[Archived] Venkys London Limited - Accounts

[RoverScot]

The language in the going concern section is that the club would struggle with liquidity if the VH group withdrew funding - which is obvious considering our finances. Football generally is an insolvent business and is reliant on its sugar daddies to keep putting the money in. Similar qualifications about why Bolton are a going concern are given in the Bolton accounts and probably most accounts as football doesn't run like other businesses.

These qualifications about going concern would have had to be made if the Trust were still running the club. That's what I mean about standardised stuff in that the same qualifications about having to mitigate cash flows in the event of relegation were in the previous accounts so that its not new information that our finances are not sustainable without subsidy.

The net current liabilities for 2010/2011 were £29 million due to the £21 million loan due.

[tomphil]

A bit of a tangent here but bare with me. If Venkys decided to sell our facilities (Ewood, Brockhall etc) who would buy them?

An investment company would perhaps buy Ewood and lease it back on a 100 year lease or something like that. I believe that has happened to football grounds before.

[Baz]

Can i ask that if anyone has any questions directly relating to specific items in the accounts published they pm them to me, or put them on here. I'll collate a list and see if the club is willing to answer them, as BRAG are willing to put them to the club.

[Daniel Louis Grabko (Dan)]

Can i ask that if anyone has any questions directly relating to specific items in the accounts published they pm them to me, or put them on here. I'll collate a list and see if the club is willing to answer them, as BRAG are willing to put them to the club.

Wouldn't it be worth waiting a week or two until the actual BRF&A accounts are published? Right now, being prepared on a consolidated basis, VLL's accounts may not show the whole or accurate picture.

[philipl]

There is no obligation for Rovers' accounts to be published until April next year.

Ordinarily the accounts are out before Christmas but given how late VLL were I am not holding my breath.

As for Rovers being debt free. I will state categorically we are not. My guess is that the Rovers will close this current financial year between £20m and £40m in debt; quite possibly towards the top of that range.

The March 31 period end was chosen for a reason- it was immediately after Samba had been sold for cash and the biggest chunks of Jones and Kalinic moneys came in. We were sliding into deeper debt until the end of season PL money came in enabling Barclays to be redeemed in June 2012.

So the Venky's track record is utterly abysmal:

Injected £10m into Rovers because the Walker Trust sale agreement forced them to do so in December 2011

Injected £2m into Rovers because Barclays were going to pull the plug (see the Paul Hunt letter) without it in December 2012

Sold players to raise a net £20m cash.

At the time of take over, net Bank debt was £14m

So overall £32m came in and £14m went out or a cash drain from operations of £18m in 18 months.

That is horrendous mismanagement. The cash loss under the Trust excluding player trading was down to about £2m per annum so Venky's arrogant incompetence in so-called managing of Rovers lead to an excess cash loss of £15m or about £1m per month WORSE than under John Williams and the Trust.

Plus they cost us our Premier League place.

http://investing.bus...ency=US Dollar.

Those Venky's India accounts show that Venky's could not have found the cash to buy Rovers from the chickens. I will repeat, nobody I have spoken to in India can believe that Venky's put £50m of their own cash into a English Football Club. Nobody I have spoken to from Pune believes Venky's had anything like that amount of CASH. Somebody did though.

[Exiled in Toronto]

Those Venky's India accounts show that Venky's could not have found the cash to buy Rovers from the chickens. I will repeat, nobody I have spoken to in India can believe that Venky's put £50m of their own cash into a English Football Club. Nobody I have spoken to from Pune believes Venky's had anything like that amount of CASH. Somebody did though.

That proves it then. I'm sure all of Pune's 6.1 million population are fully up to speed on everyone else's personal wealth.

Even if it was someone else, who cares that another sucker has peed 50 million down the drain. More fool them.

[RoverScot]

Those Venky's India accounts show that Venky's could not have found the cash to buy Rovers from the chickens. I will repeat, nobody I have spoken to in India can believe that Venky's put £50m of their own cash into a English Football Club. Nobody I have spoken to from Pune believes Venky's had anything like that amount of CASH. Somebody did though.

http://www.sportingi...-detail-170103/

This Nick Harris article explains how the VH group works overall with the Venkys India arm being the only one with public accounts. Within he says:

There has been some confusion about the business credentials and wealth of the Rao family who wholly own the debt-free VH Group, confusion that has led in places to dismissive descriptions of ‘chicken farmers’. Partly this is because only one of the 28 firms – Venky’s (India) Limited – is required to make public its accounts.

