annual report and accounts 2016 - st andrews links...areas; indeed more people played golf on st...

St Andrews Links Trust: Scottish Charity No. SC006161

2016

Annual Report and Accounts

Contents

1 Contents

2 Chairmen’s Statement

3 - 7 Chief Executive’s Report

8 - 12 Trustees’ Report

13 Independent Auditor’s Report

14 - 29 Accounts for the year ended 31 December 2016 14 Consolidated Statement of Financial Activities 15 Balance Sheets 16 Cash Flow Statements 17 - 29 Notes to the Accounts

30 - 33 Reference and Administrative Information

34 - 36 Unaudited Statistical Analysis

1 | St Andrews Links Trust: Scottish Charity No. SC006161

Chairmen’s Statementfor the year ended 31 December 2016

2016 was a very good year for St Andrews Links Trust. Our mission of maintaining the Links in an economically and environmentally sustainable way was not only achieved but expectations were exceeded in several critical areas.

The playability, appearance and condition of our seven golf courses were outstanding and this encouraged a record number of local and visiting golfers to play on The

the renown and reputation of St Andrews Links as an open and welcoming destination with multiple channels of access to very reasonably priced sport but also the dedication and professionalism of our staff, particularly those responsible for the golf courses. We also include in this a recognition of the enterprise and commitment of our ‘green team’, and all of our staff, for the contribution they made to the achievement of a Green Tourism Gold

hard work and demonstrated the highest standards across the sustainability agenda with a strong broad ethos and excellent practices throughout the Links Trust.

Success in attracting people to the Home of Golf also

see that the delivery of opportunities for people to play, learn, shop and relax resulted in new records being set for

and success are vital to our ambition of developing our public facilities at St Andrews Links as they enable us to provide new infrastructure, assist in the maintenance and improvement of the quality of the golf courses and facilities, support our learning and junior golf programmes and help us to market St Andrews Links as a

An essential element of this work has been setting the conditions to prolong a successful partnership programme. 2016 was an exceptional year in this respect, with renewal of our long term relationships with our friends at Allianz, Toro – which included the elevation of

partner- and Callaway. It also included the establishment

of a new partnership with TSI Groove and Sports, which is a premier apparel and sportswear company based in Japan. All of these relationships, including our longstanding partnership with Rolex, help to promote and reinforce the unique authenticity of St Andrews Links as the Home of Golf and demonstrate to the outside world the vitality of, and our commitment to, the shared values of responsibility, openness, passion for the game and enterprise.

We will continue to invest in The Links in order to raise quality and to present the golf courses in a way in which their playability, appearance and condition is widely recognised and accredited. By doing this and in delivering unique and memorable experiences to all of our customers, be they from near or far, we will set the conditions for success in the future.

Finally, hosting occasional prestigious golf tournaments is an important element of what we do here and we look forward not only to hosting the normal round of international amateur competitions in the Spring and Summer of 2017 but also welcoming the world’s best professional senior golfers when the Old Course plays host to The Senior Open Championship presented by Rolex, in 2018.

R D Muckart S G RaceChairman of Trustees Chairman of Links Management Committee

26 May 2017

R D MuckartChairman of Trustees

S G RaceChairman of Links Management Committee

2 | St Andrews Links Trust: Annual Report and Accounts 2016


Chief Executive’s Reportfor the year ended 31 December 2016

St Andrews is the Home of Golf and an iconic destination for international golfers and those who live much closer to this unique corner of the Kingdom of Fife. It is the largest

much of Scotland’s vibrant golf industry. 2016 was an

expectations for participation being exceeded in several areas; indeed more people played golf on St Andrews Links in 2016 than have ever done so in modern times.

Our vision is to give people unique and memorable experiences and a critical element of that rests on the quality and presentation of our seven golf courses. Success in this area relies on a careful balance between skilled and passionate people who know their business as greenkeepers and guardians of the living landscape that is St Andrews Links, and investment in quality. Much of this work rests on a ceaseless round of daily care and maintenance tasks. But it also involves the careful planning

of adjustments and change such as the recent rebuilding of Cheape’s Bunker on the Old Course, new landscaping in the area of the 15th green on the Jubilee, the introduction of several ecologically diverse ‘sand-scrape’ areas on the New

between the 4th and 15th holes on the Jubilee Course. This recent work was all carried out by our own greenkeeping staff to the highest standards and was assisted at various stages by contractors from SOL Golf and renowned golf

As well as meeting the needs of everyday golf, the courses from time to time play host to prestigious golf tournaments. Our courses were hugely popular once again in 2016 with the Alfred Dunhill Links Championship and the St Andrews Links Trophy both enjoying splendid sunny conditions. Both events produced worthy winners in the form of a

former while, in the latter, Conor O’Rourke from Ireland bettered Nairn teenager Sandy Scott in a fantastic day-long battle over 36 holes on the Old Course. In addition the St Rule Trophy, an international tournament for amateur

by the Under18 Pauline Roussin-Bouchard from France. Our annual August Tournaments remain popular and over-subscribed, attracting hundreds of golfers of all ages and abilities, from near and far, in what has become over

W E B Loudon CBEChief Executive

Tyrell Hatton lifted the Alfred Dunhill Links Championship in 2016

The dedicated greenkeeping team have introduced “sand-scrape” areas on the Old and New Course Work was carried out on to improve playability and safety on the 4th

and 15th holes of the Jubilee Course

the years a two week celebration of golf; encouraging good competition, friendship and families travelling to support their relatives. We look forward to hosting these events again in 2017 whilst at the same time we will be making preparations for the staging of The Senior Open Championship, presented by Rolex, on the Old Course in 2018. Hosting such prestigious events with

most recognisable and much loved golfers of recent

exceptional links golf courses. This platform allows the development of other areas of business such as learning, food and beverage and retail which in turn enables us to re-invest in driving quality forward and, where we can, exceed people’s expectations. If seven renowned golf courses are a critical element of this, so too is our ability to recruit and retain highly skilled and motivated people. They had an exceptionally busy year in 2016 and I am most grateful to each and every one of them for the efforts they made on the Trust’s behalf to assist in delivering those unique and memorable experiences for our golfers and our other guests.

Chief Executive’s Report continued

for the year ended 31 December 2016

alone is not enough to run the Links to the standard to which we aspire and a well-managed and successful partnership programme is an essential enabling element of development as well as delivery. I was especially pleased to sign in December 2016 a contract for the continuation of our agreement for a

early part of the next decade and I congratulate the teams on both sides for the way that they have developed a meaningful

values with the promotion and marketing of St Andrews Links. In the same month we also renewed our relationship with Callaway, our long-standing equipment partner, whose history in the golf business and reputation for design, manufacture and sales is unparalleled. As they seek to maintain their pole position in a hugely competitive market there is still much we can share and learn from each other, not least in the ever increasing use of digital technologies in the modern era. We both have a hunger for innovation and we greatly enjoyed

of Distance’ - at the Academy and Balgove Course in early May 2017.

Spain’s Beatriz Recari visited the Home of Golf as part of the Allianz Golf Camp

The August Tournaments at the Home of Golf continue to attract record entrants, all anxious to play golf and make lasting friendships with golfers from around the world

Japan’s Gaku Tsukamoto edged out St Andrews’ John


One of the biggest tasks undertaken in recent times was the Turfcare Evaluation Exercise which was conducted between December 2014 and August 2016. During this period the Course Managers and their teams tested more than sixty types of mowers, tractors and utility vehicles from the so-called ‘big-three suppliers’. Staff from the Links also visited manufacturing and logistic facilities in the UK, Germany and the USA as part of the evaluation. After the companies made presentations in St Andrews in July 2016, commercial discussions took place and in early December it was announced that Toro, based in Minneapolis, had been awarded a contract to provide Toro turfcare and irrigation equipment for the next 15 years. This new partnership with Toro is based on much common ground; we are both committed to strengthening our reputations in the presentation and maintenance of Links Courses, we are both aware of our obligations to careful environmental stewardship and we both seek to be on the leading edge of innovation and technology. We were impressed by products from all of the manufacturers but we were most impressed with Toro’s high quality machinery, exemplary service and support as well as their legacy of industry-wide trusted relationships. This is the longest single commercial contract signed to date by St Andrews Links Limited and we relish the prospect of working with Toro to improve the living landscape of the Links land as we move forward together in partnership.

