WRU Annual Report 2011

T H E W E L S H R U G B Y U N I O N L I M I T E D - A N N U A L R E P O R T 2 0 1 1 1

Financial highlights 02

Neges y Llywydd / President’s message 04

Chairman’s statement 06

Group Chief Executive’s summary 08

Operating and financial review Financial review 14 Elite rugby 20 Community rugby 36 Stadium 44 Key performance indicators and business risks 52

Directors’ report 53

Consolidated profit and loss account 56

Consolidated statement of total recognised gains and losses 56

Balance sheets 57

Consolidated cash flow statement 58

Notes to the financial statements 59

Independent auditors’ report 80

Welsh Rugby Union governance 81

Registered office and advisers 84

Commercial partners 88

Contents

Match income

Competition income

Commercial income

Other event income

Other income

Analysis of turnover

56%

1%5%

21%

17%

2011

2011 Year

£ ‘m

2010

9.1

0.7

11.2

30.6

0

5

10

15

20

25

30

35

40

45

50

55

60

Turnover

Operational costs

Allocations to affiliated organisations

Amount remaining to service other costs

2011

P&L extract - 2011 & 2010

2010 2011 2010

27.6

4.4

(0.5)

30.9

20.0

7.6

EBITDA

Operating profit before exceptional items

Loss before tax & exceptional items

Year

£ ‘m

0

10

20

30

40

50

60

54.3

28.0

19.3

7.0

26.2

3.8 2.7

58.5

2.7

9.2

2.2

10.9

34.2

2.0

T H E W E L S H R U G B Y U N I O N L I M I T E D - A N N U A L R E P O R T 2 0 1 12

Financial highlights

EBITDA = Earnings before interest, depreciation, allocations and exceptional items


Turnover v EBITDA

2007 2008 2009 20112010

21.1

43.8

23.6

50.3

24.5

49.4

27.626.2

58.5

54.3

TurnoverEBITDA

£ ‘m

20

30

40

50

60

EBITDA v Allocations

2007 2008 2009 20112010

11.0

21.1

14.9

11.4

15.214.2

15.0

20.0 19.3

27.626.2

12.1

17.0

24.5

Allocations - allAllocations - Regions

£ ‘m

5

10

15

20

25

30

EBITDA

Allocations

2007 2008 2009 20112010

1.0

11.0

2.9

1.0

2.8

1.2

4.5

3.1

1.1

3.8

12.1

Community RugbyRegions

£ ‘m

0

3

6

9

12

15

1.2

Semi-professional

23.6

14.215.0

11.4

Rwy’n cyfri’r cyfleoedd a gaf bob blwyddyn i wneudcyfeillion newydd drwy gyfrwng rygbi Cymru ynychwanegu at y fraint a’r anrhydedd a deimlaf o gaelgwasanaethu fel Llywydd URC. Mae’r gamp arbennig hono’n heiddo’n denu cefnogaeth nifer o unigolionymroddedig sy’n byw wrth werthoedd ac egwyddorionrydym ni gyd yn eu coleddu ac yn gweithio’n galed i’wcadw. Gwelaf y gwerthoedd hynny’n cael eu cynrychioli ofrig y gêm yng ngharfan hyn Cymru drwodd i’r clybiau yrymwelaf â hwy bob wythnos ac o fewn calon weithredolein corff llywodraethol yn ogystal.

Eleni rydym wedi tystio i rai digwyddiadau pryderus syddwedi siglo hyder y cyhoedd gan beri i rai amau achosion yfath anniddigrwydd ac anhrefn. Soniwyd am gymdeithas‘sâl’, am gymunedau toredig a rhanedig, am bobl ifanc yncicio yn erbyn y tresi a theuluoedd ar chwâl. Rwy’n hollolbendant fod gan rygbi, ac yn arbennig rygbi’n lleol neu’ngymunedol, nawr yn fwy nag erioed, ran bwysig i’wchwarae, a lle bynnag mae rygbi’n ganolog mewncymuned, mae iechyd, bywiogrwydd a lles y gymunedhonno’n ddiogel. Rwy’n ffyddiog fod y gwerthoedd agynrychiolir gan rygbi Cymru’n dal yn gadarn ac y byddantyn parhau i ffynnu. I fi, fe’u hymgorfforir gan y fyddindawel o wirfoddolwyr sy’n cynnal ein gêm dwy weithiomor galed oddi ar y cae a thu ôl i’r llenni.

Mae’n clybiau’n cynrychioli curiad calon y cymunedau awasanaethant. Mae’u strwythur a’u trefniadaeth ynbatrwm, ac mae’r rheiny sy’n ymrwymo i ddatblygu’uclybiau, am ddim neu am fawr o fydd ariannol, yn rhoiesiampl werthfawr i eraill a rhaid i ni fyth beidio â’utanbrisio. Mae’u gwasanaeth di-dâl yn cwmpasu estyncroeso cynnes i ymwelwyr yn y clwb ar ddiwrnodau gêm,gwirfoddoli i dreulio oriau yn hyfforddi a chymell ac annogy plant sydd nawr yn ymgymryd at rygbi yn eu lluoedd.Bob mis rwy’n mynychu cyfarfodydd Bwrdd CyfarwyddwyrURC lle rwy’n gwrando ac yn dysgu am drylwyredd ygweithgarwch a’r drefniadaeth sy’n amlwg o fewn eingêm. Wrth gwrs ein bod ni’n wynebu heriau a phryderon,ond rwyf wastad yn gweld ac yn clywed am enghreifftiauclodwiw o’r modd mae rygbi Cymru’n gwneudgwahaniaeth. Eleni mae’n clybiau wedi profi fod ganddynty dycnwch i gynnal statws rygbi fel camp genedlaetholCymru.

Yn 2011 buom yn dathlu 130 o flynyddoedd bodolaethUndeb Rygbi Cymru fel corff llywodraethol ac mae

honno’n garreg filltir y gallwn fod yn falch ohoni. Rhano’m cyfrifoldeb yw cynrychioli Cymru yng nghwmnicynrychiolwyr gwledydd eraill, pobl sy’n gweithredu aramrywiol lefelau’r gêm ledled y byd, Ac mae’n amlwg i fifod ein henw da fel grym byd-eang yn y gêm hon hebwanychu na phylu. Gwn fod ein Prif Hyfforddwr WarrenGatland yn ymwybodol iawn o bwysigrwydd cysylltu brigy gêm yng Nghymru gyda’r gwreiddiau a’r sylfeini grymuso ble tardd y goreuon o’n chwaraewyr. Mae’r dynionhynny sy’n ddigon ffodus i gael eu dewis i wisgo crys cochCymru’n cydnabod bod llawer o’u llwyddiant yn deillio oymdrechion cymaint a oedd mor barod i’w helpu a’ucefnogi yn y dyddiau cynnar hynny wrth iddynt gicio’u pêlgyntaf.

Bu’r flwyddyn yn un hynod heriol yn economaidd i’rgymdeithas gyfan ond mae’n bleser nodi y dengys yrAdroddiad Blynyddol hwn fod ein hundeb mewn dwylo daac mewn cyflwr da. Er gwaethaf yr amodau heriol hynnyrwy’n falch i ddatgan bod cysylltiad URC gyda gwaithelusennol yn dal yn gadarn ac yn ystyrlon. Nid wy’nesgusodi rhag nodi unwaith yn rhagor pa mor falch ydwyfo Ymddiriedolaeth Elusennol Rygbi Cymru a’r gwaithgwirfoddol a wneir i gefnogi’r chwaraewyr rygbi aanafwyd yn ddifrifol yng Nghymru a cheisio gwellaansawdd eu bywyd. Mae cwrdd â’r chwaraewyr hyn ynysbrydoli ac maent yn cynrychioli popeth sydd yn ddaynghylch rygbi Cymru.

Edrychaf ymlaen at gwrdd â chymaint â phosib o gwmpasy gêm yng Nghymru yn y flwyddyn sydd i ddod achyfoethogi’r llu atgofion sydd gennyf o’r modd mae rygbiCymru’n rym cadarnhaol all hybu iechyd a lles eincymunedau.

Dennis GethinLlywyddUndeb Rygbi Cymru Cyfyngedig


Neges y Llywydd


The new friendships I forge each year through Welsh rugbyare a bonus to the honour and privilege I feel in serving asPresident of the WRU. This great sport of ours attracts thesupport of many committed individuals who live by valuesand principles we all cherish and work hard to preserve. Ifind those values represented from the very top of the gamein the senior Wales squad right through to the clubs I visiteach week and also inside the operational heart of ourgoverning body.

This year we have borne witness to some troubling eventswhich have shaken public confidence and caused many toquestion the causes for such unrest and disorder. There hasbeen talk of a sick society, of fractured and fragmentedcommunities, of disengaged youth and dysfunctionalfamilies. It is my firm belief that rugby, and most particularlygrassroots or community rugby, now has an even moreimportant role to play than ever, and that wherever rugbyis at the heart of a community its health, vitality andwellbeing is assured. I am confident that the valuesrepresented by Welsh rugby remain strong and willcontinue to flourish. For me, they are epitomised by thesilent army of volunteers who sustain our game by workingso hard off the field and behind the scenes.

Our clubs represent the heartbeat of the communities theyserve. Their structure and organisation provides a model,and those who devote themselves to developing their clubs,for little or no financial reward, set an invaluable exampleto others and we must never underestimate their worth.Their unpaid service stretches from the warm welcomeextended to visitors in the clubhouse on match days, to thevolunteers who spend so many hours coaching andencouraging the children who are now taking up the gameof rugby in droves. Every month I attend meetings of theBoard of Directors of the WRU where I listen and learn of

the intensity of activity and organisation at work within ourgame. Of course we face challenges and concerns, but Iconstantly see and hear of real working examples of howWelsh rugby makes a difference. This year our clubs haveproved they have the resilience to maintain the status ofrugby as the national sport of Wales.

In 2011 we celebrated 130 years of the Welsh Rugby Unionas a governing body and that is a landmark of which wecan all be proud. Part of my remit is to represent Wales inthe company of the representatives of other nations, peoplewho operate at all the different levels of the game fromaround the globe, and it is clear to me that our reputationas a world force in this game is undiminished. I know thatour Head Coach, Warren Gatland, is particularly consciousof how important it is to link the very top of the game inWales with the powerful roots and foundations from wherethe elite players emerge. Those men fortunate enough tobe selected to wear the red jersey of Wales recognise thatthey owe much of their success to the efforts of so manywilling to help and support them when they played theirfirst rugby as young boys.

The year has been an economically challenging one for thewhole of society but it is refreshing to note that this AnnualReport shows our union to be in good hands and goodshape. Despite those challenging conditions I am delightedto report that the WRU’s association with charitable workremains strong and meaningful. I make no excuses foragain mentioning how particularly proud I am of the WelshRugby Charitable Trust and the voluntary work undertakento support the seriously injured rugby players in Wales andtry and improve their quality of life. Meeting these playersis truly inspirational and they represent everything that isgood about Welsh rugby.

I look forward to meeting as many people around the gamein Wales as possible in the year ahead and enriching thestore of memories I have of how Welsh rugby is truly apositive force for the health and welfare of ourcommunities.

Dennis GethinPresidentThe Welsh Rugby Union Limited

President’s message

Dennis Gethin, President

Dennis Gethin presents George North with his first cap

We have undoubtedly emerged successfully from a financialyear which has tested the corporate mettle of the WelshRugby Union as an effective and efficient governing body.

The wider economic climate placed significant pressure onour ability to sustain the progress we have achieved overrecent years.

It is therefore extremely comforting and rewarding to notethat the financial results delivered in this Annual Reportprove that our planning, structures and corporate vigilanceare all strong.

We should all note that this success is not down to luck orthe uncontrollable influences of fate but the Executiveteam, operating under the direction of the Board.

The WRU today is a well organised and efficientorganisation which relies on its planning and deliverystrengths to counter challenges and achieve success in aplanned and strategic way and, as Chairman, I have helpeddrive this modern outlook.

I have spoken before of the successful and timelyintroduction of a professional Executive Board to interpretthe aims of the elected representation approved by theclubs and associated organisations.

That Executive team, with the approval of the Board ofDirectors, has introduced a five year rolling strategic andfinancial plan which is the roadmap for all our actions andaims going forward.

This level of planning allows us, as an organisation, to testour priorities and aims against sound financial measures sothat we are always realistic and informed about ourstrategies.

As Chairman I have observed how this modern outlook onour corporate planning helps the Union in two distinctways.

Firstly, when I look inwardly at our day to day and week byweek operation I am conscious of our progress in a surefooted and controlled manner. Secondly, with my widerremit within the game I can see how the rest of the rugbyworld respects us as a major force in rugby.

It is important we all take some pride as a nation in the factthat we are able to achieve this status against the backdropof our geographical and population limitations.

During the year ended 30 June 2011 the Executive teammonitored the Participation Agreement which we nowhave in place with our four Regional organisations throughuntil 2014 with an option to renew until 2019.

This is yet another example of how the WRU is putting inplace the kind of structures which future-proof its work asa governing body and enable proper investment in the rightareas of the game to the benefit of all.

The negotiations that took place within the year toconclude a contract with our international players, confirmsthe detail of how they will be rewarded in the nationaljersey of Wales right up until 2016.

Yet another example of our efficiency is the announcementduring the year of a schedule of international fixtures whichtakes Wales right through to 2019.

This delivers the kind of certainty in our activity which helpsus engage with sponsors, broadcasters and otherstakeholders with confidence and through a meaningfuldialogue.

The sound foundations of the WRU have also enabled usto take important decisions which will shape the game foryears to come.

During the year, a comprehensive review was undertakenwhich concluded with an announcement which will reformnot only the Premiership Division from season 2012/13 butall our other league structures as well.

I know this was a difficult call to make, but I am confidentthat the Board fully tested the findings of the review beforedelivering its approval and I am certain the reforms willopen up a new and positive pathway for the game inWales.

We need to create the right competitive environment forour best players and we have taken action which will helpus achieve those standards and continue to improve anddevelop.


Chairman’s statement

David Pickering, Chairman

David Pickering spreads the word about Welsh rugby


I spend a proportion of my time as Chairman engaging withour stakeholders within Wales and beyond our borders, soI know our progress is being noted and influences howthose partners engage with us.

The Welsh Government deserves particular praise as domany of the local authorities who work so hard to aligntheir strategies with the work of the WRU.

As Chairman of Six Nations Rugby Limited and through mywider remit within the International Rugby Board I am fullyaware of how loud the voice of Wales now resonatesthroughout the rugby world.

That is achieved through the respect within which we areheld by our colleagues fighting the same battles andseeking to achieve the same aims elsewhere.

The WRU has focused extremely hard on putting in placethe teams and facilities which enable all our elite sides toprepare in ways which ensure that the talent we haveavailable is always identified and developed.

Our senior team may not have achieved all the success theyaimed for but they have played consistently well againstsome of the best teams in world rugby to a degree whichensures no side can face Wales without being at their verybest.

Now the WRU is focusing more closely than ever on thecommunity game and as Chairman I am delighted at theprogress we can look forward to in the future.

I am further delighted to have played a significant part inensuring Wales will host several games in RWC 2015placing Wales at the centre of the rugby world again.

Also, as Chairman of Six Nations Rugby Limited, I amespecially pleased to report that we have extended ourbroadcasting deals in the UK and France, ensuring our mostvaluable income stream is protected. I am delighted to havebeen asked to extend my role as Chairman unanimously byour Six Nations partners.

So, in looking back across the past twelve months, I canreassure you all that we have plenty to look forward to.

Now in my ninth year in post, I want to again thank ourPresident, Dennis Gethin, and my Vice-Chairman, KenHewitt, for their unwavering support and growingfriendship throughout the period.

The Board of Directors too have worked tirelessly and Ithank them sincerely. My gratitude to them is expressed inequal measure but, in particular, to our Group ChiefExecutive, Roger Lewis for his leadership of the ExecutiveBoard and the chairmen of the sub-committees, MartinDavies in Finance, Mal Beynon of Regulatory and Alan Jonesfor Game Policy.

So I am confident that after 130 magnificent years the WRUis well placed to meet the challenges of the future and wecontinue along that path with our values intact and ourambitions undiminished.

David PickeringChairmanThe Welsh Rugby Union Limited

Roger Lewis and David Pickering at the launch of the Grassroots Photography Project to celebrate community rugby

Introduction

This is my fifth report as Group Chief Executive to themembers of the Welsh Rugby Union.

We have asserted, since 2006, we have asserted that thecreation of long term sustainability for all of our activities,both on and off the field, based upon sound financialmanagement, must be our over-arching strategy for theWelsh Rugby Union and the Millennium Stadium.

Achieving this has been particularly challenging this yearin such an uncertain economic climate. We have again hadto make some difficult decisions. However, I am pleased toreport that following the record turnover of 2010 and thepowerful figures of 2008 and 2009, we have once moreproduced another strong financial performance this year.

Our rolling five year financial and strategic plan is robust.It is being managed with the right systems and structuresin place and delivered by the right staff with theappropriate skills. During the year, I have strengthened theExecutive Board of the Group with the new external

appointments for the roles of Head of Legal Affairs (RhodriLewis) and Head of Sales & Marketing (Craig Maxwell).We have continued to enhance our position and in doingso we are creating long term sustainability for the WelshRugby Union Group.

Across the game there have been very encouraging signswith increased participation in certain areas of grass rootsrugby and a refreshed and youthful national team at theelite end. The reforms announced for the PrincipalityPremiership Division and the proposed introduction of anew National Championship will improve the talentpathway even further during the years ahead. TheMillennium Stadium continues to be regarded as one ofthe world’s great venues. I thank everyone in the WelshRugby Union Group at all levels and all of the staff forproducing these results.

I emphasise though that the challenges ahead of us all willagain be considerable. They must not be underestimated.There will be more difficult decisions to make in the yearsto come.


Group Chief Executive’s summary

Roger Lewis, Group Chief Executive

Coaching Mini Rugby


That said, these results and the decisions taken over thepast twelve months give us greater confidence for thefuture.

Highlights

Over the course of the coming pages we review in greatdetail our financial and operational performances,including Elite Rugby, Community Rugby and ourMillennium Stadium.

Below are the highlights for the year ended 30 June 2011;

In Financial and Commercial we:

• Recorded a turnover of £54.3m. Since 2007, wehave increased turnover by 24%

• Allocated £19.3m to our affiliated organisations.Since 2007, we have increased allocations by 30%

• Invested £3.1m in the community game

• Reduced our net bank debt by £5.9m to a record lowof £26.2m

• Reduced our bank interest charge from £2.5m to£0.8m

• Introduced the Official Hospitality Operator initiative

• Launched the 130th Anniversary Debenture Issue;and

• Negotiated and renegotiated key contracts anddeveloped new relationships which include ourbroadcasters, BBC Network, BBC Wales and S4C; ourjersey manufacturer, Under Armour; a new jerseysponsor for the Wales national team, Admiral; thePrincipality Building Society; SWALEC; Thomas Cook;Guinness; SEAT; Ticketmaster; Trinity Mirror and DHL.

In Community Rugby we:

• Continued to align our community strategies withthe Welsh Government, Sport Wales and certainLocal Authorities, which have benefited clubsthroughout Wales

• Continued to welcome the former clubs of theWelsh Districts Rugby Union in to the WRU; and

• Launched the myWRU website to support, monitorand target development across grass roots clubs.

In Elite Rugby we:

• Invested more in facilities, staff and resources for thenational team than ever before

• Negotiated a ground breaking five year contract,until July 2016, with our international players

• Signed a new four year contract with our nationalcoach, Warren Gatland, until after the 2015 RugbyWorld Cup

• Developed further our relationship with the fourRegions through decision making forums establishedwithin the terms of the Participation Agreement

• Agreed a reform of the Premiership Division with keystakeholders and the introduction of a NationalChampionship, both from the 2012/13 season

• Commenced a comprehensive review of our agegrade pathways with all key stakeholders in Welshrugby; and

• Provided a new Head Coach and Assistant Coach forthe Dragons from within our WRU age gradecoaching structure.

