Company Registration No. 03199030 (England and Wales)
CARDIFF BLUES LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
CARDIFF BLUES LIMITED
COMPANY INFORMATION
Directors
Alun Jones (Chairman)
(Appointed 1 December 2018)
Simon Down
Richard Holland
Chris Nott
Martyn Ryan
Chris Sutton
Peter Thomas CBE
Simon Webber
Hayley Parsons OBE
(Appointed 18 July 2019)
Andrew Williams
(Appointed 18 July 2019)
Secretary
Martyn Ryan
Company number
03199030
Registered office
Cardiff Arms Park
Westgate Street
Cardiff
South Glamorgan
UK
CF10 1JA
Auditor
Baldwins Audit Services
Ty Derw
Lime Tree Court
Cardiff Gate Business Park
Cardiff
UK
CF23 8AB
CARDIFF BLUES LIMITED
CONTENTS
Page
Chairman's statement
1 - 2
Directors' report
3 - 4
Directors' responsibilities statement
5
Strategic report
6 - 7
Independent auditor's report
8 - 9
Profit and loss account
10
Balance sheet
11
Statement of changes in equity
12
Notes to the financial statements
13 - 20
CARDIFF BLUES LIMITED
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
- 1 -
I am pleased to write this annual report in my first year as the chairman of the board of directors of Cardiff Blues Limited.
As you are aware, I am a lifelong supporter of this team and I am under no illusions as to how important the continued success of Cardiff Blues is to all of us. To this extent, might I begin by giving my heartfelt appreciation for the welcome and support given to me by our directors, shareholders, staff, supporters and sponsors.
During this period a significant portion of my time has been focused on the restructure and governance of the Cardiff Blues board. We will always be extremely grateful for Peter Thomas’ support during his tenure as chairman and it is no exaggeration to say we would not be here if it were not for his unwavering commitment. I am delighted that Peter remains a director and Life President of Cardiff Blues.
I am also very grateful for the support of Sir Gareth Edwards and Paul Bailey, who this year decided to step down as directors of the company. Both have contributed enormously to the cause over so many years and will remain with us as Life Patrons.
I was delighted to secure the appointments of Hayley Parsons OBE and Andrew Williams and welcome them both to the board as directors and to the Cardiff Blues family.
Hayley, from founding GoCompare, brings a wealth of expertise, particularly in terms of the commercial outlook, marketing and social media. While Andrew, a lifelong supporter of Cardiff RFC and Cardiff Blues, brings enormous business acumen from his role as CEO of FTSE 100 business, Halma PLC.
We continued to restructure the board with the addition of Sam Warburton OBE and Martyn Williams MBE as advisory members. As former Cardiff Blues, Wales internationals and British & Irish Lions, they know what it takes to succeed on and off the field, are proven leaders and they are already making a contribution through their invaluable experience.
As part of the restructuring Peter Thomas and Martyn Ryan have also kindly agreed to compromise their debts, with Peter converting part of his loan into a non voting class of shares.
At the time of writing, the legal documents are being drawn up to formalise this process ahead of our general meeting and I would like to personally thank our friends and colleagues at Cardiff Athletic Club for their support in this.
With a healthier balance sheet we can now focus on the future and we will imminently share a new long-term strategy, which I have been working on with chief executive Richard Holland and his team. This will clearly and concisely present our strategy for the forthcoming years and detail exactly how we will achieve our ambitions.
As you will conclude, we are determined to develop/invest to support our challenge for further honours.
Work also continues with the Professional Rugby Board (PRB) and my colleagues at the Welsh Rugby Union and the other regions. As has been widely reported, there has been significant focus on a potential third party investment into the PRO14.
This is an exciting time for Cardiff Blues, and I would invite you to feel enthused about what the future holds with the potential third party investment combined with the steps we have taken ourselves to formulate a clear strategy.
Dialogue continues with Cardiff Athletic Club (CAC) over a new lease at Cardiff Arms Park. Cardiff Blues enjoys a very good relationship with CAC through their directors and their chairman, Keith Morgan. All of our discussions point towards a shared ambition to deliver a new, long-term lease at Cardiff Arms Park beyond 2022.
