[Archived] Venkys London Limited - Accounts

[philipl]

I qualified as a chartered accountant.

Mercerman's interpretation is entirely valid.

Blueandwhite is equally at liberty to read an optimistic view into the statement.

It comes down to opinions meeting hard facts.

The hard facts on Rovers' current financial performance are that the relegation clauses in players' contracts the commentary refers to did exist, were enacted then were largely negated by what were in my opinion a series of highly irresponsible pay decisions this summer/autumn. Add in the loss of sponsorship and PL revenues, loss of supporters and no League cup income (we had a run until Kean intervened last season) then a running rate loss of £1.5m per month is probably on the low side of estimates for this season.

In terms of how Venky's will react, it is speculation but we can see hard facts from the past and those hard facts are:

- their non-attendance at Ewood

- they unhesitatingly sold off players to pay down the Barclays debt last season and to hell with our Premier League position

- they have a track record of dumping non-chicken core activities and not giving a damn about the criticism (Bollywood venture)

Be very afraid if we don't go up this season.

[yoda]

I qualified as a chartered accountant.

Mercerman's interpretation is entirely valid.

Blueandwhite is equally at liberty to read an optimistic view into the statement.

It comes down to opinions meeting hard facts.

The hard facts on Rovers' current financial performance are that the relegation clauses in players' contracts the commentary refers to did exist, were enacted then were largely negated by what were in my opinion a series of highly irresponsible pay decisions this summer/autumn. Add in the loss of sponsorship and PL revenues, loss of supporters and no League cup income (we had a run until Kean intervened last season) then a running rate loss of £1.5m per month is probably on the low side of estimates for this season.

In terms of how Venky's will react, it is speculation but we can see hard facts from the past and those hard facts are:

- their non-attendance at Ewood

- they unhesitatingly sold off players to pay down the Barclays debt last season and to hell with our Premier League position

- they have a track record of dumping non-chicken core activities and not giving a damn about the criticism (Bollywood venture)

Be very afraid if we don't go up this season.

So we do need someone with about 70 mill in the sky rocket if the venkys pull out, or is that not what you are saying?

[Stuart]

Looking at the post balance sheet events, it says we have made 4.4m net transfer spend, which presumably includes Rhodes net off against n zonzi and Hoillet. Considering we were due in the 6m from man utd in June, then the bank position might not be as bad as some are saying, I'm sure that the weekly losses are making it worse though.

Rhodes was after March 2012 so wouldn't be included...?

[tomphil]

I qualified as a chartered accountant.

Mercerman's interpretation is entirely valid.

Blueandwhite is equally at liberty to read an optimistic view into the statement.

It comes down to opinions meeting hard facts.

The hard facts on Rovers' current financial performance are that the relegation clauses in players' contracts the commentary refers to did exist, were enacted then were largely negated by what were in my opinion a series of highly irresponsible pay decisions this summer/autumn. Add in the loss of sponsorship and PL revenues, loss of supporters and no League cup income (we had a run until Kean intervened last season) then a running rate loss of £1.5m per month is probably on the low side of estimates for this season.

In terms of how Venky's will react, it is speculation but we can see hard facts from the past and those hard facts are:

- their non-attendance at Ewood

- they unhesitatingly sold off players to pay down the Barclays debt last season and to hell with our Premier League position

- they have a track record of dumping non-chicken core activities and not giving a damn about the criticism (Bollywood venture)

Be very afraid if we don't go up this season.

The non attendance says a lot, just how many times have they been over since their pet stooge departed ? Not even to welcome or support their new manager which one of them supposedly picked. They did indeed sell players and freeze out/slash the wages, all be it on awful advice to cover someone else's vested interest, because they had to pay the debt down. Why didn't they pay it down themselves ? As ive said before when the pressure comes for cash they will sell whatever they have to regardless of any harm it will do to the team and when the time comes to bail (and it will) they will do one overnight i would think.

[readsi3k]

The Going Concern qualifications are by no means standard !!!!!!!!!!!!!!!!!!!!!!!

What Going Concern qualifications?

The only qualification I can see relates to the value of some random investment.

