The following was addressed, in all innocence I am sure, to JO and MA
Assuming you are now reading, I reiterate that I am not faulting your work or suggesting any wrongdoing on your part. However, I wonder if would you care to make a public statement as to whether in 10 years you believe there have been some dodgy goings on with the bookkeeping (eg two books, strange expenses, occasions you were asked to turn a blind eye etc). In reality you are of course hardly likely to say yes if you believe it to be the case for your own protection - however if you come out and catagorically say No, then maybe it might help us to determine if all we are doing is infact chasing non-existant ghosts. Help us out guys - we all want to get to the bottom of this.
I think given the abuse they have been subjected to on this forum, even if they had something to say, they would do so to the administrators and not to PPRUNE. I know I would keep completely silent in their shoes.
Littlewings
Being unable to see any fundamental reason for the increasing losses you detail in recent years (other than possibly a smaller fleet and two bad summers reducing work), I can only attribute the losses to a failure to invoice work on a massive scale.
During the period where losses mounted the cost of sales actually exceeded the turnover, which seems quote an acheivement. If there was heaps of uninvoiced work then, assuming there was any record of the work, the value of this work ought to have been included as an asset in the accounts. There is some work in progress and other trade debtors but not enough. I wonder if anyone actually knows who needs invoicing and for what?
What is probably the most difficult figure in the whole accounts is the £182,084 which the Aero Engineering Business owed to its parent company, the Aero Club at 28/02/2003.
I am not an accountant, but these are not the accounts of a healthy company. A question I would pose to anyone who was a board member of the parent company, and in particular to the directors of the engineering business itself, is why was this situation allowed to develop, and to continue to develop?
Going back to the £182,084 owed by Engineering to the Club, of course this figure is shown in the Club as an asset. So with the balance sheet showing a value on the club of around £415k, we should understand that £182k of this was pretty illusory.
In greater detail:
Tangible Assets were
Planes and equipment £197,726
Land and Buildings £ 62,826
Fixtures and Fittings £ 24,204
Total Fixed Assets £ 284,757
Current Assets were
Stock and W.I.P £ 2,072
Cash £15,828
Other debtors £15,058
Owed by Engineering £182,084
Total Current Assets £215,042
Total Assets £499,799
less working capital and all liabilities of £84,571
gives a balance of £415,228 as the value of the club.
So.. around 44% of the value of our club was bound up in an engineering business which had little hope if any of ever paying back its parent company.
Now, assume that the engineering business can't pay the bills, the net assets of the club reduce to more like £233,000. And with the various debts that exist, it's easy to see why the club is verging on insolvency.
One final point; I understand there's a mortgage of £60k on RH. I can't see this in the accounts. Again, I am not an expert on reading accounts, but either this is debt incurred since 28 Feb 2003, or I am not reading the accounts right.