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Financial Integrity, Football, Moral Integrity

Celtic 1993 Accounts/Cambuslang Development: Argument with Auditor and Differences in Valuations

Interesting comparing Celtic’s 30th June 1993 Annual Report and a paper obtained under FOISA from Scottish Enterprise entitled ‘SE(92)71 Board Paper, Glasgow Development Agency, Superstadium Project – Cambuslang’. Whole paper at the end of the blog post.

Firstly we’ll look at the Annual report for year ending 30 June 1993.

Qualified Opinion from Auditor 

Qualified opinion from Auditors 30 June 1993 annual report

Note the sentence ‘This is not in accordance with the requirements of Statement of Standard Accounting Practice No.12 and Schedule 4 of the Companies Act 1985.

In 1993, the Statement of Standard Accounting Practice 12 related to Depreciation of assets:

Statement of Standard Accounting Practice 12

Schedule 4 of the Companies Act 1985 relates to the Form and content of company accounts:

Schedule 4 Companies Act 1985

The Auditors also say loss before and after tax was understated by £122,374. 

This was when Celtic were a private limited company not listed on an exchange but still there’s creative accounting then there’s something else.

Note: Celtic had a new Auditor the following year.

Valuation of Celtic’s Property

Again from the 30 June 1993 Annual Report:

November 1992 feuhold building valuation


  1. Feuhold in Scotland is the equivalent of freehold in England and Wales. 
  2. This was before the development at Celtic Park. The board used this to claim Parkhead and Barrowfield was worth £14 million. Not sure even the Celtic fans at that time would have stretched to that valuation.
  3. This was before Glasgow City Council delivered the Westthorn [land of the expanding GCC ‘Blastzone’] and The Celtic Triangle [where Glasgow Ratepayers money disappears] land. 

Celtic Accounts year ending 30 June 1993

Profit and Loss:

Celtic Profit and Loss yr ending 30 June 1993

According to the Auditor the Loss for year ending 30 June 1993 after tax (which was zero) instead of £1,282,871 should have been £1,405,245.

Balance Sheet:

Celtic Balance Sheet yr ending 30 June 1993

Seems strange that if the directors had a £14 million feuhold property valuation that Fixed Tangible assets is only just over £8 million. Maybe even they didn’t want to stretch the valuation as far as Barr’s did?

Note: Net Asset Value of Celtic was £571,309. Just over a half a million pounds.

Cambuslang Document

During 1992/93, Celtic looked at transferring their football operations to land owned by Glasgow Development Agency, a subsidiary of the Scottish Enterprise Board.

Couple of interesting historical highlights from the SE(92) 71 document requesting approval for the Celtic deal obtained under FoI are found.

In 1992 Parkhead is only Valued by GDA at £2 million

GDA valuation of Parkhead 1

GDA valuation of PArkhead 2

Parkhead sale revenue 2 million

The above are excerpts from the GDA document and the first one even says the valuation of Parkhead of £2 million would be optimistic.

However Celtic’s board maintains that Parkhead plus Barrowfield is worth £14 million. Barrowfield would be very optimistically say £250,000 making Parkhead £13.750 million.

The valuation done by valuer James Barr & Son, Chartered Surveyors looks a bit iffy and you have to wonder what method/dartboard they used. It’s Depreciated Replacement Cost (DRC) method.

Depreciated Replacement Cost method

From a Plimmer and Sayce paper:

DRC method

Notice they are the actual costs of when the land was purchased and when the building was constructed. Both a long time ago so those costs would have been low. There would have been improvements over the years to add in. Depreciation on the property from the age of the buildings would have been very high. The buildings were very poor and the whole stadium required updating under the Taylor Report.

Yet James Barr & Son gives a figure of approx. £13.250 million for Parkhead.

The GDA figure of £2 million is an expected ‘value under sale’ while Barr’s figure of £13.250 million is for accounting purposes but they are way off being comparable. GDA would have had a very realistic finger on the market value of the land and under sale their figure would have been close. 

Question: What would the Net Asset Value have been with Parkhead as only £2 million? Hmmm

Celtic’s Overdraft at 30 June 1993 was £4.7 million

Celtic 30 June 1993 Overdraft 4.7 million

The Bank of Scotland was owed £4.7 million and held Fixed security over all freehold property (Parkhead & Barrowfield) and also a Floating Charge against all assets of the company. Now you can see why the James Barr & Son valuation had to be defended by the board else the board would have breached the assets backing of the overdraft.

GDA grant of £250,000 for Celtic to just to ‘work up the proposal’ on Cambuslang

GDA 250k grant to Celtic

How bad financially do you have to be for a public authority who wants to sell you land that it actually has to subsidise your evaluation of the proposal?

Celtic got £250,000 and didn’t even have to repay that grant if it didn’t go ahead which it didn’t obviously.

SE(92) 71 Glasgow Development Agency – Superstandia Cambuslang

SE 92 71 p1

SE 92 71 p2

SE 92 71 p3

SE 92 71 p4

SE 92 71 p5

SE 92 71 p6

SE92 71 p7

SE 92 71 p8

SE 92 71 p9

SE 92 71 p11

SE 92 71 p12

SE 92 71 p13

SE 92 71 p14

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