I am confident the company and team are in safe hands with Richard Holland as CEO and John Mulvihill as head coach. I have been very impressed by the organisation, structure and dedication displayed by what is a relatively small but hugely passionate workforce.
CARDIFF BLUES LIMITED
CHAIRMAN'S STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
- 2 -
It is truly a privilege to play my part in the future of the company and rest assured that the entire board of directors is resolved and fully committed to ensuring that Cardiff Blues is both sustainable and successful on a long-term basis. I will work tirelessly with our board, our executive team and my colleagues at the PRB to deliver this success and to make each and every one of us proud to be associated with Cardiff Blues.
Thank you for your ongoing support.
Alun Jones
Chairman
CARDIFF BLUES LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2019
- 3 -
The directors present their annual report and financial statements for the year ended 30 June 2019.
Principal activities
The principal activity of the Company continued to be that of professional rugby together with related activities.
Directors
Chris Nott, Chris Sutton and Simon Down are appointed by Cardiff Athletic Club, who hold 750,000 Heritage shares of £1 and 500,000 Ordinary shares of £1.
Alun Jones (Chairman)
(Appointed 1 December 2018)
Paul Bailey
(Resigned 30 January 2019)
Simon Down
Sir Gareth Edwards CBE
(Resigned 31 December 2018)
Richard Holland
Chris Nott
Martyn Ryan
Chris Sutton
Peter Thomas CBE
Simon Webber
Hayley Parsons OBE
(Appointed 18 July 2019)
Andrew Williams
(Appointed 18 July 2019)
Auditor
On 14 May 2019 as a result of a recent merger, MHA Broomfield Alexander resigned as auditors in accordance with Section 516 of the Companies Act 2006 and re-engaged its services as Baldwins Audit Services. In accordance with the company's articles, a resolution proposing that Baldwins Audit Services be reappointed as auditor of the company will be put at a General Meeting.
Statement of disclosure to auditor
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.
Going Concern
The directors have a reasonable expectation that the Company has adequate resources to continue in operation for the foreseeable future and therefore continue to adopt the going concern basis in preparing the accounts.
Employment Policy
It is the Company's policy to treat all its employees fairly and ensure equal opportunity for all regardless of gender, ethnic origin, age, disability or religion.
This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.
CARDIFF BLUES LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 4 -
On behalf of the board
Alun Jones (Chairman)
Richard Holland
Director
Director
28 October 2019
CARDIFF BLUES LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 JUNE 2019
- 5 -
The directors are responsible for preparing the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors 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 directors 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 Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:
- select suitable accounting policies and then apply them consistently;
- make judgements and accounting 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 Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company 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 Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
CARDIFF BLUES LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 JUNE 2019
- 6 -
The directors present the strategic report for the year ended 30 June 2019.
On the pitch
It was a season of mixed fortunes for Cardiff Blues as we narrowly missed out on a place in the Guinness PRO14 play-offs and subsequently the Heineken Champions Cup but saw promise in the performances of a number of the players and coaching staff. John Mulvihill, who joined Cardiff Blues this season as head coach, can reflect on a number of areas of encouragement as the Region continues to build.
We made a slow start to the 2018/19 season, losing the three opening games by a single score in the dying moments. Nonetheless, the season saw us win the majority of matches at Cardiff Arms Park and secure a number of encouraging away wins at Parc-y-Scarlets, Rodney Parade, and an impressive 21-30 victory against Lyon OU at the Matmut Stade de Gerland.
The season saw a number of talismanic figures including Sam Warburton, Gethin Jenkins and Matthew Rees retiring, while Gareth Anscombe and Rhys Carré were among those to move on. Sam, Gethin and Matthew have been peerless ambassadors for the Blues and we are delighted that Gethin remains at the club in a coaching role with the academy and Sam has taken up an advisory role at the Region.
