Annual Report Year Ending 31st March 2013
Mallaig Harbour Authority Annual Report Year Ending 31st March 2013

Authority Information
___________________________________________________

Non-Executive Directors Michael Currie (Chairman)
Charles King (Vice Chairman)
Michael Foxley
Allan Henderson
Anthony Kenning
John MacMillan
Andrew Race
Jacqueline Wright

Chief Executive Officer Robert MacMillan

Harbour Master James McLean

Auditor S Bargh
Partner with William Duncan & Co.
30 Miller Road
Ayr
KA7 2AY

Business Address Harbour Office
Mallaig
Inverness-shire
PH41 4QB

Bankers Bank of Scotland Commercial
Broxden House
Lamberkine Drive
Perth
PH1 1RX

Solicitors West, Anderson & Co.
92 Bath Street
Glasgow
G2 2EJ

Engineers Wallace Stone
Dowan Farm Steading
Dowan Road
Milngavie
Glasgow
G62 6HA

Appointments
As detailed in last year’s Annual Report the Mallaig Harbour Revision Order 2012 was finally established on 1st April 2012. The HRO enables the Authority to operate under the Modernisation of Trust Ports Legislation, changes the way that non-executive Board Members are appointed and dictates the duration of that appointment.

Following on from the new HRO and subsequent advertising, six new Board Members were duly appointed and the current full membership of the Mallaig Harbour Authority is as listed below:

Michael Currie (Chairman)
Charles King (Vice-Chairman)
Robert MacMillan (CEO)
Michael Foxley
Allan Henderson
Anthony Kenning
John MacMillan
Andrew Race
Jacqueline Wright

Report and Financial Statements
The members of Mallaig Harbour Authority have pleasure in submitting their report and financial statements for the year ended 31 March 2013.

Port Usage
A monthly average of 68 vessels of varying types made use of the Harbour. (This does not include Marina usage).

Fish Landings/Dues
Landing volumes and monetary values for the current year, the two previous years plus two other years (for comparative purposes) are listed below:

VOLUME IN TONNES
Year ended Herring Sprats/ Whitefish Shellfish Total Value
31st March Mackerel
1978 9,483 10,425 3,712 887 £7,640,036
1984 405 1,582 5,373 1,055 £5,195,726
2011 8 540 1,297 1,126 £6,549,717
2012 25 505 1,609 1,262 £8,876,480
2013 100 1295 2,337 1,427 £10,361,143

As can be seen from the aforementioned table, landings with a combined value of over £10m were landed at Mallaig as the port experienced its busiest period of fishing activity for manys a year.

Demersal landings for the year were up by a significant 74% and shellfish by a more modest (but very welcome 13%). This was achieved via the influx of large North East of Scotland based trawlers who fished in an around the Minch up until the month of July landing good quantities of white fish and prawns. Shellfish price remained high through this period of the year and indeed remained higher than 2011 levels throughout the 2012 Calendar year!

Since the turn of the year however prices have dropped considerably – by as much as 28% – due in no small part to the financial instabilities of European countries (and beyond)!

It seems unlikely that the high level of fishing (and subsequent landings) at the port will continue as legislation restricting their days at sea will deny the NE trawlers significant access to west coast waters.

Four local trawlers “Rebecca Jeneen”; Caralisa”; “Margaret Ann” and “Ocean Hunter” commenced the winter sprat fishery on Monday 19th November 2012 and although it only lasted for 4 weeks, landings attained a 5 year high with just short of 1,300 tonnes being discharged at the port. The same vessels also landed a token 100 tonnes of herring considerably less than the near 10,000 tonnes landed 35 years ago!!!

Prices paid quayside at Mallaig:-

Year End 31st March 2013 Whitefish – £1,097 per tonne Shellfish – £5,221 per tonne
Year End 31st March 2012 Whitefish – £1,429 per tonne Shellfish – £5,106 per tonne

Tourism
Figures obtained from the CalMac Ferries Limited/Mallaig Harbour Authority dues returns are listed below as is the comparative table for the previous year.

Year 2011/12 Year 2012/13
1st April 2011 – 31st March 2012 1st April 2012 – 31st March 2013
Passengers 247,891 Passengers 246,531
Cars 53,434 Cars 51,504
Coaches 1,615 Coaches 1,744
Commercials 580 Commercials 1,379

For the fourth successive year there has been a slight downturn in the number of cars (3.5%) utilising the Skye and Small Isles Ferry Services and this situation is compounded by the fact that for the first time in four years passenger numbers also show a slight decline – 0.5%.

However it’s encouraging to note the increase in tour operators making use of the Skye Ferry illustrated by an 8% increase on the previous year’s figures but it’s the increase in commercial vehicles – 138% that is most welcome.

