annual report 2015 - stornoway port...

ANNUAL REPORT 2016

ANNUAL REPORT 2015

ContentsOur Vision, Mission and Values.............................................................................................................3

Highlight of 2015.....................................................................................................................................4

Chairman’s Statement............................................................................................................................6

Board Summary........................................................................................................................................7

– The Board............................................................................................................................................ 6-9

Trust Ports.................................................................................................................................................11

Audit Committee...................................................................................................................................12

Chief Executives Statement...............................................................................................................13

Who we are and what we do............................................................................................................14

Review of the Year.................................................................................................................................15

– Statistics...............................................................................................................................16

– Operational Report..........................................................................................................17

– Port Marine Safety Code................................................................................................19

The Way Ahead.......................................................................................................................................20

– Strategic Targets.................................................................................................................21

– Port Masterplan.................................................................................................................23

Sustainability...........................................................................................................................................24

– Economic Advancement................................................................................................24

– Environment & Safety......................................................................................................25

Community..............................................................................................................................................26

– Community Funding........................................................................................................27

– 150th Anniversary Events..............................................................................................28

– Website and Social Media.............................................................................................28

– Heritage Assets/Trail........................................................................................................28

Annual Accounts ............................................................................................................................31-48

Stornoway Port AuthorityAmity House, Esplanade Quay, Stornoway, Isle of Lewis HS1 2XST: +44 (0)1851 702688 F: +44 (0)1851 705714 E: [email protected]

OUR VISION Our vision is to be the leading port in the north west of Scotland

OUR MISSIONOur mission is to provide a safe and efficient port, whilst continuing to grow and develop

OUR VALUESOur values are the delivery of results, customer service and accountability

STORNOWAY PORT AUTHORITY ANNUAL REPORT 2015 3

YEAR IN REVIEW

23%TOTAL AMOUNT OF CRUISE SHIP PASSENGERS INCREASED FROM 11,746 IN 2014 TO 14,472 IN 2015

2015 HIGHLIGHTS

15%TOTAL VESSEL MOVEMENTS GREW 15% FROM 664 IN 2014 TO 768 IN 2015

%

FIRST ANNUAL MEETING

ZERO LOST TIME INCIDENTS 2015

COMPLETION OF FERRY TERMINAL

FIRST ANNUAL MEETING16CRUISE SHIP VISITS INCREASED FROM 37 TO 43 OVER 2015


THE AMOUNT OF FERRY PASSENGERS INCREASED FROM 226,040 IN 2014 TO 235,688 IN 2015

4.2% 4.9%2015 SAW A RISE OF 3486 CARS TRAVELLING FROM ULLAPOOL TO STORNOWAY FROM 70,394 IN 2014 TO 73,880 IN 2015

STORNOWAY PORT AUTHORITY CELEBRATED ITS 150th ANNIVERSARY IN 2015 WITH A PACKED EVENTS CALENDAR.

2015 SAW THE COMPLETION OF THE ICE PLANT. THE MACHINE IS CAPABLE OF PRODUCING 15 TONNES OF ICE PER DAY AND IS EQUIPPED WITH A 20 TONNE STORAGE CONTAINER.

CHANGES ON THE BOARD - NEW CHAIRMAN AND NEW VICE CHAIR

NEW MANAGEMENT TO STORNOWAY PORT AUTHORITY WITH A NEW CHIEF EXECUTIVE AND HARBOUR MASTER BEGINNING IN 2015

5STORNOWAY PORT AUTHORITY ANNUAL REPORT 2015

CHAIRMAN’S STATEMENT

TEM

I am very pleased to be making my first annual

report statement as Chairman of the Board of

Stornoway Port Authority and in being able to report

a very successful year of activity for the Port on the

occasion of the Port’s 150th Anniversary.

The Board took the decision to mark this historic year

with a series of notable events, including a display by

the Red Arrows and hosting of the BPA Conference,

which at the time seemed very ambitious. As it

transpired each event has proved in it’s own way

to be memorable for the Port and for the wider

community.

I would like to thank Capt Bert Frater, from whom

I took over as Chairman, and also Dr Neil Galbraith

who chaired our 150th Anniversary Sub Committee

for their noteworthy contribution to the Anniversary

proceedings.

2015 has seen a number of changes to the Board

membership and I would take this opportunity

to thank Mr John Smith and Mr Alasdair Morrison

who left the Board though the year. I would also

congratulate Mr Ian Burgess on his appointment as

Vice Chairman and welcome Mr Ian Don Maciver and

Mr John Nicolson who joined the Board.

The past year has had it’s challenges with personnel

changes and with significant infrastructure

improvements being undertaken and I would like

to express the Board’s appreciation to Capt Roddy

Jardine and Mr John Maclennan who helped with

the transitional arrangements.

In July 2015 Mr Alex Macleod was appointed as Chief

Executive and member of the Board and I would like

to thank him and all the staff for their hard work and

commitment.

As we move forward there will no doubt be many

challenges as well as opportunities and I would take

the opportunity to express the Board’s appreciation

to our many stakeholders for their cooperation

and support and also to acknowledge that “ God’s

providence is our inheritance”.

Murdo A. Murray


BOARD MEMBERS SUMMARY

Non–executive Board members are appointed for a period of three years following a selection process involving advertisement and an interview, which is undertaken by an appointing panel consisting of the Chairman and two independent advisors. In addition, the Board has the facility to appoint two co-opted members with applicable specialist knowledge for a maximum period of one year.

Our current board contains a balance of specialist skills, the skills being recommended by the Modern Trust Ports for Scotland Guidance for Good Governance, including but not limited to the following: local government, finance, fishing and fish processing, marine leisure industry, shipping, management, commercial and a wide variety of other applicable skills. The

Guidance for Good Governance makes particular reference to the requirement to have, as a priority, adequate financial and commercial expertise. The breadth of skills across the current Board is currently under review, and will be used to determine the professional skills to be included within our next advertisement for non-executive board members.

MR MURDO MURRAY - CHAIRMAN

Following a time at contractors Howard Doris in Kishorn and R J McLeod in Applecross, South Rona and Barvas, Murdo Murray spent most of his career with Comhairle nan Eilean Siar as an Assistant Engineer, Senior Engineer, Deputy Director and for eleven years as Director of Technical Services. Since 2005 he has been an independent Engineering Consultant with a special interest in Renewable Energy. He is an elder of the Free Church in Stornoway and has served on national church committees including the Personnel Committee, the Finance Committee and is currently on the Board of Ministry of the Free Church of Scotland.

In the Western Isles branch of the Gideons he has just completed a three year term as Treasurer and has recently been appointed as the Branch Chairman.

THE BOARDMR IAN BURGESS - VICE CHAIR

Ian Burgess started his career in 1973 as a navigating cadet in the Merchant Navy, serving on tankers until 1984. He joined HM Coastguard in 1984, starting in the coordination centre in Stornoway and has retired from full time work this year. He became a non-executive Director with NHS Western Isles in 2013 and has been on the Board of Stornoway Port Authority since September 2014. Ian’s work experience has given him access to the coastal communities within the Western Isles, working with volunteer teams and engaging with community stakeholders. He is Member of Stornoway Golf Club and the Public & Commercial Services Union (PCS).