December to sign a long-term partnership agreement

Allianz ambassador Paul McGinley shares his knowledge and experience with participants at the Allianz Golf Camp

Chief Executive’s Report continued

for the year ended 31 December 2016Joining Toro as newcomers to the partnership programme in 2016 was the major Japanese corporation, TSI Groove and Sports, who we have contracted with to develop, under licence, a range of clothing collections and other products which will carry the family of St Andrews Links brands, including Tom Morris. This new business relationship allows us to shift our focus in this area away from wholesale operations to our more successful model of licensing and retail.

In this context we should not allow this particular report to pass without paying tribute to the historic American clothing

partner came to an end on 31 December 2016. Brooks Brothers support, led so prominently by its owner Claudio Del Vecchio, has played a huge part in supporting the Links brand and assisting in the promotional protection of the reputation and heritage of St Andrews in recent years. This leadership and commitment often went beyond that which was legally necessary and demonstrated consistently a passion for St Andrews as well as a desire for strong and mutually supportive partnership.

Some of this work, protecting intellectual property (IP) assets, can be unglamorous and on occasions, controversial but it is essential for the long term wellbeing of the reputation and heritage of St Andrews Links. Fortunately the Links Trust has built up a strong skills set and track record in this area over the last decade and one of the very positive outcomes of this work in licensing and royalties was the formation of the St Andrews Community Trust. This local independent charitable trust receives annual payments from St Andrews Links Limited in connection with its work on the protection and control of IP and since 2010 this has resulted in £538,000 being made available for distribution to good causes in and around St Andrews.


On the question of customer journey, improvements to our offerings in food and beverage and in retail and merchandising resulted in sales increasing year-on-year by

develop new product lines and have now included Tom Morris items in all of our retail outlets.

and mechanisms for the sale of Old Course Commercial Tee Times from April 2018- has been going on throughout the past year. This has involved extensive engagement with many stakeholders and has enabled the Trust to develop a wider understanding of how we take forward our business relationship with golf tourism in Scotland and beyond. This work reached an advanced stage by the end of 2016 and the new model, its terms and conditions, applications and allocation processes were discussed with and issued to golf tour operators at home and abroad. The early feedback was

and we look forward to matching our unique and historical

service and customer care, both to our Authorised Providers of Old Course commercial tee times and our visiting golfers in 2018.

Manabu Senza (President TSI Groove & Sports) and Masahiko Miyake (Chairman TSI Holdings) visited the Home of Golf to celebrate the new agreement between St Andrews Links and TSI Holdings

The debut St Andrews collections by TSI Groove and Sports launch in 2017


Running an economically disciplined and environmentally aware business is what we aspire to do from day to day and week to week. Much of what is achieved can be credited to a skilled set of people on the staff of the Links Trust who are passionate about what we do. We continue to invest in the quality of our people and I was particularly pleased to see the progress that was made in 2016 in our Unlocking Potential (UP!) programme where an internal group of colleagues identify candidates to undertake additional training in order to assist their personal development. The internal ‘colleague recognition’ exercise which was introduced in December 2016 also allowed some of our unsung heroes, who really do understand what it takes to ‘create unique and memorable experiences for our customers’, to be recognised by their peers at work.

We have also placed emphasis and effort in the last four years or so in softening our environmental footprint. This has involved voltage optimisation, solar panels, water management, air source heat pumps, fuel economy in vehicles and a carefully targeted waste management campaign which has resulted in less than 1% of the

introduced and driven by a number of departments across the Links and they brought colleagues together in a shared and worthy purpose as well as delivering real

ambitions recognised in 2016 through the successful reaccreditation of St Andrews Links Trust with the

programme; the achievement of a Green Tourism Gold

Visitor Attraction status. Recognition on this scale, both from national and international bodies, validates the efforts of everyone connected with St Andrews Links Trust.

So, in sum a very good year and, as the Chairmen said, we will continue to invest in the Home of Golf in order to raise quality. By doing this, we will continue to deliver unique and memorable experiences and help to set the conditions for future success.

26 May 2017

27 May 2017

The Links received the Green Tourism gold award for its commitment to developing sustainable practices across its living landscape

St Andrews Links Golf Shops set a new record for retail income

IntroductionThe Trustees of St Andrews Links Trust present their Annual Report and Accounts for the year ended 31 December 2016. This report is prepared in compliance with the Charities Accounts (Scotland) Regulations, 2006 (as amended), Financial Reporting Standard 102 (FRS102) and the Charities SORP (FRS102) (referred to as SORP).

Reference and Administrative InformationReference and administrative information is shown on pages 30 to 33.

Structure, Governance and ManagementGoverning legislation and appointment of TrusteesThe Trust was established by the St Andrews Links Order

of Parliament. The principal objective of the Trust is to

public resort and recreation for the residents of

The Links Act provides for the appointment of eight Trustees, three nominated by the ‘local authority’ (Fife Council), three by The R&A and one by the Scottish Government. The eighth Trustee is the Member of Parliament in whose constituency the Links are situated. With the exception of the MP, Trustees are appointed for a three year term and are eligible for reappointment at the end of that term.

chairperson and are reminded of their duties and responsibilities under the Links Act and other charities legislation. Trustees are not representatives or delegates of their appointing body and must have regard only for the best interests of the Trust.

Trustee induction and trainingNewly appointed Trustees participate in an induction programme. They are provided with the latest Annual Report and Accounts, copies of past minutes and other

of the Trust’s operations from senior management.

GovernanceDay to day management of the Trust and its subsidiary companies is carried out by a management team, headed

regular formal meetings, the minutes of which are published.

Several sub-committees and working parties exist to facilitate more detailed consideration of key aspects of the

companies has a Board of Directors which include a mixture of Trustees, members of the management

directors. The sub-committees, working parties and Boards report to the Trustees at their formal meetings.

The Audit and Risk Committee is responsible for agreeing the planning for and discussing the outcome of the annual audit, approving the draft Annual Report & Accounts for submission to Trustees and for reviewing the Trust’s risk register. The Finance Committee is responsible for reviewing and approving draft budgets and pricing recommendations prior to their submission to Trustees for approval. A Governance Sub-Committee is tasked with ensuring the Trust’s governance practices remain appropriate for an organisation of the Trust’s size and complexity. A Remuneration Sub-Committee sets the pay and remuneration of the Directors having regard to various factors including the movement in RPI and CPI indices.

The Trustees have overall responsibility for ensuring that

and otherwise, exist. The systems of internal control are designed to provide reasonable, but not absolute, assurance against material misstatement or loss. They include;-

annual budgets approved in advance by Trustees,

strategic plans, periodically updated and approved by Trustees,

by the Trustees through management accounts and trading performance reports,

delegation of authority and segregation of duties, and

The Trustees are of the opinion that the major risks to

evaluated and that systems are in place to manage those risks and identify any new risks to which the Trust may

Trustees are discussed in more detail in the Financial Review section of this report.

Charitable purpose

therefore exempt from income and corporation taxes on its charitable activities. Trading activities which are considered to be outwith the Trust’s charitable purposes

are remitted to the Trust under Gift Aid arrangements.

Related partiesInformation on transactions with related parties is given in Note 21 to the accounts.

Objectives and Activities

and maintain the Links as a public park and place of public resort and recreation for the residents of

Trustees’ Reportfor the year ended 31 December 2016



as it is where the game began and largely evolved into its current form. It is home to The Old Course- the oldest and most famous golf course in the world- and is recognised

This historic background raises the expectations of the

acutely aware that only the highest standards of course

vision to develop St Andrews Links as the most renowned public golf complex in the world, delivering unique and memorable experiences for golfers to play, learn, shop and relax.

In addition to this international perspective, the Links plays an important role in the everyday life of the town. This is recognised in the Links Act which extends certain privileges to residents of the town and to members of the R&A. The town is home to several long-established golf clubs and the Trust works closely with those clubs

competitions. Pricing and access privileges have been extended to holders of yearly tickets, the majority of whom are members of these local golf clubs.

R&A Members, yearly ticket holders and residents of St Andrews play nearly 50% of all golf played on the Trust’s courses yet only a small proportion of the Trust’s income is derived from these sources. The Trust therefore has a

revenues, supplemented by royalties earned from the Trust’s intellectual property portfolio.

