Thetownend.com

So that's the accounts for TWO years ago.

Nice for them to be so timely !!!

Losses if 1.22m ............slightly different to their 750k that they keep banding around, dread to imagine the 05/06 ones though

What do they want ........................ a fucking pat on the back or something ???

A Mars bar should suffice

http://www.swindontownfc.premiumtv.co.uk/page/News/NewsDetail/0,,10341~1022459,00.html

Oooh on the website now. Happy days for all those involved. Bet they'll enjoy the Mars bar.

(Mind you, you've got to wonder if they'll have to give Willie one from a Celebrations pack - I fear a full-sized one will put him in hospital with all that sugar)

Given the shocking track record of innacurate and downright misleading statements as to the club's financial situation made at the last several years' AGMs, I'd expect this year's to require equally large pinches of salt as well. The sad thing is now that if even Sandy et al stood up and told shareholders the whole picture without reserve, few people would believe them because of that track record. They are simply too discredited by too many years of failure, incompetence and an aversion to owning up to the truth.

*BREAKING NEWS*

We've won the 1969 League Cup after beating Arsenal at Wembley!  :beers:

They may be signed off by the auditors, but I doubt they'll be approved - which means they're not worth the paper they're written on

Very good point, the last set never did get approved did they?!

Yes the did

they were qualified too

I was fucking amazed

Oh right I thought they never got approved as couldn't be proven to be accurate...........well I never, I've got no idea how they managed to pull that off

Fred actually just read Rob Tuck's post on thisis, he seems to say they weren't properly signed off but just got a qualification instead.....I'm sure this is what I remember also as can't remember them ever announcing they had been formally signed off.

I might be wrong here but don't accountants "approve" accounts & then "qualify" that approval by saying that they were approved, based on the information provided being correct & that they haven't seen (audited) all of the paperwork.

They weren't signed off by the accountants as they were qualified.

However they were approved at a vote at the last AGM

Ah right fair enough, SSW holds most of the shares though so he would always approve them surely based on advice from Diamond Mike.

as Fred states, the shareholders vote to approve the accounts.  SSW therefore just gives the nod to say he's happy with them being shit.

£1.22m is still a huge loss to make at our level.  It's this sort of loss that has lead to the downfall of a few clubs in recent years and is unsustainable.  Check out Rotherham for example.

Most clubs of our size will have a seaosn here and there where this happens, but every year is a very bad sign.  For every pound we earn we spend £1.33 ish.

Odd also that they only mention Operating losses, wonder if this means a worse performance on the profit/loss after all the accountants bits.  IIRC the previous years had an excpetional item that chalked off £800k making them look better, maybe the 2004/05 ones don't so show a worse end position.

 :nod:

You're right Rob

The balance sheet will not look too clever

Will fit right in with the people that put it together then  :-))(

Of course, these will be the accounts that are going to show Diamond Mike's 'financial engineering', to get the balance sheet down from -£10m to +£2m !!

That's only because of the 'loan notes' though. Potentially the debt is still there, there just has to be a trigger for it to become repayable.

and the trigger is the thing they say they can't survive without doing, so they've all but secured the debt against a future asset - making it more likely to be repaid if and when they happens than remaining as unsecured debt.

Profit or loss before Tax - don't ask Sandy

excellent, I forgive them for everything now and my backing for the current board is 100%.

we want power out!

This is the disclaimer from, the Auditor in 04

   Because of the possible effect of the limitation in evidence available to us , we are unable to to form an opinion as to whether the the financial statements give a fair view of the loss for the year ended May 04, or of the comparitives shown in these financial statements.

  In all other respects the financial statements have ben properly prepared.

  In respect alone of the limitation on our work relating to balances brought forward and comparitive amounts in these accounts
 
 .....we had not obtained all the information and explanations that we considered neccessary for our audit and

 .....we were unable to determine whether proper accounting records have been maintained.

Phil's got it right about the audit opinion.

