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Thanks Mr.B :D

I think as most of the websites have said that I have read today, we deserved it, we really should have won by 2 or 3 a fantastic save from Weaver near the end.

The possession at the end of the game worked out pretty even, I thought the sending off was a bit harsh, although I felt Sinclair's tackle warranted a Red Card ,so that evened it up for me.

We won because we played as a unit, everyone in the side has played together a long time now, only Sol is new to the team, so I think if we can maintain our home form we could be OK, although our next two home games are United and Chelsea so I am not expecting much from these games.

However you have to understand from my perspective that if we are going to survive at this level we have to beat teams like City, Boro, Bolton, Fulham, Charlton West Ham, Pompey etc at home, otherwise we will be back where we started.

Part of my dream came true though...we are sitting in a UAFA cup spot right now :o

I will enjoy the moment, I am sure SP will sort things out for you, and I wont be expecting much when we play at your place (although the last time we played there we did manage to win :D

Thanks for being a good sport :D

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Thanks for being a good sport :o

Well, you win some, you lose some eh :D

I think as most of the websites have said that I have read today, we deserved it, we really should have won by 2 or 3 a fantastic save from Weaver near the end.

I think it was more even than that TP. In fact shots, possession etc, we had more chances. But you capitalised on yours and we are not finishing. Oh well :D

From SkySports:- Last nights stats

Reading Team Statistics Manchester City

1 -----------Goals-------------- 0

1 --------1st Half Goals-------- 0

6 -------Shots on Target ------8

8 -------Shots off Target ------8

2 -------Blocked Shots --------3

6 ----------Corners ------------4

8 -----------Fouls -------------18

1 ----------Offsides ------------5

0 --------Yellow Cards --------4

0 ---------Red Cards ----------1

59.6 ----Passing Success---- 74.9

26 ---------Tackles ------------34

65.4 ----Tackles Success ----70.6

40.1------ Possession --------59.9

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ThaiPauly again no disrespect intended but Reading were hardly ayt the races for large parts of the game and to claim you should have won by 2 or 3 nil is to be polite ridiculous :o

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All the best for the rest of the season to you as well Mr.B

Cheers TP :D I'm a tad gutted this morning :D But well done Reading

Well am i pissed off this morning!!!Once again ty pical bloody City.Following our great win against Arsenal we go and ###### it all up and get beaten by Reading for crying out loud.No disrespect meant to Reading but it was evident that City were the vastly superior team and we had huge portions of possesion in one 10 minute period according tro sky it was over 72%!!but we justr cant put the ball in the net!!!!This apart from being embarrising is becoming a serious problem.1 goal from 4 games and none from open play.Guess what?We are the only Club in the country with this unenvious statistic!!!I really do despair because as ive all ready alluded we actually played really well last night but were lacking the final ball and our ever glaring weakness on the left hand side was there for all to see!!

On the positive side nicky Weaver was superb again and i really feel he is justified no 1 status and indeed will be very annoyed if Pearce(who i am beginning to question somewhat)drops him.Also Dunne was equally superb along with Distin.Sinclair ran hisa socks off again and Barton looks like he is getting back to his best.So its not ALL doom and gloom but heck we really need to sort out our strike force!!!

Yep, not much to add to that. Except that, the sending off for Dabo was ridiculous, no intent, no elbow and now he will miss vital games. :D

Yeah, don't you just hate it when that happens. I especially hate it when it happens in pre-season games that mean <deleted>*k all....! :o:D:D


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Yeah, don't you just hate it when that happens. I especially hate it when it happens in pre-season games that mean <deleted>*k all....! :o:D:D

Agreed Red. :D Rooney was treated disgracefully by the FA.

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Thanks Mr.B :D

I think as most of the websites have said that I have read today, we deserved it, we really should have won by 2 or 3 a fantastic save from Weaver near the end.

The possession at the end of the game worked out pretty even, I thought the sending off was a bit harsh, although I felt Sinclair's tackle warranted a Red Card ,so that evened it up for me.

We won because we played as a unit, everyone in the side has played together a long time now, only Sol is new to the team, so I think if we can maintain our home form we could be OK, although our next two home games are United and Chelsea so I am not expecting much from these games.

Thanks for being a good sport :D

Yep, you read but didn't watch judging by your comments. If being under the cosh for huge parts of the game and playing on the break at home is a definition of "we deserved it" well fair play to you, but i'd put it like this - we dominated the game, failed to capitilise on it and you took your chance.

