been a community councillor and Universities and British Universities. was appointed chair of the Pontypool Community Council in 2016.

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71 Welsh rugby union governance BOARD OF DIRECTORS FOR THE YEAR ENDING 30 JUNE 2018

anthony John alwyn Jones ian Jeffery Re-joined the Board in 2012. Joined the Board in 2012. Joined the Board in 2015. He is Vice President of the Llanelli and He is a member and former player, captain He enjoyed a progressive career in the District Rugby Union, has served as a and secretary of Bangor. He represented construction and private development committee member for Kidwelly for 30 North Wales as a player, and was Secretary sectors, holding positions on the boards of years, fixture secretary for 10 years and is a of District J for 16 years. three national house builders, recently trustee of the club. Alwyn spent his career working for HMRC. joining Persimmon & Charles Church Homes He captained the Zambian national team as Regional Commercial Director. whilst working in the region, and played for He started playing rugby at 11 years of age Loughor and Kidwelly. He worked as a site and commenced his senior rugby in Exeter, manager for D wˆ r Cymru Welsh Water for moving to the Gloucester leagues before 33 years. joining Usk in 2004, finally retiring from the game in 2011. Whilst playing he also served on club committees for 24 years, joining the District A meetings in 2010 as a representative of Usk.

chris morgan aileen richards Phil thomas Joined the Board in 2014. (appointed independent Joined the Board in 2015. He played rugby for Glyncorrwg, Tonmawr non-executive director) From Clydach, he is a former Wales Schools and the Royal Marines, before moving into Joined the Board in 2015. U16 international and played youth rugby the coaching environment where his main Prior to that she was based in the USA for for Morriston before joining Vardre where background is in strength and conditioning. seven years as the Executive Vice President he became club secretary, vice chairman and He has worked in this field at Premiership and Vice President of People and then chairman in 2012. level with Swansea and Aberavon, spent Organisation for Mars Incorporated. He works for the City and County of three years in the regional set up with the Swansea. Ospreys senior squad and played a She grew up outside Cardiff where she significant part in the management and gained her passion for Welsh Rugby, and coaching set up of the Wales Deaf Rugby holds a BSc Honours degree in business team which won the World Cup in New studies. She spent her 30-year career at Zealand in 2002. Mars working across the management structure in a number of high profile roles He is a former senior non-commissioned in the UK, Belgium and the USA. officer in the Royal Marines with 18 years' experience, holding high profile Now retired from her executive role, she has appointments during a distinguished career. several non-executive directorships. He now runs his own gym and fitness centre.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

72 Welsh rugby union governance BOARD OF DIRECTORS FOR THE YEAR ENDING 30 JUNE 2018

ray Wilton david young Company Secretary Joined the Board in 1998. Joined the Board in 2014. rhodri lewis He is a citing commissioner to Test match He played for the youth and senior teams of Joined the Group in 2010. level. Llandaff North and, following injury, joined He started his legal career at the He has been a member of the Tylorstown the committee, latterly as the rugby international law firm Freshfields Bruckhaus committee for over 30 years and secretary, and was awarded life membership Deringer in London, before joining the represented the club on the Mid District after 23 years of service. He was formerly a commercial legal department at UEFA (the Committee from 1971. He became selector, vice chairman and competition European football governing body, based in chairman of the Mid District selectors. secretary for the East District Rugby Union. Switzerland) working predominantly on Champions League, Europa League and He worked as a development engineer in He is a retired chartered electrical engineer UEFA European Football Championships the power industry and was also employed and former design and construction matters. by Hoover for over 30 years. manager for Cardiff Council. He left UEFA to become the Senior Solicitor at The FA Group and was responsible for a broad range of legal matters in relation to both The Football Association (including in relation to the 2010 FIFA World Cup) and Wembley Stadium. In 2015, he was named as The Lawyer magazine’s ‘In-House Lawyer of the Year’. He played rugby throughout his time at Ysgol Gyfun Gymraeg Glantaf and has played for Dinas , for teams in London, Thailand, Hong Kong, Australia and Switzerland and for the University of London. He was appointed Company Secretary in August 2018.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

