norwich city football club plc annual report 2016files.canaries.co.uk/canaries/annualreport.pdf ·...

Annual Report 2016for the year ended 30 June 2016

Norwich City Football Club PLC

Norwich City Football Club PLC, Carrow Road, Norwich NR1 1JETel: 01603 760 760

canaries.co.uk

Company number 00154044

NORWICH CITY FOOTBALL CLUB PLC

ANNUAL REPORT

FOR THE YEAR ENDED

30 JUNE 2016

NORWICH CITY FOOTBALL CLUB PLC ANNUAL REPORT For the year ended 30 June 2016

Board of Directors: E Balls (Chairman: appointed 20 January 2016) M M Foulger (Deputy Chairman) J Moxey (Chief Executive: appointed 10 August 2016) S J Phillips Ms D A Smith Mr T Smith (Appointed 20 January 2016) E M S Wynn Jones

Company Secretary: S Stone (Director of Finance)

Other Senior Executives: A Neil (Football Manager) A Blofeld (Club Secretary)

Company Number: 00154044

Registered Office: Carrow Road Norwich NR1 1JE

Auditor: BDO LLP 55 Baker Street London W1U 7EU

NORWICH CITY FOOTBALL CLUB PLC ANNUAL REPORT For the year ended 30 June 2016

INDEX PAGE

Strategic Report 1 - 2

Report of the Directors 3 - 6

Independent auditor’s report 7

Consolidated statement of comprehensive income 8

Consolidated statement of financial position 9

Company statement of financial position 10

Consolidated statement of changes in equity 11

Company statement of changes in equity 12

Consolidated statement of cash flows 13 - 14

Notes to the annual report 15 - 36

NORWICH CITY FOOTBALL CLUB PLC STRATEGIC REPORT

Page 1

The Directors present the Group’s Strategic Report for the year ended 30 June 2016.

Principal activities

The Group's principal activity is that of a professional football club (the “Club”). The principal activities of the subsidiary undertakings are shown in note 15.

Key performance indicators

The Club uses a variety of performance measures in order to monitor and manage the business effectively. These are both financial and non-financial measures and include the following key performance indicators (KPIs):

2016 2015

Average league attendance (number) 26,973 26,368

Season tickets sold (number) 20,481 20,773

Player wage costs as a percentage of turnover (%) 55 67

Cash balance at the year end (£'000) (2,599) 1,902

Group operating profit/(loss) excluding player trading (£'000) 15,379 (9,176)

Business review and future outlook

2015/16 has been a disappointing season for the Club, culminating in relegation to the Championship after only one year in the Premier League.

At £14.2m, operating profit was much higher than planned due to a significant proportion of salary costs being performance-related in terms of remaining in the Premier League, and therefore not paid.

The Club has continued its policy of investing all available cash in improving the playing squad. The cash outflow of £4.5m in the year is impacted by a net payment of £10.9m for player trading which is a significant increase on the net £2.7m payment in the prior year. This was achievable because of the increase in broadcasting revenue as a result of being in the Premier League, after allowing for full repayment of non-interest bearing Directors’ loans totalling £2.0m.

This means that aside from a working capital facility provided by Barclays Bank and preference shares classified as debt, the Club has no debt, either external or owed to its shareholders.

The Club’s future strategy remains that of investing all available surplus cash in to the playing squad and hence maximising the chances of returning to the Premier League at the earliest opportunity. This in turn will allow the consideration of longer term investment projects centred on both the Club’s training facilities at Colney and at Carrow Road itself.

NORWICH CITY FOOTBALL CLUB PLC STRATEGIC REPORT

Page 2

Principal business risk management objectives and policies

The Club’s Board maintains a risk register which is reviewed, discussed and updated at every Board meeting. The Board considers the key potential business risks to be as follows:

• first team performance and the direct impact on league status and position and ultimately revenue generation; • recruitment and retention of key colleagues; • negative high profile player or colleague issues; • supporter attendance levels at first team matches; • negotiation of key commercial contracts; • rules and regulations of the applicable football governing bodies; • Health & Safety considerations arising from operating a match day venue; and • cash management in line with agreed working capital facility limits.

The Board delegates responsibility for operational risk to the Chief Executive. First team performance can have a significant impact on most of the other key risk areas, so investment in the playing squad continues to be our priority. Key performance indicators in relation to both football and commercial areas of the business are measured and reviewed weekly with corrective action taken where appropriate.

Going concern

In assessing the appropriateness of the going concern assumption, the Directors have produced detailed cash flow forecasts, considering reasonably foreseeable material uncertainties in relation to income and costs.

The scenarios have been prepared on the basis of both continued Championship status and also Premier League status and indicate that, based on these cash flow forecasts and expectations for player trading and the availability of future external finance as required from time to time, the Club can meet its liabilities as they fall due.

The Directors have therefore concluded that it is appropriate for the financial statements to be prepared on the going concern basis.

BY ORDER OF THE BOARD

S Stone Company Secretary 14 October 2016

NORWICH CITY FOOTBALL CLUB PLC REPORT OF THE DIRECTORS

Page 3

The Directors present their report and the consolidated financial statements for the year ended 30 June 2016.

Information included in the Strategic Report

Under S414c(ii) of the Companies Act 2006, the following information is included in the Strategic Report:

• details of the principal activity of the Group;

• a review of the business including developments in the year, its performance and current position;

• a summary of the principal risks and uncertainty affecting the position; and

• information relating to the KPIs monitored by the Club.

Results and dividends

The profit for the year after taxation amounted to £9,415,000 (2015: loss of £5,312,000).

A dividend on the 'A' preference shares of £507 (2015: £507) and on the 'B' preference shares of £57,538 (2015: £57,538) has been accrued for the year ended 30 June 2016 (note 11).

Directors

The Directors of the Company serving as at 30 June 2016 together with their beneficial interests in the Company's issued share capital were:

Ordinary shares

of £1 each

'B' preference shares

of £1 each

30 June 2016 1 July 2015 30 June 2016 1 July 2015

E Balls (appointed 20 Jan 2016) 100 - - -

M M Foulger 98,200 98,200 4,400 4,400

S J Phillips 100 100 - -

Ms D A Smith 100 100 - -

Mr T Smith (appointed 20 Jan 2016) 104 4 1 1

E M S Wynn Jones 100 100 - -

Ms D A Smith and E M S Wynn Jones (jointly) 327,309 327,309 3,025 3,025

The above Directors served throughout the whole year unless the appointment date is shown.

In addition the following Directors served for part of the year:

• A J Bowkett – resigned 7 December 2015;

• S J Fry – resigned 18 January 2016; and

• D McNally – resigned 31 May 2016.

None of the Directors had a beneficial interest in the 'A' preference shares of £1 each.


Page 4

Directors’ and officers’ liability insurance

During the year ended 30 June 2016 the Group maintained liability insurance for its Directors and Officers, as permitted by Section 233 of the Companies Act 2006.