Sorry but disagree on the red cards point, there wasn't a challenge in the game worthy of a red but we know how refs are these days with those cards - i.e Dickov's booking at Chelsea for buzzing round the goalie.

Anyway its going to be a long hard season for both of us judging by what i've seen this season. For us, if no one steps up to score goals regularly we'll end up with Barton top scorer with <10 goals. Shit. :o

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http://www.uit.no/mancity/ is the unofficial Manchester City supporters'

home page. Created in 1994, it is the longest running of the Manchester

City related web sites. Back issues of MCIVTA are also hosted on the site.

If you don’t already get the brilliant MCIVTA twice a week newsletter, you should subscribe – free.


This is the first of a promised series of articles in the lead up to the

publication of the annual report and general meeting. In it, I have

attempted to clarify the share-holding position, the structure of the club

and who does what on the board.

1. The Club's Shares, Ownership and Management

Manchester City is a "publicly quoted" company. This doesn't mean that

we're always in the press but that our shares are traded on a recognised

stock exchange and can be easily bought and sold. The market involved is

called Plus (formerly Ofex) and specialises in smaller to medium size

companies. Their website can be found at www.plusmarketsgroup.com. The

Manchester City page can be found at:

www.plusmarketsgroup.com/details.shtml?ISIN=GB0005599336. Other sporting

members of Plus are Arsenal, Glasgow Rangers and Northampton Saints Rugby


Anyone can buy the shares, through a stockbroker, and being a shareholder

entitles you to attend the Annual General Meeting, vote on various matters

and question the directors. The AGM is a statutory requirement and is

usually held in December, following the publication of the annual report

and accounts in October. In the past, with the various boardroom

upheavals, these have been lively affairs but have been quieter recently.

However, the handling of last year's meeting led to some dissatisfaction

and, with increased focus on the finances following the sale of SWP,

things could start warming up again!

The more shares anyone has then the more they have the capacity to

influence events. On the basis of "one share, one vote" then anyone who

owns over 50% of the shares controls the company. In the case of our

friends in Salford, the Glazer family (bless them) own virtually all the

shares and have made their company "private". This means they do not have

to issue accounts publicly or hold an AGM. Therefore their supporters

don't have a clue. Sorry, that should read …don't have a clue about the

financial affairs of the company.

We know who the major Manchester City shareholders are as there is a

requirement for public companies to declare any shareholding of 3% and

over and these are detailed in the annual report. There are just over 54

million City shares in circulation and the current share price is quoted

as 28p. This is what is known as a "mid-price" as the price for buying a

share is higher than the price for selling. So currently you can buy

shares at 29p each but would only get 27p each if you sold them

immediately. The difference is the stockbrokers' profit margin. There is

no minimum investment but many brokers will levy a flat dealing charge up

to a certain level. So the fewer you buy, the greater the average cost per


The share price is a reflection of the financial worth of a company and

its perceived prospects. Multiplying the number of shares by the mid-price

gives what is known as the market value of the company. Therefore, in

theory, MCFC is valued at just over £15m. Compare that to Aston Villa,

which has just been sold for about £64m (but there are reasons for the

higher valuation). MCFC has over 5,000 shareholders but there are four who


The largest group of shares are held between John Wardle, the Chairman,

and his former business partner in JD Sports, David Makin. Some are held

in John Wardle's own name and some are held jointly between him and David

Makin but the overall holding totals 29.95%. The significance of this

level of holding is that anyone who owns 30% of a company's shares is

obliged to make an offer to buy the shares of the other shareholders.

Therefore unless they plan a full takeover of MCFC then Messrs Wardle and

Makin will keep their maximum shareholding at this level. Although they

don't own over 50% they clearly have a large say in events at Manchester


The next largest shareholder is the Boler family. The late Stephen Boler

built up a substantial stake in MCFC some years ago and this currently

represents 18.75% of the shares. Sadly, he died in 1998 but his family's

interest was represented on the board by Ashley Lewis for a number of

years. He stood down last year but Stephen Boler's son, Mark, joined the

board earlier this year. Stephen Boler was a friend of Peter Swales and

was believed to be very upset about the way Swales was treated at the time

of the Francis Lee takeover.