Retail and licensing activities through the Trust’s subsidiaries St Andrews Links Golf Shops Limited and St Andrews Links Limited make a strong contribution to the Trust’s turnover and surplus and provide a degree of diversity from reliance solely on income derived from the

underwrite the Trust’s ability to keep yearly ticket prices as low as possible.

Under a contract with the St Andrews Community Council, St Andrews Links Limited pays a royalty to the St Andrews Community Trust which applies those

and the surrounding area. This ensures that the wider

and commercialising its intellectual properties. In 2016

Community Trust, bringing the total amount of royalties since the Community Trust was established in 2010 to more than £538,000.

Achievements and Performance

results there were several other noteworthy achievements.

The Trustees are committed to ensuring that the Trust operates in an economically and environmentally sustainable fashion. It was therefore very satisfying for these environmental ambitions to be recognised through

of Gold status in the Green Tourism Business Scheme run by VisitScotland. These awards complement the retention in 2016 of the Trust’s 5-Star Visitor Attraction status.

Following on from discussions held with Fife Council in 2015, with effect from April 2016 the Trust took over from the Council the responsibility for maintaining the grassed areas along West Sands Road. Trustees intend to develop a master plan for the area, working closely with interested parties such as the Fife Coast & Countryside Trust and the Council.

During 2016 the Trustees, together with the Board of Tom Morris International Limited (TMI) undertook a

brand. As a result of that review it was apparent that

clear that licensing offered the best option. TMI therefore had no further purpose and, accordingly, it was struck off on 6 December 2016.

The Trustees’ belief in the value of the Trust’s trademark

underpinned through the signing of an agreement with TSI Groove and Sports, a major Japanese corporation, under which TSI will develop, under license, a range of clothing collections and other products primarily for the Japanese and other Asian markets. It is anticipated that these collections will reach the market during 2017, with St Andrews Links Limited receiving royalties based on a percentage of sales.

it has gone from strength to strength with both parties

also renewed for a further term.

As reported last year, the Trustees have ended the contract with Compass Group, trading as ‘The Old Course

of Old Course tee times to commercial operators being introduced for the 2018 season. A great deal of work was undertaken during 2016, including discussions with tour

the details of the new arrangements. As a result of that work, it was possible to launch these arrangements early in 2017 with the aim of allocating starting times for 2018

as normal throughout 2017 and will continue to receive an allocation of starting times in 2018 and beyond under the same terms and conditions as other commercial operators. The Trustees would like to place on record their

their gratitude for the assistance they have given during this transitional phase.

Financial ReviewPresentation of the accountsThe accounts are prepared in compliance with the Charities SORP (FRS102). Consolidated accounts are presented, with the results of the Trust and its subsidiary companies combined as if they were a single entity. Intra-group trading is eliminated from income and expenditure

intra-group balances are eliminated from the consolidated balance sheet. Commentary on the accounts

retail income with total income increasing by over £2.25 million. With total expenditure increasing by £428,000 a

before the actuarial adjustments required to comply with FRS102 rules on the calculation and disclosure of pension scheme liabilities. That adjustment, which is discussed

£3,566,630 (2015 – surplus of £3,650,684).

Cash generation, driven by the record income, was exceptionally strong, allowing the Trust to repay all outstanding interest-bearing borrowings during the year while still retaining in excess of £4 million in cash at the

Trust has a positive net cash position rather than having net borrowings.

A strong balance sheet is vital for the long-term success of the Trust, as it provides resources for reinvestment in the Links or to provide a measure of resilience should events outwith the Trust’s control prevent golfers travelling to St Andrews.

Although income reached record levels in 2016 it is important to understand that the great majority of that income is generated from visitors to St Andrews, with less than 7% of total income being generated from yearly tickets and the R&A’s annual contribution.

Thus, any reduction in visitor numbers would have a disproportionate impact on the Trust’s ability to generate the surpluses necessary to continue to improve the courses and facilities available to the public.

In contrast to other sources of income, royalty income reduced by just over £400,000 in 2016. This was mainly due to the timing of royalty payments on some agreements and agreements which reached the end of their term together with the inability to generate income from the licensed golf academy in China. Action taken by the Chinese Government, which had a major impact on the Chinese golf market, prevented the licensee, White Horse Group, from operating the academy.

It is appropriate to acknowledge the integrity of White Horse Group in their relationship with St Andrews Links Limited and to note the Trust’s disappointment that, through no fault of either party, they were unable to bring the plans for the Simapo Island golf academy to fruition.

operating costs of St Andrews Links Trust and the Castle Course St Andrews Limited- were consistent with 2015 costs.

on raising funds. This expenditure relates to the operating costs of the Trust’s other subsidiary companies, St Andrews Links Limited, Tom Morris Limited and St Andrews Links Golf Shops Limited. The main components of this movement were a reduction in general operating expenses which were more than offset by higher legal and professional fees and an increase in the cost of sales of goods sold.

This last item is attributable to the writing down of the carrying value of goods originally purchased by Tom Morris International Limited (TMI) which were transferred to Golf Shops in 2015. These goods have been on sale through all of the Trust’s retail outlets in 2016 and sales have exceeded expectations. However, due to the quantities that had to be ordered by TMI to meet manufacturers’ minimum order requirements, these stock levels are much higher than would normally be required to service the Trust’s retail operations. The decision was therefore taken to write down the carrying value of some of these stocks at 31 December 2016, resulting in an abnormally high cost of sales charge for 2016.

Mention needs to be made of the adjustment required to comply with the requirements of FRS102 in respect

triennial review, the next of which is due with effect from 31 March 2017. In carrying out that review the scheme actuary will analyse the scheme’s assets and liabilities in depth, based on actual scheme data, and project its long-

Trustees’ Report continued




scheme. This enables the actuary to assess the adequacy of the contributions paid in by employers and scheme members to maintain the long-term health of the scheme and to set appropriate contribution rates for the following three years.

By contrast, the FRS102 adjustment takes a snap-shot view of the assets and liabilities at a point in time, using a set of assumptions prescribed by FRS102 and using estimated rather than actual data. This valuation has no bearing whatsoever on the actuary’s triennial valuation.

The annual valuation tends to produce wild and

over the last few years, and generates a theoretical liability which has no relationship to the Trust’s share of any

In his calculations at December 2016 the actuary has made some material changes to the assumptions used for the 2015 calculation. These are explained in more detail in Note 17 to the accounts but, in summary, he has assumed that the rate of increase of both salaries and pensions will be higher than was assumed at December 2015 and, to comply with FRS102, he has used a materially lower discount rate to calculate the assets and liabilities of the scheme.

The effect of these changes, in particular with regard to the discount rate, is to substantially increase the theoretical liabilities of the scheme while simultaneously reducing projected returns. This has led to a large increase in the theoretical net liability as at December 2016 which compares to a substantial decrease in the liability as at December 2015.

It is unfortunate that this adjustment, which has little credibility but has the force of regulation behind it, overshadows the accounts to the extent it does, as it prejudices an understanding of the underlying strength of the Trust’s balance sheet.

Although the Trustees are obliged to comply with the requirements of FRS102 in preparing these accounts they have no reason to believe that the Trust’s share of

valuation of the scheme, which will set the Trust’s contribution rate for the period April 2018 to March 2021, will bear any resemblance to the theoretical liability shown in these accounts.

Setting aside the FRS102 adjustment, the Trust’s balance sheet is very strong thanks to the success of the Trust’s activities throughout 2016. Cash balances have risen to their highest ever level, even after all remaining interest-bearing borrowings were repaid during the year and the Trust ended the year with net cash balances of £3,612,676 compared to a net indebtedness at December

Reserves policy

of £17,888,142 (2015 - £21,454,772) and the cash

represents the aggregate total of all surpluses earned by

to the cash and bank facilities available to the Trust.

The Audit & Risk Committee has highlighted to the Trustees that the Trust is vulnerable to major events outwith its control which might affect visitor numbers and, over the longer term, Trustees aim to accumulate free cash reserves appropriate to the Trust’s needs.

Principal risks to the Trust’s activitiesDuring 2016 the Audit & Risk Committee updated the Trust’s risk register and presented it to Trustees for discussion and approval.

