Sanctuary warns of ‘serious loss of capital’ ahead of accounting review

Sanctuary, the music group with the likes of Joss Stone, Robert Plant and
Elton John on its books, has warned that it is facing a ‘serious loss of
capital’ as it commences a review of its accounting policies.

In an announcement released this afternoon Sanctuary said that it was in
‘continuing discussions’ with auditors Baker Tilly as it undertook an accounting
review which would ‘alter the balance sheet significantly’ and see the group
show net liabilities on its 30 September 2005 balance sheet.

The group announced a review of its business in June, and has since
undertaken a cost reduction programme in addition to the accounting review
announced today.

Sanctuary said that the review could ‘give rise to prior year adjustments’,
‘alter its methods of estimation in certain areas’ and give rise to exceptional
items in its accounts.

The group said it was investigating whether the impact on its balance sheet
constituted a serious loss of capital as defined by Section 142 of the Companies
Act (1985).

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