Cardiff Blues continue to demonstrate the success of their age-grade programmes, typified most recently by current Cardiff Blues players and academy graduates Tomos Williams, Josh Navidi and Dillon Lewis being named in the Wales World Cup Squad and a strong representation continuing at Wales age group levels. These three join Josh Adams and Hallam Amos, as Wales look to capitalise on their Six Nations winning form in Japan.
In order to enhance rugby development and local engagement the Cardiff Blues Community Foundation was established as a Charitable Incorporated Organisation (Charity no. 1179205) on the 16
th
July 2018. This new vehicle complements our existing “Blues Benevolent Fund” (formerly Stay Strong for Ows) that supports players and administrators throughout the Region and provides the broadest based third sector involvement of any Region. We thank the Trustees who have freely given their time to make these initiatives such a success.
We are also deeply indebted to those members of staff and volunteers that cultivate the grassroot Mini, Junior and Schools rugby. This remains an essential part of the Blues future and we anticipate many years of continued success for those whose rugby development we support across the Region.
Steve Law and the Cardiff RFC team enjoyed success in WRU National Cup, ending a 22 year wait, whilst finishing only six points adrift of eventual Premiership winners Merthyr. In a hugely positive campaign, inside centre Ben Thomas also contributed to a great year for the club by being named Principality Premiership newcomer of the season and has now graduated to the Cardiff Blues senior squad.
CARDIFF BLUES LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 7 -
Finance
The results for the year are set out in the financial statements. The loss before exceptional items and taxation has fallen from £1,972,000 during the year to 30 June 2018 to £527,000 in the current financial year.
Turnover for the year of just over £13.0 million represented an increase of £3.4 million or 35.9% against the prior year. The majority of the increased income came as a result of “Project Reset” with an additional £1.9 million coming from the central governing body, the WRU. Commercial revenue grew to £4.5 million with an additional £0.5 million from sponsorship and hospitality and a further £0.6 million of food and beverages sales as a result of terminating the outsourcing arrangements and taking the facilities in house from February 2018.
Expenditure increased to £13.4 million from £11 million. Approximately, an additional £1.5 million was spent on increased squad costs and investment in coaching, academy and infrastructure. The balance resulted from the costs of providing food and beverages after the end of the outsourcing contract.
The results for 2019 also benefit from a significant reduction in interest resulting from the reductions in debt as described in more detail in the 2018 Annual Report and Financial Statements and also include £0.5 million of Research and Development Tax Credits, made up of a current year claim and two retrospective claims for 2017 and 2018. These credits have been invested in the year and lead to a small profit for the financial year for the Company. This is a significant achievement and reflects the growing financial stability of the professional game in Wales. The club continues to invest into its Research and Development programmes and in particular evaluating and seeking to reduce the risk of concussion and other common injuries to players.
The business continues to address the strength of the balance sheet and has made significant progress in structure, this focus will continue. Following the substantial capital restructuring in 2018 it was unfortunately still necessary to rely on medium term support from benefactors. We continue to be grateful for this support.
Off the pitch
The collaborative work undertaken by the Cardiff Blues, other regions and the Welsh Rugby Union to support the operational foundations of rugby in Wales, under the new collaborative Professional Rugby Board (PRB), continues to progress, as can be evidenced by a clear stabilisation in the Blues financial position and performance.
During the year, we have been delighted to welcome Alun Jones, Managing Partner of Hugh James Solicitors, as Chair of Cardiff Blues. Alun brings a wealth of professional experience to the Region and continues to provide valuable oversight on PRB matters.
In my role as Chief Executive, I continue to work with the Board to support, develop and strengthen the senior management team within the Region and we look to reinforce the organisation with a number of key appointments during the forthcoming months. We remain grateful to all of our staff for their efforts and are encouraged by the clear, positive progress in evidence during the last financial year.