Share capital

During the period 200 (2015: 25) £1 ordinary shares were issued at a weighted average cost of £1 each (2015: £100).

Principal financial risk management objectives and policies

The Group aims to minimise financial risk and prepares 18 month rolling budgets and monitors actual performance against these budgets. In addition the Group prepares rolling cash flow forecasts to make sure that cash is managed effectively. As part of the strategy, the Group has implemented a number of initiatives to ensure that it has sufficient cash resources to meet its day to day requirements (see going concern section on page 15).

The financial assets that expose the Group to financial risk include cash and trade debtors. Cash is held in bank accounts with Barclays Bank PLC. Trade debtors are monitored closely to minimise the risk of bad debts and amounts due from other clubs are covered by specific football creditor rules that help minimise these risks. The Directors are of the opinion that the risks associated with the Group’s financial instruments are well managed.

Charitable donations

In the year to 30 June 2016, the Club engaged in a number of community and charity activities, to provide support to groups and individuals in Norfolk and beyond.

The Club’s Official Charity Partner, the Community Sports Foundation, engaged with over 31,000 people through its various sport, well-being, and education programmes. The Foundation works with a broad range of people, including those with disabilities or vulnerable adults, as well as schools and local female and male footballers with potential.

As well as delivering vital services through its own programmes, the Foundation supports the Club to administer its charitable donations and support to external causes.

During the course of the 2015/16 season:

• 221 club pennants, signed by the first team, were issued to worthy causes to aid with fund-raising; • four ground collections took place, raising over £4,000 for charities (Royal British Legion, Walking with the

Wounded, CSF, British Red Cross); • a special campaign and ground collection raised over £66,000 for Save the Children to help young Syrian

refugees; and • match day tickets were issued to numerous charities, such as Royal British Legion, Veterans Norfolk, Walking

with the Wounded, Tickets for Troops, Soldiers Sailors Airmen and Families Association, Blesma, the Base, Nelson’s Journey, and Street Life Soccer.

The Foundation’s inaugural Run Norwich 10k (August 2015), named three additional local charities (Nelson’s Journey, Age UK Norwich, Norfolk Accident Rescue Service) as race partners, and the event raised a total of over £70,000.

The Club’s first team squad engaged in a range of community activities, including visits to the Foundation’s disability and education programmes.

Several highlights included full squad involvement in unique ‘wish days’, which saw groups with disabilities meet the players, and join their official squad photo or visit a training session at Colney. The Foundation’s Down Syndrome Football Team was invited to join the players on the pitch at the end of their open training session at Carrow Road.


Page 5

Colleague involvement

Within the bounds of commercial confidentiality, information is disseminated to all colleagues about matters that affect the progress of the Group and are considered to be of interest and concern to them as colleagues.

Disabled colleagues

The Group gives full consideration to applications for employment from disabled people where candidate aptitude and abilities are consistent with adequately meeting the requirements of the job. Opportunities are available to disabled colleagues for training, career development, and promotion.

Where existing colleagues become disabled, the Group’s policy is to provide continuing employment wherever practicable in the same or alternative position and to provide training to achieve this aim.

Payments to suppliers

The Group's policy in relation to all suppliers is to agree the terms of payment when agreeing the transaction and to abide by those terms, provided it is satisfied that the supplier has provided the goods or service in accordance with the agreed terms and conditions. The Group does not follow any code or standard of payment practice. The ratio expressed in days between amounts invoiced to the Group by its suppliers in the year and the amounts owed to its trade creditors at the end of the year was 28 (2015: 53) days.

Asset values

Accounting Standards require the Club to value its assets using specific criteria. At the year end there were 32 players (2015: 30) for which the cost of their player registration has been capitalised and is still being amortised over the period of the respective players' contracts. The combined net book value of these players at 30 June 2016 was £32.8 million (2015: £25.5 million). The Carrow Road stadium and other land and buildings are currently stated at £26.6 million (2015: £27.1 million), being valued on a historical cost basis or an adopted valuation as detailed in note 14, less accumulated depreciation. In the opinion of the Directors, the recoverable amount of the land and buildings at 30 June 2016 would exceed the book value included in the financial statements. A regular valuation undertaken by the Club’s insurers during the period supports this opinion.

Post balance sheet events

Details of post balance sheet events are given in note 30 to the financial statements.


Page 6

Statement of Directors’ responsibilities

The Directors are responsible for preparing the Strategic Report and the Report of the Directors and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial period. Under that law the Directors have elected to prepare financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable laws). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and Group and the profit or loss of the Company and Group for that period. In preparing each of the Group and Company financial statements, the Directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

In so far as each of the Directors is aware:

• there is no relevant audit information of which the Group's auditor is unaware; and

• the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

BY ORDER OF THE BOARD

S Stone Company Secretary 14 October 2016

NORWICH CITY FOOTBALL CLUB PLC INDEPENDENT AUDITOR’S REPORT

Page 7

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF NORWICH CITY FOOTBALL CLUB PLC We have audited the financial statements of Norwich City Football Club PLC for the year ended 30 June 2016 which comprise the consolidated statement of comprehensive income, the consolidated and company statements of financial position, the consolidated and company statements of changes in equity, the consolidated statement of cash flows and the related notes. The financial reporting framework that has been applied in the preparation of the consolidated and parent Company financial statements is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice). 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. Respective responsibilities of Directors and auditors As explained more fully in the statement of Directors’ responsibilities, 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 and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Financial Reporting Council’s (FRC’s) 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 FRC’s website at www.frc.org.uk/auditscopeukprivate. 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 2016 and of the Group’s profit for the year then ended; • the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted

Accounting Practice; • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. Opinion on other matters prescribed by the Companies Act 2006 In our opinion the information given in the Strategic Report and 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: • 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.

Ian Clayden (senior statutory auditor) For and on behalf of BDO LLP, statutory auditor London 14 October 2016 BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

NORWICH CITY FOOTBALL CLUB PLC CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2016

Page 8

Note

Operations excluding

player trading

Player trading

2016 Total

2015 Total

£'000 £'000 £'000 £'000 Group turnover 3 97,816 - 97,816 52,165 Operating expenses 4 (85,182) (22,403) (107,585) (75,965) Other operating income 5 2,741 - 2,741 1,467 Group operating profit/(loss) 15,375 (22,403) (7,028) (22,333) Gain on disposal of players' registrations 6 - 21,243 21,243 13,614 Share of operating profit in associate 4 - 4 8 Group operating profit/(loss) including share of associate and joint venture 15,379 (1,160) 14,219 (8,711) Interest receivable and similar income 9 594 1,207 Interest payable and similar charges 10 (1,830) (575) Profit/(loss) on ordinary activities before tax 12,983 (8,079) Tax on profit/(loss) on ordinary activities 12 (3,568) 2,767 Profit/(loss) for the year 9,415 (5,312) Other comprehensive income for the year

- -

Total comprehensive income for the year

9,415 (5,312)

All operations are continuing.

