The_Rugby_Football_League - Accounts
The_Rugby_Football_League - Accounts
The directors present the strategic report for the year ended 31 December 2020.
Principal activities
The principal activity of The Rugby Football League Limited (“the RFL” or “the League”) throughout the year was the promotion of the game of Rugby League. The RFL organises and promotes competitions to maximise returns to members. The RFL is also the governing body for the sport of Rugby League in Great Britain and Ireland.
Business Model
The primary remit of the Board is to lead the RFL and the sport by focusing on four key areas of the business: strategic issues facing the RFL and Rugby League generally; monitoring and review of executive performance; approval of changes to the regulatory framework; and finally representing the RFL externally when appropriate and required.
Day to day management of the RFL is delegated to the executive management team under the leadership of the Chief Executive Officer. The Board of Directors receive presentations and reports from members of the executive management team at each Board and Board sub-Committee meeting and may also request updates or attendance at Board or Board sub – Committee meetings from an individual departmental manager if there are significant issues to discuss in an area.
Management of the business is organised via the Chief Executive Officer through four key executive areas managed by; the Chief Regulatory Officer, Chief Commercial Officer, Chief On Field Officer and the Chief Operating Officer.
The RFL Strategic Plan provides a road map for Rugby League up to the end of 2021. This plan covers distinct areas of activity and its primary objectives are;
i. More players;
ii. More spectators;
iii. More viewers;
iv. More digital;
v. England winning;
vi. Financial sustainability, and
vii. Excellence governance
Over the period of the current plan, performance against it is and will be closely monitored by the Board. The Board are currently in the development stages of its strategic plan for the decade starting in 2022. This will form the basis of a significant consultation with members throughout 2021.
The Super League clubs are also members of Super League (Europe) Ltd which acts as a vehicle for the distribution of revenues earned by the Super League from broadcasting, commercial partnerships and the staging of events. The RFL is a shareholder in Super League (Europe) Ltd with key rights over specific issues.
The Championship and League 1 clubs meet at least three times a year to discuss matters of common interest.
The RFL also has a Community Board which comprises representatives from various sections of the community game including youth and adult participation, schools, universities, and armed services. This Board meet four times a year to discuss matters of importance in the community game.
Business review and results
The accounts for the RFL show a profit for the financial year of £24k for the year ended 31 December 2020 (2019: £10k). The RFL has maintained an aggregate positive cash balance throughout the year. At 31 December 2020, this balance was £813k (2019: £1,521k).
Impact of Covid-19
The impact of Covid-19 has been significant for Rugby League. The key areas which directly affect the RFL’s trading activities are as follows:
Central events
The restrictions placed on the ability to stage events in front of spectators has significantly impacted the RFL’s ticket income. The measures put in place by the Government have seen all of the RFL central events played behind closed doors in 2020 and the International Ashes Test Series against Australia was cancelled. In line with Government guidance, restrictions meant reduced numbers of spectators at both the Betfred Challenge Cup Semi-Final and Final in 2021.
Broadcast Income
The RFL and SLE in 2021 will pay SKY a rebate of £3,725,000 due to the lack of ability to deliver live content in 2020 as a result of restrictions placed on the hosting of live sporting events.
Super League fixtures resumed from August 2020 behind closed doors (BCD) and have continued as such until the Government roadmap allowed some fans into stadia from 17th May 2021. Matches played BCD has allowed the sport to honour its broadcast contract with SKY and has secured the contracted 2021 broadcast revenue from SKY and BBC.
Cashflow management
During 2020, short-term cash flow has been carefully managed, and the medium-term external finance arranged in 2017 is still in place. In addition to this, the RFL has applied to the DCMS Rugby League Professional Sport Support Fund for a loan of £4.5m which has been approved by an independent Loan Committee made up of officials from DCMS, the RFL and Sport England. This will support the cash flow of the business for the foreseeable future. As part of the RFL’s move to the Etihad Campus, in May 2021 its office in Leeds was sold and this has made a significant positive impact on the RFL’s cashflow along with reducing expected long-term estates liabilities. Cash flow is continuously monitored and the budget approved by the Board for 2021 generates a profit to further increase cash and reserves in order to facilitate commencement of the RFL’s DCMS loan repayments.