Richard Holland
Chief Executive Officer
28 October 2019
CARDIFF BLUES LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CARDIFF BLUES LIMITED
- 8 -
Opinion
We have audited the financial statements of Cardiff Blues Limited (the 'company') for the year ended 30 June 2019 which comprise the profit and loss account, the balance sheet and notes to the financial statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including FRS 102
The Financial Reporting Standard applicable in the UK and Republic of Ireland
(United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
-
give a true and fair view of the state of the company's affairs as at 30 June 2019 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.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the
Auditor's
responsibilities for the audit of the financial statements
section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard
, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
-
the directors' use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
-
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the company’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue
.
The directors are responsible for the other information. The other information comprises the information included in the annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the
financial statements
does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit
:
-
the information given in the strategic report and the directors' r
eport for the financial year for which the financial statements are prepared is consistent with the financial statements
; and
-
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CARDIFF BLUES LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF CARDIFF BLUES LIMITED
- 9 -
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identifie
d
material misstatements in the strategic report and the directors'
r
eport
.
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 directors' remuneration specified by law are not made; or
-
we have not received all the information and explanations we require for our audit; or
-
the directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemption in preparing the directors' report.
Responsibilities of directors
As explained more fully in the directors'
r
esponsibilities
s
tatement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the
Financial Reporting Council’s website at: http://www.frc.org.uk/auditorsresponsibilities
.
This description forms part of our auditor’s report.
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
Ian Thomas BSc FCA DChA (Senior Statutory Auditor)
for and on behalf of Baldwins Audit Services
28 October 2019
Accountants
Statutory Auditor
Ty Derw
Lime Tree Court
Cardiff Gate Business Park
Cardiff
UK
CF23 8AB
CARDIFF BLUES LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2019
- 10 -
2019
2018
Note
£
£
Turnover
13,019,553
9,578,670
Expenditure
(13,425,647)
(10,983,624)
_________________________________________________________________________________________
Operating loss before interest, tax, depreciation - EBITDA
(278,351)
(1,298,540)
Depreciation
(127,743)
(106,414)
Interest payable and similar expenses
(120,446)
(566,778)
_________________________________________________________________________________________
Loss before exceptional income & taxation
(526,540)
(1,971,732)
Exceptional income
2
-
4,266,928
(Loss)/profit before taxation
(526,540)
2,295,196
Tax on (loss)/profit
5
529,688
-
Profit for the financial year
3,148
2,295,196
CARDIFF BLUES LIMITED
BALANCE SHEET
AS AT
30 JUNE 2019
30 June 2019
- 11 -
2019
2018
Notes
£
£
£
£
Fixed assets
Tangible assets
6
445,813
347,578
Current assets
Stocks
54,635
10,000
Debtors
7
1,315,746
307,925
Cash at bank and in hand
191,741
45,711
1,562,122
363,636
Creditors: amounts falling due within one year
8
(4,191,825)
(3,588,312)
Net current liabilities
(2,629,703)
(3,224,676)
Total assets less current liabilities
(2,183,890)
(2,877,098)
Creditors: amounts falling due after more than one year
9
(1,979,560)
(1,289,500)
Net liabilities
(4,163,450)
(4,166,598)
Capital and reserves
Called up share capital
10
5,035,202
5,035,202
Capital contribution reserve
9,288,101
9,288,101
Profit and loss reserves
(18,486,753)
(18,489,901)
Total equity
(4,163,450)
(4,166,598)
These financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.
The financial statements were approved by the board of directors and authorised for issue on 28 October 2019 and are signed on its behalf by:
Mr Alun Jones
Mr Richard Holland
Director
Director
Company Registration No. 03199030
CARDIFF BLUES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2019
- 12 -
Share capital
Capital contribution reserve
Profit and loss reserves
Total
£
£
£
£
Balance at 1 July 2017
5,035,202
-
(20,785,097)
(15,749,895)
Year ended 30 June 2018:
Profit and total comprehensive income for the year
-
-
2,295,196
2,295,196
Transfers
-
9,288,101
-
9,288,101
Balance at 30 June 2018
5,035,202
9,288,101
(18,489,901)
(4,166,598)
Year ended 30 June 2019:
Profit and total comprehensive income for the year
-
-
3,148
3,148
Balance at 30 June 2019
5,035,202
9,288,101
(18,486,753)
(4,163,450)
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2019
- 13 -
1
Accounting policies
Company information
Cardiff Blues Limited is a
private
company
limited by shares
incorporated in England and Wales.
