The directors present their strategic report together with the audited financial statements for the year ended 31 May 202 1 .
The result for the year for the group is set out in the group statement of comprehensive income. The directors do not recommend a payment of a dividend.
The directors consider the key performance indicators of the group to be league status, finishing position of the club, and the year's operating result.
The financial year ended 31st May 2021 endured the start of a period of blight that has continued until this time and will extend beyond the time of writing. A Global Pandemic, Covid-19 has struck all parts of the world and continues to affect the daily lives of everyone in the UK. As a club, our thoughts and sympathy go out to all that have lost a loved one, and of course our thanks will be eternal to the NHS for their unwavering desire to help all under such dangerous circumstances.
From a business view-point, sport has been severely impacted, with the postponement of fixtures and leagues, re-arrangement of the sporting calendar, and matches taking place behind closed doors. The impact to all EFL clubs has been huge and negative.
A new 10-year Ricoh Arena lease was agreed and announced in March 2021. All stakeholders including the club owners, board and fans alike celebrated the return of the team to the Ricoh Arena. The 10-year deal took over 12 months to discuss, negotiate and close. Playing at St Andrews gave both parties the opportunity to strike an appropriate long-term agreement. The return was in part due to the positive role and intervention played by the Mayor’s Office of the West Midlands Combined Authority. The lease agreement allows the club to benefit from a greater proportion of non-ticketing match day revenues. The club went on the record in thanking Birmingham City Football Club for their support in ground sharing at the St Andrews stadium.
The 2019-20 season saw the club get promoted from League One as Champions. Following the announcement of the first National Lockdown the EFL competition was suspended on 13th March 2020 and the season for League One finally curtailed on 9th June 2020, with the club sitting on top of League One with 67 points - having played 34 games. The club were 5 points clear of second place and 8 points clear of the play-off positions, with a game in hand over most of the other contenders. Champions, promotion and relegation issues were all decided on a ‘points per game’ method, with the play-offs being played behind closed doors during July 2020.
Despite the method of promotion, the achievement of promotion from League One to the Championship was richly deserved, following an exhilarating season of free flowing, attacking football enjoyed by all.
The 2020-21 Championship season got underway on 12th September 2020, with fixtures being played behind closed doors. Further into the season, the National Lockdown tiering system was introduced, allowing some clubs to hold a minor number of matches with a limited number of fans in attendance. However, the tiering system was short-lived, and the club unfortunately had to play the whole of its 2020-21 fixtures behind closed doors.
Despite operating under a ground-share arrangement , and missing the magnificent support of our fans, the club were able to retain their Championship status, finishing in a creditable 16th position in the league table. The playing surface undoubtedly contributed to and aided the playing style adopted by the football management. Indeed, the players, football management, and all involved with the club should be extremely proud of their combined achievements during both the 2019-20 and 2020-21 seasons. We now play our fixtures at the CBS (formerly Ricoh) Arena. We look forward to another memorable season in the EFL Championship.
Unfortunately, and as expected, the pandemic and lockdown has had a material impact on the financial performance for the year.
The 2020-21 period saw an increase in turnover of £6,744,234 (YE21 £11,847,727; YE20 £5,103,493). Within turnover, there was an expected decrease in match receipts through playing fixtures behind closed doors, but there was a significant increase in central league distributions as a result of being promoted to the EFL Championship for the 2020-21 season. Also, the loss of match receipts was supplemented through new income from live TV streaming: the fantastic take up by our fans of the new Championship Club memberships; and claims against the Clubs business interruption insurance cover.
In respect to costs then the decrease in direct costs of £159,308 (YE21 £1,149,155; YE20 £1,308,463) is again largely due to match costs savings as a result of playing all fixtures behind closed doors. The saving in this area would have been greater, but for new costs that are specific to Championship clubs, such as goal-line technology charges, together with costs appertaining to the Championship Club memberships income (shirt/delivery costs).
The administrative costs show a substantial increase of £6,661,594 (YE21 £15,700,397; YE20 £9,038,803). The main reason for this increase was the contractual player/management salary increases upon promotion to the EFL Championship, together with bonus’ payable upon promotion from League 1. Savings made from reduced stadium rental costs as a result of playing fixtures behind closed doors, were offset by a £1M increase in player amortisation costs, such increase arising through the further investment in the playing squad. The increased investment to achieve a competitive playing squad was instrumental in the club achieving its target of retaining its EFL Championship status at the end of the 2020-21 season.