Auditors generally qualify their opinion to cover their back (if not they would get wrongly sued left right and centre). If there was something majorly wrong they wouldn't even give a qualified opinion.

A qualified opinion is a negative form of expression...basically saying that the auditors agree with the figures and disclosures, but subject to limitations. By and large the accounts conform to UK GAAP (Generally Accepted Accounting Principles). In other words, there are limitations, but actually they're generally ok and are not materially misstated (where the users of the financial information could be influenced by a material [significantly wrong] misstatement), except for one or two items.

This differs from and adverse opinon, which is the opinion that states the accounts do not conform to UK GAAP as a whole. This means they are materially misstated and should not be relied on whatsoever.

how does this £1.2million loss relate to our second period in administration? was that before, during or after the accounting period?

these accounts relate to a normal trading period where all we were subject to was the CVA, i.e a £100k payment during this accounting period, as was the set before (so combined losses of over £2m in 2 years, plus whatever was lost during 2002/03 as well which I think was even more).

Accountants approve the accounts...
Auditor's signing off is called "to qualify" the accounts...
To complicate things its is possible to approve non-qualified accounts with an auditor's approval  :?

It's about known unknowns (see Donald Rumsfeld!)

"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don't know we don't know."

No, the accounts are approved by the director(s)

Auditors give an opinion on the accounts, whether they give a "true and fair view" and are not "materially misstated". This opinion may be qualified, unqualified or adverse.

It doesn't sound right, but the unqualified opinon is the best one.

Interesting...unqualified with an "emphasis of matter paragraph" which draws attention to note 1 of the financial statements but does not affect the audit opinion.



NOTE 1 in the accounts:



Note 10:

The holding company accounts make for interesting reading. Firstly the auditors have given an adverse opinion. To quote the Auditing Practices Board para.39 of (International Standard on Auditing) ISA 700
"an adverse opinion should be expressed when the effect of a disagreement [with the management] is so material and pervasive to the financial statements that the auditor concludes that a qualification of the report is not adequate to disclose the misleading or incomplete nature of the financial statements"

Secondly, the adverse audit opinion for the year ended 31 May 2005 shows the shares held in STFC to be worth ZERO. Secondly, it suggests that the loans from STFC and Shaw Park Developments are wholly irrecoverable:

They're certainly cutting the CVA fine then, just over a month and if they haven't paid it or renegotiatied then we have to cough up £5 million. Fucking great.

Um to try and explain in simpler terms (someone asked)...

The STFC accounts are unqualified...this means they present a 'true and fair view' i.e. they are an accurate reflection into the state of affairs of the company at that given time. There is an "emphasis of matter" paragraph (about the CVA) which is just there to further emphasise a point, although it doesn't change the fairness of the accounts.

It states the club cannot pay the £900k CVA payment but are able to continue as a "going concern" (trade for the forceable future) because the CVA supervisor says he will be able to renegotiate it. Should it fail however, the club is liable for over £5m.



The holding company accounts give an "adverse opinion". This means that the auditors have disagreed with the management (Directors) over items in the accounts, to the extent that it means they do not give a true and fair view. In other words, according to the auditors the holding compnay accounts are bogus. This is worse than a "qualified opinion" which would state apart from a particular item(s) the accounts provide a true and fair view.

The points referring to the adverse opinion is the investment (share value) of the holding in STFC. The auditors say it should be reduced to zero (i.e. worthless) because of the substantial net liability of the football club (they owe shit loads of money to many creditors). Furthermore, the auditors feel the holding co should have written off the loans (money owed to the holding company) from STFC and SPD. This is because they are unlikely to be paid. So basically the holding company should accept those loans are gone as they won't be paid.

If all of these were written off, then the holding co would have an increased loss of £2.9m and would make a negative balance sheet position of £1.6m.

uuurururrrggg braiiiiiiiiiiiiiiin freeeeeeeeeeeeeeeeeeeeeeezeeee :cry:

Si Pie, as an acocuntant, would you be advising a company in that situation to cut and run?