In our Millennium Stadium we:

• Upgraded the audio-video facilities in a £3.0mproject with the assistance of a £1.7m grant fromthe Welsh Government

Warren Gatland signs new four year contract

• Welcomed 0.8m paying visitors to enjoy a range ofrugby, music, tours, soccer and other sporting andvaried events

• Hosted a record 6th Heineken Cup Final, whichresulted in an economic impact on Cardiff in excessof £24m.

• We hosted the Ryder Cup Welcome to WalesConcert

• Presented Take That live in concert on twoconsecutive evenings

• Welcomed England to play Wales in internationalsoccer

• Hosted the Wales Varsity match, broadcast live onS4C

• Continued to develop our strategy for the land tothe east of the stadium; and

• Near completion to achieve the award of BSI 8901for Sustainable Management Systems for Events

Our purpose, vision, mission and values remain constant.

The purpose of the WRU

The purpose of the WRU is to promote, foster, encourage,control and improve rugby football in Wales.

The Group’s vision

The Group’s vision is three fold:

• Taking Wales to the world with our rugby

• Welcoming the world to Wales in our Stadium

• Defining Wales as a nation

The Group’s mission

The Group’s mission is based upon:

• Leading Welsh rugby to the forefront of the globalgame in performance and reputation

• Maximising participation and performance at alllevels

• Developing grass roots rugby, supporting clubs,schools and colleges and bringing communitiestogether

• Promoting the Millennium Stadium as a unique,must play, must visit venue.

Our Values

Our purpose, vision and mission are underpinned by valuesand beliefs which embrace integrity, excellence, success,courage, family and humour.

Outlook

For the past three years I have forecast that, “the futurepromises to be very positive for the Welsh Rugby Union”– this continues to be the case for the year ahead.

Again though I urge caution, whilst always encouragingus to continue to seize the moment when it arises.

The recent and measurable success delivered through ouroperational structure and effective decision making isdefined in this and our other recent Annual Reports,inspiring me with confidence in the Group’s ability to facethe challenges of the future.

Our rolling five-year financial plan, as I have mentionedpreviously, has identified the issues surrounding the cyclicalnature of our business. This is supported by the rolling fiveyear strategic plan which recognises the business risks andopportunities which need to be managed. The plancontains specific objectives, actions, responsibilities andtimelines for all aspects of our activities agreed by theBoard of the Welsh Rugby Union.

We have developed a very clear strategy to take usforward. Once more, there are a number of majorinitiatives which we will continue to develop and which wehave enhanced once more over the past period. Wereviewed and updated the plan during the past 12 months.

Our Five Year Strategic Plan objectives continue toinclude:

• Improving our community rugby facilities andequipment and supporting the volunteers who arevital to the game


Group Chief Executive’s summary(continued)

Roger Lewis, Gethin Jenkins and Matthew Reessign new five year international player contract


• Maximising participation and fulfilling potential at alllevels in the game based upon recruitment andretention

• Improving the health and well-being of ourcommunities in partnership with our rugby

• Providing the right competitive environment forcommunity rugby at all levels

• Creating a new strategy for rugby with schools andcolleges, which has proved to be elusive

• Developing further the North Wales Strategic Plan

• Identifying and maximising the funding for thecommunity game from public, private and charitablesources

• Ensuring all of the above points are measuredagainst past and present achievements and thattargets are set for the future

• Delivering world class facilities, systems and practicesto support the elite rugby performance pathways

• Developing world class players, coaches and officials

• Supporting our national team of players, coachesand support staff focussed upon winning

• Continuing the development of the womens’ gameand understanding the opportunity that OlympicSevens rugby will provide

• Ensuring the long term financial and physicalsustainability of the Millennium Stadium and itsdigital technology facilities

• Enhancing our sponsorship and inventory strategy

• Expanding the reach of the WRU and MS brands,particularly through new media

• Increasing revenue opportunities through ourlicensing, broadcast and online platforms

• Developing our strategy for the land to the east ofthe stadium and consider other opportunities; and

• Recruiting and retaining the right individuals with theright values and skills

Conclusion

We have begun the new financial year with confidence. Awin against England at home in August as part of ourRugby World Cup 2011 warm up games, following anextraordinary period of preparation for the national team,means we head down to New Zealand in a very positiveframe of mind.


Group Chief Executive’s summary(continued)

The new screen in the South Stand

Roger Lewis and Admiral CEO Henry Engelhardt sign new jersey sponsorship deal


Attendances at the two England games and the fixtureagainst Argentina show that our fan base is very solid.

Our international team of players, confidently led byWarren Gatland and his outstanding coaching,conditioning and management staff, may not havedelivered all the results in the 2011 Six Nations that theyand we would have wanted, but the style of rugby oncemore produced has been recognised around the world byfans and media alike as truly compelling and engaging.

At the time of writing this report we are about to headtowards the 2011 Rugby World Cup in New Zealand. Ourinternational schedule over the past 12 months has beenthe most demanding in our 130 year history. Ourpreparation both on and off the pitch has never beenbetter.

In the autumn of 2011 we welcome Australia to theMillennium Stadium and in the 2012 RBS 6 Nationstournament we host Scotland, Italy and France.

Once more we will play the Barbarians in June 2012,before embarking on a three test match tour of Australia.

We are also actively planning for the 2012 Olympic Gameswhen we host eleven Olympic soccer matches in theMillennium Stadium.

There are a number of additional events being planned forthe next twelve months, details of which will beannounced in due course.

All these factors are key in securing for Wales a pivotal rolein maintaining and developing rugby union as a dynamicand dominant sport enjoyed by millions of participants,volunteers and supporters around the world.

I conclude by personally thanking my Executive Board fortheir continued endeavour and hard work. I sincerely thankDavid Goldstone, our Special Advisor on Estates, for hiswise counsel and his time generously given.

I once more thank the Board for their help and guidanceand, in particular, I thank David Pickering, our Chairman,for his constant support of myself and the Executive team.

As I said on joining the WRU in October 2006, rugbydefines us as a nation, and unites us as a nation and I amconfident that the Welsh Rugby Union and all of itsmembers, continues to be united around the goal ofplacing Wales at the forefront of world rugby, withpassion, with pride and with dignity.

Diolch yn fawr iawn.

Roger Lewis Group Chief Executive OfficerThe Welsh Rugby Union Limited

Gwernyfed Minis get stuck in to training

The Group’s business and objectives

Group activities

The Welsh Rugby Union Limited’s (“Company”) principalactivity is to promote, foster, encourage, control andimprove the game of rugby football throughout Wales.The Company wholly owns, amongst others, theMillennium Stadium plc (“MS”) and the WRU NationalCentre of Excellence Ltd (“WRUNCE”) and collectively theyare referred to as the Group.

Dynamics of the business

The activities, both operational and financial, of theCompany and MS are so intrinsically linked that there islittle merit in assessing the performance of one withoutthe other. Whilst they are two separate legal entities andare obliged to prepare separate financial statements, it isthe Group’s performance that is the only meaningfulmeasure.

The Group must deliver on its commercial activities to allowre-investment in both elite and community rugby and tosupport financial allocations to affiliated organisations.

Accordingly, the Group’s income generation is paramountto delivering on its stated objectives. The key economicincome driver of the Group’s business is the hosting ofevents at the Millennium Stadium; particularly, the hostingof international rugby events featuring the Welsh teamand especially a winning Welsh team. The more matchesthat are played, the greater the Group’s revenues andprofits that are available for re-investment in Welsh rugby.The Group welcomed 396,000 (2010: 531,000) rugbyspectators through its turnstiles for the Invesco PerpetualAutumn Series, the RBS Six Nations Championship and theDHL Challenge in June, analysed as follows:

2011 2011 2010 2010No. of ‘000 No. of ‘000home home

matches matches

Autumn series 4 223 4 255Six Nations 2 144 3 216June Test 1 29 1 60

7 396 8 531

The average attendance per match was 57,000 (2010:66,000) and equated to an average of 77% (2010: 89%)when expressed as a measure of capacity attendance.

The primary reasons that the overall attendance hasdecreased in 2011 were due to:

• a reduction in the Autumn Series for the year endedJune 2011 (“YE11”) against the period ended June2010 (“PE10”);

• playing two Six Nations matches as compared to thethree in 2010; and

• a reduction in the Summer Test due to playing theBarbarians in YE11 as opposed to South Africa inPE10.

The average ticket income per attendee at matches heldat the Millennium Stadium in YE11 was £43 (2010: £40).

Commercial income, including sponsorship income, cluband box seat income, programme income, stadium toursand hospitality income are also critical to the financialperformance of the Group.

Within reason, our operational cost base is relatively fixed;albeit there are incremental costs if more Group controlledevents are staged. As a consequence, incremental eventsshould mean incremental profits, which can be reinvestedinto the game across all levels.

Changes in the period to 30 June 2011

In respect of the financial performance of the Group forthe year, it is important to note that the prior period wasthirteen months in duration so much of the data,particularly costs, will be more than YE11. The year enddate was changed as it was felt that more rugby was beingextended into the June period.


Operating and financial reviewYear ended 30 June 2011

Steve Phillips, Group Finance Director

Wales v Barbarians - DHL Challenge


Financial Performance

Overview of Performance

The Group generates income from its internationalmatches (including sponsorship and broadcast rights) andincremental revenue from the use of the MillenniumStadium. This income meets the operating costs of theGroup to allow the majority of the surplus to be “invested”in “Welsh Rugby”, as follows:

2011 2010£’m £’m

Group income 54.3 58.5Business and administration (5.6) (6.5)Direct costs (12.0) (13.1)Stadium costs (4.5) (5.4)surplus 32.2 33.5

As analysed later on page 16, the Group earned some£54.3m (2010: £58.5m) predominantly from internationalrugby matches staged at the Millennium Stadium. Thesematches generated 56% (2010: 58%) of the Group’soverall income.

Commercial income at £11.2m contributes 21% (2010:19%) of the Group’s overall income and has increased by3% on the prior period.

Two other income streams, not generated from staginginternational rugby matches, arise from:

• Competition income, which represents the incomefrom competitions including the Heineken Cup andthe RaboDirect Pro12 (formerly the MagnersLeague); and

• Other events, which represent events staged at theMillennium Stadium apart from rugby matches

featuring the National Squad - including, in the twoperiods indicated above, pop concerts, motorsport,football and the Heineken Cup Final.

These two forms of income amount to some 22% (2010:19%) of the Group’s income.

The remaining income arises from ancillary activities andvarious grant sources. There was a decrease in YE11 dueto a contribution from the British & Irish Lions of £1.7m inPE10.

The business and administration costs represent the costsof managing the Group; the direct costs represent thecosts of staging both international rugby matches andother events held at the stadium; the stadium costsrepresent the costs of managing the stadium other thanthose directly attributable to events.

The surplus of £32.2m (2010: £33.5m) made by the Groupwhich is invested in “Welsh Rugby” can be analysed asfollows:

2011 2010£’m £’m

Operational costs- Elite rugby 4.0 3.8- Community rugby 1.9 2.1

5.9 5.9

Allocations to affiliates - Regions (Professional) 15.0 14.2- Clubs (Semi - professional) 1.2 1.3- Community rugby 3.1 4.5

19.3 20.0

Total investment in “Welsh Rugby” 25.2 25.9

The balance is analysed as follows:Surplus 32.2 33.5Total investment in “Welsh Rugby” (25.2) (25.9)

7.0 7.6

Deprecation (net of grants) 3.1 3.2Exceptional items (see Note 4) - 0.3Interest costs 1.0 3.1Fair value losses on derivative 0.2 1.8financial instrumentsTax 0.7 (0.1)Transferred to reserves 2.0 (0.7) 7.0 7.6

Youth training session

The allocations to the four Regions have increased by 5%(2010: 18%) to £15.0m (including the competition incomereferred to above). These allocations cover all internationalplayer release and provide core financial support for thefour Regions and reflect the new Participation Agreementsigned in September 2009.

The allocation to the Group’s semi-professional league hasdecreased slightly on the previous year and stands at£1.2m. The allocations to the Group’s community clubshave decreased by 31% to £3.1m; this decrease includesthe participation points’ scheme of £1.0m in PE10.Excluding the participation points scheme, the reductionwas some 11% and this primarily relates to the lower takeup of the cash-back scheme by community clubs. This hasresulted in the Group investing more in the marketing ofinternational matches.

On a pre-exceptional basis, the Group generated anoperating profit of £3.8m (2010: £4.4m) from which netdebt service of £1.0m (2010: £3.1m) is deducted, the fairvalue losses on derivative instruments of £0.2m (2010:£1.8m) were deducted, resulting in a profit beforeexceptional items and tax of £2.7m (2010: loss of £0.5m).

Revenues

Revenues are analysed as follows:

2011 2010£’m £’m

Match income 30.6 34.2Competition income 9.1 9.2Commercial income 11.2 10.9Other event income 2.7 2.0Other income 0.7 2.2

54.3 58.5

Match income decreased by £3.6m predominantly due toone less home match in the Six Nations and the Junematch against South Africa in PE10 attracting greaterincome compared to the Barbarians match in YE11. Matchincome can be further analysed as follows:

2011 2010£’m £’m

Autumn internationals 11.8 11.8Six Nations 17.6 20.5June Test 0.6 1.9Other broadcast income 0.6 -

30.6 34.2

Commercial income increased by 3% to £11.2m due toincreases in the sponsorship programme and one-offhospitality sales.

Other event income increased by 35% to £2.7m; mainlydue to the return of the Heineken Cup Final, the Wales vEngland soccer international and two consecutive nightsof Take That.

Operational costs

As shown in Note 2(b), recognising that PE10 was athirteen month period, the Group’s operational costs havedecreased by some 9% to £28.1m. With the exception ofElite Rugby, there are decreases across all elements ofoperational costs, and an overall decrease of £2.8m. Thisoverall decrease includes an increase in staff costs of 2%to £7.9m.

Business and administration costs have decreased by 14%to £5.6m as a result of:

• the effect of PE10 being a thirteen month period,which amounts to c.£ 0.5m;

• a decrease in legal costs as this was brought in-houseduring the year; and

• a reduction in discretionary one-off spend given lessrevenues.

Direct costs are costs incurred directly in relation toattaining revenues and will include all National Squad costsand third party costs incurred in delivering events at theMillennium Stadium. These costs have decreased by£1.1m, which is mainly as a result of:

• reduced costs associated with staging one lessinternational match at the Millennium Stadium;


Operating and financial reviewYear ended 30 June 2011 (continued)

The camaraderie of Welsh rugby


• a change in the contractual arrangement forbroadcast income relating to the RaboDirect Pro12(formerly the Magners League);

• the effect of PE10 being a thirteen month period;and

• an offsetting increase in the marketing costs forinternational matches.

The costs in respect of elite rugby have increased by 4%to £4.0m and include managing the age-grade structures,player development, referee costs, centre of excellence andinsurance which collectively amount to some 69% (2010:65%) of the total with the balance of the 31% (2010:35%) comprising staff costs, including the staff costs ofthe academy structures. The primary increases arise fromincreased investment in the WRUNCE, running additionalprogrammes in North Wales and additional referee costs.

The costs in respect of community rugby have decreasedby 8% from last year to £1.9m and include coachdevelopment, referee costs and insurance, which amountto some 38% (2010: 42%) of the total, with the balanceof the 62% (2010: 58%) comprising staff costs, includingthe district development officers.

Stadium costs have decreased by some £0.9m to £4.5mmainly due to an accelerated preventative maintenanceprogramme in the prior period.

As shown in Note 5, staff costs have increased by £0.1m,which is largely due to an increase in the coaching staff forthe National Squad in preparation for RWC11 andemploying an in-house solicitor to reduce externalprofessional fees. These staff costs are included within thecost categories shown above.

EBITDA and net result

One of the key measures of the Group is the earningsbefore interest, tax, depreciation, exceptional items andallocation to affiliates (“EBITDA”). This is a key measure asit is the best proxy for cash generated from the Group’soperational activities. This provides the cash to fund theGroup’s strategic objectives.

The Group’s EBITDA was £26.2m (2010: £27.6m), whichfinanced the Group’s funding of Welsh rugby. The Group’spre-exceptional profit before tax was £2.7m (2010: loss£0.5m); after exceptional items, a profit before tax of£2.7m (2010: loss £0.8m). This can be analysed as follows:

2011 2010£’m £’m

Company 24.6 25.8WRUNCE 0.2 0.1MS 1.4 1.7Group EBITDA 26.2 27.6

Allocations to affiliated organisations (19.3) (20.0)Exceptional items - (0.3)Depreciation (net of grant release) (3.1) (3.2)

Operating profit 3.8 4.1

Net interest (0.9) (3.1)Fair value losses on derivative financial (0.2) (1.8)instruments

Proft/(loss) before tax 2.7 (0.8)

Tax (0.8) 0.1

Proft/(loss) after tax 1.9 (0.7)

Net interest expense

The Group cancelled its previous derivative instruments on30 June 2010 at a cost of some £5.1m. As a consequenceof this, despite PE10 being a 13 month period, the Grouphas enjoyed considerable interest savings, which can beanalysed as follows:

2011 2010£’m £’m

Bank interest payable & similar 0.8 2.6Other interest payable - 0.3Bank charges 0.2 0.2Interest receivable (0.1) -Total 0.9 3.1

Provided that LIBOR remains in line with current levels, it isanticipated that these interest savings can be continuedfor the year ending 30 June 2012.


Operating and financial reviewYear ended 30 June 2011 (continued)

Taxation

The Group has been in discussions with HM Revenue &Customs (“HMRC”), regarding the treatment of certainmatters for corporation tax purposes, for some time.

HMRC have been challenging the eligibility of certainexpenditure on the Millennium Stadium for the purposesof capital allowances. If HMRC's challenge should provesuccessful, this would have a detrimental effect on theGroup's tax position. These discussions have been on-going for a number of years and the Directors have takenthe advice of independent leading counsel. On the basisof this advice, the Directors believe the Group hasmeritorious arguments relating to HMRC's challenges.

These discussions with HMRC are on-going, andnegotiations are unlikely to be concluded in the short term.Although the outcome of these negotiations could impacton the future tax position of the Group, the Directors donot believe that it is necessary to reflect any furtherprovisions in the financial statements in excess of those taxprovisions already included.

Cashflow and Net Debt

The Group’s net cash inflows from operating activitieswere as follows:

2011 2010£’m £’m

EBITDA 26.2 27.6

Allocations to affiliated organisations (19.3) (20.0)Working capital movements 2.2 2.0

Net cash inflows from 9.1 9.6operating activities

From this amount in YE11, the Group paid net interestcosts of £1.0m, paid £3.8m in respect of fixed assets,repaid a grant to Letheby and Christopher of £0.1m,received a grant from the Welsh Government in respectof the new audio/visual facilities at the stadium of £1.7mand paid tax of £0.1m leaving a net cash increase of£5.8m.

The Group paid some £0.3m in respect of hire purchasecapital repayments and repaid, on a net basis, some£6.5m of its bank borrowings. The hire purchaseliabilities of the Group were terminated ahead of the duedate during the year in order to avoid unnecessaryinterest costs.

The Group issued 73 new debentures at £6,000 eachduring the year; the cost of issuing these debentures wassome £0.2m.

Net debt, which is defined as bank loans, debenture loansand hire purchase agreements less cash balances, as at30 June 2011 was £73.8m (2010: £79.8m).

Net bank debt, which is bank loans less cash balances,was £36.2m (2010: £42.1m). Included within theseamounts is some £10.0m which is repayable only in theevent of certain defined events occurring.

As explained in Note 13, the Group refinanced itsarrangements with Barclays Bank PLC on 2 July 2010. Aspart of this refinancing, the primary debt and theassociated derivatives are now shown in the Company;prior to that they were shown in MS.

In order to properly understand the refinancing duringthe year, the net bank debt position and the cashflowperformance of the Group, the following, excluding the£10.0m debt referred to above, is relevant:

30 June 2 July 30 June2011 2010 2010£’m £’m £’m

LoansTerm loan 23.1 25.0 31.6Revolving credit facility (“RCF”) 3.5 8.0 1.5

26.6 33.0 33.1Cash (0.4) (0.9) (1.0)Net bank debt 26.2 32.1 32.1

Matthew Rees leads his team out with the mascot at the Millennium Stadium


The decrease in net bank debt from 2 July 2011 to 30 June2011 of £5.9m includes a £1.9m reduction in the termloan in line with the terms of that loan together with a£4.5m reduction in the RCF. As shown above the new RCFwas £8.0m drawn as at 2 July 2010, £3.5m drawn as at30 June 2011 and had a maximum and minimum draw of£8.5m and £0.5m respectively during the year.