CAPT. ROBERT FRATER

Captain Robert Frater gained his education at The Nicolson Institute and Lews Castle College. Mr Frater served as a Cadet, Fourth Officer and Third Officer on the West African service with Elder Dempster Lines of Liverpool. He was transferred to Harrison Line of Liverpool (Caribbean Service) as a Third Mate and then to Denholm Line of Glasgow ( Worldwide Service ) as a Second Mate.

He sailed with Denholms for 21 years, the last 15 as Master. Mr Frater served as a Harbour Master with CNES for 10 years. He is a charter member of both the Nautical Institute and the UK Harbour Masters Association. He has been involved in various local voluntary organisations over an extensive period of time, including 12 years on the Board of Stornoway Trust. Captain Frater has been a Board member at SPA since 2004.

DR. NEIL GALBRAITH OBE

Neil Galbraith is in his second term with the Port Authority. He is Chair of NHS Western Isles and has had wide experience in Local Government as Chief Executive and Director of Education. He has worked internationally in Russia, Montenegro and Albania on educational systems and management reform. He is currently the Chair of the North of Scotland Planning Group of the NHS and exercises a regional remit in regard to the co-ordination of the interests of six NHS Boards, including three island Boards. He holds degrees in Psychology and History, a doctorate from the Open University and is an accredited coach/mentor working in Health, Education and Local Government.

MR ALLAN MACDONALD

Allan Macdonald is born and bred in Stornoway, educated in Aberdeen BSc (Hons) Geology and Petroleum Geology and at Heriot Watt to MSc level in Petroleum Engineering. He has worked in the oil and gas industry for 9 years gaining experience in both drilling and production operations for multinational companies within the UK and abroad. Since 2006 he has worked as Managing Director for a local business in the retail sector.

He enjoys outdoor pursuits and is an active member and qualified coach with Stornoway Canoe Club. He was appointed to the Stornoway Port Authority as a matter of public service which he feels is extremely important in a small community. He also recognises the importance of the Port to the people of the Western Isles.

MR JOHN NICOLSON

John, a Point native, has had a long career in the maritime industry and is particularly well known around Stornoway harbour where he worked in the fishing and fish processing industry for over 35 years.

Following a career in the Merchant Navy where he served as a Master Mariner with Blue Star & Weston Shipping, John owned and operated the prawn trawlers Ivy Rose and Alpha. He was one of the founding members of the Stornoway Fisherman’s Co-operative and served as both Chairman and General Manager. In 1985 John went to work for Ross Fish Ltd (now Young’s Bluecrest) where he became the Buyer Export Manager. He worked in a number of roles with Young’s including periods in Fort William and Northern Ireland, and finally

THE BOARD - continued

as General Manager of Young’s Goat Island factory until his retirement in 2012. John has also had leisure craft in Stornoway harbour for a number of years. His extensive maritime, fishing and business experience will be of great benefit to the Board.

MR IAIN DON MACIVER

Iain Don MacIver is born and bred in Point, where he still lives in the family home with his wife and two sons. He was educated in Bayble School and latterly the Nicolson Institute. Mr MacIver went on to work for CalMac at Stornoway Harbour for over 22 years and for the last 10 years, has been CalMac’s port manager at Stornoway. He has experience in administration, shipping and other forms of transport and information technology.

Mr MacIver is a native Gaelic speaker and a regular contributor on Radio nan Gaidheal, often on issues relating to, football. Iain Don is also keen fisherman and with his work and experience of the harbour facilities will be an asset to the port board.

MR ALEX MACLEOD – CHIEF EXECUTIVE

Brought up in the village of Knock, Mr MacLeod’s family has had a long connection with the Port. His Great-grandfather owned and skippered the sailing vessel “Muirneag” one of the most famous fishing vessels of its time. Following time working in Glasgow with the Civil Engineering company Lilley Construction, Mr MacLeod worked with Fletcher Construction in Auckland, New Zealand, which included working on the viaduct basin Americas Cup facilities. Following his return from New Zealand he has worked for a long established Civil Engineering company during which time he worked on a number of projects around Stornoway harbour. He commenced employment with the Authority as Chief Executive in July 2015.

THE BOARD - continued


9

Executive Member Joined the Board 2015 Meetings attended

Mr Alex MacLeod July 2015 4 of 4

Non-executive Board Members Joined the Board 2015 Meetings attended

Mr Murdo Murray (Chairman) May 2012 8 of 8

Mr Ian Burgess (Vice Chairman) August 2014 8 of 8

Captain Robert Frater August 2004 8 of 8

Dr Neil Galbraith November 2009 7 of 8

Mr Allan MacDonald May 2014 7 of 8

Mr Iain Don MacIver August 2015 2 of 4

Mr John Nicolson November 2015 2 of 2

STORNOWAY PORT AUTHORITY ANNUAL REPORT 2015

TRUST PORTS

Trust Ports are independent

statutory bodies, each governed

by its own, unique, local

legislation and controlled by

an independent board. Their

common feature is their unique

status as trusts. There are no

shareholders or owners, neither

are they treated as part of the

public sector. This is in stark

contrast to a private port which is

privately owned by shareholders

and a local authority port which

is owned by the Local Authority.

Trust port guidance is produced

by Transport Scotland in the

document “Modern Trust Ports

for Scotland Guidance for Good

Governance”. This document is

reviewed every three years and

the port communicates regularly

with Transport Scotland about

content and potential future

change. Transport Scotland

occasionally attend Board

meetings to review meeting

procedures and to update board

members on Transport Scotland

guidance.

Well publicised governance

issues in the past few years

have highlighted the need for

the Board of Stornoway Port

Authority to review and classify

the purpose and function of

the Board. Seven out of eight

board members attended a Trust

Port seminar in Glasgow in early

November, which will assist

with Board development and

understanding of governance

requirements

The Harris Tweed Authority

is one of few bodies locally

to be constituted by an Act

of Parliament which gives

both bodies a unique but

similar structure. During their

anniversary year the Port

Authority were pleased to work

with the HTA who supported the

BPA conference by supplying gift

bags to the guests.


“There are approximately 100 such [trust] port authorities in the UK, autonomous bodies that were created by local Acts of Parliament. Trust ports are not Government-owned and are not treated as part of the public sector. All trust ports operate broadly commercial lines…. And any profits from their activities are reinvested in the port for the benefit of users.”II

II

Modern Trust Ports for Scotland Guidance for Good Governance


AUDIT COMMITTEE

A particular function of the Board is to identify the principal risks to the Port Authority. The Port Authority has therefore identified significant risks which have been considered and these are included in the table below. This list is not exhaustive. However, it is just a brief summary of what issues the Board must consider.

