[Archived] Venkys London Limited - Accounts

[AndyNeil]

The company made a profit and when you pro-rata it down comes out at circa £23k for a standard reporting period of 12 months - now given that there won't be player sales of £10m this season (never mind £20m) and a drop of Sky income to the tune of £35m plus the 'gift' of £12m, the period to 30th June 2013 is going to show a rather large loss. Some people will point to the fact that we are debt-free, but at what cost for the future of the club (we've been relegated, divided and slashed match-day paying fanbase, key personnel both on and off the pitch lost, PR and goodwill through the floor). I'd rather be £10m in debt with guaranteed income of circa £60m, against debt free and guaranteed income of circa £20m... Overall, I can't see how people can look upon these Accounts in a favourable fashion.

[Exiled in Toronto]

The company made a profit and when you pro-rata it down comes out at circa £23k for a standard reporting period of 12 months - now given that there won't be player sales of £10m this season (never mind £20m) and a drop of Sky income to the tune of £35m plus the 'gift' of £12m, the period to 30th June 2013 is going to show a rather large loss. Some people will point to the fact that we are debt-free, but at what cost for the future of the club (we've been relegated, divided and slashed match-day paying fanbase, key personnel both on and off the pitch lost, PR and goodwill through the floor). I'd rather be £10m in debt with guaranteed income of circa £60m, against debt free and guaranteed income of circa £20m... Overall, I can't see how people can look upon these Accounts in a favourable fashion.

Any accounts under any owners the year after relegation would look horrendous. No one thinks we are in a good position, just that the accounts look a hell of a lot better than the ITK's had been asserting they would look.

[TBTF]

Any accounts under any owners the year after relegation would look horrendous. No one thinks we are in a good position, just that the accounts look a hell of a lot better than the ITK's had been asserting they would look.

But this is 2 months before we got relegated and the true impact of that and whats happened since hasn't yet been revealed!! The ITKs would be absolutely vindicated if the accounts were produced as at 31 Oct 2012 rather than March.And its hurtling on even from there.

I dont think Fernhurst Rover is claiming to be particularly ITK-he's stating the bleeding obvious .Conspiracy theories are largely yesterdays chip papers-these are hard facts and there is a huge difference.

[Mercer]

The company made a profit and when you pro-rata it down comes out at circa £23k for a standard reporting period of 12 months - now given that there won't be player sales of £10m this season (never mind £20m) and a drop of Sky income to the tune of £35m plus the 'gift' of £12m, the period to 30th June 2013 is going to show a rather large loss. Some people will point to the fact that we are debt-free, but at what cost for the future of the club (we've been relegated, divided and slashed match-day paying fanbase, key personnel both on and off the pitch lost, PR and goodwill through the floor). I'd rather be £10m in debt with guaranteed income of circa £60m, against debt free and guaranteed income of circa £20m... Overall, I can't see how people can look upon these Accounts in a favourable fashion.

This is the perception that can lull supporters into a false sense of security.

How can we be debt free when the consolidated accounts for 31 March 2012 showed net current liabilities of about £11.5million and other liabilities (due in more than 12 months) of about £3.5million, meaning that there was a debt of £15million even at 31 March 2012 and things can only have only got worse since unless Venky's have invested heavily - £30millionish would be needed !?!?

We virtually broke even by virtue of the fact that we sold the family jewels (Jones, Samba etc) and that gave a surplus on player trading of £20m. As Philipl has pointed out, were we not expecting a £5million investment per transfer window ?

IMO, I am struggling to think how anyone can find any comfort in those accounts. Forget the spin, look at the facts.

[AndyNeil]

IMO, I am struggling to think how anyone can find any comfort in those accounts. Forget the spin, look at the facts.

<< couldn't agree with this point more...

[OJRovers]

Forget the spin, look at the facts.

Fact: £11m liabilities made up of a book entry of £6m (to clear would be DR liability CR revenue i.e. no cash) and £5m of the club's bank debt which was cleared in May,

Fact: No bank has lent against BRFC assets since these accounts.

Spin: "...and things can only have only got worse since unless Venky's have invested heavily" How do you know they haven't?

[RoverScot]

These are still bad accounts for a club that was well run years before but we already knew they would be after the bank called in the debt at Christmas 2011 and the incoherent mess of the transfer policy, no sponsor etc

While the debt is secured against Venky's India Assets (which is great), there is nothing stopping Venky's selling Rovers assets further down the line to service that debt.

No one knows what Venky's are thinking and how serious they are about the long term, we will get a big indication next season if we are still in the Championship.

True there is nothing to stop them selling assets but I would hope this would be playing assets before it is the club's fixed assets. If they wanted to sell the club, selling everything will be not attractive to a prospective buyer though neither would a deficit of £1 million a month.