73 Welsh rugby union governance EXECUTIVE BOARD FOR THE YEAR ENDING 30 JUNE 2018

Executive geraint John ryan Jones martyn Phillips Head of Rugby Performance Head of Rugby Participation Group Chief Executive Joined the Group in 2015 and was Joined the Group in 2016. Joined the Group in 2015. appointed Head of Rugby Performance in He won 75 caps and is a former Wales He is a member of the Six Nations Council, 2016. captain and a British and Irish Lion. He is a director of the British Lions Designated He had returned to Wales in September one of an elite band of players to have won Activity Company and Celtic Rugby 2015 as the Group's Elite Coach three Grand Slams with Wales (2005, 2008 Designated Activity Company. Development Manager. Previously he had and 2012) and he also played an integral He was formerly CEO of B&Q and a non- spent 10 years working abroad, with Rugby role in his country's retention of the RBS 6 executive director of Hydrogen Group plc. Canada as High Performance Manager and Nations title in 2013. He is Chairman of Global Welsh having then Sevens Head Coach, before joining the He captained the Ospreys from 2007 to been appointed in July 2017. Australian Rugby Union as Program Director 2010 and counts four Guinness Pro12 titles In 2013 he was awarded an Honorary of Sevens and Men's Sevens Head Coach in amongst his achievements. Doctorate from Southampton Solent June 2014. University for services to business. He was He is a former Wales assistant coach, who educated at Fishguard Grammar School and has also coached at Llanelli, Cardiff UWIC in Cardiff, before studying at both Metropolitan University and Cardiff Blues. Oxford Brookes College and then Templeton College, Oxford. He played for Cardiff and Llanelli, featured at every representative schoolboy level and Whilst at school he won international caps at U15 level and was a member of the was capped by . Welsh Schools U18 squad.

craig maxwell steve Phillips mark Williams Head of Group Sales Group Finance Director Stadium Manager and Marketing Joined the Group in 2007. Joined the Group in 2013. Joined the Group in 2010. He joined from TBI which was one of the He joined after a military career spanning 20 He joined from Under Armour where he largest regional airport owners in the world years during which he rose to the rank of had been the USA based sportswear and in his ten years at the company he Lieutenant Colonel in The Royal Welsh. He company’s Head of Sports Marketing in the played active roles in the acquisition of served on multiple tours of duty in Northern UK and Ireland since 2008. Whilst at Under airports in , Sweden, London Luton, Ireland, Bosnia, Kosovo and Iraq and he was Armour, he worked on the launch of the Bolivia, Costa Rica, Australia and North decorated for his actions in combat in Iraq brand’s footwear and was integral in America. in 2007. building the Under Armour brand across all He trained with KPMG and qualified as a During his military career, he held high- sports in the UK and Ireland. chartered accountant in 1989. He was profile military appointments in both He had previously worked for the Group previously Finance Director at the Tedcastle training and operational environments between 2004 and 2008 in various roles UK Group before joining TBI as Group including time as a Battalion Adjutant, within the hospitality team before Financial Controller and then Group Finance Company Commander and Battle Group becoming Group Sponsorship Manager. Director. Chief of Staff with the 2nd Battalion, The Royal Welsh. He played rugby for Greenhill He is a non-executive director of Milford Comprehensive School in Tenby and for Haven Port Authority. He played rugby for Neath College, Pembroke Dock, Narberth and Tenby at He played rugby for Amman Valley Glynneath and his Regiment. senior level. Comprehensive School, Imperial College London, University of London and Amman United, where he captained the first XV.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

74 Welsh rugby union governance EXECUTIVE BOARD FOR THE YEAR ENDING 30 JUNE 2018

mark Killingley rhodri lewis Julie Paterson Head of Digital and Head of Legal Affairs Head of Rugby Operations Communications Joined the Group in 2010. Joined the Group in 1989 and was appointed Head of Rugby Operations in Joined the Group in 2016. He started his legal career at the 2016. He joined from the RFU where he was Head international law firm Freshfields Bruckhaus She is a member of the World Rugby of Digital and Customer Relationship Deringer in London, before joining the Council and also represents Welsh rugby on Management. In that role, he oversaw the commercial legal department at UEFA (the the rugby and regulations boards of launch of the revamped, re-branded European football governing body, based in Switzerland) working predominantly on European Professional Club Rugby, the England Rugby website, plus a new digital PRO14, the Six Nations Council and has Champions League, Europa League and platform aimed at growing participation in held the position of Head of Group UEFA European Football Championships the sport across England ahead of, during Compliance since 2005. She previously matters. and after the 2015 World Cup. served in a number of areas across the Prior to joining the RFU, he was Marketing He left UEFA to become the Senior Solicitor business, dealing directly with strategic and Director of the National Football League at The FA Group and was responsible for a operational issues related to the (“NFL”) where he was responsible for all broad range of legal matters in relation to management of International, Regional and digital and marketing activity and award- both The Football Association (including in Club rugby. winning events that helped establish the relation to the 2010 FIFA World Cup) and Responsible for the management of the NFL in the UK to the point where they Wembley Stadium. National Dual Contract system and played multiple games and enjoyed record In 2015, he was named as The Lawyer administration of the Rugby Services TV audiences. magazine’s ‘In-House Lawyer of the Year’. Agreement, her remit covers club support He played rugby for Amersham & Chiltern, He played rugby throughout his time at and operations teams, liaison with other Leeds University and Buckinghamshire Ysgol Gyfun Gymraeg Glantaf and has rugby governing bodies and other County. played for Dinas Powys, for teams in stakeholders, partners or associates such as London, Thailand, Hong Kong, Australia the Welsh Government, Sport Wales and local authorities. and Switzerland and for the University of London. He was appointed Company Secretary in August 2018.