Risks Mitigating factors

Island economy Continuous consultation with all levels of governmentStakeholder consultationMarket assessment studiesTraffic studies

Strategic direction Stakeholder consultationEconomic studiesMasterplan development

Loss of community acceptance Community consultation Communication practicesStakeholder groupsManagement visibilityCommunity Funding ProgrammeSocial media presence and monitoringWebsite improvements

Financial Approval levelsManagement proceduresInternal AuditingExternal Auditors

Environmental Developed emergency plansContinuous auditingAwareness trainingCo-ordination and co-operation with other bodies24/7 staffing

Lack of development areas Port MasterplanReview land ownershipPotential for land reclamation

Lack of development funds Business planning and budgetary controlsFinancial awarenessBanking relationshipsPrioritisation of projects

Capital projects Ensure best value is acceptedProject management expertiseThird party auditImproved procedures

Governance Board member training & appraisalsReference to Guidance for Good Governance

Staff effectiveness Staff trainingPerformance appraisals & performance managementManagement reviewsWorkforce meetings

IT security problems IT expertise employedIT AuditsModern equipment

Health & safety External auditsRisk assessment by staff and external auditorsInsurance risk assessment and communicationStaff medicalsProcedures

Port Marine Safety Code External auditingConstant review of safety management systemImprove marine policiesStaff and Board member training


CHIEF EXECUTIVE’S STATEMENT

OPERATIONAL

TRADING HEADLINES

STAKEHOLDER ENGAGEMENT

Since assuming the role of Chief Executive in July 2015, I have been working closely with the Board, the management team and also liaising with stakeholders to improve the operation of the Stornoway Port Authority. Working closely with these groups the Port will realise its primary role as a facilitator of trade and the economic advancement of the island. Becoming part of the Authority during its 150th year was both daunting and challenging.

With the vast majority of freight and people passing through the port it is integral to the fabric of the island and therefore it is essential that the port runs efficiently throughout the year. The employment of Mr Tony Morrison as Harbour Master has brought a different perspective to the Harbour Master position and will drive operational improvement and user relationships around the harbour. Tony’s long association with the harbour will assist with both his and the ports drive to improve the harbour and its relationship with the users. The health and safety of our workforce and harbour users is paramount and something Tony constantly focuses on, whilst also simultaneously considering the operational needs of the harbour.

Investing in the future of the Port and the Isle of Lewis will always be the priority of the Stornoway Port Authority. The 2015 results again show a profitable business model which will allow the Port to undertake the future investments required to grow the business.

I am pleased to report the 2015 financial results which show an overall reduction in profit. However, the 2014 figures included some exceptional items which masked the 2014 operating result. Trading in 2015 was therefore broadly similar to 2014 with turnover higher as a result of increased traffic across leisure and ferrys.

As a Trust Port there is a recommendation to hold an annual stakeholder meeting, the first of which was held in September of 2015, and which was met with general approval by stakeholders. These meetings will continue, and will be moved to May/June each year to coincide with the issue of the Annual report. We are committed to further stakeholder engagement and regular stakeholder meetings are being planned with a variety of stakeholder groups. These will also involve the creation of additional stakeholder groups, as in some instances specialist groups have yet to be established.

In late September, the Port hosted the annual British Ports Association conference which resulted in over 200 of our peers and industry leaders arriving from all over Britain. The event was a resounding success and our visitors also contributed to the economy of the island.

I would like to thank the Board and staff for their support and hope that we can all work together for the betterment of the Stornoway Port Authority. Thanks also to the other local agencies including the Council, HIE, Stornoway Trust, etc. all of whom are working together with the port to develop the town and wider island.

Alex MacLeod


A commercial port catering for

all manner of visitors, one of

the Ports main functions is as a

terminal for the Calmac Ferries

Ltd lifeline service to and from

Ullapool. In addition to the ferry

traffic, the port also handles a

wide variety of cargo including

shellfish, salmon, salmon smolts,

coal, cement, fuel oils, gas, etc.

Increasing leisure traffic

has resulted in the recently

completed marina extension

already operating at capacity.

The Port provides services to a

broad range of companies and

individuals, and across a wide

range of industries. The Port’s

property interests include the

vast majority of Stornoway’s car

parking which, together with

the bus station site, is leased to

the local council Comhairle Nan

Eilean Siar.

The sheltered harbour has

long been an the attraction

to mariners, and the Port must

develop facilities to cater for

increasing vessel sizes. The

harbour also boasts a slipway

with a 950ton capacity, shipping

agents, ship chandlers and

other established port services.

The port employs 24 full time

and 3 part-time staff with a

considerable number of indirect

jobs reliant upon continuing

port operations

Stornoway Port Authority is one of the busiest ports on the west coast, north of the

Clyde.

WHO WE ARE AND WHAT WE DO



2014 2015

Passengers 226,040 235,688

Cars 70,394 73,880

Coaches 397 370

Commercial Vehicles 12,169 11,953

Ferry Movements 969 925

Total vessel movements 664 768

Marina Yacht Visits 364 334

Cruise Ship Visits 37 43

Cruise Ship Passengers 11,746 14,472

Coal 3,631 3386

Cement 2,315 800

Oil 41,475 36,495

Gas 847 1080

Road Salt 4,355 8989

Other Stats

LTI 2 0

Man-hours worked 25,532 29,334

Acts of Pilotage 40 39

Slippings 96 87

FINANCIAL HIGHLIGHTS In order to develop, a stable financial position is necessary and the Port Authority continues with a strong

financial result in 2015. The Port has to make a profit to attract future investment in to the Port.

As a Trust Port with no shareholders, all profits are re-invested into the future of the Port.

The rewards and achievements, as a result of previous investments, are reflected in our 2015 Annual financial

results:

• £3million revenue, up 18% on 2014

• £0.6million Net Profit, down 15% on 2014

• 235,688 Arriving or departing Passengers, up 4% on 2014

• 43 Cruise ship visits, up 16% on 2014, revenue similar to 2014

• Increased revenue from leisure craft

• Increased fish farm traffic

STATISTICS

REVIEW OF THE YEAR


1. FERRY OPERATIONSThe ferry infrastructure project was completed in

early February 2015 and the new Calmac Ferries

Ltd ferry MV Loch Seaforth commenced service on

the run. The ferry infrastructure project has resulted

in a larger car and truck marshalling area, the

introduction of a dedicated trailer drop area, the

installation of a modern passenger access facility,

the closure of the gap between the main pier and

the outer dolphin and a major upgrade to the

fendering system to counter the increased size of

the Loch Seaforth vessel.

It became apparent during 2015 that there are

traffic and parking concerns with the new layout.

These issues will be closely monitored during the

2016 summer season and potential solutions will

be discussed with the operator late summer prior

to any changes.

2. CRUISE SHIPSThe 2015 cruise ship season was the most successful

year ever for Stornoway Port Authority. By the end

of 2015, 14,472 cruise ship passengers from 43

cruise ships, a new record for the port. New visitors

included the Prinsendam and Hanseatic.

The Port Authority must also recognise the

importance of the tour operators, the cruise

ambassadors and shipping agents all of whom

provide a valuable service. The extensive list of

tours operated from the Port, together with the

visitor centres and attractions around the island,

all combine to give these passengers a wonderful

Hebridean experience.