Given the Trust’s dependence on visiting golfers for the majority of its income, the principal risks are connected

visitors to generate that income. Not all of these risks can

For example, a major disruption to air travel, if for a prolonged period, could have a serious impact on the number of overseas visitors to St Andrews and it is unlikely that they could be wholly replaced by domestic visitors. It is not viable to insure against such a risk but it can be offset to some extent by developing other sources of income, e.g., royalties from the Trust’s intellectual property portfolio.

The quality of the courses and their availability for play can to an extent be controlled by the Trust. The experience of the Trust’s greenkeeping staff, coupled with the best available equipment and supplies and active training programmes, enable the Trust to set a benchmark in course maintenance standards. In support of this expertise, and to provide an objective critique, the Trust engages the Sports Turf Research Institute (STRI) to carry out independent inspections of the courses.

The failure of the Trust’s coastal defences is another critical risk which is not entirely controllable by the Trustees. Parts of the Links are designated as a Site of

engineering or protection works can take place. A monitoring programme of existing coastal defences is in place with the aim of providing early warning of potential trouble spots.

Plans for Future PeriodsThe Trustees continually review the adequacy of the Trust’s facilities and will continue to invest in them and in the equipment used on the Links in pursuit of their objective of delivering unique and memorable experiences for all, together with continuing to invest in the learning and development of our staff.

With effect from April 2017 the Trust, through St Andrews Links Limited, has entered a long-term contract with Toro for the provision of turfcare equipment. This follows a two-year evaluation process in which the Trust’s greenkeeping staff were able to carry out thorough comparative evaluations of machinery from each of the three main suppliers in the market. Although all three manufacturers’ ranges were of an extremely high standard, the Trustees endorsed the recommendation from the greenkeeping team that Toro offered the best overall quality of machinery and believe that the

The review of the facilities serving the western side of

Courses and the Golf Academy, undertaken in 2016 was considered by the Trustees who have decided to delay this redevelopment in the short-term while a number of other infrastructure development opportunities are evaluated.

end in 2017 with new arrangements for the commercial sale of Old Course tee times taking effect for 2018 and

the active involvement of tour operators and local

that the new arrangements will operate well and will

tee times.

Discussions with the R&A over the future staging of the Open Championship, the The Senior Open Championship presented by Rolex and other events took place in 2016 and will continue in 2017. Both the Trust and the R&A recognise the importance of St Andrews to the standing

generated by them.

R D MuckartChairman of Trustees26 May 2017

Trustees’ Report continued




We have audited the accounts of St Andrews Links Trust for the year ended 31 December 2016 which comprise the Group Statement of Financial Activities, the charity and Group Balance Sheets, the charity and Group Cash Flow

framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice)

This report is made solely to the charity’s Trustees, as a body, in accordance with section 44 (1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and regulation 10 of the Charities Accounts (Scotland) Regulations 2006 (as amended). Our audit work has been undertaken so that we might state to the charity’s Trustees those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the charity and its Trustees as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Trustees and auditorAs explained more fully in the Statement of Trustees’ Responsibilities set out on page 32, the Trustees are responsible for preparation of accounts which give a true and fair view.

We have been appointed as auditor under Section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under that Act. Our responsibility is to audit and express an opinion on the accounts in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the

Auditors.

Scope of the audit of the accountsAn audit involves obtaining evidence about the amounts

reasonable assurance that the accounts are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the group’s and parent charity’s circumstances and have been consistently applied and

accounting estimates made by the Trustees; and the overall presentation of the accounts. In addition, we

Trustees’ Report to identify material inconsistencies with the audited accounts and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Independent Auditor’s Report to the Trustees of St Andrews Links Trust for the year ended 31 December 2016

OpinionIn our opinion the accounts:

give a true and fair view of the state of the charity’s and group’s affairs as at 31 December 2016 and of the charity’s and group’s incoming resources and application of resources, for the year then ended;

have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and regulations 6 and 8 of the Charities Accounts (Scotland) Regulations 2006 (as amended).

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matters where the Charity Accounts (Scotland) Regulations 2006 (as amended) requires us to report to you if, in our opinion:

the information given in the Trustees’ Report is inconsistent in any material respect with the accounts; or

proper accounting records have not been kept; or

the parent charity’s accounts are not in agreement with the accounting records and returns; or

we have not received all the information and explanations we require for our audit.

George M Hay (Senior Statutory Auditor)For and on behalf of Henderson LoggieChartered AccountantsStatutory Auditor

the Companies Act 2006)

The Vision Building 20 Greenmarket DundeeDD1 4QB

26 May 2017

INCOME

Catering income Rents receivable

Merchandise income Royalties Other income

Bank interest

EXPENDITURE

NET INCOME

Balance brought forward

All funds are unrestricted.

2015£

11,524,0942,197,657

8,17413,729,925

5,126,5821,566,782

134,8316,828,195

1,210

40,560

20,599,890

5,776,01513,831,19119,607,206

£992,684

2,658,000

3,650,684

17,804,088

£21,454,772

2016£

15,957,019

6,833,776

9,122

56,124

22,856,041

20,035,671

£2,820,370

(6,387,000)

(3,566,630)

21,454,772

£17,888,142

£

13,635,8142,310,688

10,517

5,600,2951,154,835

78,646

6,165,11513,870,556

Notes

2

3

17

13

Consolidated Statement of Financial Activitiesfor the year ended 31 December 2016



Investment in subsidiary companies Goodwill arising on consolidation

Stocks Debtors- due within one year Cash at bank and in hand

Amounts falling due within one year Deferred income

2015£

24,064,901-

2,949,666-

27,014,567

160,9363,698,210

646,5334,505,679

2,206,2902,640,9514,847,241

(341,562)

26,673,005

(1,150,000)

25,523,005

(3,681,000)

£21,842,005

21,842,005

£21,842,005

2016£

23,603,487-

2,949,666-

26,553,153

149,0662,217,9464,241,1906,608,202

1,889,5752,770,8664,660,441

1,947,761

28,500,914

(500,000)

28,000,914

(10,319,000)

£17,681,914

17,681,914

£17,681,914

2015£

24,791,7382,291,079

-408,928

27,491,745

2,357,424662,226729,602

3,749,252

1,915,8423,039,3834,955,225

(1,205,973)

26,285,772

(1,150,000)

25,135,772

(3,681,000)

£21,454,772

21,454,772

£21,454,772

2016£

24,308,0522,417,858

-324,321

27,050,231

1,481,740511,164

4,362,6766,355,580

1,460,1703,238,4994,698,669

1,656,911

28,707,142

(500,000)

28,207,142

(10,319,000)

£17,888,142

17,888,142

£17,888,142

Notes

5678

9

1011

12

17

13

Balance Sheetsas at 31 December 2016

Consolidated Trust Only

These accounts were approved by the Trustees at their meeting on 26 May 2017 and are signed on their behalf by:

R D MuckartChairman of Trustees

Net cash provided by operating activities (Note a. below)

Interest received on bank deposits Interest received on intra-group loan accounts

Net cash used in investing activities

Term loans from Royal Bank of Scotland- decrease in long-term balance new facility repaid R&A Foundation- decrease in long-term balance

Change in cash and cash equivalents during the year

Cash and cash equivalents at 1 January

Cash and cash equivalents at 31 December NOTES TO THE CASH FLOW STATEMENT a. Reconciliation of net movement in funds to net

Net incoming resources before other recognised losses

Add back: Amortisation of Goodwill Arising on Consolidation Non-cash movements associated with FRS102

Write off minority interest in Tom Morris International Limited, relinquished during the year Write off loan advanced to Tom Morris International during the year Deduct: Interest income shown in investing activities

one year

b. Analysis of the balances of cash and cash equivalents as shown in the balance sheet Cash in bank and on hand Bank overdraft

2015£

3,271,898

1,135163,294

(676,955)-

59,724

(452,802)

(520,000)(500,000)

(250,000)

(1,270,000)

1,549,096

(902,563)

£646,533

1,507,876984,459

-

-

662,000

(25)

-(164,429)

(5,900)(1,779,627)

2,020,55146,993

£3,271,898

646,533-

£646,533

2016£

4,683,017

8,94354,855

(593,864)-

91,706

(438,360)

(400,000)-

(250,000)

(650,000)

3,594,657

646,533

£4,241,190

2,231,743963,572

-

-

251,000

-

(4,834)(63,798)11,870

1,480,264

-(186,800)

