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MINUTE of the ANNUAL GENERAL MEETING of the BOARD of WEST LOTHIAN LEISURE LIMITED held within LOW PORT CENTRE, LINLITHGOW, on THURSDAY 7 SEPTEMBER 2017.
Present– Cindy Brook (Chair), David Eardley, Beverley Greer, Karen Anderson,
Cllr. Chris Horne, Cllr. Harry Cartmill, Robert Montgomery,
Apologies – Cllr. Tom Kerr, Cllr. Angela Doran, Cllr. Andrew Miller,
James Cameron, Paul Stark, Eric Stafford, Heather Duncan
In attendance – Robin Strang, Billy Key, Mark Chambers, (West Lothian Leisure)
1. / RECORD OF ATTENDANCE AND ASCERTAINMENT OF A QUORUM2. / Attendance is noted above. A quorum of Trustees was present.
ADDITIONAL OR ANY OTHER COMPETENT BUSINESS TO BE
CONSIDERED AT THE END OF THE MEETING
None
3. / APOLOGIES FOR ABSENCE
Noted above.
4. / DECLARATIONS OF INTEREST
David Eardley declared a non-financial interest in relevant matters contained in points 9 and 12 of the Agenda.
5. / MINUTES OF LAST AGM HELD ON 8thSEPTEMBER 2016
The Board approved the Minutes of the Annual General Meeting held on 8 September 2016. There were no matters arising.
6. / MINUTES OF BOARD AND AUDIT SUB COMMITTEE MEETINGS HELD BETWEEN 1 APRIL 2016 AND 31 MARCH 2017
The Board noted its previous approval of the Minutes of all General Meetings and all Audit Sub-Committee Meetings held between April 2016 and March 2017.
7. / CHAIRS STATEMENT
Chair’s Statement 2016/17
We had a challenging year in 2016/17 during which there was significant competition from private sector budget gyms and an increasing number of single site private operator gyms. This resulted in an overall drop in attendances of 3.7%, almost entirely due to a reduction in use of gyms by adults. Importantly attendances by children, families, older people and those with health conditions remained strong, as working with these groups in particular helps to improve the health and wellbeing of the people of West Lothian and furthered our charitable objects.
Despite the challenging conditions our incoming resources for the year increased and we out-turned an operating surplus of £130,266, helped by restructuring our prudential borrowing.
We have a concessionary access scheme to encourage participation by people who are in receipt of benefits. Concessionary access attendances increased by 71% in 2016/17 as we aim to do more to support those in our communities who need additional support.
We have furthered our charitable objectives (to improve the health and social wellbeing of our communities) by delivering a wide range of activities designed to improve health and wellbeing primarily through physical activity. The total number of visits to Xcite venues and activities during the year was nearly 2.3 million, the second highest number of annual visits in our 18 year history.
Online engagement with customers, through our Website, App and Facebook, continues to grow. We invested in a new more interactive website during the year and we will continue to develop it, in particular to encourage online sales and booking.
Key to this success has been our well trained and dedicated staff who support a high number of people, often with complex needs, to be regularly physically active, and these customers have reported consistently high levels of satisfaction with the services they receive, rating us significantly higher than the UK benchmark score for the industry. We also continued to invest in our facilities so that they remain attractive and welcoming places for people to meet, play sport and be physically active.
I would like to thank all the Trustees (Non-Executive Directors) who served on the Board during the year for their continued advice and support which is given on a voluntary basis and to thank all employees of West Lothian Leisure for their continued commitment to providing excellent service for our communities.
During the year we converted from a Community Benefit Society to a Company Limited by Guarantee. The modernising of the Trust provided a strong platform to discuss with the Council the transfer of further facilities and services, and on 1 April 2017 the management of the Low Port Outdoor Education Centre, Howden Park Arts Centre, The golf facilities at Polkemmet Country Park and the Sports and Cultural facilities at West Lothian’s 11 secondary schools transferred to West Lothian Leisure. On behalf of West Lothian Leisure I am pleased to acknowledge that the Council has placed its trust in us to deliver these much valued public facilities and services which compliment those which we already manage.