Going forward the port must work towards a

potential solution for accommodating larger cruise

ships which will allow the Port Authority to meet

the projected future growth in this market.

3. FISHING The end of 2015 finally saw the installation of a

new ice plant in the harbour, a necessity urgently

requested by the fishing industry. This investment

by the Port Authority will assist the fishing industry

in trying to recapture some of the glory days of

the Stornoway fishing industry. The ice plant will

help improve the quality of the local catch and the

increased output and storage will ensure that ice is

always available locally.

4. LEISUREActivity in the leisure industry has dramatically

increased over the past few years, and although

visitor numbers reduced marginally in 2015, overall

revenue as a result of leisure traffic increased over

the year. One of the few areas of potential growth for

the port, the management team must ensure that

premier facilities and exceptional customer service

are provided to ensure that the Marina continues to

develop as a popular yachting harbour.

5. PROPERTY The Port is currently in the process of registering

all its properties with the Registers of Scotland, a

process which Scottish Ministers hope to complete

with all land in Scotland by 2024. This is a difficult

process for the Port Authority due to the large

number of separate titles currently held. The

exercise should be completed by the end of 2016,

somewhat ahead of most other ports and local

authorities.

OPERATIONAL REPORT



An element of Port legislation generally unknown

to the wider public, the Port Marine Safety Code is

an integral component of health and safety within

a Port. It is essential, therefore, that the Stornoway

Port Authority Port works to achieve the highest

compliance with the Port Marine Safety Code.

The Port Marine Safety Code establishes a national

standard for every aspect of port marine safety and

aims to enhance safety for those who use or work in

ports, their ships, passengers and the environment.

The code applies to all harbour authorities in the UK

that have statutory powers and duties.

The Authority undertook a large scale compliance

audit towards the end of 2015, which identified

a number of areas in which the Authority needs

to improve. The Port is committed to achieve full

compliance with the code, and additional resources

will be deployed to ensure that is achieved as soon as

possible.

• Review the Byelaws

• Consider using power of General Direction

• List of holders of Delegated power of Special Directions

• Engage more actively with Port Stakeholders

• Update Navigational Risk Assessments

• Develop a full set of Marine Operation policies

• Update Safety Management System

• Update Port Emergency Plan

• Review Pilotage Directions

• Review Pilotage Rules

• Introduce registration system for small passenger vessels

• Regulate yacht moorings

The Authority requires to publicise significantly more data on its marine safety operations and, therefore, it is

the intention that the Port will regularly publish information on the Authority website.

The 2016 Port improvement plan will include the following:

PORT MARINE SAFETY CODE



The Strategic document published

in 2011 now requires a major review

and the immediate requirement

to confirm the short/medium term

aspirations of the Port. The new

Strategic Plan will be for the period

2016 to 2020, a four year period

during which the Port’s strategic

direction will alter course again.

The focus of the 2011 document

was the leisure industry and has

had a number of successes. The 80

berth marina in the Inner harbour

has changed the focus of the town

centre and has effectively created

a harbour community. The fact

that the marina is now operating

at capacity is justification for the

development. The indirect benefits

to the town of Stornoway are also

undeniable, both from a visual

effect and also the community

spirit around the marina during the

summer months.

The other major strategic element

which has proved highly successful

was the development of the cruise

ship industry in the Port. Both ship

and visitor numbers have been

steadily increasing over the past

few years. This has been a team

effort and includes a wide variety

of stakeholders, including tour

operators, bus companies, cruise

ambassadors, heritage centres, etc.

REVIEW OF 2011/2021 STRATEGIC PLAN

2016 OPERATIONAL TARGETS2016 will see the continuation and finalisation of some of the major operational undertakings commenced in

2015. These include:

• Improve consultation with Port users

• Continue with a review of management and staff structures including the harmonisation

of staff rotas

• Continue negotiations with the current leaseholder of Arnish pier with a view to the Port

Authority managing the quay

• Additional Health and Safety training, particularly focusing on risk assessment.

• A review of all property holdings

• Improvements to the Safety Management System and further development to ensure

compliance with the Port Marine Safety Code

• Board development

The Port also awaits the award of the Hebrides and Clyde Ferries contract in mid 2016, which could see a change

in operator for the first time in over 100 years. It is hoped that this tender exercise will see improvements for

port users and the Port Authority will work with the successful tenderer, whoever that may be.

THE WAY AHEAD



Strategic TargetsThe Strategic plan for 2016 includes the following:

Final completion and handover of the ferry infrastructure works Develop a Port Masterplan Structural assessment of all piers Investigate the use of technology in port operations Website development Improved stakeholder consultation Investigate and develop yacht service facilities including yacht lift, workshops, etc Investigate and develop additional Marina berths Improvements to the Goat Island slipway including the construction of a covered slipway berth. Create additional laydown areas for wintering of boats

This is not an exhaustive list but some of the more immediate requirements for the Port Authority to develop.

Andy and Ryan taking part in a safety exercise on board the Port’s pilot boat ‘Portrona’

PORT MASTERPLANStrategic planning and infrastructure investment is driven by the need to future-proof the port to support

the future economic direction of the island. The Port masterplan, is therefore, a mechanism to identify the

possible economic options together with corresponding actions of the Port Authority.

In any event the following Strategic Plan elements will be included within the Port Masterplan:

• Additional Marina berths

• Yacht/Leisure/Small boat service facilities

• Pontoon for commercial use, fishermen, large yachts

• Deep water quay of sufficient length to cater for large cruise ships

• Quay with large storage areas

• Work with other groups to develop Newton basin

• Improvements at Goat Island

• Replacement Linkspan

• Property development/Land use

• Development at Arnish

The intention of the Port masterplan is to ensure the port has the necessary infrastructure and management

facilities to adapt to any potential change to the economy. The Port must address the following potential

economic developments:

• Cruise Ships

• Marine Leisure

• Decommissioning

• Oil & Gas

• Marine Renewables

• Containerised transport

• Restrictions on Fuel Storage

• Increased freight traffic

It is expected that the Port Masterplan will be completed and published late in 2016.



SUSTAINABILITY

ECONOMIC ADVANCEMENT

Commercial viability, competitive advantagesTo ensure a sustainable future the most important element for the Port Authority

is its commercial viability. The Port must work to develop new markets and to

work with existing customers to increase revenue and operational efficiency.

To ensure that the port identifies and takes advantage of all opportunities it

must work with existing stakeholders, in particular Comhairle Nan Eilean Siar,

The Stornoway Trust and Highlands & Islands Enterprise. The Port Authority will

steer the development of the Port by facilitating dialogue and collaboration

around long term planning.

Future investmentInvestment in strategic developments is paramount for the Port Authority and can only materialise with a healthy

and stable business model. The Port must remain competitive in the marketplace to ensure investment whilst

maintaining its current investments to ensure extended lifespans.