As set out in Note 13, as at 30 June 2011, the Group hadunutilised facilities of £11.5m (2010: £8.5m).

As part of the banking agreements the Group has tocomply with bank covenants which require the Group to,inter alia, meet certain levels of cashflows and surpluses.This enforces normal business practices on the Group, butlimits the extent to which the Group can invest, makeallocations to affiliated organisations and access thefacilities above.

These bank covenants are typical of those applying tocommercial businesses. It is in the Group’s best intereststo comply with these covenants as a breach would be adefault of the loan agreements.

The Group’s financial management and controls arestructured so that the Group comply with these covenants.

Capital expenditure

During YE11, the Group invested in some £3.8m of capitalexpenditure; the main categories of investment were asfollows:

£’m

Centre of Excellence 0.2Audio/visual facilities at the stadium 3.0Pitch pallets and other stadium 0.4related expenditure Other capital expenditure 0.2

3.8

Balance sheet and reserves

The increase in the Group's net assets from £3.1m to£5.3m arises from the retained profit for the year and theactuarial gain on the defined benefit scheme.

The fixed assets of the Group reduced by some £1.0m,reflecting the capital expenditure of £3.8m offset by thedepreciation charged in the year of £4.8m.

Operating working capital fluctuates from year to yeardepending upon the timing of events arising immediatelyprior to the year end.

Pension Funds

As shown in Note 21, the Group has no deficit on thedefined benefit pension scheme which it operates as at 30June 2011; this replaced the deficit in the previous year of£308,000. This change, net of deferred taxation, wasreleased to the Group’s statement of total recognised gainsand losses.

This defined benefit pension scheme has been closed tonew members for some time and the scheme is now alsoclosed to further accrual. The Group, in conjunction withthe trustees, are currently considering winding-up thisscheme and are in discussions with its professionaladvisors.

Shane Williams; from Amman United to Wales

Overview

The 130th anniversary of the WRU was celebrated with aWales international fixture in June 2011 against aBarbarians team containing players recognised as worldclass performers. It was the second year in which the WRUhas staged an early June international match. This will nowbe enshrined as a key element of the elite rugby sportingcalendar in Wales. Some years will be marked with aninternational fixture against a major nation, but on otheroccasions a variety of options will be considered. The Junehome international will normally take place before thesenior Wales squad embark on a summer tour. In 2010,the first June fixture against South Africa preceded a tourof New Zealand for the squad. The Barbarians game in2011 took place against the backdrop of a year dominatedby Rugby World Cup preparations and the WRUestablished its determination to sustain the developmentof elite rugby in Wales by announcing a four year extensionto the contract of the senior Wales Coach, WarrenGatland, which confirms his position until after the 2015Rugby World Cup.

This level of international activity reflects a sustained andmeasurable interest in elite rugby across Wales from thegeneral population.

Research carried out on behalf of the RBS 6 NationsChampionship showed that the Wales versus Englandgame in Cardiff in February 2011 attracted a peakaudience of some 7.7m people in the UK. Their associatedresearch also revealed that 38% of the population ofWales expressed an interest in rugby, while 75% of thepopulation are interested in sport in general. These figuresplace the interest in rugby in Wales ahead of the rest ofthe UK per head of population in each nation. Thetelevision audience figures for the RBS 6 Nations in Walesduring 2011 exceeded the audience penetration for therest of the UK and helped confirm rugby’s status as thenational sport of Wales.

The WRU continued to develop its relationship withbroadcasters, which reflect a TV coverage landscape whichremains the envy of other rugby nations. A new and


Operating and financial reviewElite rugby

George North scores a try against the Barbarians


extended domestic rugby coverage contract was signedwith BBC Wales and S4C, which ensures the breadth ofthat coverage continues up to and including season2013/14. The contract covers all domestic league rugby upto the Premiership Division. It also covers the Welsh agegrade international game, Sevens rugby arranged throughthe WRU, women’s rugby and Regional friendly gamessuch as pre-season fixtures.

The television coverage enjoyed by rugby in Wales alsoimpacts on the wider reporting in the mainstream writtenmedia, with the Media Wales titles and including the DailyPost in North Wales and also the South Wales Evening Postin Swansea and the South Wales Argus in Newport,maintaining robust and regular daily reports and analysis.

The challenges faced by rugby from other sports andleisure activities remained front of mind during the yearand a major step was taken by the WRU to develop Welshrugby at Principality Premiership Division level. The WRUhave, through its Head of Rugby, Joe Lydon and Regulatoryand Game Policy Committees worked in partnership withthe various stakeholders of the game, under the collectivebanner of the Criteria Review Panel, to seek a formula toensure the sustainability and growth of the division.Following presentation to, and agreement by, the WRUBoard, it was agreed and announced that from season2012/13 the division will be reformed to consist of tenPrincipality Premiership clubs. The composition of thedivision is to be decided on a formula based on theachievement of current off the field criteria as well as aperiod of historic on the field performance across 6previous seasons. To compliment the Premiership reformsand to provide a highly competitive national competitivepinnacle for community rugby a new NationalChampionship will also be created. This new 14 clubNational Championship sits below the Premiership andabove the existing Divisions One East and West. Thesereforms are collectively geared to help maintain the qualityof competition and ensure that more young players areexposed to high intensity and quality rugby and in so doingsupport the intention of developing more talent of regionaland elite rugby quality.

YE11 also saw the WRU and the four RegionalOrganisations operate the Participation Agreementthrough monthly meetings of the Management Board andthe Rugby Board. These forums managed interpretation ofthe agreement in practice and generated meaningful andcontinuing debate about all aspects of elite rugby in Wales.

Although the Wales senior side and the four Regional

teams faced challenging results, there was clear evidenceof player development across the period. The Dragons andScarlets both increased their representation within thesenior Wales squad and young Regional players from eachof the other Regions secured their first caps for Wales. Thisdevelopment of home grown talent was utilised in a seniorsquad fixture schedule, which now pits Wales regularlyagainst the best opposition available in world rugby.Although victories have been sparse, there is clear evidencethat opponents now realise they have to select their bestXVs against a senior Wales side capable of questioning anyrugby nation on the field.

During the year the Wales National Squad backroom teamwas bolstered by a series of new appointments andreplacements. Adam Beard was appointed Head ofPhysical Performance, Dan Baugh and John Ashby bothbecame Assistant Strength and Conditioning Coaches andPrav Matheema arrived as National Medical PerformanceManager.

This elite focus on player development leading to seniorsquad recognition, was also enhanced through the WRUinternational pathway coaching structure, which duringthe year again announced strong management teams forall squads. The strength of this line up was reflected in therecognition of the talent it contained from outside theWelsh international environment. The U20 Head Coach,Darren Edwards, was recruited as the new Head Coach ofThe Dragons during the year and the U18 Head Coach,Gruff Rees, was seconded to coach the Italian side Aironiunder the leadership of another Welshman, RowlandPhillips. The U20 Assistant Coach, Rob Appleyard, alsotook an important career step during the year when hejoined The Dragons as an assistant coach. There was yet

Sam Warburton is named as Wales Captain for the first time

more recognition of Welsh coaching talent when theCardiff Blues coach joined London Wasps as Director ofCoaching. These movements from within the core agegrade management team and from Welsh Regional rugbyduring YE11 are clear proof of the success of the elitepathway environment and the Regions in developingcoaches and managers capable of success at the highestlevel. Within the WRU international pathway structure acoaching skills support unit was established to connectcoaching strategies, philosophies and player development,as well as the identification of talent throughout the playerpathway.

The continued growth and visibility of Wales on theinternational 7s circuit was sustained through involvementin the HSBC 7s World Series and in YE11 participation inthe Commonwealth Games served to increase theimportance of Wales 7s in world terms. Many of theemerging elite player pathway and 7s squad players playedimportant roles in their regional squads across the season.

In North Wales there were advances along the strategicroute towards securing an elite representative foothold insenior rugby. A WRU National Academy for North Waleswas unveiled with key WRU staff in place to develop thepathway infrastructure. There was also an importantlandmark when the First Minister, Carwyn Jones, attendedthe official opening of the project to develop Parc Eirias asa key sporting centre in the region. The ceremony was alsoattended by WRU Chairman, David Pickering, President,Dennis Gethin and Head of Rugby Joe Lydon to symbolisethe key role rugby is playing in the development and use

of the stadium facility.

The elite game in Wales was boosted further during theyear with the launch of the college’s league whichrecognises the importance and emergence of the collegegame.

The Millennium Stadium also staged the annual varsitymatch between Swansea and Cardiff University teams andthis proved to be a popular and well attended match,securing live TV coverage on S4C.

The wider value of elite rugby in Wales was epitomised bya series of off the field events throughout the year. One ofthe most profound and historic achievements was thelaunch of the attempt by former international flankerRichard Parks to conquer the seven tallest peaks on theplanet and the north and south poles all within onecalendar year. Following a send-off from the MillenniumStadium in the autumn, Richard went on to defy a seriesof gruelling challenges and by the end of the YE11 he waswell on his way to achieving his incredible goal. Alsoduring the year, fifteen former Wales captains and thecurrent Wales Head Coach Warren Gatland staged acharity climb of Mount Kilimanjaro in aid of the FelindreHospital appeal. The event was organised by the WRUofficial photographer Huw Evans, whose wife Sue hassuffered from lung cancer.

Then, in April, there was a gala dinner for former seniorinternationals to mark the 130th anniversary of the WRU.This again emphasised the recognition of the importanceof retired elite players as ambassadors for Wales’ nationalsport.

Commercial

A great deal of sales and marketing activity has beenundertaken within the year, with key agreements across alllevels of the game coming up for renewal and with theextensive work undertaken across marketing thecommercial activity has been its highest for recent years.

Major contracts with the Principality Building Society andthe WRU official kit manufacturers, Under Armour, wererenewed during the period. The Group is extremelygrateful for the level of support and energy thesecompanies apply to their relationships with Welsh rugby.Both organisations retain high profile links with the gamein Wales through activities and initiatives which reach allfour corners of Wales.

The relationship with Principality was reflected with


Operating and financial reviewElite rugby (continued)

Matthew Rees interviewed at open training session


another successful awards night, which celebrated thesuccess of the Principality Premiership Division and itsprogress as an elite force in the Welsh game.

There was also a raft of new activity underpinned bycontracts with Thomas Cook as the WRU’s official travelpartner, Guinness as an official partner and DHL as aninternational match sponsor. There were also new strategicpartnerships with Ticketmaster and the publishers TrinityMirror for programme and other publication production.

Much of the commercial activity surrounding the elitegame in Wales attracted wider attention, which reflectsthe focus the Group continues to achieve.

Through the year a great deal of work took place alongsideUnder Armour to achieve the new Wales Rugby World Cupplaying and training kit in time for a pre-tournamentlaunch during the YE11.

This relationship with the US based kit supplier ensuredthat the kit worn by Wales for RWC 2011 in New Zealandwas engineered to a degree unparalleled in the history ofthe Welsh game.

There were record levels of online sales of merchandisethroughout the year, which reflects the change in the everincreasing demands of consumers to be associated withthe game outside of typical match day opportunities. Agreat amount of focus on ensuring consistent consumerservices provided all year round is going to be a keylearning point for the future.

A new contract agreement was secured with TriDistribution to sell the Group’s range of merchandise

throughout the world.

Another reflection of the sustained interest in the nationalsport of Wales was the agreement with the internationalmatch rights sales organisation, Pitch, to sell broadcastrights of Wales’ home games abroad for the next fouryears.

Comprehensive ticket marketing programmes runningthroughout the year saw the Group attract a newdemographic of consumer and opened the MillenniumStadium experience to a different audience – high levelmarketing has seen the Group benefit from successfulticket and hospitality programmes within a challengingspectator environment across all sports.

In another move to reflect the continued interest in eliteWelsh rugby, several initiatives were launched to utilise theincreased interest in social media as a means to driveinterest in the national sport of Wales and associatedmerchandise and other sales opportunities.

Although the economic climate remains challenging, thelevel of new and renewed commercial activity can beregarded as a success for the Group

Professional - International

Wales went one better than in 2010 when they won onlytwo RBS 6 Nations matches but the Welsh challenge forChampionship honours in 2011 was always about playingcatch up after they lost at home to England in the openinground.

Building momentum is vital and, although Matthew Rees’

Neil Jenkins, Robin McBryde, Rob Howley and Warren Gatland enjoy training

team won three of the remaining four matches, that 26-19 Millennium Stadium reverse on 4 February handedEngland an advantage they never let slip on course to thetitle.

Wing Morgan Stoddart scored Wales’ only try in thesecond half, while prop Craig Mitchell left his side a manshort when he was yellow carded in the 46th minute.

There were two more yellow cards against Scotland –Wales were down to 13 men for six minutes when BradleyDavies was joined in the bin by Lee Byrne – while the morepleasing double came when Shane Williams took his Testtry tally to 53 with a brace as Wales triumphed 24-6 atMurrayfield. Rising Scarlets’ stars Rhys Priestland and JoshTurnbull made their international debuts as replacements;the only Welsh debutants of the campaign.

Wales won on the road again in Round 3, beating Italy 24-16 in Rome with tries from Stoddart and Sam Warburton,and followed that up with a 19-13 Millennium Stadiumvictory over Ireland in which the ball Mike Phillips used toscore his try, created plenty of talking points.

However, Wales’ tournament and winning run ended atStade de France in a 28-9 defeat, the boot of James Hooksupplying all the Welsh points, with Wales, Ireland andFrance all ending level on six points but Wales pusheddown to fourth on points difference.

In keeping with the Group’s commitment to provideWarren Gatland’s national team with the opportunities totest themselves against the best in the world, there were10 internationals in total during the year, culminating inthe special WRU 130th anniversary celebration matchagainst the Barbarians in which Warburton captainedWales for the first time.

Wales scored four tries through Stoddart, Phillips, GeorgeNorth and Aled Brew but Isa Nacewa broke Welsh heartswith his second try scored in the final minute to snatch adramatic 31-28 win for the star-studded invitation club.

With the 2011 World Cup in New Zealand very much inmind, Wales took the opportunity to blood newinternationals in starters Toby Faletau and Ryan Bevingtonalong with replacements Scott Williams, Scott Andrewsand Lloyd Burns.

However, the season had begun with a disappointingInvesco Perpetual Series in which a 16-16 draw against Fijisaved a series whitewash.

Australia opened the series with a 25-16 win and thenWales let a 17-9 half-time advantage slip against SouthAfrica as the reigning World Champions came back for a29-25 victory.

The match saw North become the second youngest Welshtry scorer when he crossed the Springboks’ line after justsix minutes and he finished with another to announce hisarrival on the world stage in style.

Wales had to rely on a penalty try to rescue a draw againstFiji before New Zealand wrapped up the series with a 37-25 win, with 20 points from outside half Stephen Jones, aWelsh record against the All Blacks.

Invesco Perpetual Series 2010

Wales 16 – 25 Australia

Wales 25 – 29 South Africa

Wales 16 – 16 Fiji

Wales 25 – 37 New Zealand



RBS 6 NATIONS CHAMPIONSHIP 2011

P W D L F A PD TF Pts

England 5 4 0 1 132 81 +51 13 8

France 5 3 0 2 117 91 +26 10 6

Ireland 5 3 0 2 93 81 +12 10 6

Wales 5 3 0 2 95 89 +6 6 6

Scotland 5 1 0 4 82 109 -27 6 2

Italy 5 1 0 4 70 138 -68 6 2


RBS 6 Nations 2011

Wales 19 – 26 England

Scotland 6 – 24 Wales

Italy 16 – 24 Wales

Wales 19 – 13 Ireland

France 28 – 9 Wales

WRU 130th Anniversary Match

Wales 28 – 31 Barbarians

The Regions

Magners League

The competition was improved with the inclusion of twoItalian teams for the first time this year. Once again theOspreys flew the flag for the Regions in the MagnersLeague as they were the only one of the four to make itinto the end of season Play-Offs.

But whereas they had been good enough to earn a homedraw in the semi-finals, against Glasgow Warriors, with asecond place finish in the regular league season theprevious year, their fourth place finish in 2010/11 meantan away trip to Munster in the last four.

Thomond Park has proved the graveyard for many Welshteams down the years and despite a strong performanceit was the home team who came out on top, 18-11, tomake it four wins out of five over their Welsh rivals duringthe season.

That set up an all-Irish Grand Final in Limerick againstLeinster. Whereas the Ospreys had gone to Dublin andbeaten Leinster in the inaugural Grand Final in 2010,Leinster weren’t able to scale the same heights they hadreached the previous weekend in Cardiff in winning theHeineken Cup and failed to do the double, going down19-9.

The race for the Play-Off places once again came down tothe wire with the Ospreys, Blues and Scarlets all in with achance of reaching the top four in the final round ofregular league games. The Scarlets rallied to beat the Blues38-23 to secure a bonus point at Parc y Scarlets, but a 75thminute penalty from James Hook gave the Ospreys a 12-10 win in Aironi to lift them into fourth place.

The Welsh Regions finished in a row in the final MagnersLeague table:

4 Ospreys 63 points

5 Scarlets 62 points

6 Blues 60 points

7 Dragons 49 points

Play-Offs

Leinster 18 – 3 Ulster

Munster 18 – 11 Ospreys

Grand Final

Munster 19 – 9 Leinster

The powerful Wales pack prepares to scrummage against Scotland

LV= Cup

For the second successive season in the six-year history ofthe Anglo-Welsh tournament the final was again a singlenation affair, Gloucester beating Newcastle Falcons 34-7at Worcester’s Sixways Stadium, after Welsh interest hadended at the semi-final stages when Newport GwentDragons were beaten 45-17 at Gloucester.

The clubs had met in Round 1, the Dragons winning thatone 18-12 at Rodney Parade, the Gwent club then goingdown 28-3 against Northampton Saints at Franklin’sGardens.

However, they did win on the road and took a giant steptowards qualifying for the knock-out stages when theywent to Sale Sharks and triumphed 28-20.

The last semi final place was booked with a 26-9 RodneyParade win against the Scarlets but Gloucester atKingsholm was one step too far.

The Ospreys accounted for Leicester Tigers, Cardiff Bluesand London Wasps; the Scarlets beat Leeds Carnegie andLondon Irish but the Blues managed only a home 23-23draw with Exeter Chiefs from their four matches.

Heineken Cup, Amlin Challenge Cup

The prestigious knock-out stages of the 16th HeinekenCup tournament were, once again, a Welsh free zone.

It was the third time in just seven seasons that no Welshteam qualified for the last eight of European club rugby’selite competition and, with the May 2011 finals of boththe Heineken Cup and Amlin Challenge Cup awarded toCardiff, local interest came to a premature end in lateJanuary.

The one saving grace for the nation was that theMillennium Stadium final on Saturday, 21 May, was widelyregarded as possibly the best and most spectacular of the16 showpiece matches.

With the retractable roof closed, the atmosphere waselectric as Leinster staged a remarkable second halfcomeback that turned a 16-points half-time deficit againstNorthampton Saints into a stunning 33-22 victory.

However, while the home of Welsh rugby was a runawaywinner, it was the absence of all four Regions from thebusiness end of the tournament – just as it was back in2004/05 and 2005/06 – that was a real concern.

Cardiff Blues, the Ospreys and the Scarlets each won threeof their six pool matches but Newport Gwent Dragonsfailed to record a single win with home and away defeatsby Toulouse, London Wasps and Glasgow Warriors.

The Blues did finish second in their Pool, thanks to thedouble over Edinburgh and a home win against CastresOlympique with their back-to-back contests withNorthampton Saints fiery affairs.