£4,683,017

4,241,190-

£4,241,190

2015£

3,962,278

1,210-

(834,230)(354,522)

86,757

(1,100,785)

(520,000)(500,000)

(250,000)

(1,270,000)

1,591,493

(861,891)

£729,602

992,6841,215,722

322,490

84,607

662,000

(25)

-(1,210)

105,942118,383

-461,685

£3,962,278

729,602-

£729,602

2016£

5,460,474

9,122-

(807,251)(502,752)123,481

(1,177,400)

(400,000)-

(250,000)

(650,000)

3,633,074

729,602

£4,362,676

2,820,3701,167,455

375,974

84,607

251,000

-

-(9,122)

875,684151,062

-(256,556)

£5,460,474

4,362,676-

£4,362,676

Cash Flow Statementsfor the year ended 31 December 2016

Consolidated Links Trust Only



1. ACCOUNTING POLICIES

a) Accounting convention: the accounts are prepared under the historical cost convention.

b) Basis of preparation of accounts: the Trust constitutes

accounts are prepared in accordance with the Charities and Trustee Investment (Scotland) Act, 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended), FRS102 and the Charities SORP (FRS102) (referred to as SORP).

c) Basis of consolidation: the consolidated accounts consist of St Andrews Links Trust and its subsidiary companies, St Andrews Links Limited, St Andrews Links Golf Shops Limited, The Castle Course St Andrews Limited and Tom

the gross turnover and expenditure of the subsidiary companies are treated as Activities for Generating Funds

Gross turnover and expenditure of The Castle Course St Andrews Limited are included within Charitable

activities. The assets and liabilities of the subsidiary companies are included on a line-by-line basis within the consolidated balance sheet.

d) Going concern: at the time of approving the accounts, the Trustees have a reasonable expectation that the Trust has adequate resources to continue in operational existence for the foreseeable future.

e) Turnover: turnover is stated net of Value Added Tax.

f) Incoming resources: income is generally recognised on a receivable basis where the amount is reasonably certain and there is adequate certainty of receipt, and is stated gross of related expenditure.

g) Resources expended: expenditure is accounted for on an accruals basis

Costs of generated funds include the expenses of non- charitable trading activities

Charitable activities comprise direct expenditure including direct staff costs attributable to charitable activities

Governance costs include costs associated with constitutional and statutory requirements

Support costs are allocated against the above categories on a basis consistent with the use of resources

h) Development expenditure: expenditure on projects carried out on land not owned by the Trust is treated as development expenditure unless the projects have income earning potential, in which case expenditure is capitalised as tenant’s improvements. Capital expenditure incurred on land and buildings owned by the Trust is capitalised

original historic cost including, where appropriate, the cost of irrecoverable VAT. Depreciation is provided as described more fully in note 1 k) below. Items with an original cost of less than £500 (excluding VAT) are not capitalised unless they are part of a larger pattern of expenditure.

j) Tenant’s improvements: in the Trust’s accounts, tenant’s

nature and with income generating potential undertaken on land not owned by the Trust, for example, the Links Clubhouse. Where wholly-owned companies incur expenditure of a capital nature on land and buildings not owned by them, that expenditure is also capitalised as tenant’s improvements.

assets at rates calculated to write off the cost, less estimated residual value, of each asset over its expected useful life. Depreciation on buildings and tenant’s improvements is charged from the date the

is charged on a straight line basis using the following rates:

Vehicles, plant and equipment 20%

Heritable property, including alterations 2% Tenant’s improvements 2%

No depreciation is provided on freehold land or golf courses. No depreciation is charged on assets under construction until such time as they are brought into use at which point depreciation is charged at the appropriate rate.

or protect trademarks or other intellectual properties which, in the opinion of the Trustees or the Directors of the company concerned, have a reasonable probability of generating income is capitalised as

a ten year period on the straight line basis. The

over ten years is reasonable because it can take several years to negotiate agreements to generate income from registered marks. An impairment review of all

balance sheet date. Further information on intangible

expenditure on trademark registrations and intellectual properties is written off when incurred on the basis that future revenues are uncertain.

Notes to the Accountsfor the year ended 31 December 2016

m) Goodwill arising on consolidation: where a wholly- owned company is acquired at a price in excess of the fair value of its underlying assets and liabilities, the difference between that fair value and the purchase price is treated as goodwill arising on consolidation. Goodwill arising on consolidation is amortised over ten years on a straight line basis from the date of acquisition.

n) Debtors: trade and other debtors are recognised at the settlement amount due after any trade discount offered. Prepayments are valued at the amount prepaid net of any trade discounts due. o) Creditors and provisions: creditors and provisions are recognised where the charity has a present obligation resulting from a past event that will probably result in the transfer of funds to a third party and the amount due to settle the obligation can be measured or estimated reliably. Creditors and provisions are normally recognised at their settlement amount after allowing for any trade discounts due.

p) Grants receivable: grants receivable in respect of capital projects are offset against the cost of the relevant project. Depreciation is calculated on the project cost net of grants. Grants of a revenue or non-capital nature are credited to general reserve as income when received.

q) Operating leases: rentals applicable to operating leases are charged on a time basis over the lease term.

r) Donations: donations received are credited to the Statement of Financial Activities as received. Donations made are included within operating expenses.

s) Stocks: stocks are valued at the lower of original invoice cost or net realisable value.

t) Value Added Tax: the Trust is partially exempt for VAT purposes and is therefore unable to recover all of the input VAT it incurs on its purchases. Irrecoverable

capitalised and written off at the same rate and over the same period as the underlying asset.

u) Taxation: the Trust is exempt from income and corporation taxes by virtue of its charitable status. The wholly-owned companies are liable to corporation tax but no taxation liability arose for the year ended 31 December 2016.

v) Foreign currency transactions: assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the exchange rate applicable at the transaction date. All differences on exchange are taken to the Statement of Financial Activities.

provided primarily through the Fife Council

17 below gives further information regarding pension arrangements.

x) Support costs: support costs on activities for generating funds are allocated to those activities by means of charges raised by the Trust to the wholly-owned companies. The amount charged for the year was £184,250 (2015 - £247,000). Support costs relating to governance are allocated on the basis described in Note 3 below. All other costs are regarded as directly related to the delivery of the charitable activity.

2. ANALYSIS OF GOLFING INCOME

Visitor green fees and Old Course premium

The Royal and Ancient Golf Club

2015£

7,695,282

1,401,4612,427,351

£11,524,094

2016£

10,221,487

1,471,7701,942,557

£13,635,814

Consolidated


Notes to the Accounts continued



Payroll costs (note 16) Cost of goods sold and catering non-payroll expenses Operating expenses Depreciation Amortisation and impairment

Amortisation of Goodwill Arising on ConsolidationPayments under operating leases land and buildings

Legal & professional fees Auditor’s remuneration non-audit services Development expenditure (note 4) Bank interest Notional net interest cost on FRS102 calculation on pension scheme liability VAT not recoverable (note 1 t) Governance costs (see table below)

Auditor’s remuneration audit work

Total2015

£

9,467,692

3,631,2313,891,6731,256,282

322,490

84,607

157,675-

178,864

9,477134,75382,326

213,000149,88627,250

£19,607,206

TotalExpenditure

2015£

27,250£27,250

Total2016

£

9,484,799

4,330,7153,518,7191,223,579

375,974

84,607

189,65845,573

297,536

9,895126,90323,864

145,000154,94923,900

£20,035,671

TotalExpenditure

2016£

23,900£23,900

Expenditureon charitable

activities£

8,496,599

996,6642,571,0611,080,499

-

84,607

5,50045,573

122,992

4,545126,90323,864

145,000154,94911,800

£13,870,556

Expenditureon charitable

activities£

11,800£11,800

Expenditureon raising

funds£

988,200

3,334,051947,658143,080

375,974

-

184,158-

174,544

5,350--

-

12,100£6,165,115

Expenditureon raising

funds£

12,100£12,100

Basis ofapportionment

Usage

UsageUsageUsage

Usage

Usage

UsageUsage

UsageUsage

UsageUsageUsage

Basis ofapportionment

Usage

3. ANALYSIS OF TOTAL RESOURCES EXPENDED

On-course shelters

Greenkeeping Centre improvementsRoad and pathways improvementsIrrigation system extensions etc.Coastal protection worksGeneral development work