It may be of interest to note that during the summer of 2012 the MV Coruisk, in carrying out its duties on the Mallaig/Armadale (Skye) Service actually docked at the pier/linkspan on 1539 occasions.

The Lochnevis meanwhile with its all year round service to the Small Isles (and Armadale) docked on 622 occasions.

Ferries Plan
The content of the Scottish Ferry Services Ferries Plan (2013-2022) published by Transport Scotland on the 19th of December 2012 was wide and varied but certainly not very innovative in a Mallaig context at any rate and could even be classed as being possibly detrimental to the area if certain of its recommendations are followed through.

Consequently the Ferries Plan could best be described as being like a curate’s egg – good in parts!

One of the good parts being the safeguarding of the Mallaig/Armadale route for the next 9 – 10 years – the lifespan of the Ferries Plan! The Plan confirms that the Skye Ferry service will “continue to be tendered within the network and be maintained at current levels!

The Ferries Plan does not contain much hope for those seeking the re-introduction of a Mallaig Lochboisdale ferry service. Proposals put forward by the Islanders on the Uists and Uist Estates, proposals that have gathered support from potential travellers and hauliers on both sides of the Minch, have simply fallen on deaf ears.

Transport Scotland are dismissive of the proposals citing costs of £20 – £40m of capital investment (a new vessel) and running costs of £3 – £4m per annum as being too much to justify the existence of a new ferry route.

There was no hint of a concession even for the introduction of a trial service over the summer months to help evaluate the actual costs involved in providing such a service and it’s the widely held belief that there is little political ambition for the re-introduction of a Mallaig/Outer Isles service.

It was however the proclamation that the MV Lochnevis, a ferry custom built for the

Small Isles route would be reassigned to provide an all year dedicated service for Colonsay that really upset the local populace.

So whilst the Ferries Plan contends that services to the Small Isles will be improved serious doubt must be expressed that this will indeed be the case.

The Lochnevis, custom built for the Small Isles route at a cost of £5.5m – part of a £30m EU/Government initiative to upgrade the jetties on Eigg, Muck, Rum and Canna – presently carries out the service and is highly regarded by the Islanders.

However the Ferries Plan to improve the Small Isles service is to take away its custom built ferry and locate it on Colonsay!

The Plan states that two vessels will replace the Lochnevis one of which will be a Rigid Inflatable Boat (RIB) although this will be dependent on purchase of a new RIB vessel which, once purchased, and to quote the Plan will meet the “Needs Based Assessment fully +”

There is no doubt that improvements to the Sunday Service to the Small Isles that are contained in the Plan is of benefit to the residents there but suggestions that provision of passenger services can be effectively carried out by a RIB and that this can be considered as an improvement beggars belief.

Yachting Facility
Although open for business on the 9th September 2011 Mallaig’s £900,000 yachting facility was officially declared open at a ceremony held on Friday 27th April 2012 by Mr Gary Martin, Donegal County Council and Chairman of The Sail West Steering Committee.

The new pontoon facility which was part funded by Sail West with assistance from Highlands & Islands Enterprise, The Highland Council and of course the Authority itself, was extremely well utilised as during its first full year of operation it notched up over 800 visitations.

Following an operational review of the Marina it has been decided that a further two sections of pontoons can be located in the south west corner of the existing structure and costings are currently being obtained by the Harbour Engineer.

The Authority is also initiating the placement of a “walk-through” ladder at the pontoon. This should greatly benefit access/egress on to/or off the pontoons by seafarers using dinghy’s or other small craft.

Resurfacing Contract
The upgrading of a considerable area of the surface of the Steamer Pier, its approach road and pier ducting has recently been carried out at the not inconsiderable cost of £250,000!

Work commenced during the opening week of March 2013 with contractor Noel Regan & Sons remit being the re-tarring of the road and ground alongside the Caledonian MacBrayne storage container/Lochnevis berth/car park; concrete works on the road alongside the CalMac office; plus the main access down onto the fish pier in tandem with the removal of the old service duct covers and replacement via new concrete slab covers.

It had been hoped to have all pier works carried out by Easter but when the service duct – the trench that carries water/electricity/phone lines down onto the pier – was examined, the walls of the trench were found to be in poor order with a considerable length having to be re-built/strengthened before placement of the covers could be contemplated.

This extra and unforeseen complication had the effect of extending the contract by a total of six weeks.

Road and pier lining was also carried out as part of the contract with enhanced passenger walkways, extra car parking, enhanced road layout (to improve management of vehicles utilising the ferry), speed restrictions and new road/pier signage all now in-situ.

Linkspan
As itemised in last year’s Annual Report, Authority Engineers Wallace Stone, in tandem with Authority Accountants William Duncan & Co and the Board of the Authority are currently evaluating the financial implications to the Authority if ownership of the Mallaig Linkspan, currently owned by Caledonian Maritime Assets Ltd (CMAL) is transferred to the Mallaig Harbour Authority.