MAGNERS LEAGUE 2010-2011P W D L F A BP Pts

Munster 22 19 0 3 496 327 7 83

Leinster 22 15 1 6 495 336 8 70

Ulster 22 15 1 6 480 418 5 67

Ospreys 22 12 1 9 553 418 13 63

Scarlets 22 12 1 9 503 453 12 62

Cardiff Blues 22 13 1 8 479 392 6 60

NG Dragons 22 10 1 11 444 462 7 49

Edinburgh 22 9 0 13 421 460 7 43

Connacht 22 7 1 14 394 459 9 39

Treviso 22 9 0 13 374 502 2 38

Glasgow 22 6 1 15 401 543 7 33

Aironi 22 1 0 21 247 517 8 12


The Ospreys won all three of their Liberty Stadium groupmatches, against London Irish, Munster and Toulon butdrew blanks on the road to finish third and miss out on theknock-out stages for the first time in four campaigns.

The Scarlets launched their challenge with one of the mostentertaining matches of the tournament, a 43-34 Parc yScarlets try fest against Perpignan, but that win and thedouble over Benetton Treviso only meant a third placefinish for them as well.

It added up to France supplying four of the quarter-finalistsand England and Ireland two each, while Wales joinedScotland and Italy in taking no further part in thetournament.

Three of the Heineken Cup group runners-up againqualified for the Amlin Challenge Cup knock-out stages –the route the Blues had taken a year earlier to be the firstWelsh team to win a European title – but the last eight ofthat tournament was also noticeable for the absence ofany Welsh interest.

The final was staged at the Cardiff City Stadium the daybefore the Heineken Cup final; Harlequins becoming thefirst team to win three of that tournament’s titles bybeating Stade Français Paris 19-18.

Wales U20

Wales U20 finished seventh in the 2011 IRB Junior WorldChampionship in Italy, an identical placing to their finalstanding in the 2010 competition.

Hopes of a top five finish were dashed when Fiji beat Wales34-20 but Macauley Cook’s team picked themselves up tobeat Ireland 38-24 to clinch that seventh place.

Wales opened with a win over Argentina but were crushed92-0 by eventual and regular tournament winners NewZealand to suffer a hammer blow to their confidence.

There was a second win, against Italy, before the defeat byFiji with coach Richard Webster welcoming the win overIreland. "It was pleasing to finish the tournament on a highnote, the players came back from a very ugly place to getto this point and they deserve credit for that.”

However, following the defeat by the Junior All Blacks, theWRU’s Head of Rugby, Joe Lydon, announced details of adual focused study of the Player Performance Pathwaywithin Welsh rugby, a more detailed examination of thedevelopment structures, standards and intensity ofcompetition elements that support the performance tier ofthe game.

Meanwhile Wales had drawn 26-26 with Ireland in theearlier Six Nations tournament, beginning and ending with

Ospreys versus Scarlets in a traditional derby encounter

U20 Six Nations 2011 - Edward Siggery dives in for try

defeats by England and France respectively. The high pointswere away wins, 33-3 in Scotland and 46-15 in Italy,adding up to a third place finish behind England andFrance.

U20 Six Nations






IRB Junior World Championship

Argentina 8 – 34 Wales

New Zealand 92 – 0 Wales

Italy 6 - 56 Wales

Wales 20 - 34 Fiji

Wales 38 - 24 Ireland

Wales U18

Wales U18 produced a magnificent performance againstFrance to finish third in the French-based FIRA-AER U18tournament.

To do that they had to beat the host nation in Auch andthey proceeded to do that with a superb 15-6 win.

The victory signified a massive turnaround for Gruff Rees'youngsters after losing 34-17 the previous month to the

same opponents in their first qualification game for theEuropean championships hosted by the Armagnac-Bigorreregion of south west France.

Wales had to bounce back in Auch after losing 34-38 toEngland to a try in the last move of the game in the semi-finals the previous weekend.

Despite torrential rain and difficult conditions, Walesdisplayed guts and commitment up front to match thephysical French outfit and this time showed an ability togrind out a win, Cardiff High School Old Boys outside halfRhys Patchell in fine form.

"We are all delighted with the win," said Wales U18 teammanager Gethin Watts. “After losing so narrowly toEngland in a game we could and should have won, therewas a determination to put that right and to try to reversethe disappointing result of the France game in Swansea.”

In their other tournament qualification matches, Wales lost26-12 in Italy before beating Scotland 45-29 in Swansea.

FIRA Tournament

Wales 17 – 34 France


Wales 45 – 29 Scotland

Elite Division - Semi-final:

England 38 – 34 Wales

3rd place Final




Eli Walker Wales U18

Luke Hamilton Wales U20


Sevens

The HSBC World Sevens Series continues to be a highlycompetitive environment throughout which players andcoaches can be truly tested and developed within theabbreviated version of the game. Wales finished seventhoverall in the Series, an improvement of two places and 28points on the previous year.

That was for winning the second tier Plate Competition inHong Kong, when they beat Argentina 14-7 in the final.

They kicked-off their series with a commendable 21-21draw with the reigning champions Samoa in Dubai andwent on to face New Zealand in the quarter-finals. Defeatin the last eight meant a semi-final clash with Australia inthe Plate, which was lost 26-12.

Next up was George, in South Africa, and there wasinstant revenge over the Wallabies with a 33-15 triumphin the Pool stages. This time there was a clean sweep inthe Pool, but Samoa beckoned in the quarter-finals andthey ran out 19-14 victors.

That meant another Plate semi-final and a first meeting inthe series against the Springboks. There was only a pointin it at the end, in favour of South Africa, and thatlaunched a run of five wins for them during the series overPaul John’s men.

Wales reached their third successive quarter-final in

Wellington, despite a 33-7 Pool defeat against England,but once again New Zealand proved too strong. Thencame South Africa and Wales fell in the Plate semi-final forthe third time.

There was a shock in Las Vegas when Kenya ran out 19-12 winners over Wales in the Pool stages and a seconddefeat to New Zealand meant a first outing in the series inthe Bowl Competition. This time it was the Scots whoinflicted a semi-final defeat.

Australia proved the venue for the one major success ofthe series as once again Wales reached the quarter-finals.This time England were the stumbling block, winning 17-12 in a tense affair, but the fourth Plate semi-final of theseason brought a 22-21 triumph over Fiji.

Alex Cuthbert proved the Welsh hero with two late triesin the second half and the Blues wing laid the platform fora 14-7 win over the Pumas in the final.

The final two rounds, in London and Edinburgh, broughtthe most consistent performances as Wales reached thesemi-finals of the Cup competition at both events. Spainand Kenya were beaten in the Pool stages at Twickenhambefore the French were overcome 19-12 in the quarter-finals.

That triumph set-up another clash with the Springboks anda Kristian Phillips try at the death gave Gareth Davies a

Jevon Groves scores during IRB Sevens World Series

conversion attempt to try to take the game to extra-time.In the end, his kick drifted wide and South Africa won 21-19.

There was a significant 19-12 Pool win over England atMurrayfield and earned Wales another quarter-final Cupclash with the French. This time a last gasp try from JevonGroves earned his side a 13-10 win that meant anothershowdown with South Africa.

Having raced into a 12 point lead with tries from Cuthbertand Phillips, Wales slowly saw their advantage eroded asthe Springboks hit back. They scored four tries withoutresponse before Wales grabbed a consolation score at theend to make it 22-19.

IRB Sevens World Series

(Dubai, UAE)

Wales 21 – 21 Samoa

Wales 17 – 12 Kenya

Wales 47 – 5 Arabian Gulf

Q-Final Wales 7 – 35 New Zealand

Plate Competition

S-Final Wales 12 – 26 Australia

(George, South Africa)

Wales 33 – 15 Australia

Wales 19 – 7 Scotland

Wales 29 – 12 France

Q-Final Wales 14 – 19 Samoa

Plate Competition

S-Final Wales 21 – 22 South Africa

(Wellington, New Zealand)

Wales 31 – 12 Cook Islands

Wales 36 – 5 USA


Q-Final Wales 5 – 26 New Zealand

Plate Competition


(Las Vegas, USA)


Wales 33 – 10 Uruguay


Bowl Competition

Q-Final Wales 54 – 0 Guyana

S-Final Wales 12 – 17 Scotland

(Hong Kong)

Wales 35 – 12 Hong Kong

Wales 28 – 5 Spain

Wales 12 – 45 South Africa

Bowl Competition

Q-Final Wales 29 – 14 Argentina

S-Final Wales 17 – 24 Canada

(Australia)



Wales 53 – 0 Cook Islands

Q-Final Wales 12 – 17 England

Plate Competition

S-Final Wales 22 – 21 Fiji

Final Wales 14 – 7 Argentina

(London)

Wales 33 – 10 Spain



Q-Final Wales 19 – 12 France

S-Final Wales 19 -21 South Africa

(Murrayfield)

Wales 7 – 5 Spain

Wales 35 – 12 Portugal





Bowl Competition

Q-Final Wales 13 – 10 France


FIRA Sevens Tournament

The Sevens squad competed in four FIRA Europeantournaments in June/July 2011. The FIRA campaignafforded an opportunity for the Sevens coaches andmanagement to both identify and develop potential futureSevens players who have the requisite skills and potentialto compete for Wales within future IRB Sevens WorldSeries.

Wales finished 6th in both Lyon and Moscow, 9th inBarcelona and 8th in the final tournament in Bucharest,giving an overall ranking position of 8th across the FIRAtournament as a whole.

Wales Women

At the highest level, a young and inexperienced WalesWomen side showed plenty of promise in the Six Nations.

At Cross Keys’ Pandy Park, they pushed England, rankedthe second best team in the world, all the way beforeeventually succumbing 19-0.

Wales bounced back immediately with a comprehensive12-41 triumph against Scotland with centre Elen Evansrunning over for a hat-trick.

Italy then stunned Wales 12-8 at home before CatrinEdwards led her side to a hard fought 15-14 againstIreland at Pandy Park before finishing the campaign witha 15-0 defeat against France.

After last year’s World Cup, coaches Rhys Edwards andLiza Burgess were left with plenty of holes to plug. Eventhough results didn’t always go their way, the likes ofShona Powell-Hughes and Charlie Murray showed thefuture looks bright.

On the domestic front Neath Athletic defeated Pontyclunto secure the National Cup while Seven Sisters claimed thePlate trophy after beating Caernarfon.

Womens 6 Nations






Ken Owens’ sister, Vici Owens achieving her first cap

Semi-Professional Game

Pontypridd were the form side in the semi-pro tier of Welshrugby, yet only came away with one of the three trophiesthey had targeted. The one they won was the SWALECCup, beating Aberavon in the final at the MillenniumStadium, but they also reached the semi-finals of theBritish & Irish Cup and the final of the PrincipalityPremiership Play-Offs.

Chris Dicomidis’ side, expertly coached by Paul John andDale McIntosh, were unbeaten at home in the regularPremiership campaign and ended 16 points clear ofeventual champions Llanelli to earn a home draw in thePlay-Off final.

Splitting the two were former champions, Neath, whowere one of only two sides to topple Pontypridd and whofinished on 100 points, seven behind the league leaders.But even with home advantage in the semi-final they wereoverwhelmed by Llanelli, who set up a title clash withPontypridd at Sardis Road.

The home side remained firm favourites, but having beenhit with an early try from Dan Newton they finally fell to ashock 24-18 defeat as the Premiership title went west.

Cross Keys had a fine season, finishing fifth overall, andwent on to beat arch-rivals Newport in a play-off match tosecure a place in the B&I Cup. Jonathan Westwood, GregWoods, and Mark Ring guided Keys off the field andunearthed a potential star for the Dragons in outside halfSteffan Jones. The 20-year-old was given his regional debutat the end of the season to cap a campaign that saw himscore 327 points for his club in the Premiership and play-off.

Aberavon finished fourth in the Premiership and wererunners-up to Pontypridd in the SWALEC Cup. The Wizards

weaved their magic to beat Tonmawr in the quarter-finalsand former champions Llandovery in the semi-final beforegoing down 35-24 in the final at the Millennium Stadium.

Former Wales and British & Irish Lions star Richard Websterwas another top level coach to help nurture another talentfor the regional game in Wales, in outside half MatthewMorgan. The Wales U20 cap played for the Ospreys andcaused mayhem in most defences with his running.

The battle for survival at the bottom of the table sawGlamorgan Wanderers finish last and forced into therelegation Play-Offs. While they beat SWALEC Division 1East champions Ebbw Vale 16-13 in the semi-finals, theywere comprehensively beaten 38-19 by Division 1 Westwinners Bridgend. That meant a return to the Premiershipfor the Ravens, under the guidance of former Ospreysflanker Steve Tandy.

In the B&I Cup, Pontypridd and Llanelli made it through tothe quarter-finals, but found themselves facing each otherin a preview of the Principality Premiership Play-Off Final.This time it was Pontypridd who came out on top, 12-10,to set-up a home semi-final with Bristol.

Gallant as they were, Dicomidis’ side found the full-timepros from just across the Severn Bridge too powerful upfront and they were beaten 25-6 at Sardis Road. Bristolwent on to win the final by beating Bedford Blues 17-14.

Principality Play-Offs

Semi-finals (Bridgend bye):

Glamorgan Wanderers 16 – 13 Ebbw Vale

Final:

Glamorgan Wanderers 19 – 38 Bridgend



WOMENS 6 NATIONS CHAMPIONSHIP 2011

P W D L F A PD TF Pts

England 5 5 0 0 223 8 +215 16 10

France 5 4 0 1 113 51 +62 13 8

Ireland 5 2 0 3 74 70 +4 12 4

Wales 5 2 0 3 64 72 -8 9 4

Italy 5 2 0 3 68 130 -62 6 4

Scotland 5 0 0 5 20 231 -211 3 0


Premier play-off (club 2 v club 3):

Neath 5 - 46 Llanelli

Premier Play-Off final:

Llanelli 24 - 18 Pontypridd

SWALEC Cup 2011

Quarter-finals:

Cardiff 17 – 19 Aberavon

Merthyr 30 – 38 Pontypridd

Swansea 39 – 34 Newport

Tonmawr 13 – 23 Llandovery

Semi-finals:

Llandovery 12 – 18 Aberavon

Pontypridd 35 – 22 Swansea

Final:

Aberavon 24 – 35 Pontypridd

BRITISH & IRISH CUP

Quarter-finals:

Bedford Blues 50 – 15 Leinster A

Bristol Rugby 29 – 19 Ayr

Pontypridd 12 – 10 Llanelli

Worcester Warriors 57 – 15 Moseley

Semi-finals:

Bedford Blues 43 – 27 Worcester Warriors

Pontypridd 25 – 6 Bristol Rugby

Final:

Bristol Rugby 17 – 14 Bedford Blues

Regional Age Grade Championships

There was sweet revenge for the Blues as they retained theWRU U18 Regional title with a thumping 51-25 triumphover the Scarlets at St Helens. The young Scarlets had beenthe only team to topple the Blues in the Pool stages. Notonly did they gain a 15-13 home win, but they drew 16-16 with them away.

But there was no doubt which was the better team in thewinner- takes- all final in Swansea, as the Blues, who hadtriumphed 11-9 against the same opponents the previousyear, ran in seven tries to the visitors’ three. HarryRobinson, who played for Wales U20 and the Bluesregional team before the end of the season, crossed twiceand Rhys Patchell helped himself to 21 points.

In the U16 final the Scarlets reversed the roles as they won27-5 against Blues North to clinch their first Regional titlesince 2004/05, when they swept the board in three finals.The new format meant the top four sides met in semi-finals,

Llanelli win Principality Play-Off final

where the Scarlets beat the reigning champions the Ospreys16-11 and Blues North overcame the Dragons 5-3.

Match Officials

The WRU Referees Academy completed its first full seasonof operation during the year. Under the operational controlof Nigel Owens, Nigel Whitehouse and Strength andConditioning coach Wayne Proctor, a series of initiativesand projects were completed. Sixteen referees formed thecore of the group to take part in the training anddevelopment programmes.

There was also significant success in achieving recognitionfor the strength of the match official complement in Waleswith a number of important appointments.

Nigel Owens was selected as a referee for the Rugby WorldCup 2011 in New Zealand and Tim Hayes was chosen asan Assistant Referee for this significant and high profilecompetition.

Leighton Hodges was selected and achieved a highstandard of performance at the Junior World Cup in Italyand Leighton Hodges, David Jones and Neil Hennessy allrefereed in Six Nations U20 international matches.

Neil Hennessy and David Jones also made their debuts asmatch officials in the Magners League.

Another successful graduate of the WRU match officialsstructure was Rhys Thomas who officiated in the U18Tournament in Tarbes.

Coach Development

Throughout the year the level four entry criteria andassessment procedure was developed within the

department. Level Four represents the elite level ofcoaching and formal interviews now take place to finalisecandidates for this level. The assessment process wasamended to take in all aspects of the coaches’ role frompractical sessions to managing a team in training sessionsand at games.

A new 7s coaching course was written and produced andtwo 7s pilot courses were organised during the year. Thiscourse is now advertised through the WRU website alongwith all other coaching course details. To assist thepromotion of this course the National Sevens Head Coach,Paul John, conducted 7s coaching practical sessions acrossWales.

During the year, twelve coaches attended the general LevelFour training programme. Eight of these coaches werefrom Principality Premiership Division clubs with the otherfour from SWALEC Division One clubs.

Six coaches from Wales attended the annual RBS 6 Nationsconference in Italy. Two of these were from the PrincipalityPremiership, two were age grade coaches and two wereRegional coaches.

In support of the elite coaching development programmea wide range of activity took place which is explained inthe Community section of this Annual Report.

In line with the Principality Premiership Division Criteria theWRU produced a Premiership Manual and CD for the clubsto utilise. Meetings were also held with Premiershipcoaches and match officials to help develop standards ofplay. The Wales Assistant Coach, Rob Howley, conducteda back play session for Premiership and National age gradecoaches to help this process.



Pontpridd v Bristol in B&I Cup semi final Nigel Owens


Overview

The focus on community rugby as a priority for the Groupremained sharp throughout the year. The appointment ofJason Lewis as the new National Development Managerwas further evidence of how the Group engaged with itscommitment to the grassroots game. His role is to takecharge of player development from the grassroots levelupwards with a key focus on schools and club rugby. Healso oversees the continued development of womens’ andgirls’ rugby. He reports directly to the WRU Head of Rugby,Joe Lydon, and during the year has reviewed the status ofthe grassroots game in Wales and instigated a series ofchanges and initiatives to enhance community rugby. Partof his role has been to establish robust measures offacilities, player numbers and club activity to establish afirm base for the sustainability and development ofgrassroots rugby.

As National Development Manager he was closely involvedduring YE11 in monitoring planned reform of thePrincipality Premiership Division to ensure the proposedand agreed changes impact positively across the game inWales.

Those changes involve the introduction of a new NationalChampionship from season 2012/13 which will becomethe effective bridge between the elite and communitygames in Wales. During the year it was agreed by the WRUBoard that the new National Championship will exist abovethe current Divisions One East and West.

Clubs were informed of the changes during the year but itwas agreed the reforms will become active at the start ofseason 2012/13.

The absorption of the former WDRU clubs into the WRUcontinued during the year and it was decided that theWRU’s community structure will consist of leagues fromdivisions one through to seven from season 2011/12onwards.

A major review of the player pathway structure wasundertaken during YE11 to identify ways of improving thegame for minis and juniors in Wales. By the end of YE11,the review was nearing completion with agreed reformsto be announced during 2011.

One priority of this review panel was to identify the meansof keeping more young players in the game and creating


Operating and financial reviewCommunity rugby

Maesteg Quins receive SWALEC League 4 South West Trophy


a steady supply of more skilful players through thecommunity game into the elite pathway structure.

The review panel took soundings from coaches, schools,clubs and other interested parties in order to reach theirconclusions.

The review questioned the role of competitiverepresentative rugby for young players aged below 14 andalso looked at the rules of the game for mini and juniorlevel rugby.

A product of the review will be a skills curriculum forcoaches and players with clear targets to help youngplayers develop properly through the various age gradestructures.

The rugby department liaised closely with the WelshGovernment throughout the year to align strategiesrelevant to the grassroots game and the potential for clubsto engage more widely in positive community initiatives.