The registered office is
Cardiff Arms Park, Westgate Street, Cardiff, South Glamorgan, UK, CF10 1JA.
1.1
Accounting convention
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in
sterling
, which is the functional currency of the company.
Monetary a
mounts
in these financial statements are
rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
1.2
Going concern
During the year the company has reported a profit of £3,148 and the balance sheet has net current liabilities of £2,629,703 and net liabilities of £4,163,450.
true
The company's cash flow forecasts and projections prepared for a period of 12 months from the date of approval of the financial statements show that the company should be able to operate within the level of its current facilities. After making enquiries the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements.
1.3
Turnover
Turnover represents amounts invoiced, excluding value added tax, in respect of the sale of goods and services. Ticket income, hospitality income and income from competitions are recognised as revenue when the respective event takes place. Revenue from commercial contracts - including broadcasting revenue, sponsorship and the lease of hospitality boxes is recognised based on the terms of the contract.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer
(usually on dispatch of the goods)
, the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
1.4
Tangible fixed assets
Tangible fixed assets
are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
Land and buildings Leasehold
6 - 10 years
Plant and machinery
4 - 6 years
Fixtures, fittings & equipment
4 years
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and
is credited or charged to profit or loss
.
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
1
Accounting policies (Continued)
- 14 -
1.5
Impairment of fixed assets
At each reporting
period
end date, the
company
reviews the carrying amounts of its tangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in
prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
1.6
Stocks
Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.
Stocks held for distribution at no or nominal consideration are measured at the lower of replacement cost and cost, adjusted where applicable for any loss of service potential.
At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.
1.7
Cash at bank and in hand
Cash and cash equivalents
are basic financial assets
and
include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
1.8
Financial instruments
The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset
, with
the net amounts presented in the financial statements
,
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
1
Accounting policies (Continued)
- 15 -
Basic financial assets
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest
method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Financial assets classified as receivable within one year are not amortised.
Classification of financial liabilities
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities
Basic financial liabilities, including creditors and loans, are
initially recognised at transaction price unless the arrangement constitutes a
financing transaction, where the debt instrument is measured at the present value of
the future
paymen
ts discounted at a market rate of interest.
Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective
interest rate method.
Trade creditors
are obligations to pay for goods or services that have been acquired
in the ordinary course of business from suppliers. A
m
ounts payable are classified as
current liabilities if payment is due within one year or less. If not, they are presented
as non-current liabilities. Trade creditors are recognised initially at transaction price
and subsequently measured at amortised cost using the effective interest method.
1.9
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
1.10
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The
company’s
liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by timing differences that have originated but not reversed at the balance sheet date.
1.11
Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
1
Accounting policies (Continued)
- 16 -
1.12
Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.13
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets at the lower of the assets fair
value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.
Rentals payable under operating leases,
including
any lease incentives received, are charged to
profit or loss
on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease
s
asset are consumed.
1.14
Fees payable to and receivable from other rugby football clubs on the transfer of a player's registration, together with associated costs, are dealt with through the profit and loss account in the accounting year in which the transfer of the player's registration takes place.
1.15
No value has been attributed to player's contracts in the balance sheet.
2
Exceptional income
2019
2018
£
£
Balance sheet restructure
-
(4,266,928)
As part of the planned restructure of Cardiff Blues Limited in the prior year, the following directors formally agreed to write off the following amounts owed to them through their respective loan accounts:
Mr P Thomas has agreed to write off £3,333,220 owed to him or his business interests.
Mr M Ryan has agreed to write off £933,708 owed to him.
3
Auditor's remuneration
2019
2018
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
8,350
8,100
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 17 -
4
Employees
The average monthly number of persons (including directors) employed by the company during the year was 187 (2018 - 132).
