CCFC Holdings Ltd Accounts 2011 (1 Viewer)

A brief summary of the 2011 CCFC H Ltd accounts

accounts signed off 19/06/12

- Similar statements to ccfc ltd regarding going concern and the ability to continue

- Employee involvement statement the company recognises the importance of good communications and ensures that employees are informed of matters affecting them as appropriate - pity it isnt the same for the fans

Turnover £4.48m very similar to 2010 (commercial sales £1.79m and management charges to CCFC Ltd £2.67m)

Direct costs up from £1.31m to £1.55m

Admin costs up from £3.33m to £12.1m - because CCFC H have made a provision of £8.44m against the money it provided to CCFC Ltd ie it expects to get less back than it has loaned by £8.44m

Interest paid on finance lease on equipment purchased £6297

Fixed assets down from £1.27m to £1.05m - in year purchased equipment of £160k but wrote down (additional depreciation) the freehold by £122k

current assets are down from £2.61m to £1.78m - items that can more easily be cashed to pay current liabilities

current liabilities up from £41.7m to £49.9m - of which £47.3m is owed to other group members (SBS&L etc) 2010 £39.5m

company owes £47.1m more than it has assets

Employees up to 472 from 335 in 2010 - doesnt make sense but might have been a high turnover of staff

Directors paid £233 k (2010 £275k) of which £206k paid to 3rd parties - guess this was RR's company

£500k was still in deposit re rent bond - lease held by CCFC H and recharged to CCFC Ltd

Otium Entertainment Group owns CCFC H directly but SBS&L owns the whole group

ARVO owns shares in CCFC H - 3 class B shares issued in year with no voting rights and assume these are the ARVO shares

CCFC H is a conduit for money to get to CCFC - but clearly it has big debts and little cashflow

technically yes but the key accounts are SBS&L not the individual CCFC or CCFC H ones. SBS&L show the picture for the whole group excluding amounts between group members.

I think there is something that needs clarifying - £8.44m included in the administration charges of CCFC H accounts

to begin with forget that the two companies CCFC and CCFCH are related in any way just for a moment

CCFC H took money off SBS&L (that came from SISU investors) the debt that CCFC H owed to SBS&L grew by the same amount. CCFC H now owe SBS&L £47m

CCFC H then sent the money on to CCFC Ltd. At that point CCFC owed more money to CCFCH by the amount it received ie it now owed CCFC H £52m not £44m

CCFC H has taken a look at the situation thought CCFC might never repay that and has made a provision for a potential bad debt (pretty much as it has done every year it sent money to CCFC) That means there is on the balance sheet no amount shown as a debtor of £52m and the £8.44m advanced in 2011 year end is included in admin expenses as a doubtful or bad debt. It does not mean that CCFC H does not have a claim against CCFC for £52m but simply that the current value of that debt is £nil per the directors.

If the debt had been written off by both companies then there should have been a corresponding positive in the CCFC accounts to the negative in the CCFC H accounts of £8.44m. It would have been easier for folk to understand. In fact many would have been happy because instead of a loss we would have shown a profit in CCFC accounts of £1.7m (the loss 6.7 add back the loan written off £8.44m) - but it hasnt been written off

CCFC has not written off or revalued the CCFC H debt and so accounts show a liability of £52m to group members. It is perfectly legal and correct but has the effect of distorting everyones percetion of what is going on...... bigger liability in CCFC and bigger losses in CCFC H. The two should match to properly understand but they dont because the various companies are prepared as seperate entities first and then added together to show the group later

Now link the companies again................

Consolidating or adding the companies together to get the SBS&L Group accounts requires various adjustments. Including these adjustments ...First off.............Any loan write offs in CCFCH are reinstated so that the full £52m debt shows. The CCFC liability £52m is contra-ed against the full CCFCH £52m debt (asset)..... In showing a combined figure for the CCFC H Group then there is no asset and no liability of £52m.

The combined figures of the CCFC H group is then added to the figures for the single company known as SBS&L Ltd. In that company CCFCH owes SBSL £47m (is shown as an asset) and CCFC H accounts show as a liability £47m..... to combine the two and show the SBS&L Group figures the 47m (SBS&L)asset is contraed with the 47m liability(CCFCH)..... net effect nil ......

What we are left with are the liabilities of the whole group that are owed to external creditors (including SISU investors) and this stated only in the SBS&L Group accounts

The increase in administration costs is red herring ....... it is the SBS&L Group accounts that show the real financial position especially in terms of liabilities