If you listen carefully to Shebby(its challenging when he is spouting his wisdom) he has intimated that we will be spending next season if we haven't gone up but he hasn't really said after that. They will spend this season and next but I think then the cloth will be cut in the two seasons with the £8 million parachute payments plus there is the new financial fair play rules coming in to consider.

Two questions to the posters above:

1) Venky's said they would put in £5m per window in net transfer contributions. Have you or have you not been lied to by £35m?

2) What debt do you think the 2012/13 accounts will show (despite the sell off of all our marketable players since they arrived)? Will it be nil, or £30m

I presume they thought putting £5 million in would be the bank putting it in and them being the guarantor of it. Building relations with Barclays through a cohesive non-SEM transfer policy with John Williams would have been sensible. Most of our troubles are sourced back to October 2010 to February 2011.

1. As for the £5 million net transfer spend per window,

January 2011 - the jump in agent fees explains where that money went.

Summer 2011 - Complete change in transfer policy from Kentaro to Vinny Rao/Simon Hunt/Zahavi

January 2012 - Bank wanted the cash

Summer 2012 - We have provisionally had a net transfer spend of £5 million

2. If the accumulated money being injected into the club isn't secured against the club assets, will it still be appearing in the account as a new long term liability or is it going through the parent company first and then placed in the accounts as a capital contribution reserve.

[Mercer]

Fact: £11m liabilities made up of a book entry of £6m (to clear would be DR liability CR revenue i.e. no cash) and £5m of the club's bank debt which was cleared in May,

Fact: No bank has lent against BRFC assets since these accounts.

Spin: "...and things can only have only got worse since unless Venky's have invested heavily" How do you know they haven't?

A 'book entry' of £6million - just spat my tea out !!!!!!!

Bank debt cleared in May - really ?

If you look at these accounts, it appears that the £4.5million loan balance relates to an Indian Bank as secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd. The Indian Bank may well have secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd but appear, based on these accounts, to have lent to the UK operating companies and should they require repayment of the loan(s), or any future overdraft, they would look to the borrower (UK operating companies) first and the potential consequences of that should be very worrying as they will only turn to the secured assets once all options with the UK operation have been exhausted. Generally, a lender relies on secured assets only as a last resort!

Borrowing in these circumstances can be extremely complex and just because Indian bank funds are not secured against Rovers' assets should not make supporters feel that everything in the garden is rosy ! Does anyone really think that the Raos would jeopardize their Indian operation for the longevity of the Rovers ?!?!

I don't know if Venky's have or have not invested heavily in Rovers since these accounts were drawn-up but given our experience of their initial stewardship of our club, I certainly wouldn't be putting any money on them having made that investment !

[TBTF]

A 'book entry' of £6million - just spat my tea out !!!!!!!

Bank debt cleared in May - really ?

If you look at these accounts, it appears that the £4.5million loan balance relates to an Indian Bank as secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd. The Indian Bank may well have secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd but appear, based on these accounts, to have lent to the UK operating companies and should they require repayment of the loan(s), or any future overdraft, they would look to the borrower (UK operating companies) first and the potential consequences of that should be very worrying as they will only turn to the secured assets once all options with the UK operation have been exhausted. Generally, a lender relies on secured assets only as a last resort!

Borrowing in these circumstances can be extremely complex and just because Indian bank funds are not secured against Rovers' assets should not make supporters feel that everything in the garden is rosy ! Does anyone really think that the Raos would jeopardize their Indian operation for the longevity of the Rovers ?!?!

I don't know if Venky's have or have not invested heavily in Rovers since these accounts were drawn-up but given our experience of their initial stewardship of our club, I certainly wouldn't be putting any money on them having made that investment !

They have spent heavily but that doesnt mean they have invested.If they have financed it by running up big debts at the Indian Bank then we could still be left holding a very ugly baby when the music stops!!

[Exiled in Toronto]

What was the plan to pay back the 20 million overdraft under the trust? There wasn't one. Increasing sky income and a negative transfer budget were all going on an ever-increasing wage bill.

Of course Venky's could do anything in the future, good or bad, but the accounts to date do not show them doing anything other than covering the costs of running a chronically loss-making club that now loses a lot more thanks to their stewardship.

[Baz]

What was the plan to pay back the 20 million overdraft under the trust? There wasn't one. Increasing sky income and a negative transfer budget were all going on an ever-increasing wage bill.

Of course Venky's could do anything in the future, good or bad, but the accounts to date do not show them doing anything other than covering the costs of running a chronically loss-making club that now loses a lot more thanks to their stewardship.