The third largest shareholder is BSkyB, with 9.88%. Sky has held shares in

a number of clubs and was blocked from a takeover of Manchester United a

few years ago. It is unclear what their motive is in owning shares in

football clubs although it may have something to do with being able to

influence negotiations on TV rights. They bought their stake when we were

running away with the First Division in 1999 and paid £7.5m for it. It is

currently worth around £1.5m so they are sitting on a big loss.

The last of the big four is Francis Lee, who of course endured a turbulent

period as chairman after an acrimonious battle with Peter Swales. He still

owns around 7% of the shares and, like the others, is probably sitting on

a big loss currently. Lee is not on the board and it is unclear whether he

is just hanging on to his shares until the price increases further or

whether he has other plans. However, if the share price carries on towards

50p it will be interesting to see what all the four groups do.

Between them, these four own around two-thirds of the total shares. This

leaves one third of the shares in the hands of around 5,000, smaller

shareholders. There are many people, like me, that have a few hundred

shares and about 300 of us turned up to the last AGM.

Many companies pay a dividend on their shares. This is expressed in pence

per share and is a share of the profits given to the investors (i.e. the

shareholders). It is akin to interest on your savings except that it might

be nothing or could be a very good percentage in any given year. This, as

well as the fact that shares can increase in value, is the reason that

stocks and shares have become a popular and standard form of investment.

MCFC shares have not paid a dividend for many years because the financial

performance of the company has meant there is insufficient cash to fund

this. Even a dividend of a penny per share would cost us over £500k and

just imagine what SP could do with that!

However it is interesting to note that the share price has been rising

steadily and has doubled over the last 12 months. There is no obvious

reason for this but it may reflect a feeling that the finances are

improving, there is a potential investor waiting in the wings or simply a

view in the markets that, in view of the takeovers of Manchester United

and Aston Villa among others, football club shares could be a worthwhile

investment again. They still have some way to go to reach their highest

price over the last five years, which is just over 50p. There are a number

of clubs where groups of supporters known as Supporters Trusts, own some

or all of the shares in their club and there was an article on this in

MCIVTA 1251. If we (the supporters) could somehow combine these small

holdings into a more significant bloc (say of 10% or more) then we could

wield far more clout than we do now.

The club is run by a Board of Directors, who have a number of legal

responsibilities (such as preparing accounts). The board at MCFC, in

common with many other companies has a Chairman and a Chief Executive,

plus a number of other directors. In our case there are three more

directors and this is on the low side as other clubs can have seven or


Directors can either be "Executive" or "Non-executive". The former are

full-time employees of the company and are paid a salary. Typically, there

would be a chief executive and a finance director, and maybe some others

(Marketing, Sales, Operations, etc.). Non-executives are not full-time

employees, although they are usually paid a fee and expenses. Their role

is to guide the executive directors and also act as a check and balance,

to ensure that the executives act in the best interests of the

shareholders. They may well be executive directors of other companies. The

question is often asked "What do these people do for Manchester City?"

The chairman has overall responsibility for setting the direction of the

club and, as I have already detailed, our chairman is also the major

shareholder. The chief executive has overall responsibility for running

the business side of things and most, if not all of you will already know

that our chief executive is Alistair Mackintosh. He is a chartered

accountant who was originally our finance director. He is not a major

shareholder (although he has a few thousand shares) but he is the only

executive director. It is only relatively recently that full-time, paid

directors were allowed at football clubs. Martin Edwards and Doug Ellis

were among the first to take advantage of this change.

The other directors are Brian Bodek, Dennis Tueart and Mark Boler. All of

these, as well as John Wardle, are non-executive. Bodek is an executive

director of a couple of other companies and is a qualified solicitor.

Tueart needs no introduction as he was one of our finest players of the

last 30 years but he has also built up a very successful sports promotion

business. At the last AGM, it was stated that Brian Bodek provides

valuable (and free) legal advice to the club and Tueart has responsibility

for playing affairs. Neither Tueart nor Bodek are significant shareholders

although, like Mackintosh, they have a few thousand shares. Mark Boler

represents the interests of the Boler family. They have a near 20% stake

in the company and it is usual for anyone with this level of shareholding

to have a seat on the board if they want one. In that way they can keep a

close eye on their investment. It is generally believed that Brian Bodek

performs this role for BSkyB.

Therefore not all of the directors are major shareholders. Bernard

Halford, as Company Secretary, will also attend Board meetings.

