Could we face another transfer embargo (1 Viewer)
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torchomatic
Well-Known Member
Embargo a go-go, I would imagine.
Signing off the accounts and hand them in ... how difficult can it be?
Well, it's not that simple.
First of all they need a budget for the next year and they need finances to support the budget.
How can they budget the rent and matchday expenses (and income) when the negotiations with ACL are incomplete?
And if they take the safe road and say 'ok, as long as we don't know the final result of the negotiations we're just go with current contract' - then they need to be able to finance that. And I guess they will have a hard time finding that money.
Then there's the auditors - they demand solid proof that the club will be a going concern the next year, otherwise they will not sign at the dotted line.
We will face the embargo and it won't be lifted anytime soon.
Well, it's not that simple.
First of all they need a budget for the next year and they need finances to support the budget.
How can they budget the rent and matchday expenses (and income) when the negotiations with ACL are incomplete?
And if they take the safe road and say 'ok, as long as we don't know the final result of the negotiations we're just go with current contract' - then they need to be able to finance that. And I guess they will have a hard time finding that money.
Then there's the auditors - they demand solid proof that the club will be a going concern the next year, otherwise they will not sign at the dotted line.
We will face the embargo and it won't be lifted anytime soon.
SkyBlueScottie
Well-Known Member
Yes, this time tomorrow, we will be under Um Bongo, lets hope we can get a loan striker in today.
Mary_Mungo_Midge
Well-Known Member
Absolutely correct. Which means a year wasted agreeing to deals and then changing your mind, trawling to Rushden & Diamonds, then Hinckley Town, then the architects to build something just outside Rugby. Then deciding that after all this, mediation is the best policy - well, it makes such posturing look a bit hollow, doesn't it?
Filing accounts is simple, surely? Have a realistic plan that your auditors buy into? That's why league rules punish only those who can't adhere to the basics. For us it's becoming an annual event; occurring on or about Easter on the calender
CovLis86
Well-Known Member
It's no surprise that they are on about bringing in another loan by the end of the day then is it. They realise now they can't afford to completely screw over the team by getting us under um bongo before bringing people in, but they still want to try keep their secrets safe. Why do they always have something to hide.
When the club becomes viable and profitable it will be able to hand in accounts on time.
To become viable the club needs to get all costs down to match the income.
One major cost item is the rent - so to be able to have a realistic plan that auditors will buy into, rent need to come down to an acceptable level.
When it does - be it at the Ricoh, Hinckley or Seppela Stadium - then the club have done the basics.
Mary_Mungo_Midge
Well-Known Member
How could it be that accounts have been signed off with the same rental since 2007? Has the rent ever been flagged as a point of concern by the auditors previously?
TrueSkyBlueLiam
Member
They dont know their arse form their elbow, so dont expect any miracles. Just hope we get this loan signing before friday when we will get the embargo
You misunderstood me, and fair enough.
The auditors don't have a say in how the club spend it's money. But when the accounts shows more liabilities than assets and the budget operates with an overall loss, then the club needs cash from the outside to stay alive - or as the auditors call it: be a going concern.
The auditors won't sign off the accounts unless the club can show some kind of evidence that the owners will plug the gap and fund the losses.
Here's one for the conspiracy minded: Did the club include a significant rent reduction in their last budget?
The books are up to date - the difficult part is guaranteeing there will be cash available to pay the bills the next year.
Why would you say that? They are professionals and knows exactly what they are doing - at least when it comes to financing and book keeping.
Just like I believe you know what you're doing in your own job.
Or is it a case of 'thief thinks everyone is stealing'?
shouldnt we have a massive stack of cash somewhere seen as we have not paid the rent for so long? we can use that to fund us next year
Don't expect that.
Mary_Mungo_Midge
Well-Known Member
I'm aware of that but thanks anyway. However, my point being that the rent hasn't changed since SISU took over in 2007. And accounts have been signed off over this term.
So surely the rent per se isn't the biggest issue, but SISU's failure to match income and expenditure within that framework is?
oldskyblue58
CCFC Finance Director
a few thoughts .......
Going concern is not just about the owners plugging the gap ...... in any case SISU never gave a guarantee of that
the auditors must be satisfied that the company is a going concern for 12 months plus from the date they sign the audit report
the auditors do not just consider the going concern of CCFC....... this is a group of companies and the auditors have to consider the Group situation in this case
people keep focussing on the rent like it is the magic key to this but that is not the only cost needing to be considered
Auditors will also consider income streams that will include new and existing and the likelyhood of whether those income streams increase or decrease
they will consider the amounts that the companies owe and the liklihood of those debts being called in. Equally if the club is owed money (eg transfer fees) the risk that it will not be recoverable
consider whether any legal action has been taken against the company that threatens its going concern
consider if there are liabilities like player contracts that place a burden on the club that is unsustainable
consider whether known issues last year have been resolved successfully..... rent, payroll reductions, overhead reductions, player sales past or future etc
consider the assets available, whether any can be sold, are subject to charge, or at the correct value
Consider the availability of 3rd party finance sources
consider the access to funds, whether there is any evidence past present or future of a restriction in those funds
consider the basis on which future projections are put together
consider all records and documents, including press releases and future plans (eg new ground proposals)
above all consider what the risks to the business are and whether there is a risk that projections are inaccurate.......... this is certainly not a low risk audit, given what we know I would suspect it is high risk which means the auditor is even more on his guard and requires a greater burden of evidence (especially from 3rd parties)
the final thing to consider is whether the owners will back the company and will provide evidence of such backing
It is not a question of just settling the rent dispute .......... that is just part of it nor is it just about getting owner assurances
The club will have up to date records, management accounts etc could put together a form of accounts but if the directors and or auditors do not believe the club to be a going concern the basis of those accounts could be wrong (ie should be stated on a break up value not going concern). To file those accounts in those circumstances as a going concern would be fraud.