Our best advert for corporate social responsibility is a successful long term economic business


ENVIRONMENT & SAFETY

Health & SafetyStornoway Port Authority is committed to continuous

improvements in Health and Safety across its

operations. Whilst systems and equipment can be

updated, safety performance is ultimately delivered

on the ground. A culture of shared responsibility and

engagement at all levels of the Port Authority will be

adopted and it is hoped that safety performance will

be driven higher.

Future emphasis will be on behavioural safety,

increased reporting of near misses, and detailed

incident investigations which will lead to identification

of hazards within the Port operations.

Our staff have to work in all types of conditions 24/7,

365 days a year,and the Port Authority must work to

ensure that any barrier to improving safety is identified

and resolved.

Individual staff safety is paramount and the authority

recognises the benefits of a fit and healthy employee.

Health checks will be reintroduced in 2016 and other

initiatives will also be investigated.

Environmental InitiativesThe Port Authority works co-operatively with other

users of the harbour area to ensure this valued local

environment is well cared for. As well as complying with

relevant environmental policies, the Port Authority

works proactively with users to minimise and mitigate

any negative environmental effects on the port.

We currently provide and share tidal information with

the Hydrographic Society UK and 2016 will see this real

time information added to our website.

Continuous investigation of the latest technologies are

also high on the agenda and the Port Authority will

investigate the following environmental improvements

during 2016:

a. Shore power

b. Solar panels

c. Energy saving

d. Oil spill technologies


COMMUNITY

Stornoway Port Authority is committed to supporting the local community and to encourage community

engagement the Port Authority are proposing to introduce a funding process for small community projects.

The fund will assist local community groups or local charities to support specific proposals or initiatives, with

preference given to both youth groups and marine related groups.

Community Funding

150th Anniversary Events2015 was a big year for the port as it celebrated its

150th anniversary year with a full calendar of events.

The highlight was on 29th July, 150 years to the day

of the founding of the Stornoway Pier and Harbour

Commission, when the Red Arrows Team performed

a stunning display of aerobatics over the harbour.

Later that evening, a Stakeholders Reception was

held in Stornoway Town Hall attended by over

a hundred guests comprising a cross section

of present stakeholders, former and present

Commissioners/Board Members and former and

present staff.

Events were held in and around the Harbour

throughout the year. The St. Ayles Regatta in May

saw a skiff boat race from Cuddy Point out to Arnish

and back. In June the Harbour Open Day created

a hive of activity on Cromwell Street Quay where

hundreds gathered to enjoy all the activities and

stalls. Earlier in the year the Port commissioned

D.S. Murray’s book of poems ‘SY Stornoway’ and

sponsored Sail Stornoway which was held during the

Hebridean Festival week in July.

To mark the end of the 150th anniversary year, the

Port invited Shetland’s Up Helly Ah’s Vikings over

to assist with the switch on of the Christmas lights.

Together with local torch bearers, Santa Claus in a

Viking ship, Lewis and Skye Pipe Bands, the Vikings

put on an outstanding torch parade along Cromwell

Street Quay.


Support was provided for the following in 2015:• Falamadair – Sgoth Callicvol• Stornoway beach cleaning in association with Stornoway Trust• St Ayles Skiff Rowing festival• New Year Fireworks (2014/2015)• Christmas lights, fireworks & Vikings• Red Arrows Display• Harbour Open Day• Artist’s residency in partnership with An Lanntair• Support of Sail Stornoway• The BPA conference in September had a major economic effect on the island.


Annual Meeting

Website and Social Media

Heritage Assets/Trail

The Port Authority’s stakeholders are its

customer, employees, the government, the

business community and the local community.

The Port held its first Public Annual Meeting

on 10th September 2015. The meeting gave

the Port Authority the opportunity to present

current issues, projects, events and statistics to

stakeholders. This was followed by a question and

answer session. These meetings are an occasion

for communicating with the local community,

The Port has also been working to open up new

communication channels with our stakeholders and

to strengthen those already in place.

A completely new website was launched on the 1st

of January 2015, the site was designed to enable

the Port Authority to communicate statutory and

navigational information to local residents, visitors

and commercial harbour users in an improved

format that offers site visitors quick and easy

access to content. It also provides a key role in the

publishing the latest press releases of and safety and

navigational announcements.

Having been built around the Port, Stornoway has

it at its heart and the Port Authority is looking for

ways in which to exploit the historical aspects of

Port operations. The Port is hoping to develop a

There has been continuity with regular updates on

social media sites. The number of facebook followers

has increased 480% over the last year now reaching

over 1,600 followers. Interest in the site varies

depending on the content posted, Photographs,

events, cruise ships in the harbour are amongst

the most popular posts whereas statements news

updates and statutory notices have very little

activity on the sites. Posts such as the Harbour Open

Day, Red Arrows and the Viking Torch Parade have

reached over 10,000 people.

opportunities for stakeholders to gain additional

understanding of the port and for the Port

Authority to gain feedback from the community,

further demonstrating the Port’s commitment

to its guiding principles of transparency and

accountability.

The format of these meetings will develop with

time, ensuring the Port Authority adapts to ever

changing stakeholder requirements.

heritage trail to allow visitors and locals alike to

understand the history of the port, and some of its

more illustrious persons.


STORNOWAY PORT AUTHORITY

Report of the Board andAudited Financial Statements for the Year Ended 31 December 2015

Mann Judd Gordon LtdRegistered Auditors &

Chartered Accountants26 Lewis Street

StornowayIsle of Lewis

HS1 2JF


Contents of the Financial Statementsfor the Year Ended 31 December 2015

Page

Authority Information 32

Report of the Board 33

Report of the Independent Auditors 36

Profit and Loss Account 38

Statement of Total Recognised Gains and Losses 39

Balance Sheet 40

Notes to the Financial Statements 42



Authority Informationfor the Year Ended 31 December 2015

BOARD MEMBERS: Captain R J M Frater Dr N R Galbraith M A Murray I Burgess A Macdonald I D Maciver J M Nicolson A D Macleod

CHIEF EXECUTIVE: A D Macleod

ADDRESS: Amity House Stornoway Isle of Lewis HS1 2XS

INDEPENDENT AUDITORS: Mann Judd Gordon Ltd Registered Auditors & Chartered Accountants 26 Lewis Street Stornoway Isle of Lewis HS1 2JF


STORNOWAY PORT AUTHORITYReport of the Board

for the Year Ended 31 December 2015

The Board Members present their report with the financial statements of the Authority for the year ended 31 December 2015.

PRINCIPAL ACTIVITYThe principal activity of the Authority in the year under review was that of the operation of the Harbour Undertaking and ancillary services.

REVIEW OF BUSINESSThe Board Members present their report with the financial statements of the Port Authority for the year ended 31 December 2015.

Board MembershipA detailed list of Appointed and Co-opted Members of the Authority is presented on page 1 of the Financial Statement under the heading Authority Information.

Review of BusinessThe results for the year are included in the signed accounts and can be found in the Chairman’s statement which has been reproduced on page 6 of the Annual Review.

