Professional Documents
Culture Documents
www.rangers.co.uk
Contents
Chairmans Statement
Managers Report
11
14
Balance Sheets
15
Consolidated Cash Flow Statement Bankers Lloyds Banking Group, The Mound, Edinburgh EH1 1YZ Notes to the Accounts Registrars Computershare Investor Services PLC, Lochside House, 7 Lochside Avenue, Edinburgh Park, Edinburgh EH12 9DJ Company Registration Number: SC004276 Five Year Summary Report of the Independent Auditor
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34
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Chairmans Statement
When I became the majority shareholder and Chairman of this great football Club in May this year, the sense of honour and privilege I felt was overwhelming. Those feelings are stronger than ever within me now as I present the Rangers Football Club Annual Report. First, I would like to address what matters most to every Rangers fan - football. In recent years the performance of the players and the football management team has been quite magnificent and I would suggest their achievements rank among the Clubs greatest. Three successive League titles, three out of the last four Scottish League Cups, plus two Scottish Cups and a UEFA Cup Final appearance is extraordinary by any standard and set the seal on Walter Smiths outstanding second term as manager and a truly remarkable managerial career. Every Rangers supporter owes him an enormous debt of gratitude. Walter also left the Club in good hands and Ally McCoist, Kenny McDowall and Ian Durrant are showing the same tremendous drive for success. All of us wish them - and the players - continuing success this season. In May, the Club entered a new era both on and off the pitch. Whilst this Annual Report covers the 12-month period ending on 31 June 2011, it also affords us the opportunity to look forward. I am the first to recognise the contribution that my predecessor as majority shareholder, Sir David Murray, made to Rangers over 20 years. With any change in ownership, however, there will be a change in approach and I firmly believe the changes I have implemented will be in the longerterm interest of the Club, which must always come first. We have a new Board. In addition, we have appointed a new Chief Operating Officer to drive the business forward and take advantage of emerging opportunities and a Director of Football, whose role is to help Rangers maximise every opportunity to develop, attract and retain playing talent, as well as ensure the Club engages productively with football authorities at domestic and international level. Perhaps the biggest change that has been effected since the takeover in May has been the repayment of all bank borrowings. The Club is no longer reliant on bank funding , nor does any bank control our operations on a daily basis. I hope fans would share my view that, looking ahead, the Club should do everything to live within its means and operate on a commercially viable basis. I firmly believe that is the only sustainable, long-term strategy for Rangers. Performance on the field has a direct bearing on the Clubs business performance. Participation in the UEFA Champions League remains important although increasingly difficult to achieve given the qualification process for the SPL champions. During 2010/2011 we qualified for the UEFA Champions League and played in the Europa Cup. Turnover at 57.2m for 2010/11 was an overall increase of 0.9m over the previous year. Gate receipts and hospitality sales increased overall by 1.3m to 27.1m, due to the extra Europa League games, although there was an overall reduction in season ticket sales, hospitality sales and sponsorship revenue. Net operating expenses increased by 3.6m to 47.5m reflecting increased salary levels, higher European fixture costs and operational cost increases across the business. The retained profit for the year to 30 June 2011 amounted to 2.4m, an overall decrease of 1.8m on the previous years profit of 4.2m. As this report goes to print, the Club remains embroiled in historical tax issues with Her Majestys Revenue and Customs, primarily the tax tribunal on Employee Benefit Trusts. It has been a dark cloud hanging over the Club for far too long and any resolution must enable the Club to move forward. Rangers has never been short of challenges in recent years and there is no question there are many challenges ahead for both the Club and Scottish Football in general. However, I am certain that, as a Club, we can rise to these challenges and deliver success both on and off the pitch. That is what Rangers is all about. I would like to take this opportunity to thank all supporters who have offered me so much encouragement. Your support for the Club is inspirational and I can only promise to ensure that the interests of Rangers and our fans will be at the heart of everything I do as Chairman.
Managers Report
I am proud beyond words to be the Manager of Rangers Football Club. It is the opportunity of a lifetime and I am determined to build on the success achieved in Season 2010/11 under Walter Smith. To win a Scottish Premier League Championship and League Cup double was truly remarkable and a fitting way for Walter to leave following his hugely successful second spell at the Club. Our form at the business end of last season was breathtaking and the League Cup Final victory over Celtic at Hampden certainly galvanised the players - who showed grit, steel and determination to go on and secure our record-breaking 54th League Championship. Kenny McDowall, Ian Durrant and I have learned a tremendous amount by working under Walter and rest assured the backroom team and playing staff are all working tirelessly in order to reward the loyalty of our supporters with continued success. Season 2011/12 is well underway and although we suffered disappointment in European competition at the start of the campaign, we have enjoyed a solid start to the defence of the SPL title. Winning the championship is the number one priority this season and with your backing I am sure we can enjoy further success together. Fans are the lifeblood of this great institution and on behalf of everyone at Rangers Football Club I would like to thank you for your continued and loyal support.
