The directors present the strategic report for the year ended 31 March 2022.
The whole of the turnover from continuing activities is attributable to the operations of The Blackburn Rovers Football and Athletic Limited ("The Club") including its subsidiary, Blackburn Rovers Ladies Football Club Limited; the increase in turnover to £17.1m (2021 £12.7m) is due to the emergence from the Covid 19 pandemic and a return towards normality for the Club’s revenue streams. Government restrictions had prevented supporters from attending any games during the whole of the 2020/2021 season resulting in a loss of ticket and hospitality revenue. The year to March 2022 saw an increase of £2.1m in gate receipts, £0.4m in Hospitality income, £0.4m in merchandise income and £0.8m in TV income. Other operating income of £0.9m (2021 £3.2m) comprises insurance claim receipts of £0.8m and furlough receipts of £0.1m. Operating expenditure, excluding wages and salaries, increased by £3.0m (2021 – decrease £2.6m) being mainly match expenses of £0.9m, repairs £0.5m, rent and rates of £0.7m (mainly due to the rent of the Senior training centre) contributing to the increase of operating expenses to £14.5m (£11.5m 2021). Wages and salaries decreased by £0.6m to £24.6m (2021 - £25.4m).
In June 2021 The Club sold its Senior training facility and related property for £17.3m to Venkateshwara London Limited, a subsidiary of the ultimate parent company, Venkateshwara Hatcheries Pvt. Ltd. The proceeds are due for settlement by 30 June 2023 and carry interest at 4% above the State Bank of India base rate, interest arising on the loan in the period was £562,013. The Club entered into a lease to continue to use the facility and rent arose for the period to 31 March 2022 of £273,827.
The primary focus of the company has been for the club to minimise the impact of the Covid 19 pandemic whilst being mindful of remaining compliant with the Profit and Sustainability rules. Further changes were made to the playing squad and as a result of these changes there was a profit on disposal of £10.0m (2021 profit £0.2m).
As a result of the above there was an increase in the profit before taxation of £24.1m (2021 - £0.6m increase in loss) for the year to 31 March 2022. The profit for the year was £2.7m (2020 £21.4m loss).
During the year the subsidiary of The Blackburn Rovers Football and Athletic Limited - Blackburn Rovers Ladies Football Club Limited continued to operate. The company separates the activities of ladies and girls football from the main club.
The board constantly monitors new developments and assesses the threats to the business by close monitoring of the sectors in which it operates.
The directors have received assurances from the ultimate parent company that it will provide such additional financial support as is necessary to meet the obligations of the group and that it has the capacity to provide this support. On this basis, we believe that the company's and groups financial statements should be prepared on a going concern basis on the grounds that current and future sources of funding or support will be more than adequate for their needs. We have considered a period of twelve months from the date of approval of the financial statements. We believe that no further disclosures relating to the ability of the company and of the group to continue as a going concern need to be made in the financial statements.
Business risks identified include the challenges the Club will face to maintain and improve its league status; however during the year under review, the Club was FFP compliant, and traded without restriction.
The board ensures compliance with all relevant rules and regulations, in particular those laid down by the FA, Football League, Premier League, UEFA and FIFA. Any change to the regulations of these bodies could have an impact on the company as they cover areas such as; competition format, distribution of media income, player eligibility and operation of the transfer market. The board ensures compliance with all relevant rules and regulations, and monitors the impact of any potential changes.
On behalf of the board
The directors present their annual report and financial statements for the year ended 31 March 2022.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The results for the year are set out on page 9.
No ordinary dividends were paid. The directors are unable to recommend payment of a final dividend.
Post balance sheet events are included in the Strategic report together with note 25 to the financial statements.
The board endeavours to keep up to date with new developments occurring in the market segment in which the Company operates.
The auditor, PM+M Solutions for Business LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Qualified opinion
We have audited the financial statements of Venkys London Limited (the 'parent company') and its subsidiar y (the 'group') for the year ended 31 March 20 22 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 the 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).
Basis for qualified 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 group and parent 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
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
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 their environment obtained in the course of the audit, we have not identifie d material misstatements in the strategic report or the directors' r eport . We have nothing to report in respect of the following matters in relation to which 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 parent 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 .
Extent to which the audit was considered capable of detecting irregularities, including fraud
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 identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, we have considered the following :
the nature of the industry and sector, control environment and business performance including the design of the Company' s remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
results of our enquiries of management about their own identification and assessment of the risks of irregularities;
the matters discussed among the audit engagement team including significant component audit teams regarding how and where fraud might occur in the financial statements and any potential indicators of fraud ;
a ny matters we identified having obtained and reviewed the Company's documentation of their policies and procedures relating to:
identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non - compliance;
detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations .
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and identified the greatest potential for fraud in the following areas: timing of recognition of commercial income, posting of unusual journals and complex transactions; and manipulating the Company's performance profit measures and other key performance indicators to meet remuneration targets , externally communicated targets and English Football League Profit and Sustainability requirements . In common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Company operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. The key laws and regulations we considered in this context included UK Companies Act, employment law, health and safety, pensions legislation, tax legislation and football governing body regulations.
Audit response to risks identified
Our procedures to respond to risks identified included the following:
reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations described as having a direct effect on the financial statements;
enquiring of management concerning actual and potential litigation and claims;
performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
reading minutes of meetings of those charged with governance and reviewing correspondence with HMRC; and
in addressing the identified risks of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
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. For example, the further removed non-compliance with laws and regulations (irregularities) is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it. In addition, as with any audit, there remained a higher risk of non - detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
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 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 loss for the year was £225,577 (2021 - £242,052 loss).
Venkys London Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales . The registered office is c/o Squire Patton Boggs (UK) LLP, 7 Devonshire Square, London, EC2M 4YH.
The group consists of Venkys London Limited and its subsidiary.
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 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.
The consolidated financial statements incorporate those of Venkys London Limited and all of its subsidiaries (ie entities that the g roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Subsidiaries acquired during the year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 March 2022 . 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.
Non-controlling interests represent the nominal value of the share capital held by non-controlling shareholders in subsidiaries. No proportion of the deficit on accumulated reserves has been allocated.
The Blackburn Rovers Football and Athletic Limited ("BRFC") is a 99.99% subsidiary of Venky's London Limited ("VLL" or "the group"), and accounts for the significant majority of the group's trading. As a result, the use of the going concern assumption by the group is inherently linked to the use of the same assumption by BRFC.
At 31 March 20
22
the group had net current
assets
of £
3,233,483
and for the year ended 31 March 20
22 r
eported an operating loss before player trading of £
7,336,327
. The group may continue to make operating losses and incur net cash outflows depending on a number of variables including the success of the football club in league and cup competitions and the level of transfer activity. The group is funded through a bank facility and share capital and in view of the current financial position the group remains reliant on its ability to maintain existing and obtain additional funding as necessary.
In managing the finances of the group, the directors remain mindful of the need to ensure the football club will comply with the Championship
Profitability and Sustainability
rules.
As part of the directors' assessment of going concern they have prepared detailed cash flow forecasts for the period to the end of June 2022 and outline forecasts for a further 3 years beyond that. These forecasts indicate that the group will require significant funding in addition to the current facilities available to the group. The amount of additional funding required will be dependent on the net proceeds of any player trading and availability of bank facilities.
In view of this the directors have received confirmation from the ultimate parent company (Venkateshwara Hatcheries Pvt. Ltd) that it has sufficient funds and is willing to provide such additional financing as may be required to fund the group to the extent necessary for the group to continue to trade and to pay its liabilities as and when they become due, for the next 12 months and thereafter for the foreseeable future, regardless of whether the facility referred to below is renewed in May 2023. Accordingly the directors have prepared these forecasts on an appropriate basis.
The group is currently operating within its facilities, due for renewal in
May 2023,
provided by the State Bank of India. The directors believe there are no events or conditions which will cause the withdrawal of these facilities in the near future.
On the basis of the assessment outlined above the directors have a reasonable expectation that the group will have adequate resources to continue in operational existence for the foreseeable future. Accordingly they adopt the going concern basis in preparing these financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
Gate receipt and other matchday revenue is recognised over a football season as the matches occur. Merchandising income is recogonised at the point of sale. Other revenue comprising media and commercial income is apportioned evenly over the football season or contract term as appropriate.
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.
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 recognised in the profit and loss account .
I nvestments in subsidiaries are measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
Other investments held as fixed assets are measured at cost less provision for impairment.
At each reporting period end date, the group reviews the carrying amounts of its tangible and intangible 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.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
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.
The group 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 in the group's balance sheet when the group becomes party to the contractual provisions of the instrument.
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 m ethod 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.
Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
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 group after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans and loans from fellow group companies, 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.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts 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.
Equity instruments issued by the group 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 group.
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 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 group’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 and 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 if, and only if, there is 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, 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.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
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 d asset are consumed.
Government grants are recognised at the fair value of the asset receive
d
or receivable when there is reasonable assurance that the grant conditions will be met and the grants will be received.
Deferred grants are release over the life of the assets to which they relate.
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.