Decision: To note the Chair’s Statement
8. / TREASURER’S REPORT
Treasurer’s Report 2016/17
The Company has had a challenging year in terms of its trading due to strong local competition but has continued to invest in facilities and services to offer great value to the community. The financial statements for the year ending 31 March 2017 show a deficit of £26,307 (2016: deficit of £725,988). This is before an actuarial loss of £3,589,000 (2016: loss £3,143,000) resulting in an overall deficit of £3,615,307 (2016: £2,417,012). The overall net fund balance at 31 March 2017 is now a net liability balance of £3,901,951 compared to a liability balance of £286,644 for 31 March 2016.
There were a number of challenges along the way such as:
- Reducing funding from West Lothian Council
- Strong private sector competition
- Increasing costs of operating the business
- Updated Actuarial valuation of the Pension Fund
- Tight expenditure controls
- Investment in facility improvements and new equipment
- The ongoing success of our health and wellbeing programmes and family, children’s and over 60’s memberships
- Modernising the structure of the organisation to meet future challenges
The Board is pleased that this has been another successful year albeit not without major challenges in relation to reducing funding from West Lothian Council, strong local competition and increasing costs of operating the business. Through the efforts of our staff and effective planning, coupled with the successful partnership work with the Council, we have limited the trading loss for the year. The principal factors were:
Income – Overall income grew by 3.8%, but when you factor out a re-scheduling of prudential borrowing income dropped by 5%. This was primarily due to a reduction in adult memberships because of strong local competition. Family, children and over 60’s income remains strong.
As with last year we still face challenges in respect of the sensitivity of both the income and expenditure budgets in terms of performance. Budgets remain tight and it will be difficult to achieve a surplus in the coming year.
Activity Levels – the total number of customer visits dropped by 3.7%. This was primarily due to a reduction in adult customer visits because of strong local competition for gym memberships. Family, children, concessionary and over 60’s attendances remain strong
Expenditure – Overall expenditure was under budget, this offset some of the income being under target and with the re-scheduling of prudential borrowing resulted in a surplus at year end before FRS 102 adjustments.
Investment for Growth – There was significant investment during the year including gym refurbishments and equipment renewal at Xcite Livingston, Craigswood, East Calder and Whitburn. The changing pavilion at Xcite Linlithgow was also extended to service increased demand for the new full size 3G pitch.
Strategic Risks
Each year a strategic risk register and associated risk assessments are presented to the Audit and Finance Sub Committee and to the Board. 18 strategic risks were identified in 2016 and the principal (highest rated net) risks were:
- New competition entering the local market and significantly affecting income and therefore ability to break even or trade in surplus
- Significant decrease in Council management fee leading to an in-ability to break even or trade in surplus
Going forward further local private sector competition is likely to affect the financial performance of the charity.
Investment policy
West Lothian Leisure has the ability to use Council prudential borrowing for capital projects. This can be supplemented by lottery funding or other grant income for qualifying projects. A business case is presented to the Board for approval for any investment proposals and this includes an assessment of additional income generated (and/or costs saved), payback period (if a loan is required) and a risk assessment.
Principal funding sources
The majority of income comes from customer receipts - primarily membership income, pay and play income. Other principal income sources are West Lothian Council’s management fee and partner funding from NHS Lothian for specific health and wellbeing programmes.
Reserves policy
General funds are unrestricted funds which are available for use at the discretion of the members of the Committee of Management in furtherance of the general objectives of the Society which have not been designated for any other purpose.
Designated funds are unrestricted funds that have been set aside for a specific purpose, which will be utilised during the next and future years against specific expenditure for asset improvement.
Restricted funds are funds which are to be used in accordance with specific restrictions imposed by donors or which have been raised by the Society for particular purposes. The costs of raising and administering such funds are charged against the specific fund.
The Board has examined the Company's requirements for reserves in light of the main risks to the organisation. In February 2015 it established a new policy whereby the unrestricted funds not committed (including pension liabilities) or invested in tangible fixed assets held by the Society should be at a minimum of 10% of income, excluding the Council management fee (2014:10% of all income, including the Council management fee).