Key performance indicators
The Board monitors executive performance with reference to the Strategic Plan by measuring key performance indicators (“KPI’s”). The KPI’s of the RFL are reviewed by the executive team at its weekly meetings and by the directors at each Board meeting. These KPI’s have been chosen as they allow the directors to closely monitor the performance of the RFL against the targets set in the Strategic Plan.
Principal Risks and Uncertainties
The Board and Executive team had budgeted to make a profit in 2020 (£109k) in order to continue the financial turnaround from the previous two years. The budgeted result was impacted heavily by the impact of Covid-19. The RFL has accessed Government support in the main via CJRS claims for colleagues placed on furlough leave and has been able to access a loan from the DCMS Rugby League Professional Sport Support Fund as outlined above. The Executive has mitigated some of the impact of Covid-19 by strict cost management throughout the year across the organisation.
Detailed Analysis of Trading
Year on year turnover has decreased by 26% from £20,711k to £15,346k which can be attributed in the main to the impact of Covid-19 and the absence of Match Income derived from central events and the cancelled home international Test series in 2020. Sponsorship income was also impacted by this and this decreased to £860k (2019: £1,771k) – a reduction of 51%.
Government funding from Sport England has decreased from £2,925k in 2019 to £2,280k – a reduction of 22% mainly due reduced activity in the Sport England funded interventions.
The existing BBC and Sky broadcast contracts continued in 2021. Overall broadcast income reduced from £9,907k in 2019 to £8,777k. The reduction is due to the rebate payable to SKY due to non-delivery of televised fixtures arising from restrictions placed on live sporting events due to Covid-19.
Within the RFL accounts, the cost of sales heading is broken down into two sections. The first being the external, third party costs of making the sale and the second being the cost of sales that are internal to the RFL’s stakeholders such as payments directly made to clubs. External cost of sales decreased in 2020 by 40% from 5,336k in 2019 to £3,182k, this reduction is attributable to the reduction in match costs due to the impact of Covid-19 on the ability to stage central events.
Grant funded activities expenditure has decreased by 29% from £2,903k in 2019 to £2059k in 2020 reflecting the level of programme activity actually able to be delivered in 2020, and its associated income. Whilst Sport England funded expenditure is expected to decrease in the year shadowing the financial profile of the current Sport England award, the Government restrictions on programme activity has had a significant impact.
Payments to and on behalf of clubs is made up of the cost of sales element of £1,841k (2019: £2,537k) and a further amount shown below Gross Profit on the Profit and Loss Account, which in 2020 brought the total payable to and on behalf of clubs to £7,701k (2019: £9,210k).
In 2020, Operating Costs have decreased to £4,996k from £6,172k in 2019. This is due to the reduction in overheads as a result of the cost saving measures put in place to mitigate against the impact of Covid-19.
Staff costs have significantly reduced from £5,236k in 2019 to £4,874k in 2020 – a decrease of 7%. This is driven primarily by the impact of the staff being furloughed and significant voluntary Executive and Non-Executive Director temporary salary reductions that were agreed in order best manage the financial impact of Covid-19. Director remuneration has decreased by 6% from £451k in 2019 to £425k in 2020.
Interest receivable by the RFL in 2020 was £7k (2019: £17k).
Our People
Our People are at the heart of our sport. The RFL recognises that without their commitment, professionalism, and expertise in delivering customer service excellence it would be unable to achieve its goals.
We are committed to providing ongoing investment to their learning and development to achieve the highest standards. We fully support all opportunities for employment, career progression and development, irrespective of age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race (including colour, nationality, and ethnic or national origin), religion or belief, sex (gender) and sexual orientation through our Inclusion and Diversity Tackle IT! action plan.