Strategic ObjectivesThe Stornoway Port Authority’s Strategic Objectives are:

1. To maintain existing harbour facilities, piers, building, plant and equipment including 850 ton capacity slipway in a safe and serviceable order.2. To invest in new port facilities where a need is identified.3. To diversify activities with regard to sources of income, especially where this supports and strengthens the Authority’s core harbour activity.4. To keep existing customers and attract new business.5. To maximise quality and value for money in all harbour services through continually endeavouring to make its operations cost effective, efficient and streamlined whilst maintaining high standards.

Specific PoliciesThe Authority will support the commercial, fishing and recreational activities in Stornoway Harbour through the provision of the appropriate services and good value. The policy of the Authority and its management is to:

1. Manage the assets of the Authority safely, economically and efficiently.2. Maintain all its operational equipment including pilot boat to the highest industry standards.3. Pursue modern cost-effective methods including periodic dredging and surveying.4. Train all staff to the highest professional standards with emphasis on their own safety and the safety of others.

Safety and Environmental Protection PolicyThe Authority will discharge its general and specific duties in respect of:1. the regulation of traffic.2. the safety of navigation within harbour limits.3. the maintenance of all navigation lights and marks and the review of requirements at regular intervals in consultation with users and Northern Lighthouse Board.4. the conservancy of the harbour.5. the protection of the environment within the harbour and its surrounds in consultation with Stornoway Trust, Scottish Natural Heritage, Scottish Environmental Protection Agency and Comhairle nan Eilean Siar.6. ensuring the safety at work of its employees and other persons who may be affected by its activities.7. the provision of a pilotage service with properly trained Pilots and pilot boat crew and8. the provision of adequate resources to enable its employees to carry out their responsibilities in operating a safe harbour.


STORNOWAY PORT AUTHORITY Report of the Board for the Year Ended 31 December 2015

BOARD MEMBERSThe Board Members shown below have held office during the whole of the period from 1 January 2015 to the date of this report.

Captain R J M FraterDr N R GalbraithM A MurrayI BurgessA Macdonald

Other changes in Board Members holding office are as follows:

Ms A J Maciver - resigned 9 January 2015 A Morrison - resigned 29 October 2015 Captain J Smith - resigned 30 April 2015 I D Maciver - appointed 5 June 2015 J M Nicolson - appointed 5 November 2015 A D Macleod - appointed 27 July 2015

STATEMENT OF BOARD MEMBERS’ RESPONSIBILITIESThe Board Members are responsible for preparing the Report of the Board and the financial statements in accordance with applicable law and regulations.

Legislation requires the Board Members to prepare financial statements for each financial year. Under that law the Board Members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Board Members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Authority and of the profit or loss of the Authority for that period. In preparing these financial statements, the Board Members are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Authority will continue in business.

The Board Members are responsible for keeping adequate accounting records that are sufficient to show and explain the Authority’s transactions and disclose with reasonable accuracy at any time the financial position of the Authority and enable them to ensure that the financial statements comply with the applicable legislation. They are also responsible for safeguarding the assets of the Authority and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board Members are responsible for ensuring that the financial statements comply with the Harbours Act 1964 as amended by the Transport Act 1981.

The Board Members are responsible for the maintenance and integrity of the corporate and financial information included on the Authority’s website.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORSSo far as the Board Members are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company’s auditors are unaware, and each Board Member has taken all the steps that he ought to have taken as a Board Member in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

AUDITORSThe auditors, Mann Judd Gordon Ltd, will be deemed re-appointed under Section 487 of the Companies Act 2006.


STORNOWAY PORT AUTHORITY Report of the Board for the Year Ended 31 December 2015

BOARD MEMBERSThe Board Members shown below have held office during the whole of the period from 1 January 2015 to the date of this report.

Captain R J M FraterDr N R GalbraithM A MurrayI BurgessA Macdonald

Other changes in Board Members holding office are as follows:

Ms A J Maciver - resigned 9 January 2015 A Morrison - resigned 29 October 2015 Captain J Smith - resigned 30 April 2015 I D Maciver - appointed 5 June 2015 J M Nicolson - appointed 5 November 2015 A D Macleod - appointed 27 July 2015

STATEMENT OF BOARD MEMBERS’ RESPONSIBILITIESThe Board Members are responsible for preparing the Report of the Board and the financial statements in accordance with applicable law and regulations.

Legislation requires the Board Members to prepare financial statements for each financial year. Under that law the Board Members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the Board Members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Authority and of the profit or loss of the Authority for that period. In preparing these financial statements, the Board Members are required to:

- select suitable accounting policies and then apply them consistently;

- make judgements and accounting estimates that are reasonable and prudent;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Authority will continue in business.

The Board Members are responsible for keeping adequate accounting records that are sufficient to show and explain the Authority’s transactions and disclose with reasonable accuracy at any time the financial position of the Authority and enable them to ensure that the financial statements comply with the applicable legislation. They are also responsible for safeguarding the assets of the Authority and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Board Members are responsible for ensuring that the financial statements comply with the Harbours Act 1964 as amended by the Transport Act 1981.

The Board Members are responsible for the maintenance and integrity of the corporate and financial information included on the Authority’s website.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORSSo far as the Board Members are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company’s auditors are unaware, and each Board Member has taken all the steps that he ought to have taken as a Board Member in order to make himself aware of any relevant audit information and to establish that the company’s auditors are aware of that information.

AUDITORSThe auditors, Mann Judd Gordon Ltd, will be deemed re-appointed under Section 487 of the Companies Act 2006.


Report of the Board for the Year Ended 31 December 2015

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

A D Macleod

A D Macleod – Chief Executive

Date: 28 April 2016


Report of the Independent Auditors to the Members of Stornoway Port Authority

We have audited the financial statements of Stornoway Port Authority for the year ended 31 December 2015 which comprise the Profit and Loss Account, the Balance Sheet, the Statement of Total Recognised Gains and Losses and the related notes. The financial reporting framework that has been applied in their preparation is applicable law and the Financial Reporting Standard for Smaller Entities (effective January 2015) (United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities).

This report is made solely to the Authority’s Members, as a body.. Our audit work has been undertaken so that we might state to the Authority’s Members those matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Authority and the Authority’s Members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of Board Members and auditors As explained more fully in the Statement of Board Members’ Responsibilities, the Board Members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors, including “APB Ethical Standard - Provisions Available for Small Entities (Revised)”, in the circumstances set out in note eighteen to the financial statements.

Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Authority’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the Board Members; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Report of the Board to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statementsIn our opinion the financial statements:

- give a true and fair view of the state of the Authority’s affairs as at 31 December 2015 and of its profit for the year then ended;

- have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice applicable to Smaller Entities; and

- have been prepared in accordance with the requirements of the Harbours Act 1964 as amended by the Transport Act 1981.

Opinion on other matter prescribed by the Companies Act 2006 In our opinion the information given in the Report of the Board for the financial year for which the financial statements are prepared is consistent with the financial statements.