At the beginning I said that MCFC was a publicly quoted company. In fact

MCFC consists of a number of companies. The most important of these (and

the one in which the shares are publicly traded) is Manchester City PLC

(standing for Public Limited Company). You might think the word "limited"

refers to our footballing ability but in fact it means that the

shareholders are protected against having to pay any outstanding debts of

the company if it fails. So their liability, if this were to happen, is

limited to the amount they have paid for their shares. Manchester City PLC

actually owns three other companies that make up the group.

One is Manchester City Football Club, which is self-explanatory. There are

various reasons why the football club is owned by another company and one

is that there were various restrictions placed on football clubs by the FA

that can be got round by having a so-called holding company (not to be

confused with a holding midfield player). This is a company that is set up

for the purpose of owning a majority or all the shares in another

associated company. Tottenham Hotspur was the first to go down this path

in 1983.

The two other subsidiary companies are Manchester City Investments Limited

and Manchester City Property Limited. The former "owns" the long term,

£44m debt issued a few years ago and the other, I believe, "owns" the

lease on the stadium (more of these in a subsequent article). The

establishment of these companies may well have been a requirement for

these transactions.

I hope this has given you some idea of the structure and ownership of

MCFC. If anyone has anything to add to this or I have made any howlers

then please feel free to tell me or preferably publish your views in

MCIVTA. I would also be grateful for any feedback as to whether the level

is right or not. In the next instalment I plan to look at the contents of

the Annual Report and talk about the Annual General Meeting.

Colin Savage (colin at cjsavage.co.uk)

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Stuart Pearce has accepted the punishment meted out on Ousmane Dabo :o with good grace, but is still of the opinion that the player's dismissal against Reading was harsh.

The former Lazio man was given his marching orders for catching Reading's Steve Sidwell with a stray arm during Manchester City's defeat on Monday night.

Replays showed the contact to be minimal, while it also looked accidental, but an FA panel upheld the initial ruling of referee Howard Webb - meaning Dabo will have to sit out the next three games.

Pearce has reacted philosophically to the news, with the ruling handing a chance to another of his midfielders, possibly Dietmar Hamann.

"Sky TV said they didn't think it was a sending off, Sidwell didn't think it was a sending off but obviously the referee did," Pearce said on Sky Sports News.

"We appealed and wouldn't have done so if we didn't think we had a decent case, but that appeal was turned down, we accept that and move on and someone else will play in his position."

It appeared as if there was unrest in the City camp at Reading, as Micah Richards flew into a rage when substituted during the game.

Pearce is looking to draw a line under the affair after revealing Richards has apologised for his reaction.

"He made a beeline to see me yesterday morning and apologised for his behaviour, which is fine with me, there's no problem," added Pearce.

"I knew on Monday that some good would probably come out of it and I think he will be more mature in response to it."

Edit / / From SkySports http://home.skysports.com/list.aspx?hlid=4...pts+Dabo+ruling

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Bad luck at Blackburn guys, but at least you stuck 2 goals past them.. I dislike Blackburn intensely, mostly because Robbie Savage plays for them. They are a very physical team, and I think they were desperate for some points.

You will bounce back..home game next week

Chok Dee


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Pearce rues missed chances & defensive lapses 17/09/2006 18:08 :o:D

Stuart Pearce could not hide his disappointment at the way City slipped to defeat Ewood Park, despite creating a host of good chances.

City dominated the opening phase of the game but fell behind to an own goal by Trevor Sinclair at a free kick that was Rovers’ first meaningful opportunity. More defensive lapses cancelled out Barton’s strike and Ooijer’s own goal.

Pearce said: “I'm very disappointed, we have conceded at two set plays that have been whipped in, they were ordinary balls. One's gone in off my player and the other's gone in directly. At a throw-in we've been caught with our trousers down, and it's disappointing for me.

“We have created a wealth of chances today, not taken them and we really have to be hard-nosed about things. We have to know exactly what we are about, and do those jobs for 90 minutes.

“In earlier games we did not create too many chances but defended stoutly. We went to Reading, played extremely well but came away with nothing. We started today in the same vein from Reading, if not better. We created a lot of chances, but you have got to take them.

“They scored four goals and maybe had only five chances, you have got to do that in the Premiership. You have also got to make sure you don't gift goals at the other end.

“We need to keep our shape a bit better over 90 minutes and keep creating the kind of chances we did today. We were on the road and still created a few opportunities, and if you get your nose in front your life is made a lot easier. We have not done that, and we keep having to try to come from behind time and time again.”