It's also worth remembering that players values are held on the balance sheet as intangible assets. In very basic terms, my understanding is that 'Profit' on the sale of players is the amount received in excess of the carrying value of the player when they are sold. I would imagine Jones would be held at a very low carrying value, with the club having never paid any transfer fee for him and therefore his entire selling price would be 'profit'.

Perhaps a more insightful indicator of player investment would be to look at the cash flow note on page 35. Here we see £17.3m cash outflow on purchase of intangibles and £20.9m cash inflow on the sale of intangibles. This is only cash movement (hence further consideration in a years time etc for player sales won't be shown) but it shows a relatively similar level of cash investment in players as have been sold (whether this represented good business in terms of the quality of these players is another argument entirely).

[Exiled in Toronto]

It is perhaps worth comparing these accounts with some of the fears that have been swirling around these last couple of years.

1) Venky's have but nothing into the club - well they put 30 million into the Trust's Xmas party fund and someone has now put 12.5 million into the club

2) We are mortgaged up to the hilt - paid off

3) The club's assets are at risk and Brockhall will be sold to gypsies - Venky's Indian assets are at risk

4) We are being asset-stripped - other than selling good players to pay a bloated wage bill (the modus operandi for a decade or more) no we are not

5) That Indian bank sounds well dodgy - no they aren't

6) We have a crippling amount of debt - we have none

7) We will tumble through the divisions and end up playing Darwen - we are doing the best of the 3 relegated clubs and we're all ticked off that we're down to 9th.

8) Etc etc etc

Venky's have a lot to answer for - Kean and relegation to name but two - but their financial input post-relegation seems to me to be far in excess of what was deemed a certainty on here and also far in excess of what the Trust would have done this time round.

However, since Philip tells me I should be very afraid I shall continue to cower behind the sofa with all the Manchester United fans who have been there on his advice since 2005.

[K-Hod]

Having read these from front to back and drawn a few conclusions , I took the liberty of asking an accountant who is involved in football of the implications.

On this occasion I do not agree with the , we are up poop creak .

Most people were expecting poor accounts , however what these accounts show is after everything is taken into account including player trading , rovers made a slight profit , not the £3 million loss per season as it was under the walkers trust .

Player trading is nothing new to rovers.

More importantly it also shows the £20 million debt we had was paid off in may 2012 , yes accounts run to march 2012 however this amendment is important .

It also shows venkys have also in these accounts alone given the club a further £12.5 million pound with no agreement for this to be repaid , this is purely a gift . Had these been the walkers trust , it would of been a loan. The report shows the committed to keep ticketing prices low , whilst also stating the owners are in a position to and have agreed to put any other money into the club to keep the club in a trading position . In addition to this , it states we have a banking relationship with no present concerns and none foreseen.

Pitch performance on ALL footballing clubs accounts will show expectations and turnover issues if certain things are not achieved . For e.g Chelseas will have forecasted getting a lot further in the champions league the year than it looks like they will. This will be shown in their accounts next year as a concern , despite a billionaire owner .

There is many things which need to be done at the club for supporters to be convinced about the owners , however in the words of the accountant I have spoken to he said "this is one stick you can't use to beat venkys with"

That is good enough for me and is consistent with the owners public statement that the club is debt free.

Having spoken to Derek Shaw on Friday too , he had no concerns about finance (yes club making a daily loss , but it would be under anyone at this moment in time ) gate receipts would not cover 2 players wages . The club will make funds available in January whilst more cash is being injected into other projects directly from the owners , which will be announced in the coming weeks .

The next set of accounts for this season will be the ones which will be of greater interest , should the club gain promotion then the ones the year after will be. Should we not get promoted then it's only then that anyone can make a professional opinion on rovers financial position as a self sufficient entity . If the owners continue to put their own money in as it clearly shows they have on this set of accounts , then I guess it's all irrelevant and only becomes relevant when that day comes when they decide not to put cash in. However you could say that about nearly every club , whilst some clubs have much larger liabilities and hundreds of millions of debts .

Sorry for any typos, , I have typed this on my I phone

Thanks for the explanation. Interesting reading.

It is perhaps worth comparing these accounts with some of the fears that have been swirling around these last couple of years.