Incoming resources for the year ended 31 March 2017 were £11,061,828 (2016: £10,629,967) therefore requiring at least £1,106,183 (2016: £1,062,997) in unrestricted funds, in accordance with the new reserves policy. Actual funds at 31 March 2017 were in deficit of £3,901,951 (2016: deficit of £286,644) this is not in line with the reserves policy at the year end. The reserves policy is under review following the charity restructure.
The reserves are needed to meet the working capital requirements of the Company and the Board is confident that at this level they would be able to continue the current activities of the charity in the event of a significant unforeseen financial issue. We have sufficient resources in reserve to meet potential financial challenges that may occur as a result of the level of funding available as budgets are cut.
We continue to pursue an approach to pension provision to ensure a fair and balanced position for all stakeholders, including for the long term sustainability of the company.
Risk Management The Board has assessed and recorded the major risks to which the Company is exposed, in particular those relating to the operations and finances of the Company, and is satisfied that systems are in place to mitigate these risks.
Plans for future periods
We continue to work closely with West Lothian Council so that service delivery becomes more joined up and delivers excellent value for money. We will also continue to work closely with NHS Lothian and sportscotland. Our annual business planning conference with these three key partners allows us to ensure our vision is truly a shared one and that we are focusing on the right actions to ensure we contribute to the community planning partnership’s outcomes.
We will continue to focus our work in the following areas:
1.Increased Income:
- Increasing participation in key sports, leisure and health and fitness activities.
- Working in partnership with West Lothian Integration Joint Board (Health).
- Growing the number of and improving our retention figures for memberships.
- Increasing quality of key activities and services.
- Improving the way we market and promote the Xcite Brand and services.
- Growing our corporate membership scheme.
- Increasing participation by target groups.
- Use of flexible pricing to maximise participation and occupancy rates.
- Develop our cafe and vending sales.
- Improving customer care standards.
- Further engagement with customers to help shape future service delivery.
- Ongoing review of staffing structures to ensure that they match our business and service objectives.
- Managing the performance of employees.
- Maximising the performance of all support services.
- Maximising the performance of the physical resources.
- Ensuring we get excellent value from our suppliers.
- Investing in energy efficiency in partnership with the West Lothian Council.
- Contributing towards the Council’s budget reduction plans.
Decision: To note the Treasurer’s Report
9. / ANNUAL ACCOUNTS 2016/2017 (REP-0718)
Jennifer Law (Scott-Moncrieff) had already gone through the Annual Accounts and the Audit Management Report at the Audit and Finance Sub Committee Meeting on 9th August, reporting that the accounts have been properly prepared and that they are satisfied we have complied with relevant legal and financial practices.
The Directors present unanimously approved the 2016/17audited accounts, and were happy for the Secretary to sign the Letter of Representation on behalf of the Board.
Decision: To approve the 2016/2017 Annual Accounts and the corresponding financial statements; and to note the Auditor’s opinion.
10 / APPOINTMENT OF OFFICE BEARERS
Cindy handed the Chair to Robin for this item. Robin invited nominations from the Board for the position of Chair.
Decision:
- To unanimously reappoint CindyBrook as Chair until the date of the next AGM.
positions of Secretary, Treasurer and Health & Safety Director.
Decisions:
- To unanimously reappoint BeverleyGreer as Secretary until the date of the next AGM.
- To unanimously reappoint DavidEardley as Treasurer until the date of the next AGM.
- To unanimously reappoint Karen Anderson as Health and Safety Director until the date of the next AGM.
11 / APPOINTMENT OF MEMBERS OF THE AUDIT & FINANCE SUB COMMITTEE AND ITS CHAIR
Cindy, David and Beverley were happy to continue as members of the Audit and Finance Sub Committee. Following discussion concerning Council Directors involvement at these meetings and their already busy workloads the Council Directors proposed that they try to find a solution between themselves and come back to Cindy. Robin also asked if the Board would consider the appointment of an external person to join the Committee. It was agreed that this will bepursued.
12 / APPOINTMENT OF AUDITOR
Following discussion it was agreed that we tender for the appointment of an Auditor as it is best practice to do so after a period of time with the same Auditor. It was also agreed that Scott-Moncrieff is invited to bid for the work.
Decision: to tender for an Auditor.
13 / Cindy thanked Directorsfor their time and interest in the AGM and for all their hard work during the past year.
AOCB
There was no other business.
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