The RFL is committed to ensuring that Rugby League is an inclusive sport and we have a proud history that supports this. To ensure we continue to meet the wider of objectives of the sport by increasing participation and engagement from the communities, Inclusion and Diversity sits at the forefront of this enabling us to promote our sport and encourage new interest whilst retaining the commitment and passion we currently have. In 2020, we launched Tackle It, a sport-wide action plan to make Rugby League a truly inclusive sport by tackling all forms of discrimination and breaking down any barriers to involvement. The plan sets out four strategic goals and, crucially, the specific and measurable actions that will be taken to achieve them.
An Inclusion Board- chaired by Miss Rimla Akhtar (RFL Non-Executive Director)- has been established to support the RFL in its delivery of the Tackle It plan. The group, made up both internal and external members, seeks to provide strategic advice and support to the organisation.
Covid-19 impacted particularly heavily on rugby league’s disability sports during 2020. With Wheelchair RL being an indoor sport with particular challenges and significant numbers of Learning and Physical Disability players being amongst the more vulnerable groups and in many cases having to shield, no rugby league activity was able to take place at all during 2020. The focus, as in other areas, was to keep participants active and engaged through online activity. In the case of our leaning disability players this included producing a skills journal and working with partner Community Integrated Care to develop a 33 week programme linking to the RLWC2021. With respect to diversifying the participant and volunteer playing base there are strong indicators that the Covid-19 affected 2020 season will not impact significantly on the accelerated growth we have seen In the women and girls game. With limited activity taking place in 2020 projects to ensure clubs became more representative of their local communities and the embedding of rugby league competitions in inner city schools
have been delayed. We have however, produced a range of Inclusivity and Diversity training modules to support
clubs and participants. With the absence of being able to deliver coaching activity progress against Tackle It! objectives relating to coaching were again limited to development of online resources including the introduction of I&D training and development for all rugby league coaches as part of the licensing arrangements.
Our Communities
As a leading National Sports Governing Body, we are committed to transforming our local communities by delivering an approach to positive corporate social responsibility encompassing cash donations, support for volunteering, environmentally friendly practices, and investment in our people. In line with this commitment, we have continued to support several sports related charities including the RFL Benevolent Fund, the RFL Facilities Trust, Rugby League Cares, and the Rugby League Heritage Trust. We support these organisations in cash and in kind.
Corporate Governance
The RFL is committed to high standards of corporate governance and is continually looking at ways to improve this function. This is evidenced in the Directors Report through the operation of Board Committees and through the RFL’s commitment to compliance with UK Sport and Sport England’s A Code for Sports Governance. The RFL has further enhanced this commitment through continuing to manage itself through its Non-Executive Chair and Non-Executive Director Board structure, the carrying out of an external evaluation of the Board (and the publication of that reviews’ findings) along with the continued rollout of its Inclusivity and Diversity Plan and its engagement in an internal audit programme. The internal audit programme is carried out by an independent third party and reports directly to the Audit and Risk Committee. It is a wide-ranging programme, and it provides transparency for members alongside the statutory external audit programme.
Review of 2020
The 2020 season was massively impacted by the Covid-19 pandemic. All Rugby League activity was suspended from the first National Lockdown in mid-March.
The Betfred Super League and Coral Challenge Cup competitions resumed as lockdown restrictions eased through the summer, and after all parties had made sacrifices and shown huge flexibility, both were played to a stirring conclusion.
However, the Betfred Championship and League 1 did not resume; the AB Sundecks 1895 Cup did not begin; nor did the Betfred Women’s Super League, while the Coral Women’s Challenge Cup and all community competitions, including the Warner Champion Schools, were also curtailed.
International Rugby League was another significant victim, as plans for a first home Ashes series against Australia since 2003 were scrapped because of the restrictions placed on international travel.
