[h=2]LUFC ACCOUNTS: UPDATE ON CONTACT WITH BAKER TILLY[/h] please log in to view this image TUESDAY, MAY 22, 2012 AT 10:55PM In April, the Leeds United Supportersâ Trust board wrote to Baker Tilly, the company that audited Leeds Unitedâs most recent set of accounts. We wanted to bring their attention to several errors that a number of our members, who have a background in professional finance, had identified in the account documents. Copies of our letter were also sent to Shaun Harvey and Companies House. Baker Tilly replied on 23rd April, noting that we had copied our letter to Shaun Harvey and stating that for âprofessional and legal reasons, it is not appropriate for us to enter into correspondence with shareholders or stakeholders.â We have attempted to contact Baker Tilly by telephone to clarify the situation but without success, and have not received a reply from Shaun Harvey or from Companies house as yet. We still feel that what appear to be numerous errors in the accounts are cause for concern, and so in accordance with our letter to Baker Tilly we are now sharing our findings with our members. This is a copy of the letter we sent to Baker Tilly on 10th April. Mr. Andrew P Allchin Baker Tilly UK Audit LLP 2 Whitehall Quay Leeds LS1 4HG 10th April 2012 Dear Sir Leeds City Holdings Limited and Subsidiaries We write on behalf of our members who are significant stakeholders in Leeds United Football Club. We have undertaken a review of the financial statements of the above named company (and its subsidiaries) for the year ended 30th June 2011 and invite you to comment on our findings before we report them to our members. Leeds City Holdings Limited The group balance sheet discloses creditors due within one year as £15,810,000, however note 13 states this figure is £15,807,000. The consolidated cash flow states ânet cash inflow/ (outflow)â. There is no need for the â/ (outflow)â since both periods generated an inflow. Reconciliation of operating loss to cash flow from operating activities should read reconciliation of operating profit/(loss) to cash flow from operating activities Note 10 states that a transfer has occurred from amounts due from group undertakings to fixed asset investments. This implies the prior year comparatives have been restated, why therefore is there no disclosure neither in the directorsâ report nor the financial statements of this fact? Note 23 discloses dealings between the company and a subsidiary, Yorkshire Radio Limited, which would appear to indicate that Yorkshire Radio Limited has not been consolidated within these financial statements. If this is the case then why is there a note detailing this? If Yorkshire Radio Limited has been consolidated within these financial statements then why is there no minority interest shown within the financial statements? If Yorkshire Radio Limited owed the company £1,980,516 as at 30th June 2010 why does the balance sheet note only show amounts due from group undertakings of £1,471,100? If Yorkshire Radio Limited owed the company £2,075,711 as at 30th June 2011 why does the balance sheet note show no amounts due? Leeds United Centenary Pavilion Limited The directorâs report has a heading for results and dividends but makes no comment on either the result or dividend proposals. Note 12 indicates that the loss for the year was £196,776,000 and that the shareholderâs funds are (£196,775,000). Leeds United Football Club Limited Note 8, Intangible fixed assets does not cast. The total net book value for the year should be £7,060,000 not £7,061,000 if all the individual figures are correct. Note 9 shows a transfer of assets to another group company, however no depreciation has been transferred over. It is logical to assume that this transfer was to Leeds United Centenary Pavilion Limited; however the financial statements of that company (nor any other group company) do not disclose this being the case. Surely such an omission indicates the financial statements do not present a true and fair view? The additions in the year as per note 9 total £3,022,000, however the addition line actual casts to £3,045,000. The leasehold land and buildings cost as at 30th June 2011 is disclosed as £97,000, however the note casts to £120,000. This would suggest that the leasehold land and buildings asset, currently disclosed at £55,000 is misstated by £23,000. Whilst to the balance sheet as a whole this is not a material error, it is material to the understanding of the value of leasehold land and buildings held by the company. Leeds United Media Limited The directorâs report makes no reference to results and dividends, even though all other group companiesâ financial statements do so. The financial statements contain numerous grammatical and spelling errors, for example on the directorâs report, 'loosing' rather than 'losing'. The profit and loss account refers to note 15; however the notes to the financial statements only go to note 13. All the note references on the balance sheet are incorrect, starting with no note reference for the fixed asset investment and all other note references being out by 1. Note 11 discloses a loss of £2,422,000 as opposed to £2,422. Whilst the above can be down to a lack of a final check post late adjustments, it is worrying that the total of £294,598 shown in note 8, detailing creditors due within one year, does not agree with the figure on the balance sheet (£297,448). We also note that the accounts were signed on 15 February 2012 which would have left you 45 days to check these accounts for errors before they were published. Furthermore, note 13 highlights that during the year Leeds United Media was advanced £255,476 from Leeds United Football Club Limited and that as at the year end the balance owed to Leeds United Football Club Limited was £255,476. However the amounts owed in total to group undertakings disclosed within note 8 is only £185,000. Coincidently an amount due from group undertakings as disclosed within note 7 is £255,476. In light of the above do you still stand by your audit opinion, namely that the financial statements: ⢠Give a true and fair view of the companyâs affairs as at 30 June 2011 and of its loss for the year then ended; ⢠Have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practices; ⢠Have been prepared in accordance with the requirements of the Companies Act 2006? We look forward to hearing from you in due course. Yours Faithfully Gary Cooper Chairman For and Behalf of Leeds United Supporters Trust.