Looking at those statements makes me think we are in real trouble and given we should really combine the two companies to get the overall picture they would present what I think must be the worst set of accounts ever to have been produced by STFC.

Holding co making a £2.9m loss and subsidiary making £1.2m operating loss, clubs shares worthless, £5m+ maybe due in a few months.

Thats about the long and short of it Rob

 :shock: Leaving aside the fact the club appears to be well up the creek for one moment, what's the impact of the disagreement between the company and the auditors? Is it as simple as that - ie a disagreement - or are the auditors saying the directors of the holding co have basically misrepresented their financial position in the accounts? And if the latter, erm, isn't that quite a serious matter?

Massively massively serious Paul *shudder*

A little bit of "financial re-engineering" and everything will be fine :?

let me see if i have this right:

does this then mean that the holding company is actually worth less than the club, although both of them are actually worth less than 0 ?  so in any potential takeover, would the buyer buy the club off the holding company (enabling the holding company to perhaps carry on trading), or buy the holding company (which has more liabilities and is a bigger risk, so should cost less up front) ?  or something.

I suppose as well that this is the clubs status at end of 2005 if i'm correct, so presumably the situation now could be completely different and probably lots worse..

No

Any viable take over SHOULD include the holding company as well.

The holding company still own the shares (albeit they are worthless) so any takeover would need to buyout SSW and the holding company.

but couldn't the holding company flog off the club as a going concern, or whatever its called ?

The holding company can't sell the club because they don't own it, they only have shares in it.

SSW is the major shareholder in the club.

If you break down the figures the club is still worth the least, purely because it has the most debt.

The loans given to the club (STFC) and Shaw Park Developments, by the holding company are unlikely to be repaid. So they should be written off as such. It's like if I leant someone £100 and they went bankrupt - I couldn't expect that back and would give up on it.

I read last week that some people who want to buy leeds are approaching the adminastrators and will show them that they can make full payments and that the adminastrators will basically force bates to sell the club.Im probably way off the mark but why cant that happen in this situation?

Because Diamandis has Andronikou in his back pocket.

Si Pie, am i right, looking through the particulars, that we've managed to mortgage off the following:

Everything!

To Shaw Park Developments and St Modwen

i.e - St Modwen have a legal charge over the property on the leasehold site, Shaw Park have legal charges over our fixed assets and debenture over the lease of the CG site itself?

Not much left really.

I like the way the club constantly whine about the rent but we actually paid £300k in interest charges during the 2004/05 period.

So the only thing they haven't done then is sell of their Granny's for a few quid

What a way to run a FC...shocking, god help us if they don't leave

There's nothing left to mortgage as far as I can see, save maybe creating some loan notes dependent on a development perhaps.

Because Leeds are in administration, we are in a CVA. They're different. In administration, the administrator(s) have the power to run the company, including to buy or sell it, whereas you go into a CVA as a way of exiting adminstration. A CVA is overseen by a supervisor who (theoretically) acts on behalf of the creditors to ensure the terms of the CVA are adhered to - ie that money is paid in on time and then distributed to creditors according to the terms of the CVA. The supervisor has very little actual power compared to an administrator, other than to call meetings of creditors, declare the CVA failed etc.

well that's the end of the promotion euphoria.

so, does the fact that the NDA remains unsigned suggest that there are even bigger skeletons in the cupboard?

Who knows?

These skeletons must be the remains of the BFG and his family.

Interest of £300k would indicate an approx borrowing of £6,000,000 @ 5%.  Is this maybe the interest on the loans secured on SSW property ?

Don't forget directors loans will earn interest. Off out soon so can't really go into detail...

which I add, is probably why they want to view Power's investment as shares and not a loan

I think that's more to do with the fact that they have to pay it back if they're not prepared to talk to the Fans' Consortium. And, let's face it, they haven't got £1.2 much less £1.2m.

What I meant was, the earlier it's disclosed as shares, the less interest would be accumulating. Obviously the £1.2m is huge compared to the interest.