It was also a fallow year for England Women and England Wheelchair, the latter having also hoped to host Australia in the autumn – although all England teams remained in regular virtual contact as they retained a focus on the 2021 Rugby League World Cups.
Shaun Wane had been appointed England Head Coach in February 2020, following the decision not to renew the contract of Wayne Bennett after Great Britain’s four-match tour in late 2019. Wane had been relishing the prospect of tackling Australia in the Ashes before the World Cup – but at the end of 2020, he had still to meet his squad as a group.
Betfred Super League
St Helens retained the Betfred Super League title with a Grand Final victory over Wigan, but that bold statement provides no hint of the twists and turns of the journey in what was a season like no other.
It had been relatively normal until the season suspension in mid-March, with Saints stuttering a little in their title defence with three defeats in their first six matches, perhaps distracted by the World Club Challenge in which they earned huge admiration despite a 20-12 defeat by Trent Robinson’s outstanding Sydney Roosters.
But Saints’ defeat at Castleford on Sunday March 15 was the last Rugby League fixture played for more than four months.
The competition resumed in August without fans, scrums or Toronto Wolfpack, who had withdrawn following the impact of Covid-19.
The league table was to be determined by points percentage to recognise the inevitability that games would be postponed because of positive Covid-19 tests and other players being forced to self-isolate as close contacts.
The Grand Final was put back to late November and switched from Old Trafford to the KCom Stadium in Hull, and a late decision was taken to expand the Play-Offs from five to six clubs.
Wigan Warriors finished top, with Saints second, and the old rivals beat Hull FC and Catalans Dragons respectively in the Semi Finals.
The Grand Final was a compelling classic even before the most dramatic ending, as the teams were locked at 4-4 before the Saints youngster Jack Welsby touched down a Tommy Makinson drop goal attempt which had rebounded from the post to finally claim a memorable victory.
Coral Challenge Cup
Very much like the Betfred Super League, the 2020 Coral Challenge Cup had made a deceptively normal start, as an initial entry of 44 teams from the Community Game were whittled down to 11 in the first two rounds in January, then joined in each of the next three rounds by the 11 League 1 teams, the 13 English clubs in the Championship, and four from the Super League to produce eight survivors to join the top eight from the 2019 Super League in the Sixth Round draw.
Then, a couple of hours before that draw – which had initially been planned for New York before the growing impracticality of international travel forced a rethink – the season was suspended.
By the time Rugby League action resumed in August, the RFL had confirmed that the Championship and League 1 competitions would not be resuming – leaving Featherstone, Newcastle, Sheffield, Widnes and York, who had all earned places in the last 16, with little alternative than to withdraw from the Cup.
That led to a redraw, with Catalans defeating Wakefield Trinity and Hull FC beating Castleford in the two Sixth Round ties required to produce eight teams for the Quarter Finals in mid-September.
Leeds, Wigan, Salford and Warrington qualified for the Semi Finals, which were played as a double header at St Helens on what was later confirmed as Britain’s wettest day on record, with enough rain falling across the country to fill Loch Ness. Leeds played the conditions masterfully to beat Wigan 26-12, with Luke Gale’s kicking game crucial, while Salford secured their long-awaited Wembley return by shading Warrington in a 24-22 thriller.
The Final was played in mid-October, at an empty, eerie and echoing Wembley Stadium with Salford making their first appearance since 1969.
There could have been no more fitting matchwinner than Luke Gale, wearing the Leeds Rhinos number seven jersey – with his illustrious predecessor, Rob Burrow, watching from home as Wembley’s first Chief Guest in absentia.
Gale slotted a 76th minute drop goal to secure a 17-16 win for the Rhinos on their first Wembley appearance since their consecutive wins under Brian McDermott in 2014 and 2015.