The Coronavirus Job Retention Scheme (CJRS), made available by the government to provide financial assistance during the pandemic, was utilised by the company and is shown under other operating income.
Further to the business operational loss of £4,433,473 (YE20: £4,910,397), the company was again able to realise significant profit from the sale of players (YE21 £1,870,279; YE20 £3,818,867). The majority of this profit arose from income related to contingent fees on previous player disposals, in particular Callum Wilson.
The interest payable charges of £2,168,021 (YE21) and £2,293,749 (YE20) relate mainly to accrued interest on the related party loans - the decrease in charges was as a result of the YE20 charge including forward finance costs.
Due to the pandemic, and playing fixtures behind closed doors, the increase to the final loss for the year was not unexpected (YE21 Loss £4,731,201; YE20 £3,385,242). Indeed, given the circumstances endured, the reduction in the operating loss by £476,924 is quite a remarkable feat.
Significant on-going investment in the Academy continues, with the club committing well in excess of the required minimum seasonal spend contribution in order to retain its Category Two Academy Status. The continued support for and investment into the Academy ensured that the outstanding performance has been maintained. Over the last 6 seasons, the Sky Blues have been ranked 1st in the EFL and 1st among all Category 2 clubs in productivity on how many young players they see through their Academy and Development structure reaching first-team football.
The Board acknowledges that there are a number of risks and uncertainties which could have a material impact on the group’s performance. The group’s future income is affected by the club’s performance because significant revenues are dependent upon team performance in the Football League and domestic cup competitions.
In order for the team to remain competitive, significant investment is required on an ongoing basis in both financial and non-financial terms. This investment needs to be balanced with the most important Board responsibility, which is to maintain a financially secure professional football club.
The Board maintains the financial discipline throughout the company to ensure that it is able to continue to operate within its existing facilities.
The group prepares annual budgets and forecasts, and maintains a close working relationship with its financiers and shareholders and is dependent on the continuing support from shareholders. Further details of the going concern position of the group is set out in note 1.
The directors present their annual report and financial statements for the year ended 31 May 2021.
Business review
A review of the business and its principal risks and uncertainties is set out in the strategic report.
No ordinary dividends were paid. The directors do not recommend payment of a further dividend.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The group's policy is to consult and discuss with employees, through unions, staff councils and at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the group's performance.
Transfers of player registrations subsequent to 31 May 2021, taking into account applicable costs and player acquisitions, resulted in a net c.£1,102,000 payable by the club.
In addition to the above, subsequent to 31 May 2021, the club received £ 47,5 00 in relation to sell on clauses for ex-players and paid £55,000 in relation to contingent contractual liabilities.
In accordance with the company's articles, a resolution proposing that Edwards be reappointed as auditor of the group will be put at a General Meeting.
On 11th of March 2020, the World Health Organisation officially declared COVID-19, the disease caused by novel coronavirus, a pandemic. The Club took advantage of various government schemes in order to minimise any lasting impact and to ensure the going concern status of the Club. Management continue to closely monitor the evolution of this pandemic, including how it may affect the Club, the economy and the general population further into the future. We currently have an appropriate response plan in place, and we will continue to monitor and assess the ongoing development and respond accordingly.
We have audited the financial statements of Sky Blue Sports and Leisure Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 May 2021 which comprise the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and notes to the financial statements, including 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).
Basis for opinion
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.
Material uncertainty in relati on to going concern
I n forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the disclosures made in note 1 to the financial statements concerning the company and group's ability to continue as a going concern.
The group is reliant on its shareholders and the group's forecasts indicate that they are likely to require additional funding within the next 12 months. The group has received written confirmations from its shareholders of their intention to provide additional financial support to the group when required and to not demand repayment of loans owing to them for the foreseeable future.
These conditions indicate the existence of a material uncertainty which may cast significant doubt over the group's and parent company's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group and parent were unable to continue as a going concern.
Other information
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
In the light of the knowledge and understanding of the group and the parent 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company 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.
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 parent 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.
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 .
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below .