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

75 obituaries

graham george hale educated at Cowbridge Grammar became a legendary figure at the (1920 - 2018) School and won Welsh Schools caps Brewery Field for nearly a decade. at both cricket and rugby. He went Capped five times by Wales, he was Graham Hale will not be found up to Cambridge University to read diagnosed with the disease in 2012 among the official list of Wales law and economics and won a rugby and had been bed ridden since 2017. players, but in 2013 the WRU Blue in 1958. He bore his illness with huge awarded him a Presidents Cap in courage, resilience and dignity. recognition of his appearance on the His two Welsh Senior Schools caps wing for Wales against the New came against England and France in He played in four consecutive Zealand 'Kiwis' in 1946. 1954, when he played alongside Schweppes Cup finals for Bridgend future Welsh internationals Meirion between 1979-1982 and helped the A Welsh Guards POW, he was taken Roberts and Gareth Payne, as well as Ravens triumph in the first two. He prisoner at Benghazzi in North Africa future England star Derek Morgan. scored a try in the 15-9 win over before being among a band of Wales beat England 8-3 in Swansea in 1980 and was named the prisoners who were returned to before losing 6-3 to the French Lloyd Lewis Award winner as the Britain. Hale was a fighter and as his in Cardiff. man of the match. strength came back he played again for Cardiff and in March 1945 scored At the age of 23 he was one of seven He joined Bridgend after developing two tries in Cardiff's 22-11 win over new caps selected to face England in his career at Cardiff College of a New Zealand Services side. the opening game of the 1959 Five Education and helped the Ravens win Nations Championship. the Western Mail Championship in He forced his way into a Services the 1980-81 season and then International for Wales on the left On leaving Cambridge, Davies featured in the 12-9 win over the wing against France at Swansea on became a chartered accountant and touring Wallabies at the Brewery Field 22 December 1945 with Wales eventually became the financial in October 1981. Three years earlier winning 8-0. Four days later on director at Clive Lewis and Co. He he had been in the Bridgend side Boxing Day came one of the greatest moved to London and played for beaten 17-6 by the All Blacks. He games of the 2nd NZEF ('Kiwis') tour London Welsh, captaining the Exiles played for Wales B against France in as they edged out Cardiff by 3-0 at in the 1964-65 season. 1978, 1979 and 1980 and toured Cardiff Arms Park. Only 10 days later His Welsh career had one final with Wales B in the USA in 1980. Hale was in the Wales team to meet flourish when he toured South Africa It was on that tour that he received the 'Kiwis' again at the Arms Park. in 1964 as an utility back. He was 29 the call to join up with the Lions in However, the New Zealanders won by this stage and his form at full back South Africa following the by 11-3 with just one try resulting. for London Wales earned him a place unfortunate injury to fellow Hale played until the end of the in the 23 man party, although he Welshman, Stuart Lane, in the 1946-47 season, but then retired, didn't get to play in any of the five opening game of the tour. He played having lost his best years to war. He games. in the back row in six tour games and had been the last survivor of the 30 scored tries against South African players of Wales-Kiwis and the oldest gareth Williams Country and Griqualand West. The living Cardiff player. (1954 – 2018) Lions won all six matches in which he The former Cardiff College of played and he described that tour as haydn John davies Education, Bridgend, Wales and "my greatest rugby memory." (1936 – 2018) British & Irish Lions back row forward, His Welsh international cap followed The former Aberavon, London Wales Gareth Williams, lost his long battle in the centenary season of the WRU and Cambridge University centre, with the debilitating disease, Multiple when he played in the game against Haydn John Davies, won two caps for System Atrophy, at the age of 63. the All Blacks in Cardiff in November Wales in 1959. A highly mobile and skilful player at of the same year. He then won four Born in Cowbridge in 1936, he was No 8 or No 7, he played for the Lions more caps up to 1982. while still an uncapped player and