Community Game
The Covid-19 pandemic caused unprecedented disruption across the community game. The timing of the first lockdown coincided with the start of the 2020 season. As soon as rugby league activity ceased on the 16th March 2020, RFL Community staff were immediately redeployed to support key areas of public health, player welfare, keeping players active and engaged, and supporting the financial sustainability of clubs and foundations.
On-line activity was how it was to remain until the 1st June 2020 when small group fitness and skills-based activity resumed. At the request of Government, the RFL produced a Return to Play Document for Community Rugby League which was submitted on 19th June 2020, a four-stage plan outlining a roadmap for the return of Rugby League. The RFL was one of several sports who worked jointly with Sport England to produce the Return to Recreational Team Sports Framework which once approved by Government formed the basis upon which all sports could safely return to play. As part of that framework all sports were required to produce an Action Plan with associated Community Game Guidance. Both were approved by Government and Public Health England on 10th August 2020. The progression through levels of contact all led to the possibility of games taking place during October and November 2020 albeit outside of formal competition structures which were not scheduled to return until March 2021.
Additional risk mitigation measures including limiting activity to U18’s, localised games and fortnightly fixtures were agreed before activity could resume towards the end of October. The activity was opt in and whilst some clubs took the decision not to take part, over 500 teams took part in games over the opening two weekends. Many of those teams had been training since the beginning of June. Unfortunately, the planned autumn activity was curtailed by another lockdown and once again all activity including training ceased.
In terms of participation numbers which are reported to Sport England in accordance with our contractual obligations, we lost the entirety of our Spring and Summer education programme although some Champion Schools, Colleges and University activity did take place prior to the first lockdown. Overall, the numbers of registrations dropped from a 2019 high of 109,000 to 85,000 in 2020. Whilst this was obviously concerning, ongoing support and understanding from Sport England which included a commitment funding levels would be maintained in 2021 together with a belief that the sport would build back better in 2021 gave renewed optimism after an immensely challenging year.
Events after the Balance Sheet date
Subsequent to the year end, Covid-19 has continued to affect businesses globally, including within the UK. The severity of the impact has been unprecedented, and the UK Government has continued its considerable measures to help businesses through this extremely challenging time.
Rugby League within the UK was suspended from 15 March 2020 and recommenced on 2nd August 2020 with the main competitions being played behind closed doors toward the end of the season. Matches with some spectators recommenced, albeit at reduced capacities in line with the Government’s Roadmap.
The Executive have put in place business plans which cover various scenarios covering the period from now until the end of December 2022. The impacts of various scenarios have been modelled to show the impact on cashflows along with the areas of mitigation available to management to maintain a cash position to continue to operate the business. These forecasts indicate that with support from Government, and the Sport Survival Package, the RFL can continue to trade until at least the end of 2022.
On 4th August 2021, the Rugby League World Cup 2021 board agreed that due to the withdrawal of multiple teams it was in the best commercial, reputational and ethical interests of the company and its partners to postpone the tournament until 2022. A grant application has been made to the Sport Survival Board to cover the additional costs of operating Rugby League World Cup 2021 Limited for a further 12 months to deliver the Tournament in 2022. Discussions with Government have been positive to date and the Directors assumptions in their going concern review are that the application is successful, although formal confirmation has not been received at the time of writing. Further discussions with DCMS are taking place about the potential for a conditional Underwrite of Rugby League World Cup 2021 to protect the RFL, for example, due to unforeseen impacts on the revenue and costs of staging the Tournament due to potential Covid-19 implications. If the Underwrite is not secured, whilst there would be longer term implications on the finances of the RFL, this would not be material to its going concern in the next 12 months unless further Covid-19 restrictions are necessary that impact tournament revenues and costs.
In addition to the above, the board have already taken advantage of various Government assistance schemes, including CJRS and deferral of some tax payments to aid cashflow management. The RFL has also received additional loan funding to support cashflow via direct discussions with the Department for Digital, Culture, Media and Sport. This facility, coupled with facilities already available and the continued support of broadcast contracts and funding from Sport England provides the necessary working capital for at least the next 12 months. Based on the current models and forecasts, as detailed in the going concern note on page 21, the Board remain satisfied that the RFL is a going concern.