The other companies produce accounts according to Indian law but as they firms are wholly private there is no need to make the figures public.

However, the Rovers accounts are consistent with the view that there has been no clear management or direction at the club - not having a shirt sponsor for two seasons is incredibly poor. I wonder if they were expecting Vinny Rao to be making more decisions last season as their Shebby-like on the ground representative but that he was completely was out of depth to do it.

[philipl]

That article is incorrect in a number of assertions.

That article is incorrect in a number of assertions.

[RoverScot]

This was another part to his initial investigation : http://www.sportingi...-buyout-170101/

If Venkys limited are the only part that has public accounts, is it not possible that their total business could be valued at around £1 billion? I do realise that the Venkys Limited part has a turnover of around £100 million and profits of around £10 million so did Nick Harris mess up, add a decimal place and then use these numbers the first time he investigated them?

I like the quotes from 2011 though:

Our goals are simple,’ says Venkatesh Rao, 45, who co-owns the VH Group with brother Balaji, 38, and sister Anuradha.

‘We want to keep the fans happy and make the club better.

‘As and when required, we will invest, in a responsible way, but let me be clear: money will not be a problem. I am not going to promise specific figures but if we need to spend £5m on something, we’ll spend it. If we need £10m, £15m, £20m, we’ll do it. We won’t compromise on quality. We are prepared to spend a lot over time.’

Describing Venky’s owners as chicken farmers is like saying Walker had a scrap metal yard. Walker, a steel magnate, was one of Britain’s richest 30 men when he died in 2000, with a fortune estimated at £600m.

The Rao family are worth three times more and their business is riding the crest of the Indian economic boom. The VH Group consists of 28 companies in Indiawith a collective turnover in 2010 of close to £1bn and group profits of about £100m. Growth is forecast at 15 per cent per year. There are no external partners and no debt. Acquisitions, including Blackburn Rovers and a new £130m vaccine plant in Switzerland, are made in cash.

[Ricky]

That's funny Phil, you previously said how good Nick Harris' sources were. Or was that solely when it met with your agenda?

[RoverScot]

If the suppositions are true that Venkys aren't really rich at all, did the Walkers Trust knowingly sell the club to a family whose business has only £100 million total in revenue a year? Considering they were paying £22 million and taking on a £21 million debt, it seems outlandish that they would sell knowing this to be Venky's true financial position.

I am not dismissing the bad accounts though. Covering a loss of £20 million through player sales with agent fees matching the top 6 clubs is clearly not what Blackburn Rovers football club is able to do - even with subsidy.

[AndyC]

And those who were seen dancing were thought to be insane by those who couldn't hear the music - Nietzsche

[RoverScot]

And those who were seen dancing were thought to be insane by those who couldn't hear the music - Nietzsche

Well call me crazy but I think Venkys could and did afford the £23 million to buy the club. There are alot of issues around their ownership but its silly to deny that they had the capital to buy the club in the first place.

There's nothing in this game for two in a bed - Bowen

[Athlete]

Well call me crazy but I think Venkys could and did afford the £23 million to buy the club. There are alot of issues around their ownership but its silly to deny that they had the capital to buy the club in the first place.

If you read iamarover further up in the topic click the link then Google more think you may change your mind

[RevidgeBlue]

Not read through this thread in detail, but a couple of points occurred on a quick scan through:

1) I was under the impression that pharmaceutical manufacturing was a key component of the Venky's business empire. Are we ignoring the revenues from this and the other businesses apart from chickens for the purposes of the latest doomsday predictions?

2) TBTF mentioned the financial fair play regulations above. Again I was under the assumption that this was only a gentlemen's agreement between the Chairmen in the Championship and is unenforceable by the footballing authorities. I stand to be corrected on tihis.

3) I note that on the poultry production front alone Nick Harris predicts profits from chicken consumption in India are due to explode in years to come. I have no idea how accurate that might turn out to be but if there is any truth in it an Indian Bank might be slightly more relaxed about outstanding liabilities.

[RevidgeBlue]

Those Venky's India accounts show that Venky's could not have found the cash to buy Rovers from the chickens. I will repeat, nobody I have spoken to in India can believe that Venky's put £50m of their own cash into a English Football Club. Nobody I have spoken to from Pune believes Venky's had anything like that amount of CASH. Somebody did though.