The accompanying accounting policies and notes form an integral part of these financial statements.

NORWICH CITY FOOTBALL CLUB PLC CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2016

Page 9

Note 2016 2015 £'000 £'000 £'000 £'000 Fixed assets Intangible fixed assets 13 32,847 25,455 Tangible fixed assets 14 29,165 28,967 Investment - associated undertaking 15 72 68

62,084

54,490

Current assets Stocks 16 1,263 1,614 Debtors 17 30,099 19,558 Cash at bank and in hand 83 1,902

31,445 23,074 Creditors: amounts falling due within one year 18 (59,340) (55,592)

Net current liabilities (27,895) (32,518)

Total assets less current liabilities 34,189 21,972 Creditors: amounts falling due after more than one year 19 (1,981) (2,054) Deferred grant income 20 (1,714) (1,799) Provisions for liabilities 21 (4,633) (1,673)

Net assets 25,861 16,446

Capital and reserves Called up equity share capital 23 617 617 Share premium account 24 10,730 10,730 Revaluation reserve 24 71 71 Capital redemption reserve 24 34 34 Profit and loss account 24 14,409 4,994

Shareholders' funds 25,861 16,446

The financial statements were approved by the board of Directors, signed and authorised for issue on 14 October 2016 and signed on its behalf by:

J Moxey Director


NORWICH CITY FOOTBALL CLUB PLC COMPANY STATEMENT OF FINANCIAL POSITION AT 30 JUNE 2016

Company number 00154044

Page 10

Note 2016 2015 £'000 £'000 £'000 £'000 Fixed assets Intangible fixed assets 13 32,847 25,455 Tangible fixed assets 14 29,375 29,178 Fixed asset investments 15 28 28

62,250 54,661 Current assets Stocks 16 1,263 1,614 Debtors 17 30,010 19,458 Cash at bank and in hand 83 1,902

31,356 22,974 Creditors: amounts falling due within one year 18 (59,682) (55,798)

Net current liabilities (28,326) (32,824)

Total assets less current liabilities 33,924 21,837 Creditors: amounts falling due after more than one year 19 (1,981) (2,054) Deferred grant income 20 (1,714) (1,799) Provisions for liabilities 21 (2,960) -

Net assets 27,269 17,984

Capital and reserves Called up equity share capital 23 617 617 Share premium account 24 10,730 10,730 Revaluation reserve 24 71 71 Capital redemption reserve 24 34 34 Profit and loss account 24 15,817 6,532

Shareholders' funds 27,269 17,984

The financial statements were approved by the board of Directors, signed and authorised for issue on 14 October 2016 and signed on its behalf by:

J Moxey Director


NORWICH CITY FOOTBALL CLUB PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY AT 30 JUNE 2016

Page 11

Called up equity share

capital

Share premium

Revaluation reserves

Capital redemption

reserve

Profit and loss account

Total equity

£'000 £'000 £'000 £'000 £'000 £'000 Group: 1 July 2014 617 10,728 71 34 10,306 21,756 Comprehensive income for the period:

Loss for the period - - - - (5,312) (5,312) Other comprehensive income for the period - - - - - - Total comprehensive income for the period - - - - (5,312) (5,312) Contributions by and distributions to owners:

Dividends - - - - - - Premium on ordinary shares issued during the year - 2 - - - 2 Total contributions by and distributions to owners - 2 - - - 2 30 June 2015 617 10,730 71 34 4,994 16,446 1 July 2015 617 10,730 71 34 4,994 16,446 Comprehensive income for the period:

Profit for the period - - - - 9,415 9,415 Other comprehensive income for the period - - - - - - Total comprehensive income for the period - - - - 9,415 9,415 Contributions by and distributions to owners:

Dividends - - - - - - Total contributions by and distributions to owners - - - - - - 30 June 2016 617 10,730 71 34 14,409 25,861

NORWICH CITY FOOTBALL CLUB PLC COMPANY STATEMENT OF CHANGES IN EQUITY AT 30 JUNE 2016

Page 12

Called up equity share

capital

Share premium

Revaluation reserves

Capital redemption

reserve

Profit and loss account

Total equity

£'000 £'000 £'000 £'000 £'000 £'000 Company: 1 July 2014 617 10,728 71 34 11,946 23,396 Comprehensive income for the period:

Loss for the period - - - - (5,414) (5,414) Other comprehensive income for the period - - - - - - Total comprehensive income for the period - - - - (5,414) (5,414) Contributions by and distributions to owners: Dividends - - - - - - Premium on ordinary shares issued during the year - 2 - - - 2 Total contributions by and distributions to owners - 2 - - - 2 30 June 2015 617 10,730 71 34 6,532 17,984 1 July 2015 617 10,730 71 34 6,532 17,984 Comprehensive income for the period:

Profit for the period - - - - 9,285 9,285 Other comprehensive income for the period - - - - - - Total comprehensive income for the period - - - - 9,285 9,285 Contributions by and distributions to owners: Dividends - - - - - - Total contributions by and distributions to owners - - - - - - 30 June 2016 617 10,730 71 34 15,817 27,269

NORWICH CITY FOOTBALL CLUB PLC CONSOLIDATED STATEMENT OF CASH FLOWS AT 30 JUNE 2016

Page 13

2016 2015 £'000 £'000 Cash flows from operating activities Profit/(loss) for the financial year 9,415 (5,312) Gain on disposal of players’ registrations (21,243) (13,614) Share of profit for the year of equity accounted investments (4) (8) Net interest payable/(receivable) 1,236 (632) Taxation expense/(credit) 3,568 (2,767) Impairment of intangible fixed assets 3,791 - Amortisation of intangible fixed assets 18,612 13,149 Depreciation of tangible fixed assets 1,881 1,987 Loss on disposal of tangible fixed assets 7 - Decrease/(increase) in stocks 351 (678) Decrease/(increase) in debtors 1,120 (2,305) (Decrease)/increase in creditors (10,437) 15,438 Decrease in deferred grant income (85) (88) Decrease in provisions - (4,544)

Cash from operations 8,212 626 Interest paid (380) (317) Taxation refund/(paid) 2,739 (2,389)

Net cash generated from operating activities 10,571 (2,080)

Cash flows from investing activities Purchase of intangible fixed assets (22,615) (14,057) Purchase of tangible fixed assets (2,086) (417) Proceeds from sale of intangible fixed assets 11,612 11,377 Interest received 46 357

Net cash used in investing activities (13,043) (2,740)

Cash flows from financing activities Financing element of proceeds from sale of intangible fixed assets 49 - Financing element of purchase of intangible fixed assets (31) - Issue of shares - 3 Decrease in debt (1,989) (80) Preference dividends paid (58) (58)