1) Venky's have but nothing into the club - well they put 30 million into the Trust's Xmas party fund and someone has now put 12.5 million into the club

2) We are mortgaged up to the hilt - paid off

3) The club's assets are at risk and Brockhall will be sold to gypsies - Venky's Indian assets are at risk

4) We are being asset-stripped - other than selling good players to pay a bloated wage bill (the modus operandi for a decade or more) no we are not

5) That Indian bank sounds well dodgy - no they aren't

6) We have a crippling amount of debt - we have none

7) We will tumble through the divisions and end up playing Darwen - we are doing the best of the 3 relegated clubs and we're all ticked off that we're down to 9th.

8) Etc etc etc

Venky's have a lot to answer for - Kean and relegation to name but two - but their financial input post-relegation seems to me to be far in excess of what was deemed a certainty on here and also far in excess of what the Trust would have done this time round.

However, since Philip tells me I should be very afraid I shall continue to cower behind the sofa with all the Manchester United fans who have been there on his advice since 2005.

Philipl seems completely unable to post anything without adding scaremongering or some sort of conspiracy theory.

Strange fellow seemingly.....

[Amo]

Philipl seems completely unable to post anything without adding scaremongering or some sort of conspiracy theory.

Strange fellow seemingly.....

His agenda isn't that strange when you remember who he backed to take over.

[K-Hod]

His agenda isn't that strange when you remember who he backed to take over.

Touche Topman!!

[philipl]

I see the happy clappies are back.

[K-Hod]

I see the happy clappies are back.

Not really, just interesting that yourself and Glen draw completely different conclusions. The nature of your conclusion being along the same lines of the majority of your posts. Cheerful reading as ever....

[Amo]

I see the happy clappies are back.

There's some ground between Rovers Fan and doom-monger, Philip.

[ABBEY]

alls i will say isVENKYS OUT!!!!

[RoverScot]

The accounts show a complete mismanagement of the club last season that required a £20 million transfer surplus to cover. The mismanagement of the club led to Barclays calling in the debt - presumably over the way the overdraft was run up the previous season paying for agent fees and big wages.

However, the debt to Barclays has now gone. I doubt any other British bank would give the club money and so The Bank of India was the best move for Venkys as they would have a higher credit rating with them . The BOI cannot secure the new loans against Rovers and so avoids the Portsmouth situation.

The contingency plan for not getting up within two seasons will be a fire sale to reduce the current liabilities to a sustainable point. Venkys will probably not sell though as it is probably more valuable for them to hold it and hope for a promotion miracle somewhere down the line than simply give it away to the Rovers Trust.

We will have a club for a long time yet but I'm not sure what condition it will be. The best to hope for is Venkys splurging on their own credit card but with playing assets that can be resold if they put us in the creek without a paddle.

[Hughesy]

I qualified as a chartered accountant.

It comes down to opinions meeting hard facts.

Be very afraid if we don't go up this season.

United gone bust yet?

Do the FACTS (not theory's) show our debt has been cleared with the bank?

[TBTF]

The accounts show a complete mismanagement of the club last season that required a £20 million transfer surplus to cover. The mismanagement of the club led to Barclays calling in the debt - presumably over the way the overdraft was run up the previous season paying for agent fees and big wages.

However, the debt to Barclays has now gone. I doubt any other British bank would give the club money and so The Bank of India was the best move for Venkys as they would have a higher credit rating with them . The BOI cannot secure the new loans against Rovers and so avoids the Portsmouth situation.

The contingency plan for not getting up within two seasons will be a fire sale to reduce the current liabilities to a sustainable point. Venkys will probably not sell though as it is probably more valuable for them to hold it and hope for a promotion miracle somewhere down the line than simply give it away to the Rovers Trust.

We will have a club for a long time yet but I'm not sure what condition it will be. The best to hope for is Venkys splurging on their own credit card but with playing assets that can be resold if they put us in the creek without a paddle.

The thing that must be remembered here surely is that these accounts are up to March 2012.Up to that point we were told that barclays bank was pressing for repayment and it looks as though under extreme pressure they put in £12million which was supposed to have come much earlier.Following a number of player sales and wage cuts we ended the season debt free at bank level and with alot of the wage costs much reduced.Sadly it also resulted in relegation.

However having got to that stage somebody somewhere persuaded these clowns that getting back up at the 1st attempt in the light of the new PL TV deal was the only thing to do.That would require major investment as the perceived wisdom is that those with the biggest budgets go up!!.