We obtained an understanding of the legal and regulatory frameworks within which the Group operates, focusing on those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. The laws and regulations we considered in this context were the Companies Act 2006, Taxation legislation, Health & Safety compliance and compliance with the EFL handbook and Financial Fair Play.
We identified the greatest risk of material impact on the financial statements from irregularities, including fraud, to be in the following areas: timing of recognition of income, the override of controls by management, inappropriate treatment of non-routine transactions and areas of estimation uncertainty. Our audit procedures to respond to these risks included enquiries of management about their own identification and assessment of the risks of irregularities, review and discussion of non-routine transactions, sample testing on the posting of journals and income transactions and review of accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to record transactions, collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Use of our 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.
The group statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £0 (2020 - £0 profit).
Sky Blue Sports & Leisure Limited is a private company limited by shares incorporated in England and Wales . The registered office is 96 Kensington High Street, London, W8 4SG.
The group consists of Sky Blue Sports and Leisure Limited and all of its subsidiaries.
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.
The financial statements are prepared in sterling , which is the functional currency of the group . 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.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues : Interest income/expense and net gains/losses for financial instruments not measured at fair value; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 26 ‘Share based Payment’ : Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements ;
Section 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
The consolidated group financial statements consist of the financial statements of the parent company Sky Blue Sports and Leisure Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates .
All financial statements are made up to 31 May 2021 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Notwithstanding the year-end consolidated balance sheet, which shows net current liabilities of £58,216,372 (2020 - £53,043,225) and net liabilities of £56,703,394 (2020 - £51,972,193) the financial statements have been prepared on a going concern basis.
As part of their going concern considerations, the directors have prepared detailed forecasts for the period to 31 May 2023 as part of the longer term forecasts prepared for the group. These forecasts show that the group needs additional funding from its shareholders for the period from June 2021 to May 2023.
The group has received written confirmations from its shareholders of their intention to continue to provide support to the group by not demanding repayment of loans owing to them for the foreseeable future. Shareholders have also confirmed their intention to provide or source funding as required. Notwithstanding this intention, there is no contractual certainty that such funding will be made available nor that the shareholders loans will not be called upon for repayment within the next 12 months. This casts significant doubt on the group's ability to continue as a going concern.
The directors consider the going concern basis to be appropriate as they have no reason to believe that the shareholders will not provide the required support. However these conditions indicate the existence of a material uncertainty which may cast significant doubt on the group's ability to continue as a going concern.
Turnover, which all arise in the United Kingdom, represents match receipts, executive box rentals and income from commercial activities receivable by the group, excluding VAT and trade discounts. Turnover is recognised for match related income in accordance with the matches played. Sponsorship and similar commercial income is recognised over the duration of the respective contracts in line with the contractual terms. Income arising from the fixed element of TV receipts is recognised over the course of the playing season. The non-fixed element of TV receipts relating to match coverage are recognised as the matches are played.
Income from match receipts, sponsorship and commercial contracts, which has been received prior to the year end in respect of future football seasons, is treated as deferred income.
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 and loss.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
The company has elected to apply the provisions of Section 11 'Basic Financial Instruments' and Section 12 'Other Financial Instruments Issues' of FRS 102 to all of its financial instruments.
Financial instruments are recognised 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.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit or 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 liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the profit or loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense.
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.
The pension costs charged against profits represent the amount of the benefit payable to the scheme in respect of the accounting period.
Certain employees are members of the Football League Pension and Life Assurance (FLPLA) Scheme and the Football League Players' Benefit Scheme (the "schemes"). The company continues to make contributions in respect of its share of the deficit of these defined benefit pension schemes. Accrual of the benefits on a final salary basis was suspended with effect from 31 August 1999, when actuarial review showed a substantial deficit. As one of the number of participating employers the company is advised only of its share of the scheme's deficit and recognises a liability in respect of this. Contributions payable to the scheme reduce this 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 leased assets are consumed.
Government grants are recognised at the fair value of the asset received or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
A grant that specifies performance conditions is recognised in income when the performance conditions are met. Where a grant does not specify performance conditions it is recognised in income when the proceeds are received or receivable. A grant received before the recognition criteria are satisfied is recognised as a liability.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
Finance Costs
Finance costs are charged to the consolidated statement of comprehensive income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
Investment in subsidiaries
Investments in subsidiaries are accounted for at cost less impairment in the individual financial statements.