Net cash used in financing activities (2,029) (135)

Decrease in cash during the year (4,501) (4,955) Cash and cash equivalents at beginning of year 1,902 6,857

Cash and cash equivalents at end of year (2,599) 1,902

NORWICH CITY FOOTBALL CLUB PLC CONSOLIDATED STATEMENT OF CASH FLOWS AT 30 JUNE 2016

Page 14

2016 2015 £’000 £’000 Cash and cash equivalents comprise: Cash at bank and in hand 83 1,902 Bank overdrafts (2,682) -

(2,599) 1,902


NORWICH CITY FOOTBALL CLUB PLC NOTES TO THE ANNUAL REPORT For the year ended 30 June 2016

Page 15

1 ACCOUNTING POLICIES

(a) Basis of preparation of financial statements

Norwich City Football Club PLC (the “Club” or the “Company”) is a company incorporated in England & Wales under the Companies Act. The financial statements have been prepared in accordance with FRS 102 the Financial Reporting Standard applicable in the United Kingdom and the Republic of Ireland, as modified by the valuation of certain freehold land and buildings.

These financial statements are the first financial statements prepared under FRS 102 and information on the impact of first-time adoption of FRS 102 is given in note 31.

In preparing the separate financial statements of the parent company, advantage has been taken of the following disclosure exemptions available in FRS 102:

• only one reconciliation of the number of shares outstanding at the beginning and end of the period has been presented as the reconciliations for the Group and the Parent Company would be identical;

• no statement of cash flows has been presented for the Parent Company;

• disclosures in respect of the Parent Company’s financial instruments and share-based payment arrangements have not been presented as equivalent disclosures have been provided in respect of the Group as a whole; and

• no disclosure has been given for the aggregate remuneration of the key management personnel of the Parent Company as their remuneration is included in the totals for the Group as a whole.

(b) Going concern

In assessing the appropriateness of the going concern assumption, the Directors have produced detailed cash flow forecasts, considering reasonably foreseeable material uncertainties in relation to income and costs.

The scenarios have been prepared on the basis of both continued Championship status and also Premier League status and indicate that, based on these cash flow forecasts and expectations for player trading and the availability of future external finance as required from time to time, the Club can meet its liabilities as they fall due.

The Directors have therefore concluded that it is appropriate for the financial statements to be prepared on the going concern basis.

(c) Consolidated financial statements

The financial statements incorporate the financial statements of Norwich City Football Club PLC and its subsidiary undertakings. The financial statements of all Group undertakings are made up to 30 June 2016. A separate profit and loss account has not been included for Norwich City Football Club PLC by virtue of Section 408 of the Companies Act 2006. The profit for the year ended 30 June 2016 relating to this Company of £9,285,000 (2015: loss of £5,414,000) is included in the consolidated profit and loss account.

The associate holding in EventGuard Limited is consolidated using the equity method at 24.9% being the Company shareholding in the associate.


Page 16

1 ACCOUNTING POLICIES (CONTINUED)

(d) Turnover

Turnover comprises net gate and ticket receipts, sports contracts, television and sponsorship revenue, catering, shop, programme, lottery and rental income, excluding value added tax. Turnover is the total amount excluding value added tax, receivable by the Group in the ordinary course of business. Net gate and ticket receipts are recognised when the match is played; sports contracts, television and sponsorship revenue are recognised over the contract or sponsorship period; rental income is recognised over the rental period and all other income is recognised as it becomes receivable in line with the service provided.

(e) Financial instruments

Financial assets, other than investments and derivatives, are initially measured at transaction price (including transaction costs) and subsequently held at cost, less any impairment. Financial liabilities, excluding derivatives, are initially measured at transaction price (including transaction costs) and are subsequently held at amortised cost.

The Group’s player creditors and player receivables are discounted on initial recognition. The unwinding of the discount is calculated on the effective interest rate method and is recognised in finance costs and finance income respectively.

Financial instruments which do not meet the definition of “basic” are classified as “other” financial instruments and, subsequent to initial recognition, are measured at fair value. Gains or losses on such financial instruments, which include forward foreign currency contracts used to mitigate foreign exchange risk on specific player purchase and sales, are recognised in finance income or finance costs respectively.

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 entity after deducting all of its financial liabilities.

Where the contractual obligations of financial instruments (including share capital) are equivalent to a similar debt instrument, those financial instruments are classed as financial liabilities. Financial liabilities are presented as such in the statement of financial position. Finance costs and gains or losses relating to financial liabilities are included in the statement of comprehensive income. Finance costs are calculated so as to produce a constant rate of return on the outstanding liability.

Where the contractual terms of share capital do not have any terms meeting the definition of a financial liability then this is classed as an equity instrument. Dividends and distributions relating to equity instruments are debited direct to equity.

(f) Tangible fixed assets and depreciation

Tangible fixed assets are stated at cost or valuation less depreciation. Depreciation is provided at rates calculated to write off the cost or valuation of fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Freehold land - not depreciated

Freehold buildings - straight line over 40 to 50 years or remaining useful life if less

Plant and machinery - straight line over 5 to 10 years

Motor vehicles - straight line over 5 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively, if there is an indication of a significant change since the last reporting date.


Page 17


(g) Investment property

Investment property, which includes the relevant share of property held for mixed use, is carried at fair value derived from current market rents and investment property yields for comparable real estate, adjusted if necessary for any difference in the nature, location or condition of the specific asset. No depreciation is provided. Changes in fair value are recognised in profit or loss.

(h) Leases

Rentals applicable on operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the statement of comprehensive income on a straight line basis over the term of the lease. The cost of assets acquired on finance leases and on hire purchase contracts are capitalised and written off over the estimated useful life of the asset. Lease finance charges represent a constant proportion of the capital balance outstanding and are allocated to accounting periods during the term of the lease.

(i) Stocks

Stocks are valued at the lower of weighted average cost and net realisable value after making due allowance for obsolete and slow-moving stocks.

(j) Taxation

The charge for taxation is based on the result for the period and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. In accordance with FRS 102, provision is made for deferred taxation liabilities in respect of all timing differences that have originated but not reversed by the statement of financial position date. Deferred taxation assets are recognised to the extent that it is more likely than not that they will be recovered through utilisation against future taxable profits. Deferred taxation balances are not discounted.

(k) Deferred grant income

Grants relating to freehold buildings are being released to the statement of comprehensive income on a straight line basis over 50 years or over the remaining useful life of the building if less.

(l) Pensions

The Group operates an auto enrolment defined contribution pension scheme and contributes to certain colleagues' personal pension schemes. The pension charge represents the amount payable by the Group to the fund in respect of the period.