4. DEVELOPMENT EXPENDITURE

All development expenditure is incurred by St Andrews Links Trust. The subsidiary companies have no expenditure of this

2015£

59,394-

35,06127,9046,746

2525,396

£134,753

2016£

38,83860,047

-3,026

17,1525,0002,840

£126,903

i) CONSOLIDATED

COSTAt 1 January 2016Additions

DisposalsAt 31 December 2016

DEPRECIATIONAt 1 January 2016Charge for yearDisposalsAt 31 December 2016

NET BOOK VALUEAt 31 December 2016

At 31 December 2015

ii) LINKS TRUST ONLY

COSTAt 1 January 2016Additions

Intra-group transfersDisposalsAt 31 December 2016

DEPRECIATIONAt 1 January 2016Charge for yearIntra-group transfersDisposalsAt 31 December 2016

NET BOOK VALUEAt 31 December 2016

At 31 December 2015

Total£

35,565,430807,251

-(292,994)

£36,079,687

10,773,6921,223,579(225,636)

£11,771,635

£24,308,052

£24,791,738

Total£

32,526,728593,864

-(66,541)

(149,191)£32,904,860

8,461,8271,009,251

(66,116)(103,589)

£9,301,373

£23,603,487

£24,064,901

Assets underconstruction

£

77,51844,585

(77,518)-

£44,585

---

£-

£44,585

£77,518

Assets underconstruction

£

53,89844,585

(53,898)--

£44,585

----

£-

£44,585

£53,898

furniture &equipment

£

4,663,373281,48771,946

(58,700)£4,958,106

3,830,324379,307(57,088)

£4,152,543

£805,563

£833,049

furniture &equipment

£

2,946,408176,95248,326

(720)(36,351)

£3,134,615

2,379,627256,757

(720)(36,323)

£2,599,341

£535,274

£566,781

Vehicles,plant andequipment

£

5,192,127382,527

(185,700)(234,294)

£5,154,660

3,687,385531,543

(168,548)£4,050,380

£1,104,280

£1,504,742

Vehicles,plant andequipment

£

4,169,696273,675

(185,700)(65,821)

(112,840)£4,079,010

2,867,570445,279(65,396)(67,266)

£3,180,187

£898,823

£1,302,126

Tenant’simprovements

£

6,402,207---

£6,402,207

1,838,798124,489

-£1,963,287

£4,438,920

£4,563,409

Tenant’simprovements

£

6,126,521--

£6,126,521

1,797,445118,975

--

£1,916,420

£4,210,101

£4,329,076

5. FIXED ASSETS

Land and buildings

£

19,230,20598,652

191,272-

£19,520,129

1,417,185188,240

-£1,605,425

£17,914,704

£17,813,020

Land and buildings

£

19,230,20598,652

191,272

£19,520,129

1,417,185188,240

--

£1,605,425

£17,914,704

£17,813,020





6. INTANGIBLE FIXED ASSETSDuring the year St Andrews Links Limited incurred expenditure to acquire or develop trademarks and other intellectual properties. Where this expenditure is likely to result in the successful registration of a mark with revenue earning potential

standards. If, in the opinion of the Directors or Trustees, any of the capitalised items no longer have reasonable prospects of generating future revenues, the remaining net book value of those items is written off.

(2015 - £1,453) were written off.

COSTAt 1 January 2016AdditionsWritten off following impairment review as at 31 DecemberAt 31 December 2016

AMORTISATIONAt 1 January 2016Charge for year Written off following impairment review as at 31 DecemberAt 31 December 2016

At 31 December 2016

At 31 December 2015

7. INVESTMENT IN SUBSIDIARY COMPANIESThe table below lists the Trust’s subsidiary companies. Unless otherwise stated, the value attributed to each company in the Trust’s accounts is equal to the nominal value of the issued share capital. The results of the subsidiary companies are included

£3,457,485

502,752(17,058)

£3,943,179

1,166,406359,530

(615)£1,525,321

£2,417,858

£2,291,079

NameSt Andrews Links LimitedThe Castle Course St Andrews LimitedSt Andrews Links Golf Shops LimitedTom Morris LimitedTom Morris International Limited Deduct provision against the carrying value of Tom Morris International Limited

2015£

150,000500,000500,000

1,799,666100

(100)£2,949,666

2016£

150,000500,000500,000

1,799,666-

-£2,949,666

%ageowned

100%100%100%100%100%

The following notes describe the activities of each subsidiary company.

i. St Andrews Links Limited: The company receives royalties and other income derived from the exploitation of trademarks and other intellectual properties and bears the costs associated with protecting those intellectual properties. As at 31

ii. The Castle Course St Andrews Limited: The company was formed in 2005 to operate an 18-hole golf course- The Castle

ordinary activities, after paying a management fee of £28,000 (2015 - £45,000) to the Trust of £220,773 (2015 - £67,755).

merchandise bearing the Trust’s brands. As at 31 December 2016 the company’s aggregate assets and liabilities were

the Trust of £434,243 (2015 – £47,406).

iv. Tom Morris Limited: The company was acquired by the Trust in October 2010 and its carrying value in these accounts represents the purchase price together with additional ordinary shares subscribed for by the Trust.

access to the trademarks initially held by the company and the removal of competing ‘Old Course’ brands from sale have

ongoing support for the company.

(2015 - £140,206). v. Tom Morris International Limited (TMI): The company was incorporated in 2011 and began trading in 2012 with the objective of developing and marketing products bearing the ‘Tom Morris’ mark. The company established a commercially valuable ‘Tom Morris’ brand which the Directors recommended to the Trustees could best be developed through licensing rather than through the manufacture and sale of a range of products.

As a result, there was no further requirement for a separate company to develop the Tom Morris brand and Trustees decided to wind up Tom Morris International Limited. Application was made for the company to be struck off the register of companies and the company was struck off on 6 December 2016.

The Trustees recognised the impairment of the carrying value of the investment in TMI in the 2015 accounts and made

been written off against reserves in the 2016 accounts.





8. GOODWILL ARISING ON CONSOLIDATIONThe goodwill arising on consolidation relates to the acquisition in 2010 of Tom Morris Limited and represents the difference between the estimated fair value of the company’s assets and the purchase price paid. Goodwill is being amortised over ten

Original goodwill arising on consolidation

Amortisation As at 1 January 2016 Charge for the year ended 31 December 2016

Book Value as at 31 December 2016

Book value as at 31 December 2015

£

846,063

437,13584,607

521,742

£324,321

£408,928

9. DEBTORS

Trade debtorsAmounts due by wholly-owned companiesPrepayments

2015£

100,5913,485,227

112,392£3,698,210

2016£

59,9142,019,117

138,915£2,217,946

2015£

135,633-

526,593£662,226

2016£

67,223-

443,941£511,164


10. CREDITORS: Amounts falling due within one year

Trade creditors Current portion of bank Term Loans Current portion of R&A Trust Company (No. 1) Limited loan Amounts due to wholly-owned companies Taxation and Social Security Accruals

2015£

359,590520,000250,000588,246370,251118,203

£2,206,290

2016£

329,318-

250,000760,364434,195115,698

£1,889,575

2015£

432,728520,000250,000

-376,588336,526

£1,915,842

2016£

450,633-

250,000-

450,294309,243

£1,460,170


11. DEFERRED INCOMEThe following items are treated as deferred income:

ii. the unexpired portion of yearly ticket revenues and the annual contribution from the R&Aiii. tournament and championship facility fees received in advanceiv. liability in respect of unredeemed gift cards

12. CREDITORS DUE AFTER MORE THAN ONE YEAR

i) Royal Bank of Scotland Term Loanii) R&A Trust Company (No. 1) Limited

2015£

400,000750,000

£1,150,000

2016£

-500,000

£500,000

2015£

400,000750,000

£1,150,000

2016£

-500,000

£500,000

i) Royal Bank of Scotland Term LoanOn 31 May 2008 a development loan was converted to a Term Loan, repayable in thirty-six quarterly instalments and with

2017. During 2016 the Trustees decided to repay all of the outstanding principal, without penalty.

iii) R&A Trust Company (No 1) Limited

These loans were subsequently assigned to R&A Trust Company (No 1) Limited and are due to be repaid in four equal annual

as long term liabilities.