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http://www.uit.no/mancity/ is the unofficial Manchester City supporters'

home page. Created in 1994, it is the longest running of the Manchester

City related web sites. Back issues of MCIVTA are also hosted on the site.

If you don’t already get the brilliant MCIVTA twice a week newsletter, you should subscribe – free.



The Annual Report and the AGM

Firstly, thanks to everyone who gave me feedback. It was very positive and

has encouraged me to carry on in the same vein. So here's the next

instalment, covering what goes into the Annual Report and what happens at the

Annual General Meeting.

Like any business, Manchester City plc prepares annual accounts. With them

being a public company, these accounts are sent to shareholders and are made

generally available to anyone else who is interested. The link for these is

as follows: http://www.plusmarketsgroup.com/reports.sh...IN=GB0005599336.

These follow a fairly standard pattern as required by company law and market

regulation. So what's in there and what does it all mean? I'm going to

concentrate on the general headings here but I will go into the 2005 figures

in more detail in subsequent articles.

Taking the 2005 Report as my template, the first page (2) details the

directors and the various advisers - our main bankers, auditors, solicitors,

etc. Nothing terribly remarkable here - all our advisers are well known and

very reputable companies. Brian Bodek used to be a partner at Kuit, Steinart,

Levy, one of the solicitors we use. He left in 1998 but is still listed as a


The next few pages (3 - 7) contain the Chairman's Statement. This is a report

on the past year written by John Wardle and sums up our financial

performance, on-field performance and other items of interest. In most

company reports, these tend to be pretty formulaic, with little illuminating

comment. It should be noted at this point that these accounts cover the year

to 31May 2005, which is our financial year-end. However, any significant

changes between then and the finalisation of the report have to be reported.

One such change was the sale of Shaun Wright-Phillips to Chelsea, for a

guaranteed £21m, and Wardle talks of his surprise at SWP's sudden change of


One of the statements that is revealing concerns the uses of the proceeds

from that. These include investing in the Academy, reducing outstanding

borrowing and paying off all outstanding instalments on players purchased in

previous seasons. Oh, and whatever's left might be spent on new players. So,

in other words, goodbye to any lingering hopes we might have had that the

sale represented a superb opportunity to build a strong squad that could

capitalise on our eighth place finish. He makes it clear that he considers it

more important to strengthen the balance sheet than the team.

He also talks about reducing the debt and backs it up with some figures to

show how our debt is reducing. Net external debt, he tells us, is down from

£50m in 2004 to £38.5m and total debt down from the oft-quoted £62.2m in 2004

to £57.7m. So that's good isn't it? Well in the next article I'll discuss our

debts but in the meantime make a note of what you think our total debt really

was in 2005. The answer might surprise you.

The next few pages (8 -15) are the Directors Report and associated

statements. There is some detail about each director although it doesn't make

it clear whether each director is executive or non-executive (as it should).

I talked about the difference between the two in my last article and

identified which directors fell into each camp.

The Report is in a pre-defined format but there are some interesting bits

worth noting. Firstly, each director has to formally retire and offer

themselves for re-election every three years and in 2005 it was Brian Bodek's

turn. This is usually fairly straightforward but some of you may remember

that Magnier and McManus were able to put pressure on the Manchester United

board by voting against the re-election of a couple of retiring directors. We

can see that, just before the year-end, Ashley Lewis resigned as a director.

The next section on Substantial Interests is really important. It lists any

shareholdings known to consist of 3% or more of the total shares. This means

we know who the major shareholders are and whether there have been any

changes from the previous year. Generally speaking, any significant changes

would have to be reported at the time they occurred, rather than waiting

until the accounts are published. Therefore we already know that Mark Boler

became a member of the Board earlier this year.

The first section on Page 10 (Corporate Governance) is particularly

interesting in this report. It details how the company ensures that it is

managed correctly at the highest level. They should comply with something

called the Combined Code, which sets out best practice in this area, and they

should be able to demonstrate how this was achieved during the year in

question. So they talk about regular board meetings and scrutiny of the

financial results to ensure any problems are identified early.