It was fairly well publicised at the time of sale that the purchase price was £23m.

£20m up front and £1m p.a. to the Trust for 3 years.

Where has a figure of £50m come from?

[Paul]

I'd guess Philip is talking ball park figures there. It was £23m plus £20m of debt which makes £43M paid for the club. Clearly the debt only needed security but that had to be found

[iamarover]

This was another part to his initial investigation : http://www.sportingi...-buyout-170101/

If Venkys limited are the only part that has public accounts, is it not possible that their total business could be valued at around £1 billion? I do realise that the Venkys Limited part has a turnover of around £100 million and profits of around £10 million so did Nick Harris mess up, add a decimal place and then use these numbers the first time he investigated them?

I like the quotes from 2011 though:

Our goals are simple,’ says Venkatesh Rao, 45, who co-owns the VH Group with brother Balaji, 38, and sister Anuradha.

‘We want to keep the fans happy and make the club better.

‘As and when required, we will invest, in a responsible way, but let me be clear: money will not be a problem. I am not going to promise specific figures but if we need to spend £5m on something, we’ll spend it. If we need £10m, £15m, £20m, we’ll do it. We won’t compromise on quality. We are prepared to spend a lot over time.’

Describing Venky’s owners as chicken farmers is like saying Walker had a scrap metal yard. Walker, a steel magnate, was one of Britain’s richest 30 men when he died in 2000, with a fortune estimated at £600m.

The Rao family are worth three times more and their business is riding the crest of the Indian economic boom. The VH Group consists of 28 companies in Indiawith a collective turnover in 2010 of close to £1bn and group profits of about £100m. Growth is forecast at 15 per cent per year. There are no external partners and no debt. Acquisitions, including Blackburn Rovers and a new £130m vaccine plant in Switzerland, are made in cash. th

So the public company only represents 10% of the family wealth? I really hope I am wrong, but that just does not seem plausible. Most of the other 28 companies seem related to the core business - it just does not stand up that the real wealth is in these small companies. That core business has tiny margins; it follows that the related companies work off similar ratios. Nor does the idea of a business awash with cash square with the accounts Philip has published. One note reads as follows:'The expansion-cum-modernisation programme is funded by internal accruals and long termloans. Benefits of the expanded capacities will start accruing to the Company from secondhalf of the current financial year.

I just don't believe them.

jI

[47er]

This is one of the most useless threads ever! Depending on whom I believe, the Raos either have a fortune of 1.6billion or haven't got a pot to kean in!

I'll bet anything you like that their true fortune is some where in- between!!!!

[yoda]

This is one of the most useless threads ever! Depending on whom I believe, the Raos either have a fortune of 1.6billion or haven't got a pot to kean in!

I'll bet anything you like that their true fortune is some where in- between!!!!

The voice of reason,

you don't belong on this MB sir

[iamarover]

This is one of the most useless threads ever! Depending on whom I believe, the Raos either have a fortune of 1.6billion or haven't got a pot to kean in!

I'll bet anything you like that their true fortune is some where in- between!!!!

Thank you once more for your intellect and reason. And devastating logic. Which is that the Venkys have more than a pound and less than a billion. If you really don't care then go somewhere else. Like Milton Keynes, where your teeth might drop out.

In case you haven't noticed this is actually reasonably important. You were wrong on the Trust. Wrong on the Venkys. And wrong now on ignoring the tsunami just about six months off the Lancashire coast, which could obliterate all we hold so dearly.

[PAFELL]

There is no obligation for Rovers' accounts to be published until April next year.

Ordinarily the accounts are out before Christmas but given how late VLL were I am not holding my breath.

As for Rovers being debt free. I will state categorically we are not. My guess is that the Rovers will close this current financial year between £20m and £40m in debt; quite possibly towards the top of that range.

The March 31 period end was chosen for a reason- it was immediately after Samba had been sold for cash and the biggest chunks of Jones and Kalinic moneys came in. We were sliding into deeper debt until the end of season PL money came in enabling Barclays to be redeemed in June 2012.

So the Venky's track record is utterly abysmal:

Injected £10m into Rovers because the Walker Trust sale agreement forced them to do so in December 2011

Injected £2m into Rovers because Barclays were going to pull the plug (see the Paul Hunt letter) without it in December 2012

Sold players to raise a net £20m cash.