The levels of participation within the community gamethrough YE11 continued to improve with a key emphasison the growing number of junior and mini teams beingdeveloped by clubs.

March 2011 saw the launch of the online audit system onthe myWRU website to assist with the management of theDevelopment Grant.

The system, developed by both the WRU Compliance andIT Departments, in conjunction with Writemedia, allowsClubs the opportunity to input the data required for theAnnual Development Grant throughout a given season,updating the WRU’s central database as this informationis completed.

In addition, the system has been designed to allow multipleusers from one Club, therefore removing the focus fromthe Secretary having to undertake the complete task.

The first season of the online submission process showeda considerable rise in the number of submissions by thedeadline date, with over 90% of the 217 Clubs providingtheir completed data by the 31 May 2011.

Support for the Clubs using the system was given by boththe WRU Compliance and IT Departments, withrepresentatives undertaking a series of presentations at anumber of District meetings, and providing training daysat the Millennium Stadium. In addition, each Club receiveda User Guide and a telephone support line was put inplace.

The system has also provided the opportunity forCommunity Managers and their teams to verify theinformation provided by the Clubs utilising a link to thenew online audit system. This, and the overall positivereception to the system from all users, has resulted in theWRU having an up to date picture of the CommunityGame, allowing the opportunity to see the areas thatrequire development and focus in the future.

During the year, statistics were gathered from 217 clubswithin divisions one to five which qualify for the range offunding related to the achievement of set criteria.

Most clubs submitted data to the WRU relating to teamnumbers which means an accurate reflection of the levelof team activity within the core community sector of theWelsh game can now be achieved.

Taibach v Morriston in Port Talbot

YE11 was the first year of U7’s rugby in Wales and a total of 95 teams were registered throughout the period.


Operating and financial reviewCommunity rugby (continued)

0

20

40

60

80

100

Senior Side Only

Statistics based on information declared by WRU Member Clubs in Divisions 1-5 as part of the Development Grant submission process

Senior Side +2 Senior Side +2-5 Senior Side +6-9 Senior Side +10 or more

Number of Teams being run by WRU Member Clubs: Division 1-5

2008/09 2009/10 2010/11

0

50

100

150

200

Under 8s Under 9s Under 10s Under 11s Under 12s Under 13s Under 14s Under 15s Under 16s Youth Senior 2nds

Statistics based on information declared by WRU Member Clubs in Divisions 1-5 as part of the Development Grant submission process

Number of Active Teams being run by WRU Member Clubs: Division 1-5

2008/09 2009/10 2010/11


This growth within the game in Wales is also reflected inthe number of volunteers now active within Welsh rugby.

The statistics held by the WRU range across match officials,coaches, club coach co-ordinators, safeguarding officersand qualified first aiders. The figures show that more than3,000 active volunteers operate within these categories.

There is no doubt that the number of volunteers involvedin all aspects of the game in Wales is vastly enhanced fromthe levels expressed in these official figures.

Volunteers funded through theWRU Development Grant Season 2010/11:

WRU Member Clubs (Division 1-5)

Another boost to the grassroots game was delivered inYE11 through the distribution of equipment ordered viathe Participation Points Project. This scheme involvedmeasuring clubs against existing criteria and awardingpoints which could be exchanged for rugby equipment.More than £1m was allocated to the project from Groupfunds and during the year equipment was delivered to 227clubs throughout Wales.

Within community rugby the WRU actively seek to identifystrategies and projects which help develop thesustainability of the club as the hub. For that reason,initiatives are often linked to set criteria which are designedto improve clubs and make them fit for purpose.

One such scheme involved the WRU aligning with St JohnWales to teach lifesaving first aid skills to rugby volunteers.A project was launched to invite volunteers from clubs toreceive first aid training through specially designed andorganised courses. This was fully integrated with the aimsof the WRU because clubs are rewarded under the grantfunding criteria for the number of first aiders they have.The first course took place at the St John Training Centrein Cardiff during December 2010.

The visibility and volume of activity related to thecommunity game achieved wider recognition in YE11when the WRU was asked to sponsor the volunteer awardwithin the Leading Wales Awards scheme. This schemerecognises leadership across a range of disciplines andhighlights exceptional individual examples throughoutWales. The WRU was asked to participate because of the

Volunteers prepare the changing rooms on match day

Referees

Coaches

Club Coach Co-ordinators

Safeguarding Officers

1st Aiders

938

803176

186

772

recognition of the impact the game makes in helpingdevelop leadership skills amongst volunteers throughoutthe amateur game.

Commercial

The extension of the SWALEC agreement sees therelationship go from strength to strength and furtherdeveloped their relationship across the community gamethrough a series of initiatives and aligned projects.

The most high profile activity remains SWALEC’ssponsorship of league rugby alongside the re-emergenceof the SWALEC Cup and the associated plate and bowlcompetitions.

The wider impact was reflected in the success of the JuniorStars project for young rugby players, with the reward ofexcellence in sporting prowess and teamwork being atraining session with the national team at the WRUNational Centre of Excellence. The combined pursuit ofdevelopment and awareness of the community game haslead to a very successful partnership.

There were also community awards for clubs which provedtheir worth as hubs of local communities, with the mainprize being a visit from a national squad member whohosted team training.

Similarly, the commercial relationship with Under Armourled to the successful International Combines sessionswhere youngsters from the grassroots game in Wales were

tested on an elite global measuring scheme, for a varietyof performance related attributes, to help identify somepotential stars of the future.

It is worthy of note, that across the game in Wales smallbusinesses and commercial operations continued tosupport the community game on a club by club basis. Thisactivity underpins the sustainability and development ofsome clubs and was achieved in YE11 against achallenging financial backdrop.

SWALEC National Leagues

Ebbw Vale did all they could to make an immediate returnto the Principality by winning the Division 1 East title by awafer-thin margin from Gwent rivals Newbridge. Bothsides ended with 89 points, but Ebbw Vale took the titlethanks to their 19 victories from 22 games.

Newbridge lost one more, although they were one of onlythree teams to defeat the champions, 27-17 at home onthe second weekend of the season. Ebbw Vale qualifiedfor the Play-Offs, but were beaten 16-13 by GlamorganWanderers in the semi-finals.

Division 1 West champions Bridgend then took up thecudgel for the SWALEC League clubs and beat thePremiership outfit 38-19 in the Play-Off final to reclaimtheir place in the top flight and condemn the Wanderersto relegation.

Coached by former Ospreys back row man Steve Tandy,Bridgend secured 96 points in a season that saw themdraw 13-13 against Narbeth and be beaten only once, 32-30 by arch-rivals Bridgend Athletic.

Caernafon won the Division 1 North title by a clear 20points, losing only one of their 18 games at Bethesda,while Bala pipped Llandiloes by one point to win theSecond Division crown and return to the top flight in theNorth.

Further down the SWALEC League ladder, Mountain Ashended the season in Division 2 East with a perfect recordof 22 wins, although second placed Tredegar managed toscore four more tries than them in the campaign with 107.

Crymych won the Division 3 West title with a 100%record, as did Maesteg Quins in Division 4 South West.Calidcot were unbeaten in Division 5 East, drawing oneand winning the rest of their 20 games, while Senghenyddtook the Division 4 East crown after losing only one of their22 matches.



Cardiff v Swansea Varsity match


Furnace United ran in 156 tries to ensure they took theDivision 5 West title despite losing to Burry Port on the lastday of the season. Their 22-5 defeat was one of only threeall season and meant Burry Port finished on the samenumber of points, but were still condemned to secondplace.

Glynneath lost only once in gaining promotion fromDivision 3 South-West, while Ammanford lost twice inclinching the Division 2 West title with 96 points and acentury of tries.

SWALEC Leagues

20010-11

SWALEC NATIONAL LEAGUE DIVISIONALCHAMPIONS

One East Ebbw Vale

One West Bridgend

Two East Mountain Ash

Two West Ammanford

Three East Rhymney

Three West Crymych

Three South East Abercynon

Three South West Glynneath

Four East Senghenydd

Four West Tenby United

Four South East Rhiwbina

Four South West Maesteg Quins

Five East Caldicot

Five West Furnace United

Five South East Penygraig

Five South West Trebanos

Five South Central Resolven

Six East Abertysswg Falcons

Six West Nantgaredig

Six South East Hafodyrynys

Six Central Clwb Rygbi

One North Caernarfon

Two North Bala

SWALEC PLATE Quarter-finals:

Ammanford 87 – 20 Risca

Glynneath 31 – 13 Aberdare

Gorseinon 37 – 22 Tylorstown

Tondu 76 – 15 Pontypool United

Semi-finals:

Gorseinon 26 – 58 Ammanford

Tondu 3 – 16 Glynneath

Final:

Ammanford 35 – 13 Glynneath

SWALEC BOWL Quarter-finals:

Amman United 6 – 13 Porth Quins

Cardiff Medicals 14 – 16 Vardre

Senghenydd 69 – 10 Monmouth

Tonyrefail 15 – 27 Maesteg Quins

Semi-finals:

Maesteg Quins 31 – 30 Porth

Vardre 10 – 34 Senghenydd

Final:

Senghenydd 28 – 18 Maesteg Quins

Volunteers at work at Ynysddu

Coach development

There was a steady intake of candidates across the rangeof formal coaching courses held by the WRU.

The tag courses attracted 531 individuals, 662 attendedLevel One courses, 129 Level 2 and 15 attended the LevelThree courses which began operating late in YE11.

To aid the development of delivery on these courses, acoach educator’s course was run with twelve candidatesattending. These coach educators will be deployedthroughout Wales to assist on future courses.

In order to try and promote the work of our volunteercoaches the WRU produced a DVD to accompany the LevelOne course. It features the Wales RBS 6 Nations CaptainMatthew Rees praising the work of junior coaches andhighlights how vital the coaches’ contribution is to Welshrugby.

A leadership course was also introduced which offers anintroduction into coaching, planning and event organising.The course also explains details of how to coach childrenin local primary schools.

As part of the on-going commitment to developing a safergame, the WRU helped the IRB upgrade the Rugby Readycourse. To aid the production of the associated DVD, theWRU assisted the IRB with the use of the WRU NationalCentre of Excellence indoor facilities to film all rugbyaspects of the Rugby Ready course utilising players fromNeath and Port Talbot College.

The implementation of the new player pathway wasdelivered via a new pathway booklet. A DVD was created

during the year to assist the roll out of the changes duringthe off season. This work led to the review of law changeswhich eventually resulted in the ‘Mini’s to Millennium’concept.

As part of the commitment to help develop emergingnations, the WRU have sent coach educators to variousparts of Europe to deliver IRB coaching courses. Thesecoach educators have been in Serbia, Germany,Luxembourg, Ukraine and Romania as these are thecountries to which the WRU has made a commitment tohelp and develop.

Match Officials

More than 600 people attended Level 1 Referee coursesconducted around Wales throughout the year whichsignifies a healthy new influx of match officials to thesystem in Wales.

Bad weather again served to disrupt fixture scheduleswhich caused major logistical problems in completing allleague matches in time for the season’s close.

All WRU match officials, advisors and RegionalAppointments Officers must accept the WRU’s gratitudefor the heavy workload achieved throughout the year.

Again through the season referee abuse featured as anundercurrent of the WRU’s activity and this will not betolerated either operationally or as part of the Welsh rugbyculture. The WRU operates under the banner of No Ref,No Game and that principle has to be recognised at alllevels of the game.



Coaching youngsters in North Wales


The Millennium Stadium maintained its internationalstanding as a prominent multi-events venue. Leading witha programme of international and European rugby thestadium continues to attract a range of diverseentertainment events including concerts, motor sport andexhibitions in line with the commitment to welcome theWorld to Wales.

This year’s events included Six Nations rugby againstEngland and Ireland, the Autumn Series against Australia,South Africa, Fiji and New Zealand and a summer fixturebetween Wales and the Barbarians. For the sixth time inthe competition’s 16 year history the stadium hosted thefinal of the Heineken Cup between Leinster andNorthampton which resulted in an economic impact onCardiff in excess of £24m. Cardiff has become the premierhost city for this event with more cup finals being held atCardiff than any other host city.

Underpinning the premier fixtures, the finals of the WRUdomestic competitions were showcased at the MillenniumStadium including the SWALEC Cup, Plate and Bowl andyouth and schoolboys’ finals. The stadium also hosted the15th Anniversary Varsity Match between Swansea andCardiff Universities with its success, as a crowd-pleaser andTV attraction live on S4C, leading to proposals to invite theplayers back as a regular event in the Welsh sportingcalendar.

Rugby League returned to the Millennium Stadium thisyear following a two year visit of the Millennium MagicWeekend to Edinburgh. By popular demand from theleague supporters, the weekend extravaganza witnessedall 14 Super Clubs competing in seven games played overtwo days.

SJM, one of the country’s top concert promoters, broughttwo consecutive appearances by Take That to the stadium


Operating and financial reviewStadium

Katherine Jenkins, Shirley Bassey and Catherine Zeta Jones at the Ryder Cup concert in the Millennium Stadium


performing to over 126,000 spectators, confirming thestadium’s status as a European premier rock and concertvenue.

Motor sport figured prominently in the summerprogramme with the British Speedway Grand Prix andMonster Jam visiting the stadium. This year was theeleventh consecutive appearance of the Speedway GrandPrix in Cardiff as part of the European Grand Prix circuit.

The stadium demonstrated its versatility as a multi-eventvenue in hosting the Ryder Cup Welcome to WalesConcert. Utilising the stadium acoustic drape system thestadium was divided in half to accommodate a formaldinner for 1,100 guests on one side followed by a concerton the other. An audience of 13,500 witnessedperformances by Catherine Zeta Jones, Shirley Bassey,Katherine Jenkins and Only Men Aloud. This curtain raisingevent for the Ryder Cup Golf competition was broadcastto a worldwide audience.


Operating and financial reviewStadium (continued)

The Saturdays perform at the Wales v Fiji match

Millennium Magic




The stadium maintained its commitment to supportingcommunity and charitable organisations in Wales with 16community event days being held. Organisations such asthe Welsh Government Education Skills Initiative, DiabetesUK, Anti-Racism in Sport, Cancer Charities and the NSPCCtook advantage of this initiative to promote their aims andobjectives.

For each ticket sold for all events at the stadium a levy ispaid to the Millennium Stadium Charitable Trust, thepurpose of which is to provide financial support tocommunities and charities in Wales. This year almost£0.4m was donated to the trust, which has now receivedover £4.5m since the stadium was opened in 1999.

Continued interest in the Millennium Stadium as an iconicvenue is evidenced by the increasing attendances forstadium tours. The route undertaken by the tour and itscontent was revised this year and saw some 45,000participate in the one hour visit programme.

Working with the Former International Players Associationa plan was devised to refurbish the former WREX barwithin the stadium. The new facility will provide state ofthe art restaurant and bar facilities, administered by theWRU, for all international players and was reopened duringthe World Cup warm up games.

The Millennium Stadium turned blue in support of Diabetes UK Cymru


In another move to develop the economic potential of thevenue, a new Official Hospitality Operator scheme wasintroduced to police the unofficial hospitality market andensure that income generated by WRU events is retainedfor the development of rugby around Wales. The schemelicenses official hospitality operators and therefore,individuals or groups who secure match tickets fromunofficial sources are not guaranteed entry to the stadium.This licensed structure will also safeguard the rights ofhospitality customers to ensure standards are maintainedgoing forward.

Behind the scenes during non-event periods the stadiumstaff have completed a comprehensive maintenance andworks programme. Maintaining a safe and secure venuewith facilities and services to meet modern spectatordemands remains a key priority.

Supported by the Welsh Government, a £3.0m audiovisual project, the first of its kind in Europe, was completedduring the reporting year. The scheme involved theinstallation of 470 new flat-screens throughout thestadium and the replacement of the two screens in thenorth and south stands; these are all linked to a televisionbroadcast quality studio that enables a stadium production

team to film, edit, and present images and sound contentto any or all parts of the stadium, The new technology,designed by American world leading company Cisco,provides an in-house live television broadcast facility whichwill enhance both the spectator experience and improveour commercial advertising opportunities.

Katherine Jenkins performs at the Ryder Cup Concert

Wales v England Euro 2012 qualifier



In 2008, as part of the WRU Group Strategic Plan it wasannounced that the stadium would develop and deliver aproject to become a stadium with recognised accreditationin the field of sustainable management, to evidence itscommitment to managing its social, economic andenvironmental impact.

In pursuit of this goal, the stadium has sought to achievethe award of BSI 8901 for Sustainable ManagementSystems for Events. Final external audits have beencompleted and it is anticipated that the announcement ofthe award is imminent. Success in this field will see theMillennium Stadium become the first stadium in the UK toreach this sustainability standard.

Speedway at the Millennium Stadium supported by the Welsh Government

Stadium staff mark BS 8901


The key performance indicators (KPIs) of the Groupare:

Rugby performance

• Success of the National Squad

• Performance of the Group’s four Regions

• Performance of the Age-Grade teams

Participation in rugby

• Development of the elite player talent within Wales

• Participation levels in Community Rugby, includingwomen and junior numbers

Financial performance

• Generation of sufficient earnings before interest,depreciation, allocations and exceptional items(“EBITDA”), over the medium term, to fulfil theGroup’s objectives and obligations

• Number of and attendances at international rugbymatches, featuring the National Squad, held at theMillennium Stadium

• Utilisation of the Millennium Stadium for non-National Squad events

• Provision of consistent and affordable levels offunding to clubs and affiliated organisations toallow them to implement long term plans to fulfiltheir objectives

Business risk

The Group feels that the principal risks facing the businessinclude:

• The performance of the National Squad

• The identification, nurturing, development andretention of Welsh players

• The identification, nurturing, development andretention of coaches and officials alongsideappropriate elite systems and structures

• The sustainability of the four Regions

• The extent of involvement and enjoyment inrecreational, grass roots, community rugby

• The securing of non-National Squad related eventsand activities at the Millennium Stadium

• The alignment of commercial strategies to deliverthe rugby and stadium strategies

• The provision of adequate banking facilities

• The physical security and insurance of our mainassets, primarily the Millennium Stadium; and

• The implementation of appropriate business systemsand controls covering financial management,commercial operations and other key business areas

All the above risks are regularly assessed by the ExecutiveBoard and actions are taken to mitigate any issues thatarise.


Operating and financial reviewKey performance indicators (“KPIs”) and business risks

WRU Referees Academy


The Directors present their report and the Group andCompany’s audited financial statements for the year ended30 June 2011.

Principal activities and review of the business

The principal activity of the Group is to promote, foster,encourage, control and improve rugby football throughoutWales. This activity and the likely future development ofthe Group are reviewed in the Chairman’s Statement, theGroup Chief Executive’s Summary and the Operating andFinancial Review.

Results for the period

The results for the period are set out in the consolidatedprofit and loss account on page 56 and show a profitbefore tax of £2.7m (2010: £0.8m loss).

Financial risk factors

The Group is exposed to financial risks from interestbearing assets and liabilities and interests in overseascompanies. These expose the Group to financial risksincluding foreign currency risk, interest rate risk, credit riskand liquidity risk.

• Foreign exchange risk

Where applicable, the Group mitigates foreignexchange risk with the use of forward contracts. Asat 30 June 2011, the Group has no material foreignexchange risk (2010: nil).

• Interest rate risk

The Group has interest bearing liabilities. As shownin Note 14, the Group’s policy is to part hedgeagainst any interest risk on liabilities by usingderivative instruments to effectively hedge theinterest rate risk. The Group has interest bearingassets which are invested at differing interest rates;these interest rates are fixed at the outset of theinvestment.

• Credit risk

The Group has no significant concentration of creditrisk. The Group has implemented policies thatrequire appropriate credit checks on potential creditcustomers before sales commence. Interest bearingassets are only invested with financial institutionsthat have excellent credit ratings.

• Liquidity risk

The Group maintains a balance between continuityof funding and flexibility. As at 30 June 2011, only22% (2010: 15%) of the borrowings were due toexpire within five years. On 2 July 2010 the Grouprestructured its debt facilities; details of therestructure are shown in Note 13.