The preparation of financial statements in conformity with FRS 102 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses, The nature of the company's business is such that there can be unpredictable variation and uncertainty regarding its business, The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources, Actual results mav differ from these estimates.
Key sources of estimation uncertainty
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.
Player transfer costs
The directors have to make certain judgements as to whether a liability should be recognised under the terms of the contracts with other football clubs in respect of player transfers, These judgements include the directors' opinion, at the balance sheet date, on the likely league status in the next season, It also requires certain judgements as to whether a player will continue to make the contractually agreed number of first team appearances. Based on these judgements, the director decide on an individual player by player basis as to whether the liability is disclosed as a contingent liability or whether it becomes recognised as a liability in trade creditors in the balance sheet.
Intangible assets, tangible assets and impairment
The directors are required to test whether intangible and tangible assets have suffered any impairment The recoverable amount of cash generating units connected to the recorded value of these assets has been determined based on value in use estimates and compared to the book value to determine if an impairment provision is needed,
All turnover arose within the United Kingdom.
The average monthly number of persons (including directors) employed by the group and company during the year was:
During the year, in addition to the above, the club also had available approximately 225 (2020 - 206) temporary staff on match days, the cost of which are included within direct expenses. Due to the football matches being played behind closed doors, the majority of the temporary staff were unutilised during the year.
The aggregate remuneration comprised:
Included within wages and salaries, are amounts of £310,475 (20 20 - £1 89 , 536 ) which have been included within direct operating costs for the year.
Eligible staff are members of the Football League Limited Pension and Life Assurance Scheme. The latest valuation of the scheme deficit has shown an underfunding of the scheme and accordingly the company's current share of the liability stands at £446,849 (20 20 - £ 378 , 680 ). This is included within creditors.
The group operates a defined contribution pension scheme for the benefit of the employees. The assets of the scheme are administered by trustees in a fund independent from those of the group.
The directors are considered to be the key management personnel. No remuneration was paid in respect of these services provided to the group.
The actual charge for the year can be reconciled to the expected credit for the year based on the profit or loss and the standard rate of tax as follows:
Factors that may affect future tax charges
The group has an unrecognised deferred tax asset of £5,13 5,123 (2020 - £4,238,735). These have not been recognised as their future recoverability is uncertain.
Any players whom the group do not consider to be a long term part of the first team squad and who will therefore not contribute to future cash flows earned by the group are assessed for impairment by considering the carrying value with the group's best estimate of fair value (being post year-end sales proceeds or expected sales proceeds) less costs to sell. The directors are satisfied that no further provision is required.
The carrying value of land and buildings comprises:
Details of the company's subsidiaries at 31 May 2021 are as follows:
The registered address of the above named company is Sky Blue Lodge, Leamington Road, Ryton on Dunsmore, CV8 3FL.
The group has not accounted for an asset in relation to the minority interest held in Otium Entertainment Group Limited as there is no contractual commitment for the minority shareholder to fund any losses generated by the subsidiary undertaking.
The subsidiary undertaking has been consolidated in the group financial statements from the period in which the group obtained control of the assets and liabilities.
Included within trade debtors is £ 80,000 (20 20 - £ Nil ) and included within accrued income is £175,000 (2020 - £Nil) in respect of transfer fees receivable .
Amounts owed to group undertakings are interest free and due on demand.
Included within trade creditors is £1,110,000 (2020 – £405,000) and included within accruals is £1,045,816 (2020 - £Nil) in respect of actual and probable transfer fees payable.
Included within other creditors due within one year is an amount of £ 60 , 8 00 (20 20 - £ Nil ) in respect of a loan advanced by the English Football League ("EFL"). This loan is unsecured and is interest free. In the event of the group defaulting on payment terms, interest will be charged at a rate of 2% above the base rate of the EFL's bankers. In addition, in the event of the Club being promoted or relegated out of the Football League the amount becomes repayable immediately.
Included within other creditors due within one year is an amount of £1,066,666 (31 May 2020 - £Nil) in respect of a "PAYE" loan advanced by the English Football League ("EFL"). This loan is unsecured and is interest free. In the event of the Club being promoted to the Premier League the amount becomes repayable immediately.