5
Taxation
2019
2018
£
£
Current tax
Research and Development Tax Credits
(529,688)
-
6
Tangible fixed assets
Land and buildings
Plant and machinery etc
Total
£
£
£
Cost
At 1 July 2018
2,187,736
1,243,448
3,431,184
Additions
-
225,978
225,978
Disposals
(124,795)
-
(124,795)
At 30 June 2019
2,062,941
1,469,426
3,532,367
Depreciation and impairment
At 1 July 2018
1,870,634
1,212,972
3,083,606
Depreciation charged in the year
64,861
62,882
127,743
Eliminated in respect of disposals
(124,795)
-
(124,795)
At 30 June 2019
1,810,700
1,275,854
3,086,554
Carrying amount
At 30 June 2019
252,241
193,572
445,813
At 30 June 2018
317,102
30,476
347,578
7
Debtors
2019
2018
Amounts falling due within one year:
£
£
Trade debtors
309,221
163,027
Other debtors
1,006,525
144,898
1,315,746
307,925
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 18 -
8
Creditors: amounts falling due within one year
2019
2018
£
£
Bank loans and overdrafts
246,607
690,522
Trade creditors
1,264,528
942,060
Other taxation and social security
851,168
774,217
Other creditors
1,116,700
1,126,513
Other loans (note 12)
712,822
55,000
4,191,825
3,588,312
9
Creditors: amounts falling due after more than one year
2019
2018
£
£
Other loans (note 12)
1,262,292
502,000
Other creditors
717,268
787,500
1,979,560
1,289,500
10
Called up share capital
2019
2018
£
£
Ordinary share capital
Issued and fully paid
4,285,202 Ordinary shares of £1 each
4,285,202
4,285,202
750,000 Heritage shares of £1 each
750,000
750,000
5,035,202
5,035,202
The Heritage shares rank equally with Ordinary shares except for the right to appoint two directors to the Board and to remove any person so appointed from time to time. Also the approval of the holders of the Heritage shares must be obtained before the company can, inter alia, alter its articles of association, dispose of its rugby activities, substantially alter the nature of the business, change the club's colours or move the home ground outside of Cardiff.
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 19 -
11
Operating lease commitments
Lessee
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, as follows:
2019
2018
£
£
Cardiff Arms Park
298,473
412,661
Vale of Glamorgan
-
1,696,979
Other
15,631
30,002
314,104
2,139,642
CARDIFF BLUES LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2019
- 20 -
12
Related party transactions
Transactions with related parties
During the year the company entered into the following transactions with related parties:
Purchases
Sales
2019
2018
2019
2018
£
£
£
£
Other related parties
330,730
356,820
61,639
79,363
2019
2018
Amounts owed to related parties
£
£
Key management personnel- Other Loans (see below)
1,975,314
557,000
Other related parties- Trade Creditors
153,670
39,818
Key Management Personnel - Other loans
1) A Director's loan account of £473,314 (2018 - £40,000) was due to Peter Thomas.
2) A loan totalling £1,000,000 (2018 - £nil) was due to Atlantic Properties Developments PLC, a company under the control of Peter Thomas. The balance has been included in both short term and long term creditors in line with the terms of the agreements.
3) A loan of £502,000 (2018: £517,000) is due to Paul Bailey. The balance has been included in both short term and long term creditors in line with the terms of the agreements.
4) The non-executive directors did not receive any remuneration.
2019
2018
Balance
Balance
Amounts owed by related parties
£
£
Other related parties
275
20,204
Advances and guarantees
Personal guarantees have been provided by Peter Thomas and Martyn Ryan, of £300,000 each, in respect of the bank overdraft held by the Company. A guarantee of £675,000 has also been provided by Martyn Ryan in respect of a loan received by the Company.
2019-06-30
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Simon Down
Sir Gareth Edwards CBE
Richard Holland
Chris Nott
Martyn Ryan
Chris Sutton
Chris Sutton
Peter Thomas CBE
Simon Webber
Andrew Williams
Martyn Ryan
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