Intra-group investments and loans
The Company has a significant investment in the shares of The Blackburn Rovers Football and Athletic Limited, a subsidiary of the company and has also advanced this subsidiary substantial loans. The short term financial performance of the subsidiary has been volatile but in the opinion of the directors the value of this investment has increased since the previous year end. The Company is committed to support the subsidiary going forwards and is confident of its growth and continued improving performance. The Company has no concerns over the going concern status of its subsidiary and considers it inappropriate to recognise any discounts to the value of its loans. Taking into consideration the realisable value of the subsidiary's assets, diminution in the value of the company's investment in its subsidiary is considered temporary in nature and hence the Company considers no provision is necessary.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Impairment of fixed assets and release of negative goodwill
An impairment loss is recognised whenever the carrying amount of an asset or its income-generating unit exceeds its recoverable amount. Impairment losses are recognised in the profit and loss account.
Negative goodwill arising on acquisition is included within fixed assets and released to the profit and loss account in the periods in which the fair values of the non- monetary assets purchased in the same acquisition are recovered whether through depreciation or sale.
The carrying value of tangible fixed assets is an area where the directors exercise their judgement over useful lives and residual values.
Intra- group investments and loans
The valuation of intra-group investments and loans is an area where the directors exercise their judgement. See note 1.19 for details.
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:
Their aggregate remuneration comprised:
The actual credit 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:
Taxable losses from previous years are available to offset against future taxable profits. A deferred tax asset has not been recognised in respect of these losses as the group does not anticipate taxable profits to arise within the immediate future. The estimated value of the deferred tax asset not recognised, measured at the expected future standard rate of 25% (2020 - 19%), is £66m (2021 - £51m).
The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.
Investments are carried at cost less provision for impairment.
The investment in subsidiary represents a 99.99% shareholding in The Blackburn Rovers Football and Athletic Limited, comprising 176,571,484 (2021 - 146,981,759) ordinary £1 shares. The subsidiary is a professional football club with related commercial activities. During the year a further investment of £29,583,000 was made by the conversion of some of the loan creditor.
The Blackburn Rovers Football and Athletic Limited holds 100% of the share capital of Blackburn Rovers Ladies Football Club Limited consisting of 100 ordinary shares of £1 each.
The registered office of both companies is Ewood Park, Blackburn, Lancashire, BB2 4JF.
The other investment represents a minority shareholding in Hitlab INC, a Canadian unlisted company.
The bank overdraft is not secured over any of the group's assets, however the bank reserves the right to ask for a debenture charge over the assets of the group during the life of the facility. Interest is paid upon the facility at 2.65% over GBP 6 month LIBOR.
Other borrowings represent two unsecured loans: -
The first loan of £486,700 is repayable in 5 equal half yearly instalments,
The second loan of £ 5,553,334 is repayable in 4 equal half yearly instalments .
Finance lease payments represent rentals payable by the company or group for certain items of plant and machinery. Leases include purchase options at the end of the lease period, and no restrictions are placed on the use of the assets. The average lease term is 4 years. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.
Net obligations under finance lease and hire purchase contracts are secured on the assets to which they relate.
In respect of the subsidiary undertaking, pension contributions are paid, by the group, into the personal pension schemes of certain employees. The assets of the scheme are held separately from those of the group in independently administered funds. The contributions paid during the period amounted to £252,547 (2021 - £142,204 ).
The subsidiary company is a member of the Football League Pension and Life Assurance Scheme, which was closed with effect from 31 August 1999. The scheme is a defined benefit multi-employer plan and therefore has been treated as a defined contribution scheme. The scheme was the subject of an actuarial valuation in September 2020 and was in deficit. Full provision has been made for this deficit and a payment schedule agreed. The group's share of the deficit at 31 March 2022 is currently estimated to be £445,659 (2021 - £209,475 ).
The amount charged to the profit and loss account in the year amounted to £358,605 (2020 - £Nil).
During the year a further 19,633,000 ordinary shares were issued at par of £1 each to fund further investment, including the utilisation of the capital contribution reserve.
The profit and loss reserves represents accumulated losses.
The capital contribution reserve represents amounts received from Venkateshawara Hatcheries Pvt Ltd. No interest is charged on this funding and there is no intention for these funds to be repaid, although shares may be issued in respect of it.
In respect of the subsidiary undertaking, under the terms of certain contracts for the purchase of players' registrations, future payments may be due, dependant upon the success of the team and/or individual players. Similar terms exist in contracts for sales of player registrations.
Any amounts payable in relation to playing appearances and team performances are recognised when the event occurs. The maximum potential unrecognised liability for amounts due to football clubs and other third parties for first team players is £6,002,505
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:
Transfer agreements
Since the balance sheet date, the group has entered into transfer agreements amounting to net transfer fees receivable of £462,500.
The company is a subsidiary of Venkateshwara Hatcheries Pvt. Ltd, whose registered address is Venkateshwara House, S. No. 114/A/2 Pune-Sinhagad Road, Pune - 411 030, India. This is the ultimate holding company and group accounts are prepared for this company which are available from the registered address.