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C.T. Whyte (Chairman) (Appointed 6 May 2011) P. Betts (Appointed 6 May 2011) A.J. Johnston (Resigned/Removed 23 May 2011) J.F. McClelland CBE (Vice Chairman) (Resigned 17 October 2011) M. Bain (Resigned 24 June 2011) D.C. McIntyre J. Greig MBE (Resigned 17 October 2011) D.C. King M.S. McGill (Resigned 6 May 2011) D.W. Muir (Resigned 6 May 2011) P. Murray (Resigned/Removed 23 May 2011)
In addition to the Directors interests, the Company has been notified or is aware of the following interests of over 3% of the issued ordinary share capital as at 22 September 2010: Registered Holder
92,842,388
On the 6 May 2011, The Rangers FC Group Ltd purchased 62,060,479 ordinary shares at 10p from Murray MHL limited and 37,448,489 ordinary shares of 10p from RFC Investment Holdings limited. C.T. Whyte is the beneficial owner of 100% of the Ordinary Share Capital of The Rangers FC Group ltd through his ownership of Liberty Capital limited, a company incorporated in the British Virgin Islands which owns 100% of the Ordinary Share Capital of The Rangers FC Group Ltd. C.T. Whyte, P. Betts and ??? retire by rotation and, being eligible, offer themselves for re-election.
CRAIG WHYTE, Chairman, Ibrox Stadium, Glasgow G51 2XD 23 November 2011 Company Registration Number: SC004276
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Balance Sheets
as at 30 June 2011
Notes
2010 000 Notes 56,287 ( 43,856 ) FIXED ASSETS Tangible assets Intangible assets Investments 10 11 12 2011 000
2 3
Trading profit/(loss) Amortisation of player registrations Operating profit/(loss) Exceptional items: Gain on disposal of player registrations Taxation of Discount Option Scheme Profit/(loss) before interest and taxation Interest payable Profit/(loss) on ordinary activities before taxation Taxation Profit/(loss) for the year Basic and diluted earnings/(loss) per share
118,688 11,594 130,282 2 5,640 348 5,990 ( 27,568 ) ( 21,578 ) 108,704 ( 37,938 ) 70,766
116,814 7,892 751 125,457 2 8,913 8,552 17,467 ( 48,822 ) ( 31,355 ) 94,102 ( 20,372 ) 73,730
118,626 10,781 751 130,158 2 7,806 8 7,816 ( 27,316 ) ( 19,500 ) 110,658 ( 37,941 ) 72,717
5 7
13 14
CREDITORS Amounts falling due within one year NET CURRENT LIABILITIES TOTAL ASSETS LESS CURRENT LIABILITIES CREDITORS Amounts falling due after more than one year NET ASSETS CAPITAL AND RESERVES Called up share capital Share premium account Capital reserve The Rangers Bond Revaluation reserve Profit & loss account SHAREHOLDERS FUNDS
15
8 21 9
76 0.07 p
16
( 20,369 ) 70,842
Consolidated Statement of Total Recognised Gains and Losses for the year ended 30 June 2011
There were no other material gains or losses other than the profit for the year.
Consolidated Note of Historical Cost Profits and Losses for the year ended 30 June 2011
Reported profit/(loss) on ordinary activities before taxation Difference between historical cost depreciation and the actual charge for the year calculated on the revalued amount Historical cost profit/(loss) on ordinary activities before taxation Historical cost profit/(loss) on ordinary activities after taxation The accompanying notes form an integral part of these financial statements. 2011 000 76 2010 000 4,209
20 21 21 22 21 21 23
563 4,772 4,772 The financial statements on pages 14 to 33 were approved by the Board on XX XXXXXXX 2011. C.T. Whyte, Chairman The accompanying notes form an integral part of these financial statements.
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Reconciliation of Operating Profit/(Loss) to Net Cash Inflow/(Outflow) from Operating Activities Operating profit Depreciation Amortisation of intangible fixed assets Advance royalty release Capital grant release Loss on disposal of fixed assets Decrease in debtors Increase in creditors Outflow on termination of discontinued operations Net cash inflow/(outflow) from operating activities
Notes
2011 000 1,246 2,265 8,464 ( 1,450 ) ( 222 ) 35 210 4,803 ( 178 ) 15,173
2010 000 5,092 2,416 7,391 ( 1,450 ) ( 226 ) 27 2,262 ( 3,356 ) ( 260 ) 11,896
1. ACCOUNTING POLICIES The Groups principal accounting policies set out below have remained unchanged from the previous year.