The directors present their annual report and financial statements for the year ended 31 December 2020.
The RFL has a Board of Directors that is totally independent of any club or member involvement. The Board is currently comprised of two Executive Directors, and five Non-Executive Directors – including the Non-Executive Chair.
All non-executive directors are subject to election by the RFL Council at the first opportunity after their appointment, and to re-election every nine years. Non-Executive directors retire by rotation and may offer themselves for immediate re-election.
The directors who held office during the year and up to the date of signature of the financial statements were as follows:
The Board undertakes a formal and rigorous annual evaluation of its own performance and that of its committees and individual directors. This includes a review of whether each director continues to contribute effectively and demonstrate a commitment to the role (including commitment of time for Board and committee meetings and any other duties). The evaluation process is used constructively as a mechanism to improve Board effectiveness, maximise strengths and address areas of improvement.
Board Committees
The Board has established four specific committees, each with defined terms of reference. Minutes of the meetings are circulated to and reviewed by the Board.
The Audit & Risk Committee
This consists of two Non-Executive directors, staff members of the RFL and two independent members. This Committee was chaired by Rimla Akhtar throughout 2020 and meets four times per year. In addition to the Committee members, it is attended by representatives of the external auditors and other RFL staff as required. The non-executive Chairman, and all other Board directors can be invited to attend as the Committee wishes. The Audit & Risk Committee considers the Annual Report and Financial Statements before submission to RFL Board for approval. The Committee also reviews accounting practices to ensure compliance with accounting standards. In addition, it recommends the appointment of the external auditors for approval at the AGM, oversees the internal audit programme, considers the scope of past and future audits, reviews the RFL’s estates strategy, reviews and helps determine the risk management framework of the organisation, deals with matters arising from the audit and reviews internal control procedures. All non-audit services provided by the Group’s auditors are considered by the Chair of the Audit and Risk Committee at the meeting which the external auditors attend.
The Remuneration Committee
The Board of Directors consider it important to benchmark senior staff remuneration against other businesses of similar size and against other sports governing bodies. To this end, the Remuneration Committee meets as appropriate under the chairmanship of Chris Brindley and currently comprises Chris Hurst, Sandy Lindsay and Rimla Akhtar. The Committee determines the terms and conditions of employment for executive and non-executive directors and agrees the level of remuneration for senior managers whose earnings are within the committee’s prescribed criteria. The objective of the committee shall be to ensure that members of the executive management of the RFL are rewarded, in a fair and responsible manner, for their individual contributions to the success of the RFL.
The Nominations Committee
The RFL believes that there should be a formal and transparent procedure for appointing new members to the Board of Directors. To this end the Board established a Nominations Committee which leads the process for Board appointments. This Committee is chaired by Simon Johnson and includes all Non-Executive Directors. The Committee is responsible for nominating candidates to fill Board vacancies for the approval of the Board as and when they arise. Before considering any appointment, the balance of skills, knowledge and experience on the Board is evaluated, the diversity and make-up of the Board is considered and, in the light of this evaluation, a description of the role and capabilities required for an appointment is prepared. In addition, full consideration is given to succession planning during its work, considering the challenges and opportunities facing the company and the skills and expertise that are therefore needed on the Board in the future as well as regularly reviewing the structure, size and composition (including skills, knowledge and experience) of the Board and making recommendations to the Board with regard to any changes.
Laws Committee
The Committee is chaired by the RFL’s CEO. The Committee met twice in 2020 Its role is to review the current laws of the game whilst also fully considering the potential impact of the introduction of new laws based on three principles of keeping the game safe, fair and entertaining. Drawing from across the game, the Committee comprises of a range of members who are considered representative of all stakeholders.