Included within other creditors due after more than one year is an amount of £1 2 2, 0 00 (20 20 - £ 182,800 ) in respect of a loan advanced by the English Football League ("EFL"). This loan is unsecured and is interest free. In the event of the group defaulting on payment terms, interest will be charged at a rate of 2% above the base rate of the EFL's bankers. In addition, in the event of the Club being promoted or relegated out of the Football League the amount becomes repayable immediately.
Included within other creditors due after more than one year is an amount of £1,333,334 (31 May 2020 - £Nil) in respect of a "PAYE" loan advanced by the English Football League ("EFL"). This loan is unsecured and is interest free. In the event of the Club being promoted to the Premier League the amount becomes repayable immediately.
Included within other loans falling due within one year is an amount of £28,554,349 (20 20 - £28,554,349) which relates to amounts advanced under a loan facility with Investment Funds managed by SISU Capital Limited, collectively these Funds hold a majority shareholding in the company.
Included within other loans falling due within one year is an amount of £5,732,556 (2020 - £5,732,556) secured on certain assets of the football club in relation to monies advanced by Arvo Master Fund Limited, a company which has an interest in the share s of the company. Interest of £7,994,813 (2020 - £6,876,964) is included within accruals in relation to this loan.
Included within other loans falling due within one year is an amount of £1,750,913 (2020 - £1,750,913) which relates to monies advanced by Arvo Master Fund Limited, a company which has an interest in the shares of the company. Interest of £1,808,334 (2020 - £1,608,334) is included in accruals in relation to this loan. These loan notes are convertible to ordinary shares in specific circumstances and have been treated as having elements of both debt and equity (see note 1 9 ).
Included within other loans falling due within one year is an amount of £2,207,557 (2020 - £2,347,557) which relates to a Revolving Credit Facility agreed with SISU Master Fund Limited. Interest of £1,243,218 (2020 - £8 69 , 745 ) is included within accruals in relation to this loan.
Included within other loans falling due within one year is an amount of £238,000 (2020 - £238,000) which relates to a Revolving Credit Facility agreed with SISU Capital (UK) Limited. Interest of £65,727 (2020 - £36,033) is included within accruals in relation to this loan.
Certain employees of the group participate in the Football League Pension and Life Assurance (FLPLA) Scheme and the Football League Player' Benefit Scheme. Both schemes are defined benefit schemes co-sponsored by the FA Premier League and the Football League.
Accrual of the benefits on a final salary basis was suspended with effect from 31 August 1999, when actuarial review showed a substantial deficit. As one of the number of participating employers the group is advised only of its share of the scheme's deficit and recognises a liability in respect of this.
The latest valuation of the scheme deficit has shown an understanding of the scheme and accordingly the group's current share of the liability stands at £ 446,849 (20 20 - £ 378,680 ). This is included within creditors.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Transfers of player registrations subsequent to 31 May 2021, taking into account applicable costs and player acquisitions, resulted in a net c.£1,102,000 payable by the club.
In addition to the above, subsequent to 31 May 2021, the club received £ 47,5 00 in relation to sell on clauses for ex-players and paid £55,000 in relation to contingent contractual liabilities.
Details on loan arrangements with investment funds managed by SISU Capital Limited are set out in the "Other loans and overdrafts" note .
The group also received loans from Arvo Master Fund Limited, a company with an interest in the shares of group companies. These amounts are included within note 1 7 . The minority interest relates to preference shares in the subsidiary owned by Arvo Master Fund Limited. Interest payable to the minority shareholder is shown in the "Interest payable and similar expenses" note.
Group
The group has, under transfer agreements, a liability to pay additional sums dependent on players' attainment of agreed numbers of first team appearances and any subsequent transfer value. No provision has been made in these accounts for such liabilities as the conditions are not met at the balance sheet date and no reliable estimate can be made of any subsequent transfer values.
Based on transfer agreements signed prior to the year-end the group could potentially receive additional amounts of at least £ 205 ,000 (20 20 - £3 50 , 0 00). These sums are dependent on the attainment of certain objectives by the player and the club they are now employed by. Conditions have not been met at the balance sheet date and no asset has been recognised.
The majority shareholding in the company is held by investment funds under the management of SISU Capital Limited who are considered to be the controlling party.