10 11 19
Basis of Preparation The Financial Statements have been prepared in accordance with applicable UK Accounting Standards (UK GAAP) and under the historical cost convention with the exception of certain freehold properties, which are included at valuation. The Directors are comfortable that the Financial Statements have been prepared under the going concern principle for the reasons outlined in the Report of the Directors. Basis of Consolidation The consolidation includes the Financial Statements of the Company and its subsidiary undertakings and is based on their audited Financial Statements for the year ended 30 June 2011. Acquisitions are accounted for under the acquisition method, and goodwill on consolidation is capitalised and written off over its expected useful life from the year of acquisition. The results of the companies acquired, or disposed of are included in the Profit and Loss Account after or up to the date that control passes respectively. As provided by Section 408 of the Companies Act 2006, a separate Profit and Loss Account has not been provided for the Company. Tangible Fixed Assets
Cash Flow Statement Net cash inflow from operating activities Returns on investments and servicing of finance Taxation Capital expenditure and financial investment Cash inflow before financing Financing Increase in cash 15,173 ( 1,228 ) 948 14,893 ( 783 ) 14,110 11,896 ( 1,392 ) ( 6,460 ) 4,044 ( 1,328 ) 2,716
24 24 24 24
The Groups freehold properties are carried at the lower of depreciated replacement cost and recoverable amount. Independent valuations are performed every five years, or in any year where there has been a material change in value. Depreciation is provided on the cost or valuation of the asset other than freehold land on a straight line basis to write down the cost or valuation over its useful economic life at the following rates: Fixtures and Fittings Freehold Properties Long Leasehold Properties 10%-25% per annum 1%-2% per annum Lower of assets life and period of lease
As certain freehold properties are depreciated over a period in excess of 50 years, the Directors carry out annual impairment reviews in order to support the carrying value of the assets. Player Registrations
Reconciliation of net cash flow to movement in net debt Increase in cash Decrease in debt Movement in net debt in the period Net debt at 1 July 2010 Net debt at 30 June 2011 The accompanying notes form an integral part of these financial statements. 25 12,240 783 13,023 ( 27,074 ) ( 14,051 ) 2,716 1,328 4,044 ( 31,118 ) ( 27,074 ) The costs associated with the acquisition and retention of football personnel are capitalised as Intangible Assets and amortised over the period of the respective contracts. Payments which are contingent on the performance of the team or the player are recognised where the criteria are considered likely to be met. Receipts which are contingent on the performance of the team or the player are not recognised until the events crystallising such receipts have taken place. Trade Marks The costs of trade marks are capitalised as Intangible Assets and are written off on a straight line basis over 20 years. Goodwill Positive goodwill arising on acquisitions is capitalised, classified as an Intangible Asset on the Balance Sheet, and amortised on a straight line basis over 20 years, which is in line with the Directors assessment of its useful life. It is reviewed for impairment at the end of its first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. If a subsidiary is subsequently sold, any goodwill arising on acquisition that has not been amortised through the Profit and Loss Account is taken into account in determining the profit or loss on sale. Negative goodwill is written back to the Profit and Loss Account to match the recovery of the non-monetary asset acquired. Capital Contributions Capital contributions from the Rangers F.C. Development Fund Ltd. are credited directly to Capital Reserve on date of receipt. Grants Capital grants from the Football Trust, Football Foundation, sportscotland and the Rangers F.C. Development Fund Ltd. are credited to Capital Grants Deferred on receipt and released to the Profit and Loss Account over a period approximating to the lives of the relevant assets. Revenue grants are credited to the Profit and Loss Account to match the incurred expenditure.
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1. ACCOUNTING POLICIES (continued) Turnover Turnover represents income receivable from football and related activities and is stated net of value added tax. Turnover is analysed principally between gate receipts, hospitality, sponsorship, broadcasting rights and commercial income. Ticket and hospitality income is recognised over the period of the football season as games are played. The fixed element of broadcasting revenues is recognised over the duration of the football season, whilst UEFA distributions are spread over the European matches played, with distributions relating to match performance taken when earned. Sponsorship and similar commercial income is recognised over the term of the respective contracts. In June 2006, the Club agreed to grant a ten year licence to JJB Sports plc for an initial advanced consideration together with a guaranteed minimum annual royalty in each year of the licence. The advance consideration is spread evenly over the term of the agreement. The royalty income receivable is classed as turnover net of value added tax. Foreign Currencies Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the Balance Sheet date. Any exchange differences are dealt with through the Profit and Loss Account. Investments Investments are included at cost, less amounts written off. Deferred Taxation Deferred taxation is provided in full on timing differences which result in an obligation at the Balance Sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law enacted or substantively enacted at the balance sheet date. Timing differences arise from the inclusion of items in income and expenditure in taxation computations, in periods different from those in which they are included in the Financial Statements. Deferred taxation is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the asset. Deferred tax assets are recognised to the extent that it is regarded more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. Pension Costs Defined contribution pension arrangements are made for certain employees to which contributions are made by the Group. Amounts due to insurance companies are charged against the Profit and Loss Account in the year in which they become payable. The assets of pension schemes are held separately from those of the Group in independently administered funds. Leases