Report of the Independent Auditors to the Members of Stornoway Port Authority

Matters on which we are required to report by exception We have nothing to report in respect of the following matters where the Harbours Act 1964 as amended by the Transport Act 1981 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

- the financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of Board Members’ remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit; or

- the Board Members were not entitled to prepare the financial statements in accordance with the small compa-nies regime and take advantage of the small companies’ exemption from the requirement to prepare a Strategic Report or in preparing the Report of the Board.

John E Moffat

John E Moffat FCA (Senior Statutory Auditor) for and on behalf of Mann Judd Gordon Ltd Registered Auditors &Chartered Accountants26 Lewis StreetStornowayIsle of LewisHS1 2JF

Date: 28 April 2016

Note:The maintenance and integrity of the Stornoway Port Authority website is the responsibility of the Board Members; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.



Profit and Loss Accountfor the Year Ended 31 December 2015

31.12.15 31.12.14 Notes £ £ £ £

TURNOVER 2,863,162 2,381,723

Cost of sales 1,528,608 1,073,679 GROSS PROFIT 1,334,554 1,308,044 Administrative expenses 911,391 523,180 423,163 784,864

Other operating income 190,577 181,249 OPERATING PROFIT 3 613,740 966,113

Income from fixed asset investments - 36,327Interest receivable and similar income 4 12,316 5,217Other finance income 16 12,000 - 24,316 41,544 638,056 1,007,657

Interest payable and similar charges 5 24,083 165,066Other finance costs 16 - 8,000 24,083 173,066 PROFIT ON ORDINARY ACTIVITIESBEFORE TAXATION 613,973 834,591

Tax on profit on ordinary activities 6 34,716 154,929 PROFIT FOR THE FINANCIAL YEAR 579,257 679,662



Statement of Total Recognised Gains and Losses for the Year Ended 31 December 2015

31.12.15 31.12.14 £ £

PROFIT FOR THE FINANCIAL YEAR 579,257 679,662Actuarial gains on pension scheme 264,000 55,000Movement on deferred tax relating to pension asset/(liability) (48,720) 210

TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE YEAR 794,537 734,872



Balance Sheet31 December 2015

31.12.15 31.12.14 Notes £ £ £ £FIXED ASSETSTangible assets 7 12,191,935 11,929,232Investment property 8 1,555,100 1,555,100 13,747,035 13,484,332

CURRENT ASSETSDebtors 9 680,164 1,111,344Cash at bank and in hand 2,029,576 3,223,651 2,709,740 4,334,995CREDITORSAmounts falling due within one year 10 519,788 1,490,913 NET CURRENT ASSETS 2,189,952 2,844,082 TOTAL ASSETS LESS CURRENT LIABILITIES 15,936,987 16,328,414

CREDITORSAmounts falling due after more than one year 11 - (1,402,723)

PROVISIONS FOR LIABILITIES 13 (90,126) (82,573)

ACCRUALS AND DEFERRED INCOME 14 (8,556,900) (8,164,414)

PENSION LIABILITY 16 (936,150) (1,119,430) NET ASSETS 6,353,811 5,559,274

RESERVESRevaluation reserve 15 1,095,763 1,095,763Harbour Redevelopment Reserve 15 - 2,200,000Profit and loss account 15 5,258,048 2,263,511 6,353,811 5,559,274



Balance Sheet - continued31 December 2015

The financial statements have been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies and with the Financial Reporting Standard for Smaller Entities (effective January 2015).

The financial statements were approved by the Board on 28 April 2016:

M A Murray

M A Murray - Chair

I Burgess

I Burgess – Vice-Chair



Notes to the Financial Statementsfor the Year Ended 31 December 2015

ACCOUNTING POLICIES

Accounting conventionThe financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets and in accordance with the Financial Reporting Standard for Smaller Entities (effective January 2015).

TurnoverTurnover comprises the total income receivable for the year, excluding value added tax, from dues on berthings, goods landed and utilisation of ancillary services.

Tangible fixed assetsDepreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Land, Buildings and Works - at varying rates on cost Plant and Equipment - at varying rates on cost Office equipment - at varying rates on cost Motor vehicles - 25% on cost

Investment propertyThe Authority recognises its portfolio of rental properties as investment properties in the balance sheet, and in-cludes them at Market Value.

Any revaluation surpluses arising on the revaluation of the investment property portfolio will be reflected in the Statement of Total Recognised Gains and Losses and within the Revaluation Reserve.

Deferred tax will be provided in full only if a property is subject to a binding agreement for sale.

The Board will revisit the valuation of the investment property portfolio on a periodic basis.

Deferred taxDeferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Deferred tax is only provided for on revaluation surpluses arising, where a property is the subject of a binding agree-ment for sale.

Hire purchase and leasing commitmentsRentals paid under operating leases are charged to the profit and loss account on a straight line basis over the peri-od of the lease.

Pension costs and other post-retirement benefitsThe authority operates a defined benefit pension scheme. A full actuarial evaluation by a professionally qualified ac-tuary is carried out every 3 years. The surplus/deficit in the scheme is recognised as an asset/liability on the balance sheet. Changes in the asset/liability are written off in the profit and loss account or statement of total recognised gains and losses as appropriate.

GrantsCapital grants received in respect of fixed assets are credited to deferred income and amortised to the profit and loss account over the useful economic lives of the assets to which they relate.

1.


2.

3.

4.

5.


Notes to the Financial Statements - continuedfor the Year Ended 31 December 2015

STAFF COSTS 31.12.15 31.12.14 £ £Wages and salaries 751,297 677,802Social security costs 54,720 52,398Other pension costs 126,000 129,000 932,017 859,200

The average monthly number of employees during the year was as follows: 31.12.15 31.12.14

Operational 18 18Administration 4 4Managerial 4 5 26 27 OPERATING PROFIT

The operating profit is stated after charging/(crediting):

31.12.15 31.12.14 £ £Depreciation - owned assets 1,174,933 233,685Profit on disposal of fixed assets (26,898) (289,520)Auditors' remuneration 8,775 10,750

Board Member remuneration and other benefits etc 45,452 -

INTEREST RECEIVABLE AND SIMILAR INCOME 31.12.15 31.12.14 £ £Deposit Account Interest 12,316 5,217

INTEREST PAYABLE AND SIMILAR CHARGES

Interest payable and similar charges includes the following: 31.12.15 31.12.14 £ £Bank loan interest - 1,737Loan Interest 24,083 163,329 24,083 165,066


STORNOWAY PORT AUTHORITYNotes to the Financial Statements - continued

for the Year Ended 31 December 2015

TAXATION

Analysis of the tax chargeThe tax charge on the profit on ordinary activities for the year was as follows: 31.12.15 31.12.14 £ £Current tax:UK corporation tax 117,117 128,502Under provision of corporationtax in prior year (89,954) - Total current tax 27,163 128,502

Deferred tax 7,553 26,427 Tax on profit on ordinary activities 34,716 154,929 TANGIBLE FIXED ASSETS Land, Plant Buildings and Office Motor and Works Equipment Equipment Vehicles Totals £ £ £ £ £COSTAt 1 January 2015 12,278,883 1,572,566 47,970 45,404 13,944,823Additions 946,757 486,468 8,763 - 1,441,988Disposals - (5,440) - - (5,440) At 31 December 2015 13,225,640 2,053,594 56,733 45,404 15,381,371 DEPRECIATIONAt 1 January 2015 1,346,014 597,304 37,507 34,766 2,015,591Charge for year 981,984 175,420 13,352 4,177 1,174,933Eliminated on disposal - (1,088) - - (1,088) At 31 December 2015 2,327,998 771,636 50,859 38,943 3,189,436 NET BOOK VALUEAt 31 December 2015 10,897,642 1,281,958 5,874 6,461 12,191,935 At 31 December 2014 10,932,869 975,262 10,463 10,638 11,929,232 Included in cost of land and buildings is freehold land of £462,620 (2014 - £462,620) which is not depreciated.