The Group is one of a number of participating employers in the Football League Limited Pension and Life Assurance Scheme. The Group is unable to identify its share of the assets and liabilities of the scheme and therefore accounts for its contributions as if they were paid to a defined contribution scheme. Full provision has been made for the additional contributions that the Group has been requested to pay to help fund the scheme deficit.

The assets of all schemes are held in funds independent from the Group.


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(m) Transfer income and intangible assets

Transfer income is credited to the statement of comprehensive income, after deducting the net book value of the relevant player's registration. In accordance with FRS 102, transfer fees, transfer levies payable and agents’ fees are capitalised as intangible assets at their present value, where payments are deferred. Amortisation is provided at rates calculated to write off the cost of the transfer over the duration of the player's contract, with contract term extensions affecting prospective amortisation charges. Payments, which are contingent on the appearances and/or performance of a player, are not recognised as provisions until the events crystallising such payments are considered probable.

(n) Impairment

The Directors do not consider it possible to determine the value in use of an individual player in isolation, as that player cannot generate cash flows on his own. However, in circumstances where it is apparent that as at the period end the player would not be available for selection to play for the Club, the player is taken outside of the wider cash generating unit and valued on a recoverable amount basis, being the Directors’ best estimate of the player's fair value less cost to sell, with any resulting impairment charge being made in operating expenses.

Examples of such circumstances include: the player falling out of favour of the senior football management, career threatening injury and a clear intention on behalf of the player to leave the Club. The Directors’ assessment of fair value will be based on:

• in the case of a player who has fallen out of favour with senior football management or intends to leave the Club, either the agreed selling price if a transfer has been agreed subsequent to the year end or, if a transfer has not yet been agreed, the Directors’ best estimate of disposal value taking into account relevant transfer market information; or

• in the case of a player who has suffered a career threatening injury, the value attributed by the Club's insurers.

(o) Onerous contracts

Present obligations arising under onerous contracts are measured and recognised as provisions. An onerous contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.

(p) Foreign exchange

In accordance with FRS 102, foreign currency transactions are translated at the rates ruling when they occurred. Foreign currency monetary assets and liabilities are translated at the rate of exchange ruling at the statement of financial position date. Any differences are taken to the statement of comprehensive income.

The consolidated financial statements are presented in ‘sterling’, which is the Company’s functional currency and the Group’s presentation currency.


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2 JUDGEMENTS IN APPLYING ACCOUNTING POLICIES AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In preparing these financial statements, the Directors have made the following judgements:

(a) Player impairments

The Directors assess whether, at the period end, players are available for selection to play for the Club. In circumstances where it is apparent that the player would not be available to play for the Club and has not yet been sold (e.g. fallen out of favour with senior football management or suffered a career threatening injury), that player is valued on a “recoverable amount” basis which is based on the Directors’ best estimate of his valuation at the next available transfer window. Any resulting impairment charge is recorded within operating expenses.

(b) Onerous contracts

The Directors review all contracts, including primarily those of the players, and determine whether the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. If they do, an onerous contract provision is created.

Specifically in relation to players, if a player’s valuation has been impaired (as described in (a) above), and that player is not expected to be selected to play for the club, an onerous contract provision will be made for the period of time in which the Directors reasonably expect the player to remain at the Club. If a player in this category has been loaned out to another club, contributions made by that club will be netted off the Club’s contractual obligations when calculating the onerous contract provision.

(c) Property provision estimates

The Directors review known future property-related obligations, and estimate the cost of these obligations after giving due consideration to the scope of work required. A provision is made, based on this cost estimate.

(d) Deferred taxation

In line with FRS 102, provision is made for deferred taxation liabilities in respect of all timing differences that have originated but not reversed by the statement of financial position date. In respect of potential deferred taxation assets, the Directors assess whether it is more likely than not that they will be recovered through utilisation against future taxable profits. If they deem this the case, the Directors will recognise the deferred taxation asset.


Page 20

3 TURNOVER

Turnover in respect of the business operations comprised: 2016 2015 £'000 £'000 Gate receipts and ticket sales 11,509 10,713 Broadcasting (FA & League income) 70,165 28,549 Media 139 148 Catering 4,370 4,065 Commercial 9,955 7,336 UEFA Solidarity & Prize Money 825 827 Other income 853 527

Group turnover 97,816 52,165

4 OPERATING EXPENSES

Total operating expenses comprised: 2016 2015 £'000 £'000 Staff costs (note 7) 67,193 48,529 Depreciation of tangible fixed assets (note 14) - owned by the Group 1,881 1,987 Auditor's remuneration: - audit of the Company's financial statements 15 14 - other services - audit of the Company's subsidiaries 3 4 - tax services 5 10 Operating lease rentals 356 232 Other operating expenses 15,729 12,040

85,182 62,816 Amortisation and impairment of intangible fixed assets (note 13) 22,403 13,149

Total operating expenses 107,585 75,965

The total charge resulting from the impairment of player registrations was £3,791,000 (2015: £nil).

5 OTHER OPERATING INCOME

2016 2015 £'000 £'000 Loan player income 2,741 1,437 Donations - 30

2,741 1,467


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6 GAIN ON DISPOSAL OF PLAYERS’ REGISTRATIONS

2016 2015 £'000 £'000 Gain on disposal of players’ registrations 21,243 13,614

7 STAFF COSTS

Staff costs, including Directors’ remuneration, were as follows: 2016 2015 £'000 £'000 Wages and salaries 53,416 43,525 Other employment costs (including loan players) 6,684 1,203

60,100 44,728 Social security costs 6,730 3,592 Pension costs 363 209

67,193 48,529

Staff costs include a credit of £nil (2015: credit of £2.5m) relating to the contracts of certain players whose contracts had been classified as onerous contracts.

The average monthly number of regular employees, including Directors, during the year ended 30 June 2016 was as follows:

Number of employees 2016 2015 Directors 7 7 Football (including academy and football support staff) 138 119 Other 159 149

304 275


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8 DIRECTORS’ REMUNERATION

2016 2015 £'000 £'000 Total Directors Aggregate emoluments, fees and benefits 833 1,137 Contributions to money purchase pension schemes 55 57 Compensation for loss of office 1,351 -

Aggregate emoluments include performance related bonuses of £nil (2015: £551,250) for achieving targets in the year. In addition, payments made to Directors under long-term incentive scheme accrued in previous years totalled £nil (2015: £333,334).

2016 2015 £'000 £'000 Highest paid Director Aggregate emoluments, fees and benefits 743 1,137 Contributions to money purchase pension schemes 55 57 Compensation for loss of office 1,351 -

Aggregate emoluments include performance related bonuses of £nil (2015: £551,250) for achieving targets in the year. In addition, payments made to Directors under long-term incentive scheme accrued in previous years totalled £nil (2015: £333,334).