1. ACCOUNTING POLICIES (continued) Compound Financial Instruments Compound instruments comprise both a liability and an equity component. At date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar debt instrument without the equity feature. The liability component is accounted for as a financial liability in accordance with the accounting policy set out above. The residual is the difference between the net proceeds of issue and the liability component (at time of issue). The residual is the equity component, which is accounted for as an equity instrument. The Directors consider the Rangers Bond to be a compound financial instrument. The Directors have assessed the liability component of the bonds and consider this to be an immaterial element and as such have recognised the full amount as an equity instrument. Share Based Payments The Company issues equity-settled share-based payments to certain employees (including Directors). Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, together with a corresponding increase in equity, based upon the Company's estimate of the shares that will eventually vest. Derivatives The Group uses derivative financial instruments to reduce its exposure to interest rate and exchange rate movements. The Group does not hold or use derivative instruments for speculative purposes and accordingly does not recognise them at fair value within the financial statements. For an interest rate swap to be treated as a hedge, the instrument must be related to actual assets or liabilities or a probable commitment and must change the nature of the interest rate by converting a fixed rate to a variable rate or vice versa. Interest differentials under these swaps are recognised by adjusting net interest payable over the period of the contracts. For foreign exchange contracts the transactions to which they relate are translated at the contracted rate of agreement. 2. TURNOVER Contributions to turnover, which is derived entirely in the United Kingdom and is related to one activity, are as follows: 2011 000 Gate receipts and hospitality Sponsorship and advertising Broadcasting rights Commercial Other operating income 27,054 2,168 3,713 22,272 1,976 57,183 In the opinion of the Directors all business is related to one activity and as such no segmental disclosures have been provided. 3. NET OPERATING EXPENSES 2010 000 25,834 2,941 3,760 21,730 2,022 56,287
Assets held under finance leases and hire purchase contracts, where the risks and rewards of ownership are transferred to the Company, are initially reported at the fair value of the asset with an equivalent liability categorised as appropriate under creditors due within or after one year. The asset is depreciated over its useful economic life. Finance charges are allocated to accounting periods over the period of the contracts to produce a constant rate of return on the balance. Rentals are apportioned between finance charges and reduction of the liability. Rentals under operating leases are charged on a straight line basis over the lease term. Financial Instruments Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. A financial liability exists where there is a contractual obligation to deliver cash or another financial asset to another entity, or to exchange financial assets or financial liabilities under potentially unfavourable conditions. Finance costs and gains or losses relating to financial liabilities are included in the Profit and Loss Account. The carrying amount of the liability is increased by the finance cost and reduced by payments made in respect of that liability. Finance costs are calculated so as to produce a constant rate of charge on the outstanding liability. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Dividends and distributions relating to equity instruments are debited directly to reserves.
2011 000 Staff costs (Note 6) Other operating charges Loss on disposal of fixed assets Hire of plant and machinery Depreciation of tangible fixed assets (Note 10) Amortisation of trade marks and goodwill (Note 11) Auditors remuneration Revenue grants Capital grants released (Note 19) 29,666 15,642 35 334 2,265 52 45 ( 292 ) ( 222 ) 47,525
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3. NET OPERATING EXPENSES (continued) Auditors Remuneration by Category: 2011 000 Fees paid to Group auditor for the audit of the annual accounts Fees payable to the Group auditor for other services: The audit of the Companys subsidiaries, pursuant to legislation All other services 4 4 Fees in respect of the Company pension schemes: Audit 1 4 4 1 40 2010 000 39
7. INTEREST 2011 000 Interest payable on bank loans and overdrafts, and other charges Interest payable on hire purchase agreements Interest payable to HMRC Total interest charged to profit and loss account 1,095 49 958 2,102 2010 000 1,260 135 1,395
8. TAXATION Group 2011 000 Corporation tax Current year Prior year 2010 000 2011 000 Company 2010 000 -
4. AMORTISATION OF PLAYER REGISTRATIONS 2011 000 Amortisation of player registrations (Note 11) 8,412 2010 000 7,339
5. EXCEPTIONAL ITEMS The income tax provision reflects a liability in relation to a Discounted Option Scheme associated with player contributions between 1999 and 2003. 6. STAFF COSTS 2011 000 Wages and salaries Contributions to employee trusts Social security costs Defined contribution pension costs 25,924 347 3,112 283 29,666 2010 000 23,667 1,358 2,818 290 28,133
Current year Prior year Total Potential deferred tax asset Based on Trading Losses Decelerated capital allowances
The balance of historical tax losses are available for offset against any future profits as and when these are generated. The difference between the tax charge of nil (2010 - nil) and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax is as follows: 2011 000 Profit on ordinary activities before tax Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 27.5% (2010 - 28%) Expenditure not deductible for tax purposes Capital allowances for the period (greater than)/less than depreciation Accountancy depreciation not eligible for tax purposes Tax losses utilised Capital grants released Accounting depreciation not eligible for tax purposes Other short term timing differences Current Corporation Tax Credit 76 663 303 ( 73 ) 7 ( 196 ) ( 62 ) 2010 000 4,209 1,180 413 308 ( 1,838 ) ( 66 ) 2 1 -
The Murray Group Management Ltd. Remuneration Trust was established to provide incentives to certain employees and other service providers. Payments to the Trust are charged to the Group Profit and Loss Account in the year incurred. On the basis of expert tax advice, the Club is defending a query raised by HMRC into this Trust, which is part of an ongoing tax enquiry scheduled to be heard by a tax tribunal before the end of the year. 2011 000 Directors remuneration: Emoluments Pension contributions to money purchase pension schemes 538 73 611 2010 000 759 73 832
During the year, 2 Directors (2010 - 2 Directors) participated in money purchase pension schemes. The emoluments of the highest paid Director were 450,000 (2010 - 633,000), including money purchase pension contributions of 55,000 (2010 - 55,000). 2011 The average monthly number of employees was made up as follows: Football players Others 65 204 269 In addition, the Group employed an average of 46 part-time employees (2010 - 45) during the year. 2010 66 190 256
9. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. The Group has 1,200,000 of potential dilutive ordinary shares at 30 June 2011. As the current share price is below the option price, the basic and diluted earnings per share is the same. Reconciliations of earnings and weighted average number of shares used in the calculations are set out overleaf.