INVESTMENT PROPERTY Total £COST OR VALUATIONAt 1 January 2015and 31 December 2015 1,555,100

NET BOOK VALUEAt 31 December 2015 1,555,100

At 31 December 2014 1,555,100

6.

7.

8.




INVESTMENT PROPERTY - continued

Included in cost or valuation of investment property is freehold land of £1,555,100 (2014 - £1,344,600) which is not depreciated.

Cost or valuation at 31 December 2015 is represented by: £Valuation in 2012 1,061,735Cost 493,365 1,555,100 If the investment properties had not been revalued they would have been included at the following historical cost:

31.12.15 31.12.14 £ £Cost 493,365 493,365 Aggregate depreciation (34,028) (34,028) The investment properties were valued on an open market basis on 31 March 2012 by Graham + Sibbald Chartered Surveyors.

DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 31.12.15 31.12.14 £ £Trade debtors 424,438 398,597Other debtors 255,726 712,747 680,164 1,111,344

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 31.12.15 31.12.14 £ £Bank loans and overdrafts - 1,438Hire purchase contracts 2,723 3,590Trade creditors 129,257 62,065Taxation and social security 137,810 143,290Other creditors 249,998 1,280,530 519,788 1,490,913 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 31.12.15 31.12.14 £ £Bank loans - 1,400,000Hire purchase contracts - 2,723 - 1,402,723

8.

9.

10.

11.




CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR - continued 31.12.15 31.12.14 £ £Amounts falling due in more than five years:

Repayable by instalmentsBank loans more 5 yr by instal - 689,412

SECURED DEBTS

The following secured debts are included within creditors:

31.12.15 31.12.14 £ £Bank loans - 1,401,438

Royal Bank of Scotland hold a Standard security over all of the heritable and leasehold property of Stornoway Port Authority.

PROVISIONS FOR LIABILITIES 31.12.15 31.12.14 £ £Deferred taxAccelerated capital allowances 90,126 82,573

Deferred tax £Balance at 1 January 2015 82,573Provided during year 7,553 Balance at 31 December 2015 90,126

ACCRUALS AND DEFERRED INCOME 31.12.15 31.12.14 £ £Deferred government grants 8,556,900 8,164,414

11.

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RESERVES Profit and Harbour Loss Revaluation Redevelopment account reserve Reserve Totals £ £ £ £

At 1 January 2015 2,263,511 1,095,763 2,200,000 5,559,274Profit for the year 579,257 579,257Transfer to profit and loss reserves 2,200,000 - (2,200,000) -Actuarial Gain/(Loss) onpension scheme 215,280 - - 215,280 At 31 December 2015 5,258,048 1,095,763 - 6,353,811

Profit and loss account excluding pension liability 6,194,198 Pension deficit (936,150) Profit and loss account 5,258,048 PENSION COMMITMENTS

Staff of the Stornoway Port Authority are Members of the Highland Council Pension Scheme - which is a defined benefit scheme.

Value of scheme assets and liabilities

31.12.15 31.12.14 £ £Market value of assets 3,738,000 3,659,000Present value of scheme liabilities (4,923,000) (5,076,000) Deficit in scheme (1,185,000) (1,417,000)Related deferred tax liability 248,850 297,570 Net pension liability (936,150) (1,119,430)

Movement in deficit during the year 31.12.15 31.12.14 £ £Deficit in scheme at start of year (1,417,000) (1,416,000)Current service cost (126,000) (129,000)Contributions 82,000 81,000Other finance income 12,000 (8,000)Actuarial gain 264,000 55,000 Deficit in scheme at end of year (1,185,000) (1,417,000)

15.

16.



Notes to the Financial Statements - continued for the Year Ended 31 December 2015

PENSION COMMITMENTS - continued

The Authority contributes to the Highland Council Pension Fund. Contributions to the scheme are charged to the profit and loss account in the year in which they are payable. The contributions are assessed in accordance with the advice of a qualified actuary using the projected unit method. The latest tri-annual actuarial valuation was at 31 March 2014.

The main conclusions arising from the valuation of the entire scheme are:

- The funding level (ratio of assets to past service liabilities) as at 31 March 2014 is 97% (compared with 96% as at 31 March 2011.- The cost of ongoing benefits was assessed as 24.6% of pensionable pay. The average employee contribution was assessed as 5.8% of pensionable pay leaving a balance of 18.8% to be met by employers.- Assuming the funding level is targeted to reach 100% over the next 20 years then this requires an extra contribution of 1.4% of pensionable pay from employers. The results in a total contribution from employers of 20.2% of pensionable pay, which equates to 348% of employee contributions.- In assessing the required level of contributions allowance for future improvements in mortality.- The financial position of the fund deteriorated in the period after the valuation date principally as a result of declining equity markets. Accordingly, certified employer contribution rates higher than disclosed by the valuation.- Further sums should also paid to the Fund to meet the costs of any early retirements using methods and assumptions issued by the actuary from time to time.- The certified contribution rates represent the minimum level of contributions to be paid. For Stornoway Port Authority, the contributions payable will be 18.5%, 19.0% and 19.5% of employee's pensionable pay in the years to 31 March 2016, 2017 and 2018 respectively.

RELATED PARTY DISCLOSURES

A number of the Board Members have vessels moored in the Authority's pontoons. All such supplies to Board Members are at the rates published in the Schedule of Rates and Dues.

Board Member Service Opening balance Invoice issued Closing balance

Captain J. Smith Harbour Dues £2,304 - -John Nicolson Harbour Dues £1,229 - -

APB ETHICAL STANDARD - PROVISIONS AVAILABLE FOR SMALL ENTITIES

In common with many other businesses of our size and nature we use our auditors to prepare and submit returns to the tax authorities and assist with the preparation of the financial statements.

PILOTAGE

The Statutory Harbour Undertakings (Pilotage Accounts) Regulations 1988 require the separate disclosure of revenue and expenditure applicable to pilotage activities.

31.12.15 31.12.14 £ £

Revenue from pilotage services 18,904 26,671

Pilotage expenses 20,592 618

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annual report 2015 - stornoway port...

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