Fixed assets

The Millennium Stadium, recorded at a carrying value inthe financial statements of some £98m (2010: £98m) is aunique asset. The asset is recorded at historical cost anddue to the unique nature of the asset an alternative usevaluation is not considered appropriate. If the MillenniumStadium was valued at replacement cost the carrying valuerecorded in the financial statements would be in excess of£250m.

Directors

The Directors who held office during the period and up tothe date of signing the financial statements are noted onpage 81.

Donations

The Group’s primary charitable donation was £61,000(2010: £114,000) to the Welsh Rugby Charitable Trust.This trust, which is independent from the Group, was setup to provide support to players who were injured whilstplaying rugby in Wales. There were no political donations(2010: £nil).

Policy on payment to creditors

The Group’s policy, concerning the payment of themajority of its trade creditors, is to:

• set the terms of payment with those suppliers whenagreeing the terms of each transaction

• ensure that those suppliers are made aware of theterms of payment by inclusion of the relevant termsin contracts

• pay in accordance with its contractual and otherlegal obligations.

Directors’ reportfor the year ended 30 June 2011

Gareth Williams, Company Secretary

Corporate social responsibility

The Group recognises its responsibility to the communitieswhich are affected by its businesses and continuallyreviews its policies with regard to social, ethical andenvironmental matters. Any matters in any of thesecategories which may materially affect the business of theGroup are reviewed periodically by the Board.

Employment of disabled persons

The Group’s policy for the employment of disabled personsgives full and fair consideration to all applications foremployment made by such persons, having regard to theiraptitudes and abilities and to the Group’s operationalrequirements. Once employed, a career plan is developedso as to ensure suitable opportunities for each disabledperson. Arrangements are made, where possible, forretraining employees who become disabled, to enablethem to perform work identified as appropriate to theiraptitudes and abilities in line with the Group’s operationalrequirements.

Employee involvement

During the period, regular consultations and briefings tookplace with employees to increase their knowledge andunderstanding of the Group’s performance and thefinancial and economic factors which affect it, and toenable the Group to take into account the views of theemployees when making decisions likely to affectemployees’ interests. The interests of employees in thedefined benefit pension schemes were represented in theperiod by the trustees of those schemes.

Going concern

The Directors believe that the Company and the Grouphave adequate resources to continue in operationalexistence for the foreseeable future and it thereforecontinues to adopt the going concern basis in preparingthe financial statements.

Statement of directors’ responsibilities

The Directors are responsible for preparing the AnnualReport and the financial statements in accordance withapplicable law and regulations.

Company law requires the Directors to prepare financialstatements for each financial period. Under that law theDirectors have prepared the Group and Company financialstatements in accordance with United Kingdom GenerallyAccepted Accounting Practice (UK Accounting Standardsand applicable law). Under company law the Directorsmust not approve the financial statements unless they aresatisfied that they give a true and fair view of the state ofaffairs of the Group and the Company and of the profit orloss of the Group for that period. In preparing thesefinancial statements, the Directors are required to:

• select suitable accounting policies and then applythem consistently;

• make judgements and accounting estimates thatare reasonable and prudent;

• state whether applicable UK Accounting Standardshave been followed, subject to any materialdepartures disclosed and explained in the financialstatements; and


Directors’ reportfor the year ended 30 June 2011 (continued)

Dennis Gethin, Joe Lydon and First Minister Carwyn Jones at Parc Eirias


• prepare the financial statements on the goingconcern basis unless it is inappropriate to presumethat the Company will continue in business.

The Directors are responsible for keeping adequateaccounting records that are sufficient to show and explainthe Company’s and Group’s transactions and disclose withreasonable accuracy at any time the financial position ofthe Company and the Group and enable them to ensurethat the financial statements comply with the CompaniesAct 2006. They are also responsible for safeguarding theassets of the Company and the Group and hence fortaking reasonable steps for the prevention and detectionof fraud and other irregularities.

The Directors are responsible for the maintenance andintegrity of the Company’s website. Legislation in theUnited Kingdom governing the preparation anddissemination of financial statements may differ fromlegislation in other jurisdictions.

Disclosure of information to auditors

So far as the Directors are aware, there is no relevant auditinformation of which the Company’s auditors are unaware

and the Directors have taken all the steps necessary tomake themselves aware of any relevant audit informationand to convey that information to the Company’s auditors.

Independent auditors

PricewaterhouseCoopers LLP have indicated theirwillingness to continue in office and a resolution toreappoint them will be proposed at the forthcomingAnnual General Meeting.

By Order of the Board

Gareth WilliamsCompany Secretary22 September 2011

Wales Women play England in the Six Nations


Consolidated profit and loss accountfor the year ended 30 June 2011

13 monthsto 30 June

Note 2011 2010£’000 £’000

Turnover 2 (a) 54,254 58,492

Administrative expenses 2 (b) (50,501) (54,373)

Operating profit before depreciation, 26,173 27,641exceptional items and allocations to affiliated organisations (“EBITDA”)Allocations to affiliated organisations 2 (d) (19,281) (19,964)Exceptional items 4 - (22)Depreciation (net of grant release) 4 (3,139) (3,536)

Operating profit 3,753 4,119

Financing costs:- Interest payable and similar charges 3 (1,015) (3,117)- Interest receivable and similar income 3 128 1- Fair value losses on derivative financial instruments 3 (161) (1,762)

Profit/(loss) on ordinary activities before tax 2,705 (759)

Tax on profit/(loss) on ordinary activities 6 (789) 33

Profit/(loss) for the financial period 18 1,916 (726)

The turnover and operating profit shown above are derived from continuing operations. There are no recognised gains and losses otherthan those shown above and the net actuarial loss on the pension scheme as disclosed in the consolidated statement of total recognisedgains and losses below.

Consolidated statement of total recognised gains and lossesfor the year ended 30 June 2011

13 monthsto 30 June

2011 2010£’000 £’000

Profit/(loss) for the financial period 1,916 (726)

Actuarial gain/(loss) on pension scheme 428 (512)Movement in deferred tax on pension scheme (120) 147Net effect of pension schemes 308 (365)

Total gains/(losses) recognised in the period 2,224 (1,091)


Balance sheetsas at 30 June 2011

2011 2010 2011 2010Group Group Company Company

Note £’000 £’000 £’000 £’000

Fixed assetsTangible assets 8 140,338 141,421 38,614 38,819Investments 9 - - 60 60

140,338 141,421 38,674 38,879

Current assetsStock 10 318 61 - -Financial Assets- Derivative financial asset 14 51 212 51 -- Debtors 11 3,568 5,872 68,909 26,871- Cash and cash equivalents 12 382 1,000 309 941

4,319 7,145 69,269 27,812

Current liabilitiesCreditors – amounts falling due within one year 13 (23,944) (21,430) (18,962) (12,800)Net current (liabilities)/assets (19,625) (14,285) 50,307 15,012

Total assets less current liabilities 120,713 127,136 88,981 53,891

Creditors – amounts falling due after more 13 (68,410) (77,421) (68,059) (37,325)than one year

Accruals and deferred income 15 (43,001) (43,029) - -

Provisions for liabilities and charges 16 (4,023) (3,323) - -

Net assets excluding pension liabilities 5,279 3,363 20,922 16,566

Pension liabilities 21 - (308) - (308)

Net assets including pension liabilities 5,279 3,055 20,922 16,258

Capital and reservesOther reserves 18 2,314 2,314 2,610 2,610Profit and loss account 18 2,965 741 18,312 13,648Capital employed 5,279 3,055 20,922 16,258

These financial statements were approved by the Board of Directors on 22 September 2011 and signed on its behalf by:

David Pickering Roger LewisChairman Group Chief Executive OfficerThe notes on pages 59 to 79 form an integral part of these financial statements.

The Welsh Rugby Union LimitedCompany Number 3419514

13 months 13 monthsto 30 June to 30 June

2011 2011 2010 2010Note £’000 £’000 £’000 £’000

Net cash inflow from operating activities 22 9,107 9,602

Returns on investments and servicing of financeInterest received 128 1Interest paid (1,098) (3,136)Realised loss on derivative financial instrument - (5,033)Payments to acquire new derivative instruments - (212)Interest element of hire purchase repayments - (46)Net cash outflow from returns on investments (970) (8,426)and servicing of finance

Taxation (64) -

Capital expenditure and financial investmentPurchase of tangible fixed assets (3,750) (2,768)Grant repaid (100) (1,100)Grant received 1,766 539Net cash outflow for capital expenditure (2,084) (3,329)and financial investment

FinancingDrawdown of bank loans 3,500 1,500Repayment of bank loans (10,044) (2,309)Debenture issue 236 -Capital element of hire purchase repayments (299) (208)

Net cash outflow in respect of financing (6,607) (1,017)

Decrease in net cash in the period 23 (618) (3,170)

The notes on pages 59 to 79 form an integral part of these financial statements.


Consolidated cash flow statementfor the year ended 30 June 2011


1. Accounting policies

The Group’s financial statements are prepared on the goingconcern basis, under the historical cost convention, excludingadjustments to historical cost attributable to fair valuemovements, in accordance with the Companies Act 2006 andapplicable accounting standards in the United Kingdom. TheGroup’s accounting policies, which have been appliedconsistently, are as set out below.

a. Basis of consolidation

The consolidated financial statements incorporate the financialstatements of The Welsh Rugby Union Limited and itssubsidiaries, Millennium Stadium plc, WRU Supporters ClubLimited, WRU National Centre of Excellence Limited and WRUDebentures Limited, all of which are made up to 30 June 2011and prepared using consistent accounting policies. All intergrouptransactions are eliminated on consolidation.

b. Turnover

Turnover represents amounts invoiced, excluding value added tax,in respect of the sale of goods and services. Ticket income, saleof hospitality packages, competition income and other eventincome are recognised as revenue when the related event isstaged. Revenue determined by commercial contracts, whichmakes up the majority of broadcasting revenue, sponsorship androyalty revenue and lease of hospitality boxes is recognised basedon the relevant contractual terms. Where consideration isreceived in kind, income and expenditure are grossed up on thebasis of arms’ length commercial rates.

c. Exceptional Items

In order to improve the understanding of the financialstatements, the Directors have identified separately, on the faceof the profit and loss account, those items of income and chargewhich by their size, nature and/or incidence are exceptional tothe financial statements for the period. These are shown asexceptional within the categories of expenditure to which theyrelate.

d. Tangible fixed assets

Tangible fixed assets are stated at historic cost less accumulateddepreciation. Cost includes the original purchase price of theasset and the costs attributable to bringing the asset to itsworking condition for its intended use.

The tangible fixed assets of the Group, excluding land, aredepreciated on a straight line basis calculated to write down theircost to estimated residual values over their estimated usefuleconomic lives as follows:

Buildings Up to 50 years

Fixtures and fittings Up to 5 years

Plant and machinery Up to 10 years

Leasehold buildings are depreciated over the lower of 50 yearsand the remaining life of the lease.

e. Investments in subsidiaries

Investments in subsidiaries are included at cost less any provisionfor impairment.

f. Trade investments

Trade investments are valued at cost less any provision forimpairment.

g. Leased assets

Where the Group enters into a lease which entails takingsubstantially all the risks and rewards of an asset, the lease istreated as a “hire purchase arrangement”. The present value ofthe minimum lease payments is recorded in the balance sheet asa tangible fixed asset. Future instalments under such leases, netof finance charges, are included within creditors. Rentals payableare apportioned between the finance element, which is chargedto the profit and loss account, and the capital element whichreduces the outstanding hire purchase liability.

All other leases are accounted for as “operating leases” and therentals charged to the profit and loss account on a straight linebasis over the life of the lease.

h. Stock

Stock is valued at the lower of cost and net realisable value andconsists of finished goods purchased for resale. Where necessary,provision is made for obsolete, slow moving and defective stock.Cost is determined on a first in first out basis.

i. Deferred tax

Deferred tax is provided in full on all material timing differences.Deferred tax assets are recognised where their recovery isconsidered more likely than not. Deferred tax assets and liabilitieshave not been discounted.

j. Pension costs

The Group operates defined contribution schemes and a definedbenefit pension scheme.

The pension costs in respect of the defined contribution pensionschemes comprise contributions payable in respect of the period.

The assets of the defined benefit scheme are measured usingclosing bid-market rates. Pension scheme liabilities are measured

Notes to the financial statementsfor the year ended 30 June 2011

using the projected unit method and discounted at the currentrate of return on a high quality corporate bond of equivalent termand currency to the liability. The increase in the present value ofthe liabilities of the defined benefit scheme expected to arisefrom employee service in the period is charged to operatingprofit. The expected return on the scheme’s assets and theincrease during the period in the present value of the scheme’sliabilities, arising from the passage of time, are included in netinterest payable. Actuarial gains and losses are recognised in thestatement of total recognised gains and losses.

k. Grants

Grants receivable in respect of tangible fixed assets are creditedto the profit and loss account over the expected useful economiclives of the relevant assets to which they relate. Grants receivedbut not yet released to the profit and loss account are includedas deferred income in the balance sheet. Revenue grants arereleased to the profit and loss account in the same period as therelated expense.

l. Capitalisation of interest

Interest is capitalised on major development projects and capitalworks in progress where appropriate. Capitalisation ceases whensubstantially all the activities necessary to get the asset ready foruse are completed. Capitalised interest is amortised to the profitand loss account over the useful economic life of the asset towhich it relates.

m. Financial instruments

The derivative instruments utilised by the Group are interest rateswaps and foreign currency forward contracts. Derivatives areinitially accounted for and measured at fair value on the date a

derivative contract is entered into and subsequently measured atfair value based on market price data from relevantcounterparties. The gain or loss on re-measurement is taken tothe profit and loss account except where the derivative is adesignated cash flow hedging instrument. Whilst the Directorsare of the belief that these derivatives are commercially effectivehedges, the Group’s derivatives do not qualify for hedgeaccounting under FRS 26 in either 2011 or 2010. The instrumentsare carried at fair value with changes in fair value beingrecognised immediately in the profit and loss account.

n. Trade debtors

Trade debtors are recognised initially at fair value andsubsequently measured at amortised cost less provision forimpairment. They are first assessed individually for impairment,or collectively where the debtors are not individually significant.Where there is no objective evidence of impairment for anindividual debtor, it is included in a group of debtors with similarcredit risk characteristics and these are assessed collectively forimpairment based on their ageing. Movements in the provisionfor impairment are recorded in the profit and loss account.

o. Cash and cash equivalents

Cash and cash equivalents include highly liquid investments thatare readily convertible into known amounts of cash and whichare subject to an insignificant risk of change in value.


Notes to the financial statementsfor the year ended 30 June 2011 (continued)


2. Segmental information

As set out in the Directors’ report, the Group has only one business segment and all income is derived from activities within the UK.The information below is provided as additional information.

Business analysis

(a) Turnover

2011 2010Turnover is analysed as follows: £’000 £’000

Match income 30,543 34,150Competition income 9,111 9,240Commercial income 11,241 10,914Other event income 2,657 2,031Other income 702 2,157

54,254 58,492

Other event income represents amounts receivable in respect of staging fees and other similar income arising within the MillenniumStadium for events which are not promoted by the Company. Other income includes £0.1m (2010: £0.1m) of grants received from theSports Council of Wales matched by expenditure included in community rugby costs and £nil (2010: £1.7m) from the British & IrishLions.

(b) Total costs are as follows: 2011 2010£’000 £’000

Operational costs (see (c) below) 28,081 30,851Exceptional costs - 22Depreciation – net of grant release 3,139 3,274Accelerated depreciation (exceptional) - 262Allocations to affiliated organisations (see (d) below) 19,281 19,964

50,501 54,373

(c) Operational costs: 2011 2010£’000 £’000

Business & administration 5,587 6,428Direct 12,046 13,092Elite rugby 4,020 3,847Community rugby 1,921 2,081Stadium 4,507 5,403

28,081 30,851

(d) Allocations to affiliates 2011 2010£’000 £’000

These are analysed as follows:Regions – professional rugby 14,954 14,227Clubs – semi-professional rugby 1,210 1,233Clubs – community rugby & affiliates 3,117 4,504

19,281 19,964



3. Financing costs

2011 2010£’000 £’000

Interest payable and similar chargesInterest payable on bank and similar loans 842 2,500Amortisation of arrangement fees on bank loan - 62Interest on finance lease and hire purchase arrangements - 46Bank charges 173 210Charges arising on re-financing and new derivative instruments - 296Other finance charges in respect of pensions (see Note 21) - 3Total 1,015 3,117

Interest receivable and similar incomeShort term deposits 128 1Total 128 1

Fair value losses on derivative financial instrumentsInterest rate swaps - 644Interest rate cap 84 251Interest rate floor 77 867Total 161 1,762

Total net financing costs 1,048 4,878

Fair value losses on derivative financial instruments

Derivative financial instruments are held for economic hedging purposes although they do not qualify as accounting hedges under FRS26. Consequently, the Group’s derivative instruments are fair valued at each balance sheet date with the net loss or gain recognised inthe profit and loss account.

4. Profit/(loss) on ordinary activities before tax

Profit/(loss) on ordinary activities before tax is arrived at after charging/(crediting):2011 2010£’000 £’000

Depreciation on owned assets 4,833 4,877Depreciation on leased assets - 100Accelerated depreciation (exceptional) - 262Release of deferred income (grant release) (1,694) (1,703)Net charge to the profit and loss account 3,139 3,536Rental of land and buildings 319 238Trade debtors impairment 68 275

Exceptional items NotesLitigation costs (a) - 83Rebate from rates reassessment (b) - (154)Reduced provision for doubtful debts & similar adjustments (c) - (56)Reorganisation costs (d) - 149Total exceptional items - 22


4. Profit/(loss) on ordinary activities before tax (continued)

During the previous period, the Group incurred charges/received income that due to their size and incidence were considered“exceptional”. In order to assist in understanding the Group’s results and, in view of the materiality of the exceptional items to theprevious period’s results, the Directors believe that it is appropriate to show separately the operating profit of the Group beforeexceptional items on the face of the profit and loss account as additional information. Detailed commentary is shown below:

(a) The litigation costs in 2010 arose from ongoing disputes or disputes settled in the period.

(b) Following the 2005 rateable value assessment, the Group challenged the value ascribed to the Millennium Stadium. The Groupreceived notification during the previous period that this challenge had been successful. The revised assessment resulted inlower rates charges for the period 2005 to 2010. Refunds that were received in respect of overcharged rates for the period2005 to 2009 were treated as exceptional income.

(c) In 2009 the Group performed a detailed review of accounts receivable and liabilities and concluded that, inter alia, furtherprovisions were required as certain amounts were doubtful of recovery and certain liabilities were under accrued. During theperiod to June 2010 certain of these amounts considered doubtful in 2009 were recovered and the provisions were reversed.

(d) During the period to June 2010 the Group undertook a programme of restructuring. The costs for redundancies andcompensation for loss of office were identified as an exceptional cost.

During the period, the Group obtained the following services from the Group’s auditor:

2011 2010£’000 £’000

Fees payable to Company auditor for the audit of the parent company and consolidated accounts 26 25

Fees payable to the Company’s auditor for other services:The audit of the Company’s subsidiaries pursuant to legislation 23 20Taxation services 21 51Other services 60 53

5. Staff numbers and costs

Staff numbers 2011 2010 2011 2010Group Group Company Company

The average number of employees, including directorsin a service contract, during the period was:

Management and administration 55 53 33 32Direct 22 23 19 16Elite rugby 33 26 33 26Community rugby (including district development officers) 37 38 37 36Stadium 37 34 - -

184 174 122 110

The above staff numbers do not include any players representing national teams, stewards employed for events nor do they include thenon-executive directors of the Company. However, the staff numbers include 3 (2010: 4) (full time equivalents) District DevelopmentOfficers (“DDOs”) who are employees of various local authorities.

5. Staff numbers and costs (continued)

Staff costs 2011 2010 2011 2010Group Group Company Company£’000 £’000 £’000 £’000

The staff costs during the period were as follows:Wages and salaries 6,852 6,923 5,243 5,415Social security costs 650 705 502 545Pension income – defined benefit schemes - (242) - (242)Pension costs – defined contribution schemes 433 409 326 319

7,935 7,795 6,071 6,037

Included in the above costs are contributions amounting to £nil (2010: £0.1m) towards the DDOs.