The Combined Code talks about the establishment of committees to ensure that

proper financial controls and suitable accounting policies are in place (the

Audit Committee) and one that covers all aspects of directors' and senior

management remuneration (the Remuneration Committee). These should both be

made up of at least two, non-executive directors, according to the Code. The

Audit Committee should ultimately ensure that a Chief Executive and/or

Finance Director are looking after the financial side of things properly but

look who's one of the two members of the Audit Committee. It's none other

than Alistair Mackintosh, who IS our Chief Executive (and therefore an

executive director rather than the non-executive suggested by the Combined

Code. So effectively he is checking his own work, particularly as he was also

our Finance Director previously (and still is to all intents and purposes).

Up to 2005, Ashley Lewis had been on the Audit Committee but he was no longer

a Director at this point.

I wrote to Alistair Mackintosh to query this after the last AGM and he

replied that our external auditors were happy with this. However, he did not

make it clear how they had indicated this. It could be that he meant that

they had not said they were unhappy, which is not quite the same as

specifically saying they accept the situation. It will be interesting to see

if the position has changed in the next report.

The Remuneration Committee report takes up the next few pages (12 -14) and

this is another safeguard designed to ensure that the executives and senior

managers don't simply award themselves inflated salary and benefit packages.

There is a section on share options, which are supposedly a device to reward

executives for their performance by giving them a stake in the company,

potentially at an advantageous price. A share option gives an executive the

chance to buy shares within a defined time period at a fixed price.

Mackintosh therefore has the ability to buy up to 200,000 shares at any point

up to March 2010 at 45p each, regardless of the market price at the time. If

the market price were significantly in excess of 45p then this would be a

very valuable benefit but it is clearly not in his interest to pay 45p for

shares that anyone else can currently buy for 29p. The incentive, from his

point of view, is to push the share price up via attracting external

investment at a suitable price or superb financial performance.

The final part of this section details the shareholding of each director and

their remuneration for the year. Mackintosh received a salary of over

£170,000, a bonus of £50,000 plus a £10,603 contribution to his pension fund.

Page 15 is a statement of the directors' legal responsibilities.

Page 16 contains the Auditors Report. The auditors are an external, properly

qualified accountancy company (in our case KPMG). They are supposed to ensure

that the accounts presented fairly represent the true state of affairs of the

company. They will have examined the accounting records and checked that the

accounting policies we use to state the figures are appropriate, prudent and

take into account all foreseeable circumstances. They will ensure that

transactions have been properly recorded and reflected in the accounts. So,

for example, they would want to be sure that our attendance figures are

recorded accurately and that all the associated revenue from those tickets

had found its way into the accounts.

As a former auditor myself, I had to do things like count millions of bricks

in a brick-maker's yard (as the correct stock figure is critical) and stay in

a casino all night until seven in the morning to ensure that the cash and

chips were properly counted and balanced. So if you see someone in a suit and

tie going round with a clipboard during a game counting heads, you know what

they're doing! The auditors will (or should) have questioned the directors on

key matters, where required and their answers will be reflected in these

accounts. I'll talk about some of the accounting policies in subsequent

articles but at this point will say that there can be many different ways to

represent the financial situation of a transaction or asset and these can

have a material impact on the figures. Therefore it is important that an

appropriate policy is used.

Finally the auditors express their opinion that, in this case, the accounts

fairly represent our financial situation. This is not an absolute, cast-iron

guarantee that things are OK however as a board determined to misrepresent

their figures (eg Enron) will do so. KPMG (one of my former employers, I

should add) are one of the biggest and most reputable accountancy firms in

the world but even they can get things wrong. They signed off the accounts of

another former employer in 2001, just weeks before this company collapsed in

a big heap! This is still all subject to legal proceedings so I'd better not

say any more. If they do uncover material irregularities then they should say

so in the auditors report but someone adding up their expenses wrong is not

usually going to affect anything to any great degree.

The auditors are engaged by the directors but carry out their work on behalf

of the shareholders, who have to formally re-elect them every year at the

AGM. They can also be changed by the directors if they feel the situation

warrants it. It is most important that the external auditors are seen to be

independent of the directors. Therefore it would not be appropriate for a

close relative of one of the directors to be responsible for the independent

audit. It could be seen as a little surprising that the Manchester office of

KPMG is the one which carries out our audit, as this could involve City fans

on the auditors' staff having access to details that other fans don't, even

though they have a strict duty of confidentiality. However, when I think

about it, if we were to use the London office there is the danger that too

many Manchester United fans could potentially be poking their noses into our

books so, on the whole, it's probably safer using the local office.