Its the fact the operating losses have gone through the roof that should worry everyone the most. The fact we had to sell £20m worth of players to keep near stable shows that issue. You ccan only imagine what those numbers would look like in 12 months when income has dropped and we have no assets left to sell. Venkys arent wealthy enough to sustain that for very long. The £20m overdraft wasnt a problem under JW.

[Exiled in Toronto]

Its the fact the operating losses have gone through the roof that should worry everyone the most.

Why when someone is paying for them? Because they might stop? Did you worry about our cumulative operating losses of 150 million under the last regime? Did it never occur to you that a 70 year old man might one day die, or run out of money, or get fed up? Or that Barclay's, one day, might want their 20 million back? That relegation with a 50 million wage bill and a 20 million debt was always going to be a catastrophe? That owners who couldn't wait to get out of the building might not have our best interests at heart?

I

[Athlete]

these can't be dressed up , I'm no finance person but can see it doesn't make good reading and the next ones will make even worse reading....VEnkys have truly screwed this club !

[Andy]

Personally, I do think Venky's are here for the long term. They had the chance to cut and run a year ago when the arabs came calling and they also had the chance to do the same in the summer when the 2 Ian's were interested. Since then, they have invested a significant amount of money into the club which they are liable for, not Rovers. I suspect the thinking is that if/when the club is promoted they can recuperate a large proportion of that money back.

It's also important to remember that although they are losing significant amounts of money on Rovers, they are also making significant amounts of money on the back of being associated with Rovers.

Also, one huge reason why I don't believe they would ever see the club go bust is because of the massive damage that would do to the Venky's brand. Their expansion plans would be down the drain which in turn would lose them millions and millions of pounds.

+1

[PAFELL]

The company made a profit and when you pro-rata it down comes out at circa £23k for a standard reporting period of 12 months - now given that there won't be player sales of £10m this season (never mind £20m) and a drop of Sky income to the tune of £35m plus the 'gift' of £12m, the period to 30th June 2013 is going to show a rather large loss. Some people will point to the fact that we are debt-free, but at what cost for the future of the club (we've been relegated, divided and slashed match-day paying fanbase, key personnel both on and off the pitch lost, PR and goodwill through the floor). I'd rather be £10m in debt with guaranteed income of circa £60m, against debt free and guaranteed income of circa £20m... Overall, I can't see how people can look upon these Accounts in a favourable fashion.

Fully agree. How anybody can take comfort in these accounts are seriously deluded.

[TBTF]

A 'book entry' of £6million - just spat my tea out !!!!!!!

Bank debt cleared in May - really ?

If you look at these accounts, it appears that the £4.5million loan balance relates to an Indian Bank as secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd. The Indian Bank may well have secured against assets of the ultimate parent company Venkateshwara Hatcheries Pvt Ltd but appear, based on these accounts, to have lent to the UK operating companies and should they require repayment of the loan(s), or any future overdraft, they would look to the borrower (UK operating companies) first and the potential consequences of that should be very worrying as they will only turn to the secured assets once all options with the UK operation have been exhausted. Generally, a lender relies on secured assets only as a last resort!

Borrowing in these circumstances can be extremely complex and just because Indian bank funds are not secured against Rovers' assets should not make supporters feel that everything in the garden is rosy ! Does anyone really think that the Raos would jeopardize their Indian operation for the longevity of the Rovers ?!?!

I don't know if Venky's have or have not invested heavily in Rovers since these accounts were drawn-up but given our experience of their initial stewardship of our club, I certainly wouldn't be putting any money on them having made that investment !

Mercerman-did you notice that we had 272 employees on the payroll as at 31 March??!!! How many feckin teams have we got?? Christ knows what it will be now that Shebby and his inherited family of Portugese have landed.

[Mercer]

Mercerman-did you notice that we had 272 employees on the payroll as at 31 March??!!! How many feckin teams have we got?? Christ knows what it will be now that Shebby and his inherited family of Portugese have landed.

I did and absolutely staggering: Football 138, Commercial 56, Admin. 29 and Maintenance 49.

In some of the organisations that I have worked for, those numbers would be slashed by at least a third overnight.

IMO, too many cushy numbers and I would start with the high profile ones - at least one one from Singh, Shaw & Agnew and the same from Black, Brunskill & Hendry.

[TBTF]

I did and absolutely staggering: Football 138, Commercial 56, Admin. 29 and Maintenance 49.

In some of the organisations that I have worked for, those numbers would be slashed by at least a third overnight.

IMO, too many cushy numbers and I would start with the high profile ones - at least one one from Singh, Shaw & Agnew and the same from Black, Brunskill & Hendry.