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Profit 000s
10. TANGIBLE FIXED ASSETS (continued) Per share amount pence Company Freehold Properties 000 At 1 July 2010 As valued 2008 At cost to date Additions Disposals Total 000 AT 30 JUNE 2011 As valued 2008 At cost to date AT 30 JUNE 2011 121,874 ( 494 ) 121,380 26 ( 526 ) 120,880 121,874 ( 994 ) 120,880 Long Leasehold Properties 000 3,976 3,976 3,976 3,976 3,976 Fixtures And Fittings 000 20,237 20,237 885 21,122 21,122 21,122
Total 000 121,874 23,719 145,593 911 ( 526 ) 145,978 121,874 24,104 145,978
2,411
108,791
2.22
4,209
108,791
3.87
10. TANGIBLE FIXED ASSETS Group Freehold Properties 000 At 1 July 2010 As valued 2008 At cost to date Additions Disposals AT 30 JUNE 2011 Long Leasehold Properties 000 Fixtures And Fittings 000
960 53 1,013
3,976 3,976
21,206 21,206
NET BOOK VALUE 30 JUNE 2011 NET BOOK VALUE 30 JUNE 2010 Assets of the Group and Company held under finance leases are as follows:
110,340 112,088
2,963 3,016
3,511 3,522
116,814 118,626
960 53 1,013
Net Book Value at 30 June 2011 Net Book Value at 30 June 2010 Depreciation provided in the year
2,963 3,016 53
2,963 3,016 53
NET BOOK VALUE 30 JUNE 2011 NET BOOK VALUE 30 JUNE 2010
110,340 112,088
2,963 3,016
3,553 3,584
116,856 118,688
The Directors determined the valuation of freehold properties based on their recoverable amount as at 30 June 2011. No provision has been made in the deferred taxation account for the estimated corporation tax that would be payable on the disposal of the revalued assets because, in the opinion of the Directors, the land and buildings are unlikely to be disposed of in the foreseeable future. On an historical cost basis, the Groups and Companys freehold heritable properties would have been 53,133,000 (2010 - 54,318,000) for the Group and 53,133,000 (2010 - 54,318,000) for the Company. The Group and Company cumulative borrowing costs capitalised to 30 June 2011 total 1,740,000 (2010 - 1,740,000).