9 INTEREST RECEIVABLE AND SIMILAR INCOME

2016 2015 £'000 £'000 Bank interest receivable 19 42 Exchange rate gains - 835 Net gain on other financial instruments: forward currency contracts 195 79 Finance income on unwinding of discount on player receivables 353 251 Other interest receivable 27 -

594 1,207


Page 23

10 INTEREST PAYABLE AND SIMILAR CHARGES

2016 2015 £'000 £'000 Bank loans and overdrafts 284 194 Other similar charges Exchange rate losses

94 928

98 -

1,306 292 Pension liability (note 26) 67 46 Finance charges on shares classified as liabilities: preference share dividends 58 58 Finance charge on unwinding of discount on player liabilities 399 179

1,830 575

11 DIVIDENDS ON SHARES CLASSIFIED AS FINANCIAL LIABILITIES

2016 2015 £'000 £'000 Dividend payable 'A' preference shares 1 1 'B' preference shares 57 57

58 58

12 TAX ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES

a. Analysis of tax (charge)/credit for the year ended 30 June 2016:

2016 2015 £'000 £'000

Based on the Group profit/(loss) for the year ended 30 June 2016 Current tax UK Corporation tax on profit for the year ended 30 June 2016 (note 12b) (47) 2,729 (47) 2,729 Deferred tax Current period (note 21) (3,521) 38

Total tax (charge)/credit (3,568) 2,767


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12 TAX ON PROFIT/(LOSS) ON ORDINARY ACTIVITIES (CONTINUED)

b. Factors affecting the tax charge for the year ended 30 June 2016:

The effective rate of tax is different to the full rate of corporation tax. The differences are explained below: 2016 2015 £'000 £'000

Profit/(loss) on ordinary activities before tax 12,983 (8,079) Profit/(loss) on ordinary activities multiplied by standard rate of corporation tax in the UK of 20% (2015: 20.75%) 2,597 (1,676) Expenses not deductible for tax purposes (net of income not taxable) (63) (5) Fixed asset differences 1,325 - Capital allowances in excess of depreciation - (924) Unrelieved tax losses and other timing differences - 79 Utilisation of losses brought forward - 2,526 Adjustment in respect of prior periods 6 - Tax reclaim on carry back of trading losses - (2,729) Deferred tax on 2015 FRS 102 adjustments - (34) Adjustment to closing deferred tax to average rate of 20% (329) - Other temporary timing differences 32 (4)

3,568 (2,767)

13 INTANGIBLE FIXED ASSETS

Players’ registrations Group and Company £'000 Cost At 1 July 2015 55,499 Additions 34,821 Disposals (16,763)

At 30 June 2016 73,557 Amortisation At 1 July 2015 30,044 Charge for the year ended 30 June 2016 18,612 Disposals (11,737) Impairments 3,791

At 30 June 2016 40,710

Net book value at 30 June 2016 32,847

Net book value at 30 June 2015 25,455


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14 TANGIBLE FIXED ASSETS

Assets in the course of

construction

Freehold land and buildings

Plant and machinery

Motor vehicles

Investment property Total

£'000 £'000 £'000 £'000 £'000 £'000 Group Cost or valuation At 1 July 2015 92 44,313 9,293 11 765 54,474 Additions 902 779 405 - - 2,086 Disposals (7) - - - - (7) Transfers (52) 386 (334) - - -

At 30 June 2016 935 45,478 9,364 11 765 56,553

Depreciation At 1 July 2015 - 17,952 7,544 11 - 25,507 Charge for the year ended 30 June 2016 - 1,528 353 - - 1,881 Disposals - - - - - - Transfers - 193 (193) - - -

At 30 June 2016 - 19,673 7,704 11 - 27,388

Net book value at 30 June 2016 935 25,805 1,660 - 765 29,165


The net book value of freehold land and buildings comprises: 2016 2015 £'000 £'000 Assets at adopted valuation Land (not depreciated) 2,483 2,483 Assets at cost Land (not depreciated) 1,325 1,325 Buildings and infrastructure 21,997 22,553

25,805 26,361

If the amount of the revalued land had been determined according to historical cost accounting rules, the book value of the land would have been as follows: 2016 2015 £'000 £'000 Cost and net book value 2,412 2,412


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14 TANGIBLE FIXED ASSETS (CONTINUED) Assets in the

course of construction

Freehold land and buildings

Plant and machinery

Motor vehicles

Investment property Total

£'000 £'000 £'000 £'000 £'000 £'000 Company Cost or valuation At 1 July 2015 92 44,482 9,293 11 765 54,643 Additions 902 779 405 - - 2,086 Disposals (7) - - - - (7) Transfers (52) 386 (334) - - -

At 30 June 2016 935 45,647 9,364 11 765 56,722

Depreciation At 1 July 2015 - 17,910 7,544 11 - 25,465 Charge for the year ended 30 June 2016 - 1,529 353 - - 1,882 Transfers - 193 (193) - - -

At 30 June 2016 - 19,632 7,704 11 - 27,347



The net book value of freehold land and buildings comprises: 2016 2015 £'000 £'000 Assets at adopted valuation Land (not depreciated) 1,917 1,917 Assets at cost Land (not depreciated) 2,185 2,185 Buildings and infrastructure 21,913 22,470

26,015 26,572

If the amount of the revalued land had been determined according to historical cost accounting rules, the book value of the land would have been as follows:

2016 2015 £'000 £'000 Cost and net book value 1,846 1,846


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15 FIXED ASSET INVESTMENTS

Group Interest in associated

undertaking

Company Investment

in associated undertaking

Company Investment in

subsidiary undertakings

£'000 £'000 £'000 Cost At 1 July 2015 68 28 940 Share of result and movement in equity 4 - -

At 30 June 2016 72 28 940

Amounts written off At 1 July 2015 - - 940 Movement in the year - - -

At 30 June 2016 - - 940

Net book value at 30 June 2016 72 28 -

Net book value at 30 June 2015 68 28 -

Subsidiary undertakings The subsidiary undertakings, which were incorporated in England and Wales and are included within the consolidated financial statements at 30 June 2016, are as follows: Company % owned Principal Activity N.C.F.C. (Holdings) Limited 100% Property holding company Kerrison Holdings Limited 100% Provision of car park facilities and property development Kerrison Developments Limited 100% Investment holding company Associated undertaking Norwich City Football Club PLC owns 24.9% of the shares in EventGuard Limited.

16 STOCKS

Group and Company 2016 2015 £'000 £'000 Goods for resale 1,263 1,614

The amount of stocks recognised as an expense in the statement of comprehensive income during the year was £2.1 million (2015: £1.9 million). A stock provision of £0.7 million was recognised in the year (2015: £0.1 million).