13. UNRESTRICTED RESERVES (RETAINED SURPLUS)Unrestricted reserves represent the aggregate of all surpluses earned by the Trust or, in the case of the consolidated balance sheet, the Trust and its subsidiary companies. Unrestricted reserves bear no relationship whatsoever to cash or bank facilities available to the Trust.

Movements on unrestricted reserves can be analysed as follows:

Unrestricted reserves brought forward at 1 January Net incoming resources Unrestricted reserves carried forward at 31 December

2015£

19,464,6782,377,327

£21,842,005

2016£

21,842,005(4,160,091)

£17,681,914

2015£

17,804,0883,650,684

£21,454,772

2016£

21,454,772(3,566,630)

£17,888,142







14. FINANCIAL ACTIVITIES OF ST ANDREWS LINKS TRUST (the Charity)

Gross incoming resources Total expenditure on charitable activities Governance costs Net incoming resources before other recognised gains / (losses)

Provision against investment in Tom Morris International Limited Net incoming / (outgoing) resources after remeasurement loss on pension scheme Total funds brought forward Total funds carried forward Represented by Unrestricted reserves

2015£

13,787,896(12,268,820)

(11,200)1,507,8762,658,000

(1,788,549)2,377,327

19,464,678£21,842,005

£21,842,005

2016£

14,443,788(12,200,245)

(11,800)2,231,743

(6,387,000)(4,834)

(4,160,091)21,842,005

£17,681,914

£17,681,914

15. ST ANDREWS LINKS JUNIOR GOLF ASSOCIATIONSt Andrews Links Junior Golf Association (SALJGA) was set up by the Trustees in 2002 to continue and expand existing town initiatives to promote the development of junior golf in St Andrews. Membership is open to any child, aged 5 to 18, residing in or attending a school in St Andrews. Members receive coaching from both professional and trained volunteer coaches, each of whom has received specialist training in golf tuition and child protection. The Trust underwrites the costs of the SALJGA programme, although some funds are generated through membership subscriptions, events and other sponsorships. In 2016 The R&A Foundation made a grant to the Trust of £15,000 (2015 - £15,000), which the Trustees applied against SALJGA costs. In 2016 the net cost to the Trust was £32,787 (2015 - £37,138).

16. EMPLOYEES AND THEIR REMUNERATIONThe average number of employees of the Trust and its subsidiary companies during the year ended 31 December 2016

Payroll costs can be analysed as follows:

Social Security costs

FRS102 adjustments

2015£

7,358,179522,813886,979189,74860,973

449,000£9,467,692

2016£

7,613,903622,422879,279207,25755,938

106,000£9,484,799

2015

-2121-6

2016

1212-17

17. PENSIONS

pension provision. Trustees decided to enhance pension provision by making employer contributions based on 5% of salary rather than the 1% required by law.





Pension increase rateSalary increase rate

Discount rate

2015

2.4%3.5%3.9%3.9%

2016

2.5%3.7%2.7%2.7%

Mortality assumptions are based on SAPS year of birth tables with mortality loadings applied based on membership class. The valuation as at 31 December 2015 used the following assumptions of longevity (in years) following retirement:

Current PensionersFuture Pensioners

Females

23.7 years26.4 years

Males

22.0 years24.1 years

ii) Analysis of assets and expected rates of returnThe estimated split of assets attributable to the Trust’s portion of the scheme, and the expected return on assets for each category is as follows:

BondsPropertyCash

Expected return

3.9%3.9%3.9%3.9%

Share of Assets

69%15%10%6%

Expected return

2.7%2.7%2.7%2.7%

Share of Assets

70%15%9%6%

2016 2015

iii) Reconciliation to the balance sheetThe following table provides the reconciliation of funded status to the balance sheet:

Fair value of Scheme assetsPresent value of funded Scheme liabilitiesNet underfunding in funded plansPresent value of unfunded liabilitiesNet liability

commissioned a valuation from the scheme actuary, Hymans Robertson, of the Trust’s portion of the overall scheme assets and liabilities as at 31 December 2016. That valuation was based on estimated information in some respects rather than detailed information and analysis as at 31 December 2016 and for the year then ended. The following tables summarise the assumptions used by the actuary and his valuation of the Trust’s share of assets and liabilities.

i) Financial assumptionsThe last actuarial valuation of the Scheme was carried out as at 31 March 2014 and the actuary prepared his valuation at December 2016 by projecting the results of that valuation forward using approximate methods. The valuation as at 31 December 2016 used the following principal assumptions:

2015£’000

18,282(21,917)(3,635)

(46)£(3,681)

2016£’000

22,406(32,678)(10,272)

(47)£(10,319)

As at 31st December

The Trust expects to pay employer’s contributions of approximately £877,000 in 2017.

iv) Changes to the present value of liabilities during the yearThe following table analyses the component parts of the change during the year in the present value of scheme liabilities attributable to the Trust:

Current service costInterest costContributions by membersRemeasurement (gains) / losses

v) Changes to the fair value of assets during the yearThe following table analyses the component parts of the change during the year in the fair value of scheme assets attributable to the Trust:

Opening fair value of assetsEstimated return on assetsContributions by membersEmployer contributions

Remeasurement gains / (losses)

Closing fair value of assets

vi) Amounts recognised in net outgoing resourcesThe following table analyses the component parts of amounts recognised in net outgoing resources:

Current service costNet interest costRemeasurement of return on assetsTotal

2015£’000

22,5501,348

835276

(2,738)(5)

(303)£21,963

2016£’000

21,963990874267

8,972(5)

(336)£32,725

Year ended 31st December

2015£’000

16,873542276894

5-

(5)(303)

£18,282

2016£’000

18,2823,314

267879

5-

(5)(336)

£22,406


2015£’000

1,34821380

£1,641

2016£’000

990145

(2,585)(£1,450)






18. TRUSTEE REMUNERATION AND BENEFITS

19. OBLIGATIONS UNDER OPERATING LEASES

20. FUTURE CAPITAL COMMITMENTS AND PLANNED CAPITAL AND DEVELOPMENT EXPENDITURE

2015£

£49,065

£778,044

2016£

£44,585

£425,655

2015£

£76,749

£1,016,060

2016£

£110,957

£482,633

Consolidated Links Trust only

21. RELATED PARTIES

Within one year

2015£

185,800734,510315,835

£1,236,145

2016£

190,944637,003249,760

£1,077,707

Land and buildings

Within one year

2015£

5,50013,310

-£18,810

2016£

5,50013,310

-£18,810

Land and buildings

2015£

---

£-

2016£

58,959132,658

-£191,617

Plant & Equipment

2015£

---

£-

2016£

58,959132,658

-£191,617

Plant & Equipment

1. TrusteesThe following persons served as Trustees during the year. The appointing body for each Trustee is noted below.

R D Muckart (Chairman)S GethinsMrs G G KirkwoodCouncillor J LeishmanCouncillor D F MacgregorG D MackenzieMrs I MorrisonJ C Noble

The Royal and Ancient Golf ClubMP for North East Fife (see below)The Scottish GovernmentFife CouncilFife Council (Retired 31 December 2016)The Royal and Ancient Golf ClubFife CouncilThe Royal and Ancient Golf Club (Retired 31 December 2016)

Reference and Administrative Informationas at 31 December 2016

On 31 December 2016 Councillor D F Macgregor and J C Noble reached the end of their terms of appointment. Cllr D F Macgregor was reappointed to serve a further term and J C Noble was replaced by M Cordner.

Parliament was suspended on 2 May 2017 in preparation for the General Election to be held on 8 June 2017. Accordingly, S Gethins ceased to be a Trustee on that date.

Following the Local Government elections on 4 May 2017, at which Cllr. D F Macgregor did not stand, Fife Council informed the Trust that they would revoke his appointment as a Trustee. At the date of signing this report no successor had been nominated.


(Back Row; L-R) G D Mackenzie, Cllr D Macgregor, S Gethins MP and J Noble(Front Row; L-R) Mrs G Kirkwood, R Muckart (Chairman) and Mrs I Morrison(Inset Above) Cllr J Leishman and M Cordner

Cllr J Leishman

M Cordner


2. Links Management CommitteeThe following persons served on the Links Management Committee during the year. The appointing body for each member is noted below.