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11. INTANGIBLE FIXED ASSETS Group Cost: At 1 July 2010 Additions Disposals AT 30 JUNE 2011 Player Registrations 000 26,400 6,339 ( 6,698 ) 26,041 Trade Marks 000 75 75
12. INVESTMENTS Company Goodwill 000 896 896 Total 000 27,371 6,339 ( 6,698 ) 27,012 Subsidiary undertakings 000 Cost AT 30 JUNE 2011 AND 30 JUNE 2010 751
Amounts written off: At 1 July 2010 Charge for year (see Notes 3 & 4) Eliminated on disposal AT 30 JUNE 2011
62 4 66
200 48 248
751
Details of the investments in which the Company holds 20% or more of the nominal value of any class of share capital are as follows: Name of Company Subsidiary Undertakings (all incorporated in the United Kingdom): Rangers Youth Development Ltd Rangers Media Investments Ltd Rangers Media Investments Ltd Rangers Financial Services Ltd The Rangers Shop Ltd Rangers.co.uk Ltd Rangers Matchday Services Ltd Holding Proportion of Voting Rights and Shares 100% 100% 100% 100% 100% 100% 100% Nature of Business Youth Development Dormant Dormant Dormant Dormant Media Dormant
NET BOOK VALUE 30 JUNE 2011 NET BOOK VALUE 30 JUNE 2010 Company Cost: At 1 July 2010 Additions Disposals AT 30 JUNE 2011
7,969 10,885
9 13
648 696
8,626 11,594
Ordinary Shares Ordinary Shares Preference Shares Ordinary Shares Ordinary Shares Ordinary Shares Ordinary Shares
75 75
Amounts written off: At 1 July 2010 Charge for year Eliminated on disposal AT 30 JUNE 2011
62 4 66
NET BOOK VALUE 30 JUNE 2011 NET BOOK VALUE 30 JUNE 2010
7,883 10,768
9 13
7,892 10,781
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13. STOCK Group 2011 000 Goods for Resale 2 Group 2010 000 2 Company 2011 000 2 Company 2010 000 2
17. BORROWINGS Borrowings are repayable as follows: Group 2011 000 Overdraft amounts falling due within one year: Bank loan Amounts due to Group Other loans Lease creditor Group 2011 000 Group 2010 000 3,877 30 1,733 5,640 Company 2011 000 4,685 3,357 236 635 8,913 Company 2010 000 3,796 2,246 91 1,673 7,806 Amounts falling due within one to two years: Bank loan Lease creditor 18,684 450 132 19,266 141 141 Amounts falling due within two to five years: Bank loan Lease creditor 538 538 Group 2011 000 Group 2010 000 3,695 1,000 700 2,231 2,724 4 222 16,833 159 27,568 Company 2011 000 18,684 200 6,524 94 7,343 311 107 15,427 132 48,822 Company 2010 000 3,695 1,000 450 2,174 57 2,915 4 222 16,640 159 27,316 Amounts falling due after five years: Bank loan Lease creditor 2,999 2,999 22,944 Details on securities granted over assets are given in Note 18. Group 2010 000 3,695 1,000 700 159 5,554 1,000 129 1,129 3,000 472 3,472 14,000 3,267 17,267 27,422 Company 2011 000 18,684 200 132 19,016 141 141 538 538 2,999 2,999 22,694 Company 2010 000 3,695 1,000 1,000 450 159 5,304 1,000 129 1,129 3,000 472 3,472 14,000 3,267 17,267 27,172
14. DEBTORS
Trade debtors Amounts due from subsidiary undertakings Other debtors Prepayments and accrued income
Included within trade debtors is 504,000 (2010 - 458,000) due outwith one year. 15. CREDITORS - Amounts falling due within one year
Bank overdraft Bank loan Amounts due to Group Other loans Trade creditors Amounts due to subsidiary undertakings Social security and other taxes Other creditors Deferred income: Capital Grants (see Note 19) Accruals and other deferred income Lease creditor
16. CREDITORS - Amounts falling due after more than one year Group 2011 000 Bank loan Trade creditors Accruals and other deferred income Deferred income: Capital Grants (see Note 19) Lease creditor 1,093 7,249 8,349 3,678 20,369 Group 2010 000 18,000 260 7,354 8,456 3,868 37,938 Company 2011 000 1,093 7,252 8,349 3,678 20,372 Company 2010 000 18,000 260 7,357 8,456 3,868 37,941
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18. FINANCIAL INSTRUMENTS The Groups financial instruments comprise borrowings, cash, and various items such as trade debtors and trade creditors that arise directly from its operations. The main purpose of the financial instruments is to finance the Groups operations. The Group also enters into derivative transactions such as interest rate swaps and forward foreign exchange contracts. The purpose of such transactions is to manage the interest rate and currency risks arising from the Groups operations and sources of finance. The main risks arising from the Groups financial instruments are interest rate risk, liquidity risk and foreign currency risk. The Board reviews and agrees policies for managing each of these risks and they are summarised below. These policies remain unchanged from previous years. All transactions in derivatives, principally interest rate swaps, are undertaken to manage risks arising from the underlying business activities and no transactions of a speculative nature are undertaken. Interest Rate Risk of Financial Liabilities The Group finances its operations through a mixture of shareholders capital, borrowings and leasing. The Groups exposure to interest rate fluctuations on its borrowings is managed by the use of both fixed and floating rates of interest. The Group policy is to have the majority of its net borrowings at fixed rates of interest. At the year end, the Group held one interest rate swap of 15.0m (2010 - 15.0m). The swap structure is in place for a period of 21 months maturing in March 2013. The Bank has the option to cancel the swap at any point after March 2011. The interest rate exposure of the financial liabilities of the Group as at 30 June 2011 was nil (2010 - 15,000,000) and 4,010,000 (2010 - 11,922,000) at a fixed and floating rate respectively. Loans of 18,684,000 (2010 - 500,000) are interest free. The weighted average fixed interest rate for financial liabilities was 4.67% (2010 - 4.67%) for which the weighted average period until maturity is 21 months (2010 - 9 months). The floating rate borrowings bear interest at various rates above LIBOR for which the weighted average period until maturity is 204 months (2010 - 222 months). The interest free loans of 250,000 are repayable on average over 3 months (2010 - 3 months). Liquidity Risk