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17 DEBTORS

Group Company 2016 2015 2016 2015 £'000 £'000 £'000 £'000 Trade debtors 6,666 7,632 6,666 7,632 Player debtors 22,051 7,090 22,051 7,090 Amounts due from subsidiary undertakings - - - - Deferred tax asset - 561 - 561 Other debtors 501 702 412 602 Prepayments and accrued income 686 834 686 834 Corporation tax - 2,739 - 2,739 Forward contracts 195 - 195 -

30,099 19,558 30,010 19,458

Included in player debtors above are amounts totalling £7.6 million (30 June 2015: £nil) falling due after more than one year.

18 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Group Company 2016 2015 2016 2015 £'000 £'000 £'000 £'000 Bank overdrafts 2,682 - 2,682 - Directors’ loans - 1,989 - 1,989 Trade creditors 1,483 1,688 1,483 1,688 Player creditors 23,752 10,664 23,752 10,664 Receipts in advance 11,276 14,489 11,276 14,489 Other taxes and social security 9,656 5,769 9,656 5,769 Corporation tax 47 - 47 - 4.5% 'B' preference shares of £1 each 1,430 1,421 1,430 1,421 Dividends payable on shares classified as financial liabilities 58 58 58 58 Other creditors 335 357 335 357 Amounts owed to subsidiary undertakings - - 483 350 Accruals and deferred income 8,621 19,157 8,480 19,013

59,340 55,592 59,682 55,798

Directors’ loans of £1,989,000 were repaid during the year.

The 4.5% ‘B’ preference shares of £1 each are classified as repayable within one year. Where valid requests have been received, subject to the Company being permitted to do so in accordance with its Articles of Association, redemption will (subject to when the valid request was received) take place on 1 January 2017.

The bank overdrafts are secured by an assignment of future Premier League parachute payments.


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19 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Group and Company 2016 2015 £'000 £'000 Receipts in advance 50 170 5.25% 'A' preference shares of £1 each 10 10 Accruals and deferred income 1,031 393 Player creditors 890 1,481

1,981 2,054

The amounts falling due after more than one year fall due for repayment as follows: Group and Company 2016 2015 £'000 £'000 In one to two years Receipts in advance 50 120 Accruals and deferred income 685 120 Player creditors 518 872

1,253 1,112

Group and Company 2016 2015 £'000 £'000 In two to five years Receipts in advance - 50 Accruals and deferred income 346 273 Player creditors 372 609

718 932

Group and Company 2016 2015 £'000 £'000 In more than five years 5.25% 'A' preference shares of £1 each 10 10


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20 DEFERRED GRANT INCOME

Group and Company 2016 2015 £'000 £'000 Deferred grant income At 1 July 2015 1,799 1,887 Credited to statement of comprehensive income (85) (88)

At 30 June 2016 1,714 1,799

21 PROVISION FOR LIABILITIES

Group Company 2016 2015 2016 2015 £'000 £'000 £'000 £'000 At 1 July 2015 1,673 6,217 - 4,544 Onerous contract provision revaluation - (2,469) - (2,469) Utilisation of onerous contract provision - (2,075) - (2,075) Deferred tax: Origination and reversal of timing differences charged to profit or loss 2,960 - 2,960 -

At 30 June 2016 4,633 1,673 2,960 -

A provision for onerous player contracts arose in earlier years (see notes 4 and 7) and was fully utilised or released in the prior year.

Provision for liabilities includes £1,673,000 in respect of property works which the Group is obliged to complete over the next two years. The amount represents the Directors’ best current estimate of the cost of carrying out this work.

The Company’s deferred tax liability of £2,960,000 arose in the current year and the liability is expected to crystallise on the disposal of certain players’ registrations, subject to the Company’s ability to further defer future taxable gains on disposal.


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22 FINANCIAL INSTRUMENTS

The Group’s and Company’s financial instruments may be analysed as follows: Group Company 2016 2015 2016 2015 £'000 £'000 £'000 £'000 Financial assets Other financial assets measured at fair value through profit or loss 195 - 195 - Basic financial assets that are measured at amortised cost 29,301 17,326 29,212 17,326

29,496 17,326 29,407 17,326 Financial liabilities Other financial liabilities measured at fair value through profit or loss - - - - Basic financial liabilities that are measured at amortised cost (30,801) (33,855) (30,660) (33,711)

(1,305) (16,529) (1,253) (16,385)

Other financial assets and liabilities measured at fair value through profit or loss comprise the value of forward foreign exchange contracts.

Basic financial assets measured at amortised cost comprise cash and cash equivalents, trade debtors, player debtors and other debtors.

Basic financial liabilities measured at amortised cost comprise bank overdrafts, directors’ loans, trade creditors, player creditors, other creditors and accruals.

Impairment losses on financial assets related to credit losses on trade debtors totalling £nil in the year (2015: £20,000).


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23 CALLED UP SHARE CAPITAL

2016 2015 £'000 £'000 Allotted, called up and fully paid Equity interest 616,913 (2015: 616,713) ordinary shares of £1 each 617 617

Interest in shares classified as financial liabilities 9,675 (2015: 9,675) 5.25% 'A' preference shares of £1 each 10 10 14,421 (2015: 14,421) 4.5% 'B' preference shares of £1 each 14 14

Total interest in shares classified as financial liabilities 24 24

During the year 200 (2015: 25) £1 ordinary shares were issued at an average cost of £1 each (2015: £100 each). The total proceeds were £200 (2015: £2,500). An amount of £nil (2015: £2,475) has been credited to the share premium account in respect of the £1 ordinary shares (note 24).

The holders of the 'A' preference shares have the right to preference dividends at a rate of 5.25% per annum on the nominal value in priority to holders of any other shares. The holders of 'B' preference shares have the right to a cumulative preferential cash dividend at 4.5% of issue price, subject to the payment of the 'A' preference dividend, but in priority to dividends on ordinary shares.

The 'A' preference shares are not redeemable, therefore the par value of the shares has been shown as a liability due in more than five years.

The holders of the 'B' preference shares have an option to redeem their shares in any year the Club achieves or retains promotion to the Premier League. The 'B' shares are redeemable at £100 per share and, as the earliest redemption date is January 2017, the shares have been classified as a liability due within one year.

In the event of a winding up order on the Company, the holders of preference shares have the right only to repayment of capital paid up thereon and arrears of preference dividends to the date of payment but shall not have any further right to participate in profits or surplus assets.

The 'A' and 'B' preference shareholders do not have the right to vote at General Meetings of the Company, except on resolutions proposing the winding up of the Company or where the preference dividend is in arrears for more than 12 months.

24 RESERVES

Share capital: The share capital account represents the nominal value of the Company’s shares.

Share premium account: The share premium account includes the premium on issue on equity shares, net of any issue costs.

Revaluation reserve: The revaluation reserve represents the accumulated unrealised gains and losses in respect of revaluations of assets held by the Group.

Capital redemption reserve: The capital redemption reserve contains the nominal value of own shares that have been acquired by the Company and cancelled.