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

76 obituaries

trevor brewer He played alongside England with the British & Irish Lions. He won (1930 – 2018) international Brian Boobyer at centre two caps against New Zealand on the for the Dark Blues against the touring 1959 tour to Australasia, including Trevor Brewer, who made his Wales Springboks in 1951 and played for the victory in the fourth and final debut as a teenager in a win at South Eastern Counties against the test, and then faced the Springboks Twickenham, died at the age of 87. 1953 All Blacks. He also played for twice on the 1962 tour, once again The former Newport High School, the Army, Combined Services, alongside Pask. Newport, Oxford University and Hampshire and London Welsh, Born in Oakdale, his playing career London Welsh wing, helped Wales whom he captained in the 1956-57 began at Newbridge Grammar get their 1950 Grand Slam campaign season. School as a centre. He then played off to a flying start with an 11-3 He joined ICI after completing his for Oakdale but reverted to the back victory over England. Other National Service, working as a row after joining Abertillery in 1954. debutants on that famous day were production services manager, and He captained Abertillery in the 1959- hooker Maldwyn Davies, lock Roy worked for a while in Northern 60 and 1964-65 seasons and also John, full back Lewis Jones, prop Ireland before returning to live played for the Combined Abertillery- John Robins and scrum half in Henley. Ebbw Vale sides that faced Australia Rex Willis. in 1957 and 1966, South Africa in But while John Gwilliam's side haydn morgan 1960 and New Zealand in 1963. marched to the first Grand Slam since (1936 – 2018) He also played for the combined 1911, Brewer was forced to kick his Haydn Joseph Morgan, one of the England-Wales XV against Scotland- heels for five years before getting great post-war flankers produced in Ireland at Twickenham in 1959 and another shot at England in 1955. Gwent, died 10 days short of his played at English rugby's Once again, he finished on the 82nd birthday. headquarters for the Army in the winning side, thanks to an Arthur annual Inter-Services Championship Edwards penalty that secured a 3-0 A superb tackler who had the speed during his National Service. He was a win at Cardiff Arms Park. and the hands of a three-quarter, he lance-corporal in REME and the Royal became the scourge of many an He retained his place in an Marines and became a paratrooper in outside half and back division while unchanged Welsh side that marched the Airborne Division. playing for club and country. on to to meet Scotland, His final appearance for Wales was in but despite scoring two tries in a 14- He won the first of his 27 Welsh caps the defeat to Australia in Cardiff in 8 defeat at Murrayfield he was at the age of 21 in a 3-3 draw against 1966 and a year later, at the age of dropped for the next game. Those England at Twickenham and held 31, he emigrated to South Africa. He three senior Welsh caps added onto his place in the back row for the continued playing for the Wanderers to seven he won for the Welsh remainder of the 1958 Five Nations in Johannesburg and for Transvaal B Secondary Schools between Championship, scoring a match- before moving to Durban, where he 1946-48. winning try against Ireland in Dublin. worked as a car salesman. One of the quickest players of his era, Wales finished as runners-up to he won the Welsh Schools 220 yards England that season and he was a title in 1947 and was second in the mainstay in the Clive Rowlands led 100 yards. From Newport High side that won the Triple Crown and School he went up to Oxford title in 1965. He played alongside his University, where he studied Abertillery team mate, Alun Pask, in chemistry at Jesus College. He missed the Welsh back row in 17 the 1950 Varsity match through internationals. injury but scored a try in the 13-0 win He finished with three test tries in a over Cambridge at Twickenham Welsh shirt, but he also scored four in 1951. tries in 34 appearances on two tours

THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

77 commercial Partners

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THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

78 THE WELSH RUGBY UNION LIMITED – ANNUAL REPORT 2018

79 The Welsh Rugby Union Limited & Millennium Stadium PLC

Principality Stadium, Westgate Street, Cardiff CF10 1NS Tel: 08442 491 999 Fax: 029 2082 2474 E-Mail: [email protected] wru.wales