The Committee consider it vital to understand the views of all relevant stakeholders (including coaches, players, medical staff, the players’ union and match officials) and this is reflected in its composition.
Community Board
By virtue of Article 79 of the Articles of Association of RFL (Governing Body) Limited, the Board has established a Community Board. This Board is accountable to the RFL Board for the management and development of all aspects of the community, grass roots and amateur game of Rugby League. The role of the Community Board is to assist in the organisation and management structure of the RFL, and to bring together all areas of the British Rugby League community, grass roots and amateur game under the governance of the RFL.
Whole Game Board (formerly Professional Game Board)
A new Board sub-committee was established in late 2019.
The purpose being to consider and make non-binding recommendations to the Board in relation to the regulation and operation of the Game on matters that directly or indirectly have impact on rugby league clubs who play in: (i) the Super League; and (ii) the Championship and League 1 and which may have a whole game impact (including potentially on the Community Game). The overriding aim being to drive the Game’s objectives.
Its membership is made up of representatives of the RFL, the Super League Clubs, the Championship and League 1 Clubs and the Community Game.
The Committee met twice in 2020.
Inclusion Board
In November 2020 the Inclusion and Diversity Advisory Group was formally made a Board sub-committee. Its purpose is to provide guidance on all equality matters and to monitor the delivery of the RFL’s Rugby League versus Discrimination Tackle It Action Plan. In addition, the Inclusion Board provides support to the Executive in delivering programmes within the plan and seeks to promote a culture of respect for Inclusion, Equality and Anti-Discrimination across Rugby League.
Its composition is 7 external and 3 internal members, and it is chaired by Rimla Akhtar.
Internal Control
The Board is responsible for establishing and maintaining the RFL’s system of internal controls. Internal control systems are intended to meet the needs of the organisation and the risks to which it is exposed. By their nature, such systems and procedures are designed to manage rather than eliminate the risk of failure to achieve objectives and can therefore provide reasonable and not absolute reassurance against material loss or misstatement.
Key elements of the internal control systems are:
Clearly defined management structure and delegation of authority to committees of the Board and the management team.
High recruitment standards and formal career development and training to ensure the integrity and competence of staff.
Regular information provided to management and staff, covering financial performance and key performance indicators.
A detailed budgeting process where departmental managers participate in the budget formation before approval by the Board.
A streamlined system with an automated workflow for the approval of capital expenditure, investments and all trading purchases.
Monthly monitoring and re-forecasting of results against budget, with management action taken and recorded against major variances.
On-going procedures to maintain the risk register, evaluate the risks faced by the business and monitor the systems to control and reduce the risks.
Proposed dividend
The directors do not recommend the payment of a dividend (2019: £nil).
No ordinary dividends were paid. The directors do not recommend payment of a final dividend.
Other information
An indication of likely future developments in the business and of significant events which have occurred since the end of the financial year have been included in the Strategic Report on page 1.
Azets Audit Services Limited were appointed auditor to the company following their acquisition of the trade of Garbutt & Elliott Audit Limited on 1 December 2021. In accordance with s487(2) of the Companies Act 2006 they are deemed reappointed annually.
select suitable accounting policies and then apply them consistently; make judgements and accounting estimates that are reasonable and prudent; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
give a true and fair view of the state of the company's affairs as at 31 December 2020 and of its 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.
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Other information
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of our audit:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or the financial statements are not in agreement with the accounting records and returns; or certain disclosures of remuneration specified by law are not made; or we have not received all the information and explanations we require for our audit.
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.
Extent to which the audit was capable of identifying irregularities, including fraud
We identified areas of laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general commercial and sector experience, through discussion with the directors and other management, and from inspection of the company's regulatory and legal correspondence. We discussed with the directors and other management the policies and procedures regarding compliance with laws and regulations. We communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance during the audit.