Meetings have been held between the Authority and CMAL and even Transport Scotland on the future ownership issue but to date they have proved inconclusive.

Nota Bene
• Two new waste oil tanks were procured at a cost of £9,000. It is a duty of the Harbour Authority to provide reception facilities for the disposal of ships waste oil. Last year 6245 gallons of waste oil were collected at the port.
• Another duty that the Harbour Authority has to carry out is to provide facilities for ships waste. This is done by hiring a weekly skip from the Highland Council. The cost of providing this facility was £16,913.72 last year!
• Four new bollards were inserted in the Steamer Pier – replacing the original ones dating back some 30 years or so.
• Roofing maintenance was effected to the Prawn Market Building, the Power House Unit and the building leased to Scottish Sea Farms. The placement of profile sheeting on all three buildings has not only enhanced the structure but extended their life.

Finance
The surplus for the year (before tax) of £241,083 is similar to the surplus for 2011/2012 and continues the improvement on the results experienced in 2010/2011.

Total incoming revenues rose by just over 21%, with the main elements of the increase being improved fish, harbour and cargo dues, together with the effect of the first full year’s income stream from the Marina facility. Vehicle and passenger dues were static with other sources of income, mainly rents receivable, showing marginal changes from the previous year.

The increased revenues allowed the authority to carry out considerable and much-needed maintenance works, reflected in the increase in harbour repair costs, principally resurfacing repairs, with the costs increased by 265% from the previous year. As regards the other operating costs, the increase in wages reflect the full year costs for staffing the Marina.

The administration overheads have risen by some 10%; the main components of this reflect increases in depreciation; full year applied to capital expenditure in the previous year (which is offset by grant release increase within other operating income) as well as increases in the Board Honorarium (as prescribed by the Mallaig Harbour Authority Revision Order 2012) and professional fees in connection with the Linkspan facility. Other admin overheads show marginal movements in line with previous years and expectation.

The Authority’s cash position continued to improve throughout the period; these reserves are necessary to allow for the ongoing maintenance programme currently being undertaken to the Harbour by the Authority, together with ongoing development and capital expenditure and commitments. The Authority is extremely grateful for grant assistance which has been received in respect of capital expenditure projects, but these costs have to be paid for by the Authority before receiving the grant rebate.

Overall, the Board is pleased with the result for the period and with the Authority’s financial position as shown at the end of the year.
Statement of members’ responsibilities

The members are responsible for preparing the Members’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the members to prepare financial statements for each financial year. Under that law the 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 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 those financial statements, the members are required to:
-select suitable accounting policies and then apply them consistently;
-make judgements and estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
-prepare the financial statements on the going concern basis unless it is inappropriate to presume that the authority will continue in business.

The 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 Companies Act 2006. 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.

Statement of disclosure to auditors

(a) so far as the Members are aware, there is no relevant audit information of which the Authority’s auditors are unaware, and

(b) they have taken all the steps that they ought to have taken as Members in order to make themselves aware of any relevant audit information and to establish that the Authority’s auditors are aware of that information.

By order of the board

Mr Robert MacMillan
Chief Executive Officer / Director

31 May 2013

As auditor appointed by the Secretary of State for Scotland under Section 3(2) of the Mallaig Harbour Authority Revision Order 2012, I have audited the financial statements of Mallaig Harbour Authority on pages 9 to 19 for the year ended 31 March 2013. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).

This report is made solely to the Authority’s members, as a body, in accordance with chapter 3 part 16 of the Companies Act 2006. My audit work has been undertaken so that I might state to the Authority’s members those matters I am required to state to them in the auditor’s report and for no other purpose. To the fullest extent permitted by law, I do not accept or assume responsibility to anyone other than the Authority and the Authority’s members as a body, for my audit work, for this report, or for the opinions I have formed.

Respective responsibilities of members and auditors

As explained more fully in the Members Responsibilities Statement set out on page 6, the Authority’s Members are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. My 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 Ethical Standards for Auditors.

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 members; and the overall presentation of the financial statements. In addition, I read all the financial and non-financial information in the Members’ Report to identify material inconsistencies with the audited financial statements. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements

In my opinion the financial statements:

– give a true and fair view of the state of the authority’s affairs as at 31 March 2013 and of its profit for the year then ended;

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

– have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In my opinion the information given in the Members’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 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 members’ remuneration specified by law are not made; or

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

Mr Stephen Bargh CA MAAT (Senior Statutory Auditor)
Partner with William Duncan & Co 31 May 2013

Chartered Accountants
Statutory Auditor
30 Miller Road
Ayr
Ayrshire
KA7 2AY

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