In their infinite wisdom they let Shebby in to dictate affairs which was a collision course with Kean such that the signings were many and various but of doubtful quality.The only thing they had in common was that they all cost a packet thus reversing the cost cutting that led to relegation.

How was this funded? well with only an Indian bank likely to go anywhere near and unable to use UK assets as security , Balaji pledges his inheritance (according to Philipl) as the only security they would take and thus we embark on another spending spree.As Rovers is owned by Venkys London then if Indian bank calls on balaji for his security what is to stop them selling Brockhall /Ewood whatever and using that as the source of repayment in India and releasing Balaji's personal security??

By my calculation we are heading for a train crash at £2million a month and once we aren't booked for promotion all bets will be off.We have no assets to sell this time round (other than Rhodes).I bet the contingency cash flows prepared to show the effects of relegation were a delight to behold.Making KPMG comfortable is no doubt the reason these accounts were delayed so long and i wonder how long Karen Silk is allowed vallium??

Philipl/Mercerman have it right -we are on the edge of the precipice here and the events since March 2012 will be frightening to see.Just all start praying that Henning was the result of divine intervention and can produce some magic and get us up this time round .

Do you believe the skills exist amongst our board /owners to pull this round? Shebby gone a little quiet?? And actually Glen , if you think them putting more money in Jan is actually helpful then unless we go up i would think it just worsens the position.

[Steve Moss]

It is perhaps worth comparing these accounts with some of the fears that have been swirling around these last couple of years.

1) Venky's have but nothing into the club - well they put 30 million into the Trust's Xmas party fund and someone has now put 12.5 million into the club

2) We are mortgaged up to the hilt - paid off

3) The club's assets are at risk and Brockhall will be sold to gypsies - Venky's Indian assets are at risk

4) We are being asset-stripped - other than selling good players to pay a bloated wage bill (the modus operandi for a decade or more) no we are not

5) That Indian bank sounds well dodgy - no they aren't

6) We have a crippling amount of debt - we have none

7) We will tumble through the divisions and end up playing Darwen - we are doing the best of the 3 relegated clubs and we're all ticked off that we're down to 9th.

8) Etc etc etc

Venky's have a lot to answer for - Kean and relegation to name but two - but their financial input post-relegation seems to me to be far in excess of what was deemed a certainty on here and also far in excess of what the Trust would have done this time round.

All good points.

Venkys have a lot to answer for, but I no longer question their motives.

In their infinite wisdom they let Shebby in to dictate affairs which was a collision course with Kean such that the signings were many and various but of doubtful quality.The only thing they had in common was that they all cost a packet thus reversing the cost cutting that led to relegation.

Which buys were Shebby's and which were Kean's?

I, for one, am grateful that Shebby (and the fans) put pressure on Kean which resulted in his resignation. I'm grateful that Shebby bought Rhodes. I'm grateful that he got Berg in (belatedly, though) as manager. I'm grateful that I haven't heard from him over the last 2 weeks, as he was getting annoying.

All in all, I think Venkys and Shebby have good motives. On the other hand, their competence and commitment are still suspect.

[TBTF]

All good points.

Venkys have a lot to answer for, but I no longer question their motives.

Which buys were Shebby's and which were Kean's?

I, for one, am grateful that Shebby (and the fans) put pressure on Kean which resulted in his resignation. I'm grateful that Shebby bought Rhodes. I'm grateful that he got Berg in (belatedly, though) as manager. I'm grateful that I haven't heard from him over the last 2 weeks, as he was getting annoying.

All in all, I think Venkys and Shebby have good motives. On the other hand, their competence and commitment are still suspect.

I was under the impression he bought all the Portugese no marks & a Polish goalkeeper at least.Who knows who bought Best/Murphy /Etuhu but probably Kean given the Fulham connection.Did Shebby buy Rhodes?? the trail at the time showed Derek Shaw doing that one with Shebby only showing up when the cameras came.Are you saying Shebby got Berg?? The day before he wanted Redknapp before that Sherwood and Mc KInlay.It seemed at the time that somebody suggested berg and because Shebby had promised a manager by the Weds he went with it having no credible alternative of his own.The story also seems that Shebby s antics cost the club dearly and allowed Kean the golden ticket of ''unfair dismissal'' the cost of which will no doubt appear in the current set of accounts.