In addition to the above amounts, £1.3m (2010: £1.5m) is paid as remuneration to the players whilst representing the National Squad.These costs are included in Direct costs within Operational costs (see Note 2 (c)).

Directors’ emoluments 2011 2010£’000 £’000

The Directors’ emoluments, during the period, were as follows:Aggregate emoluments 329 298Benefits 16 8Company contributions to defined contribution pension scheme 18 17

363 323

The emoluments above include £35,000 (2010: £38,000) payable to the Chairman. The Group received £18,000 (2010: £17,000) fromthird parties in respect of the above emoluments. There is one director (2010: one) accruing benefits under a defined contributionpension scheme. No directors (2010: none) are accruing benefits under a defined benefit pension scheme.

Emoluments of the highest paid director 2011 2010£’000 £’000

The emoluments of the highest paid director, during the period, were as follows:Aggregate emoluments 294 260Benefits 8 8Company contributions to defined contribution pension scheme 18 17

320 285

6. Tax on profit/(loss) on ordinary activities2011 2010£’000 £’000

(a) Analysis of charge in the period

Current taxUK corporation tax on result for the period 104 69Adjustment in respect of prior periods (15) 581Total current tax (Note 6(b)) 89 650

Deferred taxOrigination and reversal of timing differences 937 (750)Pension contribution relief in excess of pension cost charge - 67Changes in tax rates and laws (237) -Total deferred tax 700 (683)

Total tax charge/(credit) on profit/(loss) on ordinary activities 789 (33)




6. Tax on profit/(loss) on ordinary activities (continued)

(b) Factors affecting the current tax charge for the periodThe current tax assessed for the period is different from the standard rate of corporation tax in the UK of 27.5% (2010: 28.0%). Thedifferences are explained below:

2011 2010£’000 £’000

Profit/(loss) on ordinary activities before tax 2,705 (759)

Profit/(loss) multiplied by standard rate of corporation tax in the UK of 27.5% (2010: 28.0%) 744 (212)

Effects of:Accelerated capital allowances and other timing differences (974) 218Permanent differences 334 130Pension contribution relief in excess of pension cost charge - (67)Adjustment in respect of prior periods (15) 581Current tax charge for period (Note 6(a)) 89 650

In addition to the changes in rates of corporation tax disclosed above, a number of further changes to the UK corporation tax systemwere announced in the March 2011 UK Budget Statement. Legislation to reduce the main rate of corporation tax from 26.0% to25.0% from 1 April 2012 is included in the Finance Act 2011 which was enacted on 19 July 2011. Further reductions to the main rateare proposed to reduce the rate by 1.0% per annum to 23.0% by 1 April 2014. These further changes had not been substantivelyenacted at the balance sheet date and, therefore, are not included in these financial statements.

The effect of the changes in the Finance Act 2011 would be to reduce the deferred tax liability provided at the balance sheet date byapproximately £155k. This £155k decrease in the deferred tax liability would increase profits by approximately £155k. This decrease inthe deferred tax liability is due to the reduction in the corporation tax rate from 26.0% to 25.0% with effect from 1 April 2012.

The proposed reductions of the main rate of corporation tax by 1.0% per year to 23.0% by 1 April 2014 are expected to be enactedseparately each year. The overall effect of the further changes from 25.0% to 23.0%, if these applied to the deferred tax balance atthe balance sheet date, would be to further reduce the deferred tax liability by an additional £310k (being £155k recognised in 2013and £155k recognised in 2014).

7. Profit of the Company

The Company has not presented its own profit and loss account, as permitted by section 408 of the Companies Act 2006. The profitbefore and after tax for the financial period in respect of the Company was £5.8m and £4.4m (2010: £5.4m and £3.9m) respectively.

8. Tangible fixed assets

Stadium Centre of Other Land Other Group CompanyExcellence buildings fixed assets Total Total

£’000 £’000 £’000 £’000 £’000 £’000 £’000CostAt 1 July 2010 135,152 2,411 1,806 37,629 5,047 182,045 40,506Additions 3,038 151 7 - 554 3,750 87Transfers 116 - (116) - - - (116)Disposals - - (10) - (922) (932) (894)At 30 June 2011 138,306 2,562 1,687 37,629 4,679 184,863 39,583

Accumulated depreciationAt 1 July 2010 36,894 224 753 - 2,753 40,624 1,687Charge for the period 3,881 227 105 - 620 4,833 176Disposals - - (10) - (922) (932) (894)At 30 June 2011 40,775 451 848 - 2,451 44,525 969

Net book valueAt 30 June 2011 97,531 2,111 839 37,629 2,228 140,338 38,614

At 30 June 2010 98,258 2,187 1,053 37,629 2,294 141,421 38,819

Included in the cost of the stadium are cumulative capitalised interest costs of £4.6m (2010: £4.6m). The depreciation charge includesan amount of £0.1m (2010: £0.1m) representing the depreciation of interest previously capitalised.

All the Land and Other buildings are held under a freehold interest. Elements of the Stadium are subject to a 999 year lease and theCentre of Excellence is subject to a 99 year lease.

During the year, the Group exercised its option to settle all outstanding hire purchase arrangements early. The net book value of theGroup’s tangible fixed assets include £nil (2010: £0.5m) (Company: £nil (2010: £nil)) in respect of assets held under hire purchasearrangements. The depreciation charge on these assets amounted to £nil (2010: £0.1m) (Company: £nil (2010: £nil).

Other fixed assets comprise plant and machinery and fixtures and fittings. The tangible fixed assets of the Company predominantlyrelate to land as shown above.

9. Investments

The Group holds no material investments.

The Company held a £50,000 equity investment in Millennium Stadium plc and a £10,000 equity investment in WRU National Centreof Excellence Limited at both 30 June 2011 and 30 June 2010. Both investments are held at historical cost.

Subsidiary and other investments held directly by the Company and in which the Company has a beneficial interest, as at 30 June 2011and 30 June 2010 were:

Company Principal activity Country of % holding of incorporation ordinary shares

Millennium Stadium plc Stadia operation United Kingdom 100%

WRU Supporters Club Limited Marketing United Kingdom 100%

WRU National Centre of Excellence Limited Provision of training facilities United Kingdom 100%

WRU Debentures Limited Dormant United Kingdom 100%

Six Nations Rugby Limited Competition management Republic of Ireland 17%

European Rugby Cup Limited Competition management Republic of Ireland 17%

Celtic Rugby Limited Competition management Republic of Ireland 33%

British and Irish Lions Limited Overseas rugby tours Republic of Ireland 25%




9. Investments (continued)

Given the disposition of the other shareholdings, the Group’s inability to exercise significant influence over the investments above withless than 100% shareholdings and the immateriality of their net surpluses and net assets after receipt of income by the Group in theother investments above, the Directors do not believe that these investments fall to be treated as associate companies. Fixed assetsinvestments are stated at the lower of cost and valuation.

Cardiff County Council (“CCC”) own one share in Millennium Stadium plc; this share grants only certain rights and does not grantCCC any dividends nor any rights to amounts receivable upon winding up.

10. Stock

Group Group Company Company2011 2010 2011 2010£’000 £’000 £’000 £’000

Goods for resale 318 61 - -

11. Debtors

Amounts due within one year: Group Group Company Company2011 2010 2011 2010£’000 £’000 £’000 £’000

Trade debtors 2,211 2,703 473 1,313Loans due from Regions - 1,300 - 1,300Loans due from clubs 638 613 638 613Less: provision for impairment of receivables (823) (1,107) (731) (714)

2,026 3,509 380 2,512Prepayments and other debtors 1,520 2,341 1,127 840

3,546 5,850 1,507 3,352

Amounts due after more than one year:Amounts due from subsidiary undertakings - - 67,380 23,497Loans due from clubs 22 22 22 22

22 22 67,402 23,519

Total debtors 3,568 5,872 68,909 26,871

As a result of the refinancing undertaken on 2 July 2010, all bank loans that had previously been held by a subsidiary company,Millennium Stadium plc, were repaid. New loans were subsequently taken out by the Company (Note 13).

The amounts due from subsidiary undertakings are unsecured and have no fixed dates of repayment. An interest charge at equivalentrates to the bank loan arrangements is levied on outstanding amounts from subsidiary undertakings.

The carrying amount of debtors is a reasonable approximation of fair value and the carrying amounts of the Group’s debtors are alldenominated in UK Sterling (“GBP”).

As of 30 June 2011, trade debtors and loans due from clubs with a carrying value of £0.7m (2010: £1.2m) were impaired and providedfor. The amount of the provision was £0.8m as of 30 June 2011 (2010: £1.1m). The ageing of these debtors is as follows:

2011 2010£’000 £’000

3 to 6 months past due 127 29Over 6 months past due 606 1,175

733 1,204

11. Debtors (continued)

The debtors determined as individually impaired were amounts in excess of 3 months past due that were owed by various categoriesof customer. These debts have not been written off and the Group are pursing these amounts due.

Trade debtors that are less than three months past their due date are not considered impaired. As of 30 June 2011, trade debtors ofcarrying value of £0.6m (2010: £0.6m) were past their due date but not impaired. These are balances from a number of independentcustomers and the credit risk on these customers is assessed as low. The ageing of trade debtors that are past due but not impaired isthe following:

2011 2010£’000 £’000

Up to 3 months past due 521 3263 to 6 months past due 57 182Over 6 months past due 3 120

581 628

Movements on the provision for impairment of trade debtors are as follows:2011 2010£’000 £’000

At start of period (1,107) (1,044)Debtors written off during the period 352 212New amounts charged to profit and loss (68) (275)At end of period (823) (1,107)

12. Cash at bank and in hand


Cash balance at bank 382 1,000 309 941

13. Creditors

Amounts falling due within one year:Group Group Company Company

2011 2010 2011 2010£’000 £’000 £’000 £’000

Bank loans 6,094 3,466 6,094 -Amounts due under hire purchase arrangements - 199 - -Trade creditors 2,501 3,797 187 1,204Amounts due to subsidiary undertakings - - 62 62Corporation tax 4,184 4,159 3,972 3,947Other tax and social security 339 254 258 205Other creditors 258 266 258 266Accruals and deferred income 10,568 9,289 8,131 7,116

23,944 21,430 18,962 12,800

The amounts due to subsidiary undertakings are unsecured and have no fixed dates of repayment. An interest charge at equivalentrates to the bank loan arrangements is levied on outstanding amounts to subsidiary undertakings.




13. Creditors (continued)

Amounts falling due after more than one year:


Bank loans 30,498 39,670 30,498 -Amounts due under hire purchase arrangements - 100 - -Debentures 37,561 37,325 37,561 37,325Deferred income 326 326 - -

68,410 77,421 68,059 37,325

Maturity analysis:

Bank loans are due: Group Group Company Company2011 2010 2011 2010£’000 £’000 £’000 £’000

Within one year 6,094 3,466 6,094 -Between one and two years 2,364 2,014 2,364 -Between two and five years 7,500 6,130 7,500 -In more than five years 20,634 31,526 20,634 -

36,592 43,136 36,592 -

On 2 July 2010 the Group replaced its existing loan facilities with a revised arrangement. The £31.6m term loan held by a subsidiarycompany was repaid and immediately replaced with a new £25.0m facility in the Company. The Group also amended its revolvingcredit facility. The previous £10.0m facility held by a subsidiary company was replaced with a new £15.0m facility in the Company.

The Group’s term loan is repayable by fixed amounts per quarter, inclusive of interest and capital. The maturity analysis above is basedon an estimation of LIBOR by the Directors for the remaining term.

The Group has not, during the period, amended the agreed repayment profile but if the Directors’ estimate above is incorrect then thematurity analysis will change accordingly.

The principal terms of these loans are set out below:

Bank loans Interest and capital repayment terms 2011 2010£’000 £’000

Revolving credit facility LIBOR plus 1.50%, loan repayable on maturity date - 1,500Revolving credit facility LIBOR plus 2.00%, loan repayable on maturity date 3,500 -Term loan LIBOR plus 1.50%, loan repayable in instalments by 2033 23,092 31,636Tranche C Interest and capital is payable only in the event of default

or certain other defined events 10,000 10,00036,592 43,136

The principal terms of the bank loans shown above relate to the primary instrument and do not take account of derivative instruments.

Interest on amounts drawn on the revolving credit facility is referenced to the LIBOR rate applicable to the draw period. At 30 June2011 the revolving credit facility was drawn for a period of 1 month.

Interest on the term loan is re-priced every 3 months and referenced to 3 month LIBOR.

The carrying amounts of the Group’s borrowings approximate their value.

The carrying amounts of the Group’s borrowings are all denominated in GBP.

13. Creditors (continued)

Security provided on bank loans

Bank loans totalling £36.6m (2010: £43.1m) are secured by fixed and floating charges over the assets of the Company and certain ofits subsidiaries.

Borrowing facilities

The Group has £11.5m (2010: £8.5m) of undrawn committed borrowing facilities available at 30 June 2011 in respect of which allconditions precedent had been met at that date.

Obligations under hire purchase agreements are due:Group Group Company Company

2011 2010 2011 2010£’000 £’000 £’000 £’000

Within one year - 214 - -Between one and two years - 123 - -Between two and five years - - - -

- 337 - -Less: finance charges allocated to future periods - (38) - -

- 299 - -

During the year, the Group exercised its option to settle all outstanding hire purchase agreements. The hire purchase agreements abovein the prior period were secured on the assets for which this finance was used to acquire.

Debenture loans are repayable in: Group Group Company Company2011 2010 2011 2010£’000 £’000 £’000 £’000

2021 360 360 360 3602024 24,587 24,587 24,587 24,5872026 438 - 438 -2027 2,425 2,425 2,425 2,4252028 350 350 350 3502030 4,833 4,833 4,833 4,8332035 1,795 1,795 1,795 1,7952050 2,975 2,975 2,975 2,975

37,763 37,325 37,763 37,325Unamortised issue costs (202) - (202) -

37,561 37,325 37,561 37,325

All debenture loans are unsecured and bear no interest.

The Group undertook a new debenture issue during the year. These debentures will be repayable in 2026. The issue costs associatedwith the debenture issue are held as a deduction to the debenture balance. These issue costs will be amortised over the life of thedebentures.

Bank and debenture loans repayable by instalments wholly or partly after 5 years

Bank loans, with a total value of £36.6m (2010: £43.1m), are repayable wholly or partly from the balance sheet date by instalments.Of these amounts, £20.6m (2010: £31.5m) is repayable after five years.

Debenture loans, with a total value of £37.6m (2010: £37.3m), are repayable wholly from the balance sheet date. Of these amounts,£37.6m (2010: £37.3m) is repayable after five years.




14. Borrowings and financial instruments

Treasury policy

Treasury activity is focused on monitoring working capital, managing external funding and managing interest rate risk. Treasury activityis not a profit centre and the Group neither enters into transactions of a speculative nature nor trades in financial instruments. Treasuryrisk management policies are summarised below:

• Foreign exchange risk – where applicable, the Group mitigates foreign exchange risk with the use of forward contracts.As at 30 June 2011 the Group had no material foreign exchange risk (2010: nil).

• Interest rate risk – operations are financed through a mixture of bank borrowings, debenture loans and hire purchasearrangements. The Group currently borrows in floating rates of interest and uses derivative financial instruments to generatethe desired interest profile and to manage exposure to interest rate fluctuations. At 30 June 2011 some 60% (2010: 54%)of bank borrowing was subject to hedging arrangements.

• Liquidity risk – the Group’s policy is to maintain a balance between continuity of funding and flexibility. As at 30 June2011, 22% (2010: 15%) of borrowings were due to mature within five years, some 48% (2010: 70%) were due to maturebetween five years and fifteen years and some 30% (2010: 15%) were due to mature after fifteen years.

Financial instruments

As a result of the refinance undertaken on 2 July 2010, the financial instruments entered in to on 30 June 2010 and previously held ina subsidiary company were transferred to the Company at fair value. At 30 June 2011 the notional principal amounts of derivativesrelating to interest rate cap and collar agreements were £16.0m and are analysed as follows:

Instrument Principal Fair market Gain/(loss) Maturity datevalue

£’000 £’000 £’000

Interest rate cap 3.00% (effective from 30 June 2010) 16,000 16,000 - 30 June 2012Interest rate cap 3.75% (effective from 30 June 2012) 15,200 14,902 298 30 June 2018Interest rate floor 2.10% (effective from 30 June 2012) 15,200 15,247 (247) 30 June 2018

At 30 June 2010 the notional principal amounts of derivatives relating to interest rate cap and collar agreements were £18.0m andwere analysed as follows:

Instrument Principal Fair market Gain/(loss) Maturity datevalue

£’000 £’000 £’000

Interest rate cap 3.00% (effective from 30 June 2010) 18,000 17,981 19 30 June 2012Interest rate cap 3.75% (effective from 30 June 2012) 15,200 14,837 363 30 June 2018Interest rate floor 2.10% (effective from 30 June 2012) 15,200 15,370 (170) 30 June 2018

14. Borrowings and financial instruments (continued)

During the period to 30 June 2011, none of the Group’s derivatives qualified for hedge accounting under FRS 26 (2010: £nil). Theseinstruments are carried at fair value as analysed below:


Interest rate cap 298 382 298 -Interest rate floor (247) (170) (247) -Derivative financial asset 51 212 51 -

In accordance with FRS 26, ‘Financial instruments: Recognition and measurement’, the Group has reviewed all contracts for embeddedderivatives that are required to be separately accounted for if they do not meet certain requirements set out in the standard. The Grouphas no such embedded derivatives as per FRS 26.

15. Deferred income

Grants Group Group Company Company2011 2010 2011 2010£’000 £’000 £’000 £’000

At start of period 43,029 45,560 - -Grant received 1,766 272 - -Amounts repaid (100) (1,100) - -Released to the profit and loss account (1,694) (1,703) - -As at end of period 43,001 43,029 - -

During the period some £1.7m (2010: £1.7m) was released to the profit and loss account from the grant amount shown above.

Included within the grants amounts above is an amount received from the Big Lottery Fund (formerly the Millennium Commission)amounting to £31.9m (2010: £33.1m). This grant will be released to the profit and loss account as follows:


Within one year 1,196 1,196 - -Between one and two years 1,196 1,196 - -Between two and five years 3,588 3,588 - -In more than five years 25,967 27,163 - -

31,947 33,143 - -

In certain circumstances, the above grant can become repayable if the Group fails to meet the monitoring requirements of the grant.The Group is currently in full compliance with the monitoring requirements such that no monies are repayable under the terms of thegrant.




16. Provisions for liabilities and charges

Deferred tax

The movement on deferred tax is as follows:Group Group Company Company

2011 2010 2011 2010£’000 £’000 £’000 £’000

Balance at start of period 3,323 4,073 - -Released to the profit and loss account 700 (750) - -At end of period 4,023 3,323 - -

Deferred tax provided/(recognised) is made up as follows:Accelerated capital allowances 4,031 4,265 - -Other timing differences (8) (942) - -

4,023 3,323 - -

The Group is currently in discussions with HM Revenue & Customs regarding the extent to which the expenditure on the MillenniumStadium qualifies for tax relief. When these discussions are concluded, it is possible that an adjustment will be required to the provisionsfor corporation tax and deferred tax but it is not possible to quantify the likely amount and direction of this adjustment at this time.The Directors believe, based on external opinion, that the Group has meritorious arguments as regards the treatment adopted and thatno significant further liability is expected from that already reflected in the financial statements.

17. Company limited by guarantee

The liability of the members is limited. Every member of the Company undertakes to contribute such amounts as may be required (notexceeding £1) to the Company’s assets if it should be wound up while the member is a member, or within one year after a memberceases to be a member, for payment of the Company’s liabilities contracted before a member ceased to be a member. The number ofmembers is 251 (2010: 241).