Profit and loss account: The profit and loss account represents cumulative profits or losses of the Group, net of dividends paid and other adjustments.


Page 33

25 CONTINGENT LIABILITIES

Additional payments amounting to a maximum of £17,481,540 (2015: £8,415,900) will become payable if certain conditions in transfer and player contracts at 30 June 2016 are fulfilled. Additional signing on fees up to a maximum of £5,898,400 (2015: £8,409,400) will become payable to players subject to the terms and conditions of their contracts being fulfilled.

26 PENSION SCHEMES

Money purchase pension scheme

During the year the Group participated in a money purchase scheme and the Football League Limited Pension and Life Assurance Scheme, for the benefit of certain employees. The assets of the scheme are administered by trustees in a fund independent from those of the Group. Contributions to this scheme during the year ended 30 June 2016 amounted to £141,000 (2015: £138,000). At 30 June 2016 there were outstanding contributions of £21,000 (2015: £14,000).

Employees' personal pension schemes

During the year the Group made contributions to certain employees' personal pension schemes. Contributions to these schemes during the year ended 30 June 2016 amounted to £87,000 (2015: £71,000). At 30 June 2016 there were outstanding contributions of £3,000 (2015: £5,000).

Football League Final Salary Scheme

The Football League Final Salary scheme is administered nationally and is now closed to new members. The latest actuarial valuation, which was undertaken in 2014 indicated that the scheme remains in deficit and, in accordance with the scheme rules, Norwich City Football Club PLC, along with the other football clubs, are required to make payments to the pension scheme to reduce the deficit. Interest is charged by the pension scheme on the outstanding amount at approximately 7.6% per annum and interest of £55,000 (2015: £42,000) was payable during the year ended 30 June 2016. The outstanding liability will be paid to the pension scheme on a monthly basis over a period of approximately six (2015: four) years to August 2022. The total amount payable to the pension scheme at 30 June 2016, including accumulated interest, was £594,000 (2015: £513,000) and is included in accruals and deferred income.

27 OPERATING LEASE COMMITMENTS

The Group and Company had total commitments under non-cancellable operating leases as set out below: 2016 2015 Land and

Buildings Other Land and Buildings Other

£'000 £'000 £'000 £'000 Expiry date: Within one year 207 98 - 12 Between one and two years - 207 - 283 Between two and five years 40 85 250 13 After five years - 44 - 125

247 434 250 433


Page 34

28 RELATED PARTY TRANSACTIONS

Key management personnel (including directors’) compensation is as follows: 2016 2015 £'000 £'000 Aggregate emoluments 2,228 1,137 Pension scheme 55 57

Loans due to Directors and their companies

At 30 June 2016, the following balances were outstanding on loans advanced to the Group and Company: Group and Company 2016 2015 £'000 £'000 Ms D A Smith and E M S Wynn Jones - 1,529 M M Foulger - 460

The loan advanced by Ms D A Smith and E M S Wynn Jones was interest free and repayable on demand.

The loan advanced by M M Foulger was interest free and repayable on demand.

Transactions with Directors and their companies Group and Company Group and Company Sales Purchases 2016 2015 2016 2015 £'000 £'000 £'000 £'000 Ms D A Smith and E M S Wynn Jones (joint) - 2 - - M M Foulger 11 14 - - Banham Poultry Limited (M M Foulger) 21 27 - -

At 30 June 2016 and 30 June 2015 the following balances (inclusive of value added tax) were outstanding:

Group and Company Group and Company Sales ledger Purchase ledger 2016 2015 2016 2015 £'000 £'000 £'000 £'000 Ms D A Smith and E M S Wynn Jones (joint) - - - - M M Foulger 1 (4) - - Banham Poultry Limited (M M Foulger) - - - -

29 CONTROL

At 30 June 2016 Ms D A Smith and her husband and co-Director, E M S Wynn Jones owned 53.1% (2015: 53.1%) of the issued capital of the Company, In accordance with FRS 102, the Board have concluded that ultimate control of the Company vests in these related parties.


Page 35

30 POST BALANCE SHEET EVENTS

Transfer of players’ registrations Subsequent to the year end the Group has acquired the registrations of players S Canos, N Oliveira, A Pritchard, M McGovern and P Jones.

In addition to N Redmond, whose registration was sold pre year end, subsequent to the year end the Group sold the registration of R Van Wolfswinkel and cancelled the registration of V Odjidja Ofoe.

The net payment to which the Group is committed to in respect of these transactions is £12.6m with a maximum further amount due of £9.0m dependent on Club and/or player performance.

31 FIRST TIME ADOPTION OF FRS 102

The Group transitioned to FRS 102 from previously extant UK GAAP as at 1 July 2014. The impact of the transition to FRS 102 is as follows:

Reconciliation of equity at 30 June 2014 Group Company £'000 £'000 Equity at 30 June 2014 under previous UK GAAP 21,756 23,396

Equity shareholders’ funds at 30 June 2014 under FRS 102 21,756 23,396

Reconciliation of equity at 30 June 2015 Group Company £'000 £'000 Equity at 30 June 2015 under previous UK GAAP 16,600 18,138 Reclassification of mixed use property 20 20 Financial instruments carried at amortised cost (207) (207) Deferred tax impact 33 33

Equity shareholders’ funds at 30 June 2015 under FRS 102 16,446 17,984

Reconciliation of profit and loss account for the year ended 30 June 2015 Group Company £'000 £'000 Loss for the year ended 30 June 2015 under previous UK GAAP (5,158) (5,260) Reclassification of mixed use property 20 20 Financial instruments carried at amortised cost (207) (207) Deferred tax impact 33 33

Loss for the year ended 30 June 2015 under FRS 102 (5,312) (5,414)


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31 FIRST TIME ADOPTION OF FRS 102 (CONTINUED)

Explanation of changes to previously reported loss and equity:

• FRS 102 requires that mixed use property is separated for accounting purposes and investment property elements are carried at their fair value. This was not required under previous UK GAAP. This change has been applied prospectively from 1 July 2014 and on the basis that the carrying value equated to the fair value at that date. This has led to a reduction in the depreciation charge in the year ended 30 June 2015. No gains or losses in the value of the property have been required at any of the dates presented above.

• FRS 102 requires that basic financial instruments are carried at amortised cost using a market rate of interest to notionally reflect the income or expenditure associated with holding such financial liabilities, unless those financial instruments are short term in nature. The Club’s financial instruments which are affected by this change are those which arise from the proceeds it receives and pays for the acquisition and disposal of player registrations. The financial impact of the revaluation of the associated player debtors and player creditors are shown above together with the consequent impact on intangible asset carrying values, the amortisation thereof and total tax expense/income.

Annual Report 2016for the year ended 30 June 2016

Norwich City Football Club PLC

Norwich City Football Club PLC, Carrow Road, Norwich NR1 1JETel: 01603 760 760

canaries.co.uk

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