Personally i'd like never to hear from the buffoon ever again.As for him and venkys having good motives?? Well we all have good motives about how to run a football club but that doesnt make us the right people to be doing it does it???

WE shouldn't change the tone of the thread but honestly the sooner we are relieved of this reign of complete terror by these morons the better irrespective of Kean finally going-and even that ended being done by default!!

[Salgado Is A Hero]

Philipl seems completely unable to post anything without adding scaremongering or some sort of conspiracy theory.

Strange fellow seemingly.....

It's just attention seeking.

[OJRovers]

I am no Rovers Fan for Venkys but you can't beat them with these accounts.

At the time of the accounts we had debts paid off and cash in the bank, which 99% of clubs couldn't boast.

What has happened since is: our player spending has been at a net cash GAIN including Rhodes. But yes our operating activities are costing c £1m a month taking into account clauses and getting rid of some high earners.

We're heading for another £15m loss this year. Is that a bad thing if they are willing to pay for it themselves? I dont see chelsea fans or city fans complaining at their massive operational losses.

BUT it is completely unknown how Venkys are going to fund this, they might do another capital injection, they might secure it against their chicken business.

If anything, the fact no bank would lend to the club is probably a good thing.

If Venkys wanted rid of the club in summer, it was a very viable option for an investor. £50m of land, no debts. No wonder they are holding out for at least their money back.

[Mercer]

Can we get one thing straight, these accounts do not show that Rovers are debt free as some posters seem to think.

The consolidated balance sheet shows:

• Net current liabilities of £11.5m (payable within 12 months) - anyone with any basic financial knowledge will realise that this position could be very critical
  
• Creditors falling due after more than 12 months of £3.5m
  
• Total debt is therefore £15.0m
  

Therefore, with revenue streams haemorrhaging since 31 March 2012, the only way the club can stay afloat is through additional bank facilities, further funding from the Raos or the sale of any remaining player assets we may have (Henley, Olsson1 & Rhodes) - which are broadly the comments made under 'Going Concern'.

IMO, Philipl's concerns and views are very valid and no one should be sitting comfortably tonight.

IMO, the existance of our club rests almost entirely in the hands of Venky's and you can only form your own personal judgements on how that feels.

[Stuart]

IMO, the existance of our club rests almost entirely in the hands of Venky's and you can only form your own personal judgements on how that feels.

It has done since they bought it. Our best hope is that they get interested. When Kean went I hoped that it would unite the fans and galvanise us but many have simply moved the goalposts and found other excuses - even complaining about Berg!

The biggest worry is who we are sold if Venkys really lose interest.

[SIMON GARNERS 194]

IMO, the existance of our club rests almost entirely in the hands of Venky's and you can only form your own personal judgements on how that feels.

Shudders....

[Mercer]

It has done since they bought it. Our best hope is that they get interested. When Kean went I hoped that it would unite the fans and galvanise us but many have simply moved the goalposts and found other excuses - even complaining about Berg!

The biggest worry is who we are sold if Venkys really lose interest.

I think the biggest worry is that Venky's will at least want all their money back ! Viable options may well be few.

[OJRovers]

Can we get one thing straight, these accounts do not show that Rovers are debt free as some posters seem to think.

The consolidated balance sheet shows:

• Net current liabilities of £11.5m (payable within 12 months) - anyone with any basic financial knowledge will realise that this position could be very critical
  
• Creditors falling due after more than 12 months of £3.5m
  
• Total debt is therefore £15.0m
  

Therefore, with revenue streams haemorrhaging since 31 March 2012, the only way the club can stay afloat is through additional bank facilities, further funding from the Raos or the sale of any remaining player assets we may have (Henley, Olsson1 & Rhodes) - which are broadly the comments made under 'Going Concern'.

IMO, Philipl's concerns and views are very valid and no one should be sitting comfortably tonight.

IMO, the existance of our club rests almost entirely in the hands of Venky's and you can only form your own personal judgements on how that feels.

Hang on

The 11m includes 6m income in advance ie not cash due, 5m bank loan which was paid off EARLY in May (due July).