18. ReservesProfit and loss Other reserves Total

account£’000 £’000 £’000

GroupAt 1 July 2010 741 2,314 3,055Retained profit for the period 1,916 - 1,916Actuarial gain on pension fund 428 - 428Deferred tax movement on pension schemes (120) - (120)At 30 June 2011 2,965 2,314 5,279

Profit and loss Other reserves Totalaccount

£’000 £’000 £’000CompanyAt 1 July 2010 13,648 2,610 16,258Retained profit for the period 4,356 - 4,356Actuarial gain on pension fund 428 - 428Deferred tax movement on pension schemes (120) - (120)At 30 June 2011 18,312 2,610 20,922

Company - retained profit for the period 2011is analysed as follows: £‘000

Profit before tax 5,761Tax charge (1,405)

4,356

19. Contingent liabilities

Group

The Group had the following contingent liabilities as at 30 June 2011:

● The Group has guaranteed the performance of some member clubs in respect of loans that the member clubs have receivedfrom Barclays Bank PLC. The amounts due are £1.4m (2010: £1.4m).

Company

The Company had the following contingent liabilities as at 30 June 2011:

• The Company has guaranteed the performance of one of its subsidiaries under the terms of grant arrangements amountingto £43.0m (2010: £43.0m).

● The Company has guaranteed the performance of some member clubs in respect of loans that member clubs have receivedfrom Barclays Bank PLC. The current balance is £1.4m (2010: £1.4m).

The Group and Company are dealing with a small number of legal claims. The Directors have reviewed all of these claims and, on thebasis of legal advice received, believe that no provision is necessary. Consequently no provision for these claims has been included inthese financial statements.

20. Commitments

Capital commitments of the Group: 2011 2010£’000 £’000

Authorised and contracted: 221 2,984

The Company has no capital commitments (2010: £nil)

Operating lease commitments:

At the balance sheet date, the Group had the following annual commitments, under non-cancellable operating leases:

2011 2010£’000 £’000

Land and buildingsExpiring after five years 320 316

21. Pension costs

The assets of the defined contribution pension schemes are held separately from those of the Group, under independent administration.The pension cost charge for these schemes represents contributions payable by the Group to the schemes in the period amounting tosome £0.4m (2010: £0.4m). There are no material amounts included in creditors in respect of these pension costs in 2011 or 2010.

The Group operates a defined benefit pension scheme as follows:

The Welsh Rugby Union Limited Senior Employees’ Pension Scheme (“WRUSEPS”)

WRUSEPS is a defined benefit scheme which is closed to new entrants and to future accrual. The WRUSEPS assets are held in separatetrustee administered funds. Contributions to WRUSEPS are assessed in accordance with the advice of an independent qualified actuaryon the basis of triennial valuations.

The latest valuation of WRUSEPS, prepared as at 1 May 2010, was based on the Projected Unit Method of Valuation and the marketvalue of its assets at that date was some £1.6m. The contribution rates of the Group were 0% of pensionable pay from 1 June 2009.The Group’s contributions for the period amounted to £nil (2010: £nil). No material amounts at 30 June 2011 or 30 June 2010 wereincluded in creditors.




21. Pension costs (continued)

The Group has elected to account for defined benefit pension schemes in accordance with FRS 17 which prescribes the basis for valuingdefined benefit scheme assets and liabilities. The prescribed basis for valuing the scheme’s liabilities differs from the basis used by thescheme’s actuaries in producing periodic valuations of the scheme.

The main financial assumptions used in the valuation of the pension schemes under FRS 17 are:

2011 2010 2009% % %

AssumptionsInflation 3.5 3.4 3.8Rate of increase in salaries 0.0 0.0 5.4Rate of increase of pensions in payment 3.8 3.4 3.4Rate of increase of pensions in deferment 2.8 3.4 3.4Discount rate 4.3 4.1 5.4

Years Years Years

Life expectancy of a 65 year old woman at end of period 90 90 90Life expectancy of a 65 year old man at end of period 87 87 87

Life expectancy assumptions for 2011 and 2010 are derived from: 115% of the rates published in actuarial tables PNMA00 for males,with a medium cohort projection, subject to a minimum of 1.5%; and 110% of those published in actuarial tables PNFA00 for females,with a medium cohort projection, subject to a minimum of 1.0%.

For 2009, life expectancy assumptions are derived from the rates published in actuarial tables PMA92/PFA92, projected to calendaryear 2040, with a one year age deduction.

WRUSEPS has a number of purchased annuities in respect of past retirements. These are understood to match fully the associatedliabilities and so have been excluded from both the assets and liabilities. In addition, WRUSEPS has additional voluntary contributionsinvested; these are also understood to match fully the associated liabilities and so have been excluded from both the assets and liabilities.

Expected rate 2011 Expected rate 2010of return of return

% £’000 % £’000AssetsGroup pension contract 4.8 1,618 4.7 1,296Cash 4.3 - 4.1 3

1,618 1,686

The following amounts at end of period have been measured in accordance with the requirements of FRS 17:

2011 2010£’000 £’000

Fair market value of assets 1,618 1,299Actuarial value of liabilities (1,618) (1,727)Excess of liabilities over assets - (428)Related deferred tax asset - 120Net pension liability - (308)

The amounts recognised in the financial statements are as follows: 2011 2010£’000 £’000

Operating profitCurrent service costs - 20Cost of settlements and curtailments - 262

- (242)

21. Pension costs (continued)2011 2010£’000 £’000

Other finance incomeExpected return on pension scheme assets - 86Interest on pension scheme liabilities - (89)Net return - (3)

2011 2010£’000 £’000

Statement of total recognised gains and lossesActual return less expected return on pension scheme assets 258 (147)Experience gains arising on the scheme liabilities 322 63Changes in assumptions underlying the present value of the scheme liabilities (152) (428)Actuarial gain/(loss) recognised in the consolidated statement 428 (512)of total recognised gains and losses

Reconciliation of present value of scheme liabilities 2011 2010£’000 £’000

At beginning of the period 1,727 1,841Movement in period:Current service cost - 20Interest cost - 89Member contributions - 3Benefits paid - (329)Settlements and curtailments - (262)Actuarial (gain)/loss (109) 365Present value of scheme liabilities at end of the period 1,618 1,727

Reconciliation of fair value of scheme assets 2011 2010£’000 £’000

At beginning of the period 1,299 1,686Movement in period:Expected return on scheme assets 61 86Member contributions - 3Benefits paid - (329)Actuarial gain/(loss) 258 (147)Fair value of scheme assets at end of the period 1,618 1,299

The expected return on scheme assets is determined by considering the expected returns available on the assets underlying the currentinvestment policy. Expected yields on fixed interest investments are based on gross redemption yields as at the balance sheet date.Expected returns on equity investments reflect long-term real rates of return experienced in the respective markets. The actual returnon scheme assets in the period was £319,000 (2010: £(61,000)).




21. Pension costs (continued)

Movement in liability during the period 2011 2010£’000 £’000

Liability at beginning of the period (428) (155)Movement in period:Current service cost - (20)Settlements and curtailments - 262Other finance (cost)/income - (3)Actuarial gain/(loss) 428 (512)Pension scheme liability at end of the period - (428)

Amounts for current period and previous four periods2011 2010 2009 2008 2007

Defined benefit obligation (£’000) (1,618) (1,727) (1,841) (1,404) (1,573)Plan assets (£’000) 1,618 1,299 1,686 1,815 1,855(Deficit)/surplus (£’000) - (428) (155) 411 282Difference between the expected and actualreturn on scheme assets:

Amount (£’000) 258 (147) (123) (219) 77Percentage of scheme assets 16% (11%) (7%) (12%) 4%

Experience gains and losses on scheme liabilities:Amount (£’000) 322 63 (214) 365 15Percentage of the present value of the scheme liabilities 20% 4% (12%) 26% 1%

Total amount recognised in statement of totalrecognised gains and losses:

Amount (£’000) (152) (428) (175) (26) 42Percentage of the present value of the scheme liabilities (9%) (25%) (10%) (2%) 3%



22. Reconciliation of operating profit to net cash inflow from operating activities

2011 2010£’000 £’000

EBITDA 26,173 27,641Allocations to affiliated organisations (19,281) (19,964)Exceptional items - (22)Depreciation (4,833) (5,239)Release of deferred income 1,694 1,703Operating profit 3,753 4,119

Non-cash items:Depreciation 4,833 5,239Release of deferred income (1,694) (1,703)

3,139 3,536Working capital adjustments:(Increase)/decrease in stock (257) 51Decrease in debtors 2,337 2,937Increase/(decrease) in creditors 135 (1,041)

2,215 1,947

Net cash inflow from operating activities 9,107 9,602

23. Reconciliation of net cash flow to movement in net debt2011 2010£’000 £’000

Decrease in cash in the period (618) (3,170)Cash outflow from movement in debt and hire purchase arrangements 6,607 1,017Non-cash changes - (62)Decrease/(increase) in net debt during the period 5,989 (2,215)Net debt at the beginning of the period (79,760) (77,545)Net debt at the end of the period (73,771) (79,760)


24. Analysis of net debt Cash Bank debt Bank debt Hire Debentures Total due within due after purchase one year one year arrangements £’000 £’000 £’000 £’000 £’000 £’000

At 30 June 2010 1,000 (3,466) (39,670) (299) (37,325) (79,760)Cashflow (618) (34) 6,578 299 (236) 5,989Non-cash changes - (2,594) 2,594 - - -At 30 June 2011 382 (6,094) (30,498) - (37,561) (73,771)

At 31 May 2009 4,170 (1,862) (42,021) (507) (37,325) (77,545)Cashflow (3,170) 1,869 (1,060) 208 - (2,153)Non-cash changes - (3,473) 3,411 - - (62)At 30 June 2010 1,000 (3,466) (39,670) (299) (37,325) (79,760)

25. Related party transactions

In accordance with the exemption afforded by FRS 8, ‘related party transactions’, there is no disclosure in these financial statements oftransactions with entities that are part of the Group.


Independent auditors’ report to the members of The Welsh Rugby Union Limited

We have audited the group and parent company financialstatements (the ‘‘financial statements’’) of the WelshRugby Union Limited for the year ended 30 June 2011which comprise the Consolidated Profit and Loss Account,the Group and Parent Company Balance Sheets, theConsolidated Cash Flow Statement, the ConsolidatedStatement of Total Recognised Gains and the related notes.The financial reporting framework that has been appliedin their preparation is applicable law and United KingdomAccounting Standards (United Kingdom GenerallyAccepted Accounting Practice).

Respective responsibilities of directors and auditors

As explained more fully in the Directors’ ResponsibilitiesStatement set out on page 54 the directors are responsiblefor the preparation of the financial statements and forbeing satisfied that they give a true and fair view. Ourresponsibility is to audit and express an opinion on thefinancial statements in accordance with applicable law andInternational Standards on Auditing (UK and Ireland).Those standards require us to comply with the AuditingPractices Board’s Ethical Standards for Auditors.

This report, including the opinions, has been prepared forand only for the company’s members as a body inaccordance with Chapter 3 of Part 16 of the CompaniesAct 2006 and for no other purpose. We do not, in givingthese opinions, accept or assume responsibility for anyother purpose or to any other person to whom this reportis shown or into whose hands it may come save whereexpressly agreed by our prior consent in writing.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amountsand disclosures in the financial statements sufficient to givereasonable assurance that the financial statements are freefrom material misstatement, whether caused by fraud orerror. This includes an assessment of: whether theaccounting policies are appropriate to the group’s andparent company’s circumstances and have beenconsistently applied and adequately disclosed; thereasonableness of significant accounting estimates madeby the directors; and the overall presentation of thefinancial statements. In addition, we read all the financialand non-financial information in the annual report toidentify material inconsistencies with the audited financialstatements. If we become aware of any apparent materialmisstatements or inconsistencies we consider theimplications for our report.

Opinion on financial statements

In our opinion the financial statements:

• give a true and fair view of the state of the group’sand the parent company’s affairs as at 30 June 2011and of the group’s profit and cash flows for the yearthen ended;

• have been properly prepared in accordance withUnited Kingdom Generally Accepted AccountingPractice; and

• have been prepared in accordance with therequirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act2006

In our opinion the information given in the Directors’Report for the financial year for which the financialstatements are prepared is consistent with the financialstatements.

Matters on which we are required to report by exception

We have nothing to report in respect of the followingmatters where the Companies Act 2006 requires us toreport to you if, in our opinion:

• adequate accounting records have not been kept bythe parent company, or returns adequate for ouraudit have not been received from branches notvisited by us; or

• the parent company financial statements are not inagreement with the accounting records and returns;or

• certain disclosures of directors’ remunerationspecified by law are not made; or

• we have not received all the information andexplanations we require for our audit.

Mark Ellis (Senior Statutory Auditor)For and on behalf of PricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsCardiff

22 September 2011


Welsh Rugby Union governance for the period ended 30 June 2011

Patron and Office Bearers:

PatronHer Majesty Queen Elizabeth II

Vice PatronHis Royal Highness Prince William

President Dennis Gethin

Governance of Welsh Rugby

The principal activity of the Group is to promote, foster,encourage, control and improve the game of rugbythroughout Wales. The Board of The Welsh Rugby UnionLimited (“Board”) is responsible for ensuring that theprincipal activity is managed which it does through theWelsh Rugby Group Executive Board. The Board comprisesa non-executive chairman, sixteen non-executive directorsand one executive director.

The Board of The Welsh Rugby Union Limited

Non-executive chairman:David Pickering

Executive:Roger Lewis (Group Chief Executive)

Non-executive members:Kenneth Hewitt (vice non-executive chairman)Mal BeynonGerald Davies CBE, DLMartin DaviesGeraint EdwardsHumphrey EvansGordon Eynon (appointed 3 June 2011)Brian FowlerStuart Gallacher (resigned 10 October 2010)Roy GiddingsRichard Gwynn1 (appointed 30 August 2011)Russell HowellPeredur JenkinsAnthony John2 (resigned 30 June 2011)Alan JonesJohn Jones (resigned 3 June 2011)Aurwel MorganSteve Pike2 (appointed 1 September 2011)Ray Wilton

Company secretaryGareth Williams

Welsh Rugby Group – Executive Board

Chairman: Roger Lewis (Group Chief Executive)

Executive:

Tim Burton Head of Operations(resigned 15 July 2010)

Rhodri Lewis Head of Legal Affairs(appointed 2 August 2010)

Joe Lydon Head of Rugby Performance &Development

Craig Maxwell Head of Sales and Marketing(appointed 1 November 2010)

Julie Paterson Head of Compliance

Steve Phillips Group Finance Director

Gerry Toms Stadium Manager

John Williams Head of Communications

Board Committees

During the period, the Board operated three principal sub-committees to assist in its business. The role andmembership of the sub committees were as follows:

1 A number of Clubs were admitted to membership of the Company during the year. As a result of the increased membership, as stipulated by Company’s Articles of Association,the number of Clubs now comprising District E gives rise to the need for an additional director in that District. 2 At 30 June 2010, District G was without a representative non-executive Board member due to the resignation of Anthony John. Steve Pike was appointed as sucessor toAnthony John on 1 September 2011.

Brian Fowler assists Australia Team


Welsh Rugby Union governance for the period ended 30 June 2011 (continued)

The Finance Committee, chaired by Martin Daviescomprised David Pickering, Kenneth Hewitt, Roger Lewis,Humphrey Evans, John Jones, and Steve Phillips. GordonEynon replaced John Jones following his resignation on 3June 2011. The Finance Committee is responsible for allfinancial matters of the Group other than dealing with theGroup’s auditors

The Regulatory Committee, chaired by Mal Beynon,included Russell Howell, Geraint Edwards, Brian Fowler,Ray Wilton and Aurwel Morgan. It is responsible fordisciplinary matters and the management of all the leaguesand cup competitions in operation.

The Game Policy Committee, chaired by Alan Jones,included Roy Giddings, Stuart Gallagher, Gerald Davies, JoeLydon, Peredur Jenkins and Anthony John. Anthony Johnand Stuart Gallagher tendered their resignations asdirectors, and with it membership of the Game PolicyCommittee, on 30 June 2011 and 10 October 2010respectively. A successor to Anthony John will beappointed in due course. Non-Board members of theGame Policy Committee included Mike Rein (who replacedDavid Matthews who resigned during the period), IanParker, Sophie Bennett, Martyn Ryan and Jason Lewis. TheGame Policy Committee is responsible for the developmentof the game at all levels, including age groups, coachingand referees.

Development of Corporate Governance

Both the Board and the Executive Board remain committedto the continuing development of governance structures,in order to meet the evolving needs of the game of rugbyunion.

The Board and Executive Board acknowledge the value ofthe principles of good governance as set out in thecombined code. The Group are committed to adopting theprinciples of best practice in corporate governance. Whereapplicable, all Board members have undergone training inthe role of the non-executive director, delivered by theInstitute of Directors. The Group are committed to furthertraining and development of the Board.

Board and Executive Board

There is a clear division of responsibility between the roleof non-executive Chairman and Group Chief Executive.There is a detailed limit of authority protocol in place forboth the Board and the Executive Board. All ExecutiveBoard members have detailed job descriptions in additionto limits of authority.

The Board meets on a monthly basis and considers allmatters under its terms of reference which include thedevelopment and monitoring of the Group’s strategic plan,allocation of financial resources, reviewing the

Gareth Edwards, Gerald Davies and Roger Lewis at the launch of the Star for Richard Burton

Joe Lydon and Ken Hewitt at an away day discussion

performance of the Group Chief Executive and ExecutiveBoard and approval of annual budgets.

In addition, the Board considers the recommendation ofthe Board’s standing committees, whose responsibilitiesrelate to Finance, Regulatory and Game Policy as shownabove.

Appointments and Remuneration Panel

The Appointments and Remuneration Panel advises theBoard on the remuneration and terms and conditions ofthe Group Chief Executive and the Executive Board. ThePanel consists of the Chairman of the Board, the Vice-Chairman of the Board and the three heads of standingsub-committees: Finance, Game Policy and Regulatory.Alun Thomas (FCA) served as a non-Board member of thepanel during the year but resigned on 4 July 2011. Asuccessor has yet to be appointed.

The Audit Panel

The Audit Panel, chaired by Martin Davies, included JohnJones. David Hammond acted as a non-Board member.

Following John Jones’ resignation on 3 June 2011, MartynRyan was appointed as a further non-Board member. TheAudit Panel is responsible for assisting the Board dischargeits responsibilities for accounting policies, financialreporting, internal control, risk management and liaisingwith the Group’s auditors. The Group is aware of DavidHammond’s intention to step down from the Panel and areplacement is currently being sought.

Remuneration and benefits of the Board

Under the Group’s remuneration policy, no fees arepayable to non-executive Board members, other than thenon-executive chairman who receives an annual fee of£35,000.

In addition, the Board are represented on other rugbybodies including The International Rugby Board (“IRB”),Six Nations Rugby Limited, European Rugby Cup Limited,Celtic Rugby Limited and British and Irish Lions Limited, allof whom have a policy of financially compensating therepresentatives serving on these bodies.

WRU Board members Alan Jones, Peredur Jenkins, Ray Wilton and Russell Howell


The Board of Millennium Stadium plc

Non-executive chairman: David Pickering

Executive: Roger Lewis(Group Chief Executive)

Non-executive members:

Councillor Nigel Howells (vice non-executive chairman)Mal BeynonDavid CollinsMartin DaviesGeraint EdwardsKen HewittJonathan House (appointed 30 December 2010)Tom Morgan (resigned 30 December 2010)Joanne StanfordRoy Thomas

Company Secretary

Steve Phillips

Registered office and advisers

Registered officeMillennium StadiumWestgate StreetCardiff CF10 1NS

Independent auditorsPricewaterhouseCoopers LLPChartered Accountants and Statutory AuditorsOne KingswayCardiffCF10 3PW

Principal solicitorsHugh JamesHodge House114 - 116 St. Mary StreetCardiffCF10 1DY

BankersBarclays Bank PLC3rd FloorWindsor Court3 Windsor PlaceCardiff CF10 3ZL

The Welsh Rugby Union Limited & Millennium Stadium plcMillennium Stadium, Westgate Street, Cardiff CF10 1NSTel: + 44 (0)870 013 8600Email: [email protected] www.wru.co.ukwww.millenniumstadium.com


Welsh Rugby Union governance for the period ended 30 June 2011 (continued)

WRU staff workshop





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Documents

WRU Annual Report 2011