S G Race (Chairman)D A CombProfessor J S ForsythI M MarshallB MillarCouncillor D MorrisonCouncillor B ThompsonMrs A O White

Fife CouncilThe Royal and Ancient Golf ClubThe Royal and Ancient Golf ClubThe Royal and Ancient Golf ClubFife CouncilFife CouncilFife CouncilThe Royal and Ancient Golf Club

Following the Local Government elections on 4 May 2017, Fife Council informed the Trust that they would revoke Cllr. D Morrison’s appointment to the LMC. At the date of signing this report no successor had been nominated.

(Back Row; L-R) D A Comb, Cllr B Thomson, B Millar and I M Marshall(Front Row; L-R) Cllr D Morrison, S G Race (Chairman) and Mrs A O White(Inset Above) Professor J S Forsyth

Professor J S Forsyth

St Andrews

Telephone 01334 466666 Website www.standrews.com

4. AuditorsThe Trust’s auditors are: Henderson Loggie The Vision Building 20 Greenmarket Dundee, DD1 4QB

5. BankersThe Trust’s bankers are: Royal Bank of Scotland plc 113-115 South Street St Andrews

6. LawyersThe Trust’s lawyers are: Thorntons Law LLP Kinburn Castle St Andrews

7. Charity Registration NumberSt Andrews Links Trust is a registered Scottish charity. The registered charity number is SC006161.

8. Statement of Trustees’ responsibilities in respect of the Financial StatementsThe Trustees are responsible for preparing the Trustees’ Annual Report and the accounts in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

and fair view of the state of affairs of the Trust and the group and of the incoming resources and application of resources of the charity and the group for that period. In preparing these accounts, the Trustees are required to:

select suitable accounting policies and then apply them consistently;

observe the methods and principles in the Charities SORP 2015 (FRS102);

make judgements and estimates that are reasonable and prudent;

state whether applicable accounting standards have been followed, subject to any material departures disclosed, and explained in the accounts; and

prepare the accounts on the going concern basis unless it is inappropriate to presume that the charity will continue in operations.

The Trustees are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time

Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and the provisions of the

hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

charity’s website. Legislation in the United Kingdom governing the preparation and dissemination of accounts may differ from legislation in other jurisdictions.


Reference and Administrative Information continued

as at 31 December 2016


9. Organisation Chart- key management personnelThe day-to-day management of the Trust is carried out by a full-time management team. The members of that team, and their principal areas of responsibility, are shown below.

Chief ExecutiveEuan Loudon

Director of Operations

Ewen Bowman

Food and BeverageOperations

Reception

Facilities & property maintenance

Training & Development

Director of Finance

Euan MacGregor

Accounting & reporting

Information technology

Human resources

Director of Greenkeeping

Gordon Moir

Greenkeepers

Workshop & stores

Environmentalinitiatives andconservation

Director of Golf

John Grant

Reservations

Players’ assistants & Caddie department

Golf Academy, Practice Centre

& Custom Fitting

Junior Golf

Tournaments and Championships

Commercial Director

Danny Campbell

Retail operations

Partnerships, licensing and brand

management

Communications

Digitalmarketing

Five year analysis of Consolidated Statement of Financial Activities

2012£

10,968,6961,860,5543,952,9971,359,773

73,93276,9918,291

34,46318,335,697

7,332,645

2,859,6663,786,1961,102,713

73161,860

84,607220,81423,475

-204,400

-53,999

132,57015,963,018

£2,372,679

2,372,679

(1,757,000)

£615,679

2013£

11,168,4381,971,5554,573,0841,290,265

83,500121,003

7,6724,832

19,220,349

8,071,542

3,244,3534,582,3071,153,871

-198,346

84,607218,52324,0508,658

153,334

-272,208143,214

18,155,013

£1,065,336

1,065,336

(106,000)

£959,336

2014as restated

£

11,949,8182,072,1394,845,2691,323,382

71,28185,9507,729

86320,356,431

9,145,598

3,426,6964,387,7051,287,954

56,621305,974

84,607198,96027,30010,204

132,700

160,00089,872

142,73419,456,925

£899,506

899,506

(1,932,000)

£(1,032,494)

2015£

11,524,0942,197,6575,126,5821,566,782

134,83140,5608,1741,210

20,599,890

9,467,692

3,631,2314,058,8251,256,282

-322,490

84,607178,86427,250

-82,326

213,000134,753149,886

19,607,206

£992,684

992,684

2,658,000

£3,650,684

2016£

13,635,8142,310,6885,600,2951,154,835

78,64656,12410,5179,122

22,856,041

9,484,799

4,330,7153,763,8451,223,579

-375,974

84,607297,53623,900

-23,864

145,000126,903154,949

20,035,671

£2,820,370

2,820,370

(6,387,000)

£(3,566,630)

INCOME

Catering income Merchandise income Royalties

Rents receivable Interest receivable EXPENDITURE Payroll Catering non-payroll costs and goods for resale General expenses Depreciation

Amortisation of intangible assets Amortisation of goodwill arising on consolidation Legal & professional fees Audit fees Bad debts written off Interest payable Notional net interest cost on FRS102 calculation on pension scheme liability Development expenditure Irrecoverable VATTotal revenue account expenditure Net incoming resources before other

OTHER GAINS / (LOSSES) Net incoming resources before other

RETAINED SURPLUS / (DEFICIT)

Unaudited Statistical Analysisprepared from consolidated financial statements



Five year Balance Sheet summary

2012£

23,748,0101,428,147

662,74925,838,906

1,274,243726,356

1,055,1533,055,752

640,0001,217,5422,257,8454,115,387

(1,059,635)

(3,720,000)

(3,182,000)

£17,877,271

17,877,24625

£17,877,271

2013£

24,973,8512,263,964

578,14227,815,957

1,789,488798,644303,833

2,891,965

640,0002,579,2412,526,0745,745,315

(2,853,350)

(2,760,000)

(3,366,000)

£18,836,607

18,836,58225

£18,836,607

2014£

25,259,9872,259,047

493,53528,012,569

2,463,366780,60972,296

3,316,271

640,0002,479,1332,308,5945,427,727

(2,111,456)

(2,420,000)

(5,677,000)

£17,804,113

17,804,08825

£17,804,113

2015£

24,791,7382,291,079

408,92827,491,745

2,357,424662,226729,602

3,749,252

520,0001,395,8423,039,3834,955,225

(1,205,973)

(1,150,000)

(3,681,000)

£21,454,772

21,454,772-

£21,454,772

2016£

24,308,0522,417,858

324,32127,050,231

1,481,740511,164

4,362,6766,355,580

-1,460,1703,238,4994,698,669

1,656,911

(500,000)

(10,319,000)

£17,888,142

17,888,142-

£17,888,142

FIXED ASSETS

Intangible assets Goodwill arising on consolidation

CURRENT ASSETS Stock Debtors Cash at bank and in hand

CURRENT LIABILITIES Bank term loan-current repayments Creditors Deferred income

NET CURRENT LIABILITIES

LONG-TERM LIABILITIES

PENSION SCHEME LIABILITY

NET ASSETS

REPRESENTED BY:- Unrestricted reserve Minority interest

TOTAL RESERVES

Old

Castle

New

2014 2013 20122016

Jubilee

Eden

Strathtyrum

100%

80%

60%

40%

20%

0%2015

Five year analysis of rounds played on the Trust’s golf courses

2012

104,539

111,935

216,474

2013

105,061

108,025

213,086

2014

115,243

116,929

232,172

2015

107,906

101,283

209,189

2016

116,889

127,937

244,826

By local golfers

By visiting golfers

Total rounds

Following the disruption of the Open in 2015, rounds played reached a new record in 2016, approaching 245,000. Visiting golfers showed the greater increase, of 26.3% compared to an 8.3% increase in local golfer play. This is because the Open takes the Old Course out of play in peak summer months when visitor play is at its most concentrated and, whenever the Old Course is closed, there is a marked impact on visitor rounds on the other courses.

The increase in play is more modest when compared to 2014, but still represents an increase of 5.5% with visiting golfers again accounting for the majority of the increase.

Proportion of play on 18 hole courses


Unaudited Statistical Analysis continued

prepared from consolidated financial statements

St Andrews Links TrustPilmour House St Andrews Fife KY16 9SF Scotland

T: +44 (0)1334 466666 E: [email protected]

Scottish Charity no. SC006161

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