18. FINANCIAL INSTRUMENTS (continued) Currency Risk The Group may from time to time acquire foreign currency in advance of payment dates for transfer fees or UEFA receipts for European competition. During the year the Group made recognised exchange losses of 43,000 (2010 - 85,000) which are included in this years Profit and Loss Account. These exchange losses relate mainly to the acquisition of players where purchase contracts were denominated in Euros. There are no unrecognised gains or losses as at 30 June 2011. The Group is exposed to translation and transaction foreign exchange risk. The table below shows the extent to which the Group has net monetary liabilities in currencies other than sterling: 2011 000 Cash (Euros) Trade Creditors (Euros) Trade Creditors (USD) Trade Debtors (Euros) Fair Values The interest rate swap agreement has been included in the financial statements at a book value of nil (2010 - nil). The fair value of swap agreements at 30 June 2011, if recognised, would be a liability of 927,000 (2010 - liability 1,324,000). At the year end the Group had nil (2010: nil) forward foreign exchange contracts outstanding. Short Term Debtors and Creditors Short term debtors and creditors have been excluded from the above disclosures, other than the currency risk disclosures. 212 ( 237 ) ( 10 ) 444 2010 000 1,857 ( 6) 894
19. CAPITAL GRANTS DEFERRED The Group seeks to manage financial risk to ensure sufficient liquidity is available to meet foreseeable needs, to invest cash assets safely and to deliver market returns. Maturity of Financial Liabilities The maturity profiles of the Groups borrowings are set out in Note 17. Borrowing Facilities At 30 June 2011 There are no borrowing facilities with any Banking Institution. Funding is provided by the majority shareholder by way of Group Loans provided by Rangers FC Group limited. Rangers FC Group limited has a floating charge and guarantees from each Group company on account of each other in respect of the loan. 8,456 8,678 At 1 July 2010 Grant released Group and Company 2011 000 8,678 ( 222 ) 2010 000 8,904 ( 226 )
Grants received from the Rangers F.C. Development Fund Ltd. during the year were revenue grants (Note 3) supporting the costs of the youth development policy.
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20. SHARE CAPITAL 2011 000 Authorised: 120,280,602 ordinary shares of 10p each Issued and fully paid: 108,791,499 (2009 - 108,791,499) ordinary shares of 10p each 12,028 10,879 2010 000 12,028
22. THE RANGERS BOND At 1 July 2010 & 30 June 2011 Number 1,673 2,724 1,371 282 6,050 At 1 July 2010 & 30 June 2011 000 1,673 3,541 2,057 465 7,736
Class 10,879 A B C D Debenture stock at 1,000 each Debenture stock at 1,300 each Debenture stock at 1,500 each Debenture stock at 1,650 each
21. RESERVES Group Share Premium Account 000 At 1 July 2010 Retained profit for the year Transfer from revaluation reserve to profit and loss account At 30 June 2011 Company At 1 July 2010 Retained profit for the year Transfer from revaluation reserve to profit and loss account At 30 June 2011 120,973 120,973 9,185 9,185 57,770 ( 563 ) 57,207 ( 133,826 ) 1,013 563 ( 132,250 ) 120,973 120,973 Capital Reserve 000 9,185 9,185 Revaluation Reserve 000 57,770 ( 563 ) 57,207 Profit and Loss Account 000 ( 135,777 ) 76 563 ( 135,138 )
The debentures rank pari passu with respect to voting and repayment, are unsecured and no interest is payable. The debentures are repayable under the following conditions: i. at the discretion of the Company on or after 16 December 2026, being the 35th anniversary of the completion of the Club Deck in the Bill Struth Main Stand, or ii. if an order is made or an effective resolution is passed for the winding up of the Company, or iii. if an administrator or receiver is appointed to the undertaking of the Company or any of its property or assets, or iv. if the Company ceases on a permanent basis to carry on its business at the Stadium. The benefits which accrue to the debenture holders are: a. the right to purchase a season ticket in respect of a designated seat; b. where the Company has control over allocation of the designated seats for an event which is not covered by the season ticket, the opportunity to purchase a ticket in respect of the designated seat for that event, within such periods as the Company shall notify by public announcement or otherwise for the relevant event; c. the right to the use of such facilities as shall from time to time be available within the Club Deck in the Bill Struth Main Stand of the Stadium; and d. the right to have the name of the Registered Holder affixed to the designated seat.
The retained profit for the Company for the year ended 30 June 2011 was 1,013,000 (2010 - 4,914,000).
23. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS 2011 000 Profit for the financial year Net addition to shareholders funds Opening shareholders funds Closing shareholders funds 76 76 70,766 70,842 2010 000 4,209 4,209 66,557 70,766
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24. ANALYSIS OF CASH FLOW STATEMENT HEADINGS 2011 000 Returns on investment and servicing of finance Interest paid Interest element of finance lease rentals paid Net cash outflow from returns on investment and servicing of finance ( 1,171 ) ( 57 ) ( 1,228 ) ( 1,259 ) ( 133 ) ( 1,392 ) 2010 000
25. ANALYSIS OF NET DEBT At 1 July 2010 000 Cash at bank and in hand Bank loan Loan from parent company Other loans Finance Leases Net Debt ( 3,347 ) ( 19,000 ) ( 700 ) ( 4,027 ) ( 27,074 ) Cash Flow 000 12,240 19,000 ( 18,684 ) 250 217 13,023 At 30 June 2011 000 8,893 ( 18,684 ) ( 450 ) ( 3,810 ) ( 14,051 )
Capital expenditure and financial investment Purchase of tangible fixed assets Purchase of intangible fixed assets Sale of tangible fixed assets Sale of intangible fixed assets Net cash outflow from capital expenditure and financial investment ( 415 ) ( 3,662 ) 449 4,576 948 ( 264 ) ( 8,039 ) 442 1,401 ( 6,460 ) 27. CONTINGENT ASSETS / LIABILITIES For the Group and Company at 30 June 2011, additional transfer fees payable of nil (2010 - nil) and transfer fees receivable of 625,000 (2010 - 100,000) would arise if certain conditions in transfer contracts are fulfilled. ( 217 ) ( 19,000 ) 18,684 ( 250 ) ( 783 ) ( 78 ) ( 1000 ) ( 250 ) ( 1,328 ) At 30 June 2011, the Group was committed to making payments of nil (2010 - nil) during the next year in respect of operating leases expiring within 1 year, payments of 93,000 (2010 - 175,000) in respect of operating leases expiring between 2 and 5 years, and 33,000 (2010 - 33,000) in respect of operating leases expiring after 5 years. All of the Groups operating lease commitments are in respect of land and buildings. 30. ULTIMATE HOLDING COMPANY On 6th May 2011 the ultimate holding company changed from Murray International Holdings Ltd (reg no SC192523) to The Rangers FC Group limited (reg no 07380537) where C.T. Whyte is the ultimate controlling party. The largest and smallest group in which the results of the Company are consolidated is that headed by the ultimate holding company whose registered office is at 4 Bedford Row, London, WC1R 4DF. 28. CAPITAL COMMITMENTS / FINANCIAL COMMITMENTS The Group and the Company had capital commitments in respect of tangible fixed assets as at 30 June 2011 of 1,629,000 (2010 - nil). 29. OPERATING LEASE COMMITMENTS Net cash outflow from financing During the year, in the normal course of business, the Group had sales of 223,000 (2010 - 150,000) to companies of which Sir David E. Murray, or companies controlled by him, are the principal shareholders, and received services of 407,000 (2010 - 665,000), principally in relation to advertising and management services from them. At the year end, balances due from these companies were 202,000 (2010 - 5,000) and due to them were 407,000 (2010 - 53,000), and are included within trade debtors and trade creditors respectively.
Financing Capital elements of finance lease rentals Repayment of term loan Parent company loans Other loans repaid
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Independent Auditor's Report to the Members of The Rangers Football Club plc
We have audited the financial statements of The Rangers Football Club plc for the year ended 30 June 2011 which comprise the Consolidated Profit and Loss Account, the Group and Parent Company Balance Sheets, the Consolidated Cash Flow Statement, the Consolidated Statement of Total Recognised Gains and Losses, the Consolidated Note of Historical Cost Profits and Losses and notes 1 to 30. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). This report is made solely to the companys 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 companys 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 companys members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Directors Responsibilities Statement set out on page 12, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Boards (APBs) Ethical Standards for Auditors. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/apb/scope/UKNP. Opinion on financial statements In our opinion the financial statements:
give a true and fair view of the state of the group's and the parent company's affairs as at 30 June 2011 and of the group's 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.
Opinion on other matters prescribed by the Companies Act 2006
FOOTBALL
In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements. Matters on which we are required to report by exception 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:
Season Premier League Premier League Matches Premier League Points Scottish Cup League Cup European Ties Played Capital Investment in Intangible Assets (000)
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.
ROBERT HANNAH SENIOR STATUTORY AUDITOR FOR AND ON BEHALF OF GRANT THORNTON UK LLP, STATUTORY AUDITOR, CHARTERED ACCOUNTANTS Glasgow 2011
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Clydesdale Bank Premier League P W Rangers 38 30 Celtic 38 29 Hearts 38 18 Dundee Utd 38 17 Kilmarnock 38 13 Motherwell 38 13 Inverness CT 38 14 St Johnstone 38 11 Aberdeen 38 11 Hibernian 38 10 St Mirren 38 8 Hamilton 38 5
D 3 5 9 10 10 7 11 11 5 7 9 11
L 5 4 11 11 15 18 13 16 22 21 21 22
F 88 85 53 55 53 40 52 23 39 39 33 24
A 29 22 45 50 55 60 44 43 59 61 57 59
Pts 93 92 63 61 49 46 53 44 38 37 33 26
SPL Scottish Premier League, LC League Cup, CL Champions League, SC Scottish Cup
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