At the time of take over, net Bank debt was £14m

So overall £32m came in and £14m went out or a cash drain from operations of £18m in 18 months.

That is horrendous mismanagement. The cash loss under the Trust excluding player trading was down to about £2m per annum so Venky's arrogant incompetence in so-called managing of Rovers lead to an excess cash loss of £15m or about £1m per month WORSE than under John Williams and the Trust.

Plus they cost us our Premier League place.

http://investing.bus...ency=US Dollar.

anythingThose Venky's India accounts show that Venky's could not have found the cash to buy Rovers from the chickens. I will repeat, nobody I have spoken to in India can believe that Venky's put £50m of their own cash into a English Football Club. Nobody I have spoken to from Pune believes Venky's had like that amount of CASH. Somebody did though.

Very easy saying venkys did not have the funds to buy rovers or they are not the owners. But if it is true. Where did the money come from and if venkys do not own rovers, who does?

But yes, rovers are in debt.

Though why shebby singh and shaw are telling the action group that there is no debts is beyond me. Because the accounts clearly show there is a debt.

Thank you once more for your intellect and reason. And devastating logic. Which is that the Venkys have more than a pound and less than a billion. If you really don't care then go somewhere else. Like Milton Keynes, where your teeth might drop out.

In case you haven't noticed this is actually reasonably important. You were wrong on the Trust. Wrong on the Venkys. And wrong now on ignoring the tsunami just about six months off the Lancashire coast, which could obliterate all we hold so dearly.

Why do you think shaw and singh told the action group there is no debt - when the accounts show that there is. Very strange.

[RoverScot]

Thank you once more for your intellect and reason. And devastating logic. Which is that the Venkys have more than a pound and less than a billion. If you really don't care then go somewhere else. Like Milton Keynes, where your teeth might drop out.

In case you haven't noticed this is actually reasonably important. You were wrong on the Trust. Wrong on the Venkys. And wrong now on ignoring the tsunami just about six months off the Lancashire coast, which could obliterate all we hold so dearly.

I agree, its not a useless thread to discuss the financial situation of our current finances and the VH groups ability or willing to fund them.

If the Venkys India accounts are their only source of income then they definitely do not have a pot to kean in and would be worth around a 6th of the Walkers trust. However, I don't believe this is the case, as outlined by Nick Harris.

I assume the Venkys India part of their business is the India market and frozen chicken nugget part which is going to be a low profit margin kind of business and is consistent with the increase in revenue not yielding an increase in profits. The pharmaceutics side will be profitable though and add in their activities in Vietnam, Brazil and Zurich and then its not beyond the realms of possibility that they have a group with a total revenue of 1 billion dollars, probably more.

I think its therefore consistent to say they would have £23 million to buy the club and £10-20 million available to place into the club annually if necessary but that they are obviously not wealthy enough to do what a number of billionaire owners have done in recent years.

Very easy saying venkys did not have the funds to buy rovers or they are not the owners. But if it is true. Where did the money come from and if venkys do not own rovers, who does?

But yes, rovers are in debt.

Though why shebby singh and shaw are telling the action group that there is no debts is beyond me. Because the accounts clearly show there is a debt.

Why do you think shaw and singh told the action group there is no debt - when the accounts show that there is. Very strange.

They mean structural long term debt but there are still short term debts and many more being added this season. Which is why its important to know how this is being funded and what the owners intentions are if we do not get promoted this season.

[47er]

Thank you once more for your intellect and reason. And devastating logic. Which is that the Venkys have more than a pound and less than a billion. If you really don't care then go somewhere else. Like Milton Keynes, where your teeth might drop out.

In case you haven't noticed this is actually reasonably important. You were wrong on the Trust. Wrong on the Venkys. And wrong now on ignoring the tsunami just about six months off the Lancashire coast, which could obliterate all we hold so dearly.

Not wrong on the Trust, always said they were desperate to sell, no point in keep saying we wanted them to continue, welcomed Venkys, hoped they'd make a go out of it, realised they were loopy when they sacked Sam and been their sworn enemy ever since.

Quite a reasonable record and better than some.

Finally, what devastating logic makes you think I don't care? Certainly it's important, I just give up on learning much about them on here.

And certainly not from you.

[J*B]

Rovers are losing 2.3 million pounds a month at the moment.