Commercial is minus one notable one now (Beamo) but 50 odd of the buggers in a business that outside the parachute payments probably generates about £5m.In the name of god what is occurring here??

Singh adds nothing and is probably by far the biggest cost of those 3 so cheerio Shebby-and that will save on training kit as well.49 maintenance staff-wtf ??

Incidentally, any comparable figures for when JW and crew were running it? you would tbf imagine similar excesses just that you get away with out mega questions when it isn't so transparently abject in terms of how its run.

[Mercer]

Commercial is minus one notable one now (Beamo) but 50 odd of the buggers in a business that outside the parachute payments probably generates about £5m.In the name of god what is occurring here??

Singh adds nothing and is probably by far the biggest cost of those 3 so cheerio Shebby-and that will save on training kit as well.49 maintenance staff-wtf ??

Incidentally, any comparable figures for when JW and crew were running it? you would tbf imagine similar excesses just that you get away with out mega questions when it isn't so transparently abject in terms of how its run.

Comparitive figures from 2010/11 accounts:

• Senior football 76
  
• Academy football 60
  
• Commercial 54
  
• Admin 24
  
• Maintenance 49
  
• Total 263
  

So, numbers in March 2012 accounts have gone up by 9:

• Football +2
  
• Commercial +2
  
• Admin +5
  
• Maintenance unchanged
  

IMO, would appear we are getting increasingly inefficient - little wonder we are losing money like we are.

[Baz]

Why when someone is paying for them? Because they might stop? Did you worry about our cumulative operating losses of 150 million under the last regime? Did it never occur to you that a 70 year old man might one day die, or run out of money, or get fed up? Or that Barclay's, one day, might want their 20 million back? That relegation with a 50 million wage bill and a 20 million debt was always going to be a catastrophe? That owners who couldn't wait to get out of the building might not have our best interests at heart?

I

I already answered the question if you care to read the rest of my post. Venkys cannot sustain those losses. Under the previous regime we where basically self funding, and had to sell a player every couple of seasons. Under Venkys we have sold or paid off more or less a premier league 1st team squad in order to break even. I see nothing wrong in that?

[Exiled in Toronto]

I already answered the question if you care to read the rest of my post. Venkys cannot sustain those losses. Under the previous regime we where basically self funding, and had to sell a player every couple of seasons. Under Venkys we have sold or paid off more or less a premier league 1st team squad in order to break even. I see nothing wrong in that?

Of course they can't; they are betting on us going back up to the promised land which personally I find more positive than pulling the plug immediately. We lost 30 million in the 2 seasons we were down last time (40 million in todays money if not more given football wage inflation) and Jack was going to pull the plug if we hadn't gone back up thats eason. Nothing has changed other than the scale of the losses and the bank balance of our owners.

If we were self-funding, where did our 20 million overdraft come from? We have been chronically loss-making since the day Jack bought us and managed to breakeven for a couple of seasons by selling Bentley, RSC, Benni and Jones for a combined 50 million while signing hardly anyone.

[Baz]

Of course they can't; they are betting on us going back up to the promised land which personally I find more positive than pulling the plug immediately. We lost 30 million in the 2 seasons we were down last time (40 million in todays money if not more given football wage inflation) and Jack was going to pull the plug if we hadn't gone back up thats eason. Nothing has changed other than the scale of the losses and the bank balance of our owners.

If we were self-funding, where did our 20 million overdraft come from? We have been chronically loss-making since the day Jack bought us and managed to breakeven for a couple of seasons by selling Bentley, RSC, Benni and Jones for a combined 50 million while signing hardly anyone.

The losses were sustained whilst we where in the Premier League, not the championship. The £20m overdraft was run up mainly when managers where replaced (ince) or where we needed to keep the squad together as relegation would have been near otherwise, and JW decided the costs of a managed overdraft were far more sustainable than relegation.

Nothing has changed bar the scale of the losses? Surely thats the crux, 20m over 20 years or 20+m in 18 months?

[philipl]

Everybody sitting comfortably tonight?

[darrenrover]

Everybody sitting comfortably tonight?

Who could be Philip?

What's the purpose of your post?

[RoverScot]

Everybody sitting comfortably tonight?

After last nights performance, a fire sale of the clubs players could be a blessing. There is so much waste in the squad that isn't suited to the Premier League or the Championship but which commands about £200k a week.

On the financial front- If the current overdraft is secured against Venky's assets, how will the Bank of India demand payment from Rovers should the need arise? Venkys own all of Rover's assets but if the loan itself is not secured against British assets, how would they be able to force the club to pay back from its operations rather than the Venkys Hatcheries group? The decision to strip Rovers of assets would surely have to made by Venkys themselves rather than bank enforcement.