The rest of the report contains the real meat and bones, ie the figures. I'm

going to cover each section in detail in subsequent articles but there are

the accounts themselves, consisting of three financial statements, plus the

associated notes. The financial statements follow a prescribed format. The

first (Page 17) is the Profit and Loss Account and this shows our total

income and expenses during the year under review, together with the

equivalent figures for the previous year. (Page 18 is to do with property

valuations and their impact on our profit or loss).

The second major financial statement (Page 19) is the Balance Sheet and this

shows our assets (ie the things we own or are owed) against our liabilities

(the things we owe to others). The third and final statement is the Cash Flow

Statement. This reveals how much cash we actually generated or consumed in

total in the year. I'll discuss this in more detail later in the series but

it is important to be aware that a company can report healthy profits but not

actually generate any cash and, for a football club, cash is crucial as we

need it to fund transfers. In some ways it is the most important and

revealing of the three statements.

If you have a copy of the accounts or are viewing them on-line, you will see

a column called "Notes" in all three statements and figures in this column.

These are references to the final section which, not surprisingly, is the

Notes to the accounts (Pages 21 - 38). They say the devil is in the detail

and this section is the Underworld. There are explanations of the accounting

policies adopted and more detailed explanations of some of the figures in the

accounts. Therefore you will find in here how our turnover is split between

gate receipts, TV income and other income, plus many other items of interest,

including details of our debts and how we pay for the stadium.

So that is the Annual Report. When this has been issued and shareholders have

had some time to digest it, it forms one of the central parts of the Annual

General Meeting. This is a statutory meeting where the shareholders are

invited to attend and have the chance to question the board and generally

takes place in December at CoMS. Typically there will be a number of formal

pieces of business:

- A vote on the adoption of the accounts. This means that the

shareholders get the chance to say whether they agree with the accounts

as presented. Any contentious items can be queried with the board at

this point.

- A vote to re-appoint the auditors (or appoint different ones)

- A vote on the re-election of directors. Each director has to stand down

and offer himself for re-election on a regular basis and ensuring a

couple of directors were not re-elected was how Magnier & McManus

signalled their displeasure with the Manchester United board. With

close to 50% of the shares in the hands of two directors, there would

need to be a serious fall-out between Boler, Wardle & Makin to do the

same thing at City.

- A vote on any other resolutions presented by the board. This could be

an increase in the number of shares issued or a change to the rules of

the company to allow them to do something they couldn't do before.

Sometimes these can be seemingly innocuous but have a sting in the

tail. Some will require a simple majority (ie over 50%) in favour but

some more far-reaching ones might need two-thirds or three-quarters of

the votes in favour.

As far as the voting is concerned, you can (if a shareholder) turn up in

person and a few hundred did last year. You can request that your vote is

cast a certain way or that someone else has the ability to cast a vote on

your behalf as they see fit. As I said, this is the one real chance you get

as a shareholder to question the board and hear what they have to say and the

City AGM has been the scene of many a verbal bloodbath in the past!

At the last AGM, Stuart Pearce gave a short speech about the playing side and

answered some questions but no discussion of individual players and their

contracts is allowed. Finally there was an open Q & A session but it only

lasted half-an-hour. The questions range from the serious (the SWP transfer)

to the banal. The board should come out of this session feeling they've been

put through a mangle but have succeeded in justifying their actions to

shareholders. They had a very easy ride in 2005 but hopefully, with all this

knowledge MCIVTA readers will have, they will have to earn their money at the

next AGM.

In the next article I will be discussing the financial situation regarding

CoMS and analysing our debts. I think I can assure you of a fascinating read!

Colin Savage (colin at cjsavage.co.uk)

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It pains me to write this it really does as i honestly thought that Stuart Pearcewas a breath of fresh air when he started as manager of City,however sadly that same air appears to be going stale and i am getting sick of Pearces excuses about how we are not taking our chances or how much bad luck we are having etc etc.Ive heard this same crap for over 20 games now and its beginning to approach the time when City directors need to start asking questions about the validity of Pearces employment.I dont know precise figures bur i reckon we have accumulated a max of 8 points in our last 15 games!!!Instead of excuses Pearce it his job to sort out this mess and sadly i fear as manager he is failing to do this,anyone agree ???

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Instead of excuses Pearce it his job to sort out this mess and sadly i fear as manager he is failing to do this,anyone agree ???

Sadly, Yes i do :o:D

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