At the moment I do not see how any auditor can sign the accounts off as a going concern given the uncertainty........... but then again that would apply to the directors too (who have to approve the accounts before the auditor signs them off)
Going concern is not just about the owners plugging the gap ...... in any case SISU never gave a guarantee of that
the auditors must be satisfied that the company is a going concern for 12 months plus from the date they sign the audit report
the auditors do not just consider the going concern of CCFC....... this is a group of companies and the auditors have to consider the Group situation in this case
people keep focussing on the rent like it is the magic key to this but that is not the only cost needing to be considered
Auditors will also consider income streams that will include new and existing and the likelyhood of whether those income streams increase or decrease
they will consider the amounts that the companies owe and the liklihood of those debts being called in. Equally if the club is owed money (eg transfer fees) the risk that it will not be recoverable
consider whether any legal action has been taken against the company that threatens its going concern
consider if there are liabilities like player contracts that place a burden on the club that is unsustainable
consider whether known issues last year have been resolved successfully..... rent, payroll reductions, overhead reductions, player sales past or future etc
consider the assets available, whether any can be sold, are subject to charge, or at the correct value
Consider the availability of 3rd party finance sources
consider the access to funds, whether there is any evidence past present or future of a restriction in those funds
consider the basis on which future projections are put together
consider all records and documents, including press releases and future plans (eg new ground proposals)
above all consider what the risks to the business are and whether there is a risk that projections are inaccurate.......... this is certainly not a low risk audit, given what we know I would suspect it is high risk which means the auditor is even more on his guard and requires a greater burden of evidence (especially from 3rd parties)
the final thing to consider is whether the owners will back the company and will provide evidence of such backing
It is not a question of just settling the rent dispute .......... that is just part of it nor is it just about getting owner assurances
The club will have up to date records, management accounts etc could put together a form of accounts but if the directors and or auditors do not believe the club to be a going concern the basis of those accounts could be wrong (ie should be stated on a break up value not going concern). To file those accounts in those circumstances as a going concern would be fraud.
At the moment I do not see how any auditor can sign the accounts off as a going concern given the uncertainty........... but then again that would apply to the directors too (who have to approve the accounts before the auditor signs them off)
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DazzleTommyDazzle
Well-Known Member
You make it sound like it's a miracle that any company ever manages to do it.....
It's a pretty straightforward legal requirement, that well run (moderately well run...) companies meet all the time.
oldskyblue58
CCFC Finance Director
another thought ......
It was my understanding that in the group structure the company that owned CCFCH was Otium Entertainment Group (which is owned by SBS&L)........... that company was in default on its accounts 21/01/13 ............... does that mean that technically under league rules we should have been embargo already........... (Pompey went in to admin because of its parent company ) ........ probably not but I cant see the group filing any of its accounts any time soon.
It was my understanding that in the group structure the company that owned CCFCH was Otium Entertainment Group (which is owned by SBS&L)........... that company was in default on its accounts 21/01/13 ............... does that mean that technically under league rules we should have been embargo already........... (Pompey went in to admin because of its parent company ) ........ probably not but I cant see the group filing any of its accounts any time soon.
Yes, it's pretty simple and straight forward - but it could almost be classified as a miracle if the club in its current financial state were able to file the accounts in time.
Thanks for keeping it simple
... and for trying to justify the huge amount you auditors charge.
I raised the rent issue saying that it was ONE major cost item. I didn't say it was all about the rent.
oldskyblue58
CCFC Finance Director
That is the simple version Godiva ...... you should see the amount we have in our manuals or need to read from professional bodies etc !
I know you said it was one but there are people here that think agreeing the rent and matchday F&B's solve everything
Of course I could just have put
"no accounts wont be filed - embargo"
I know you said it was one but there are people here that think agreeing the rent and matchday F&B's solve everything
Of course I could just have put
"no accounts wont be filed - embargo"
scroobiustom
New Member
I've heard we are signing Didier Um Bongo, he comes from the Congo.... (although he/ it is actually produced in Portugal - look it up!)
mattylad
Member
Was not part of the agreement TF made with SISU that they would continue to support the club financially for at least three years? As such it could be some of the leg work is already done but I would expect us to be back under an embargo very soon as the auditors will be late signing off due to all the rolling around on the floor and laughing CCFC ointlaugh:
ointlaugh:
DazzleTommyDazzle
Well-Known Member
Really??
They always get round to filing them eventually, it's just that they always do it late - with the ramifications that brings (not to mention breaking the law).
The deadline shouldn't be any surprise to them.
I'd love to know your connection Sir, because whatever our vaunted leaders do/don't do you are first on the forums fighting the SISU corner. Do you think other clubs are not having to decide on all the factors you mention but I bet 90% will file their accounts according to LAW and avoid embarrassing embargos.
rupert_bear
Well-Known Member
Would an embargo mean Steve Waggott who oversees player recruitment will be made redundant ?
Any news on the fw and will Sisu keep the fans updated and be transparent as promised....