The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation), distributable profits legislation, pensions legislation, taxation legislation and further laws and regulations that could indirectly affect the financial statements, comprising employment, environmental and health and safety legislation and, in the current climate, Covid-19 regulations. We assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statement items. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. These procedures did not identify any potentially material actual or suspected non-compliance.
To identify risks of material misstatement due to fraud we considered the opportunities and incentives and pressures that may exist within the company to commit fraud. Our risk assessment procedures included: enquiry of directors to understand the high level policies and procedures in place to prevent and detect fraud, reading Board minutes and considering performance targets and incentive schemes in place for management. We communicated identified fraud risks throughout our team and remained alert to any indications of fraud during the audit.
As a result of these procedures we identified the greatest potential for fraud in the following areas:
- revenue recognition and in particular the risk that revenue is recorded in the wrong period due to significant amounts of deferred income and multiple revenue streams; and
- subjective accounting estimates
These risks arise due to a desire to present stronger results which may enable the company to secure additional finance, tender more favourably for contracts and management to benefit from enhanced incentives. As required by auditing standards we also identified and addressed the risk of management override of controls.
We performed the following procedures to address the risks of fraud identified:
- identifying and testing high risk journal entries through vouching the entries to supporting documentation.
- assessing significant accounting estimates for bias.
- testing the timing and recognition of income and, in particular, that it was appropriately recognised or deferred in relation to the underlying transactions and contracts
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by auditing standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection of fraud, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. Our audit procedures are designed to detect material misstatement. We are not responsible for preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws and regulations.
Use of our report
This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
The Rugby Football League Limited is a private company limited by shares incorporated in England and Wales. The registered office is Quay West, Trafford Wharf Road, Manchester, M17 1HH.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £1.
This company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements:
Section 4 ‘Statement of Financial Position’: Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’: Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income;
Section 33 ‘Related Party Disclosures’: The company has taken advantage of the disclosure exemptions of Section 33.1A of FRS 102 which permit it to not present details of its transactions with members of the group.
The financial statements of the company are consolidated in the financial statements of RFL (Governing Body) Limited. These consolidated financial statements of RFL (Governing Body) Limited are prepared in accordance with International Financial Reporting Standards as adopted by the EU and are available to the public and may be obtained from Quay West Trafford Wharf Road, Trafford Park, Manchester, M17 1HH.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.
Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Basic financial liabilities, including creditors, bank loans and loans from fellow group companies are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.
Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.
In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
In the opinion of the directors these financial statements are not dependent upon any accounting estimates or judgements.
All turnover is generated in the UK.
The average monthly number of persons (including directors) employed by the company during the year was:
Their aggregate remuneration comprised:
The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
During the year £5,448 was recognised as an expense in the profit and loss account in respect of operating leases (2019: £11,184).
Subsequent to the year end £4.5 million of loan funding was received from the Department of Culture, Media and Sport via RFL Investments 2020 Limited.
On 4th August 2021, the Rugby League World Cup 2021 board agreed that due to the withdrawal of multiple teams it was in the best commercial, reputational and ethical interests of the company and its partners to postpone the tournament until 2022. This has delayed the associated revenue and costs that were budgeted in 2021. A grant application has been made to the Sport Survival Board to cover the additional costs of operating Rugby League World Cup 2021 Limited for a further 12 months to deliver the Tournament in 2022. Discussions with Government have been positive to date and the Directors have reflected this in their going concern review.
RFL (Governing Body) Limited (RFLGB), has significant influence over Rugby League Cares (RLC) and The Rugby Football League Limited (RFL).
At 31 December 2020 within other debtors £317,092 (2019 - £417,000) is owed by RLC to RFL.
At 31 December 2020 within trade creditors £65,327 (2019 - £nil) is owed by RFL to RLC.
At 31 December 2020 within accruals and deferred income £16,167 (2019 - £80,925) is owed by RFL to RLC.
The company is a subsidiary undertaking of RFL (Governing Body) Limited which is controlled by its members.