Town's annual report and accounts reveal that the club made a loss of £3.17 million and took their overall debt to £35.75 million during the year to June 2005. However, chief executive Derek Bowden says the loss was to be expected in the first year without a Premiership parachute payment.

Bowden told TWTD: "I don't think fans should worry about the £3 million loss as it was always forecast that we'd make a loss this year. It's the first year without a parachute payment with one or two players still on Premiership wages.

"It's actually less of a loss than we budgeted and we're looking at a reduction in that loss for 05/06, so I don't think fans have anything to worry about."

The sale of Darren Bent to Charlton prior to the end of June 2005 prevented the loss from reaching £5 million, a figure which Bowden says would still have been within budget: "We've taken all of the Darren Bent fee into last year's accounts.

"However, the money doesn't come in until December this year and June the following year, so we've taken the view that we won't spend the money until we've got it. So, from a profit and loss point of view, the sale is recorded in 04/05, but from a cash available point of view we've got another two instalments as yet.

"The loss would have been nearer £5 million without the sale of Darren Bent but we had a player sale budgeted for July and, as it transpired, Bent was sold in the previous financial year. But our budgeted loss for the year was around £5 million, so it tallies."

Chairman David Sheepshanks also says that the results had been predicted: "Although it is never pleasing in business to report a loss, supporters should not be alarmed by the headline figure reported today. Twelve months ago we alerted shareholders to the fact that the financial year to June 2005 would be a tough one.

"Along with our commitment to the last of the Premiership player contracts and buoyed by extra income from loan note holders and increased gate revenue, the club invested in strengthening Joe Royle's squad as we pushed for promotion. In the end, as we all know, we narrowly missed out."

Despite the overall loss, Sheepshanks says the business is covering its day-to-day costs: "When one looks at cash flow, the most critical measure in a football business, there was an increase in cash of £609,000 in the year. The cash flow from our current activities - ie excluding payments arising from the period of administration, but including paying the required amount of interest on the 25-year, £25 million loan notes [Norwich Union bond] - is broadly break-even.

"We have been able to maintain positive bank current account balances throughout the year, and it is fundamental that we continue to do so."

Town's debt to Norwich Union grew from £25.17 million to £25.9 million in 2004/05. The rest of the overall £35.75 million debt (up from £34.4 million) comprises £4.7 million to Barclays (pre-administration overdraft), £2.07 million in loan notes taken out by 'high value' investors since administration, £2.43 million in accruals and deferred income, £90,000 to other creditors, £79,000 of obligations under financial leases and hire purchase contracts and £384,000 owed on the CVA (Company Voluntary Arrangement).

Bowden says the club continue to meet with former administrators Deloitte and Touche and their major creditors on a regular basis: "Deloitte and Touche don't have to approve the accounts, but they are the supervisors of the CVA and we meet with them every quarter.

"It's very light touch really, unless we were in trouble, in which case it would be more heavy-handed, but we meet with them every quarter, as we do with Norwich Union and Barclays which is part of the CVA agreement, but is also sensible business.

"Deloitte are involved, they are aware of everything we are doing, but they see absolutely no reason to intervene in the day-to-day running of the club.

"The CVA ends in May 2007. I don't think we will notice a great deal of difference, we will be making slight fewer payments, those to the Crown (£389,000 in 2004/05) will have ceased by then, so there's a slight cash benefit at the end of the CVA. But in the way the club is run there will be no difference, we've run it prudently inside the CVA and we'll run it prudently outside it."

Town's turnover dropped from £24.37 million in 2003/04 to £17.48 million, the difference down to the lack of the £7.3 million parachute payment received in previous years.

The club's wage bill during 2004/05 was £7.1 million, above the budgeted figure of £5 million. Higher than expected crowds and additional investment via loan notes (£1.33 million) allowed the loan signings of David Unsworth and James Scowcroft, the permanent acquisition of Darren Currie and contract extensions for a number of existing players.

Chairman David Sheepshanks took out a new £50,000 loan note but no other directors added further to their investment in the club. The accounts reveal that Sheepshanks's annual salary is £67,000, while Derek Bowden receives £140,000.

The club would have launched a second share issue had they been promoted or reached the play-off final, however, after a second successive loss at the semi-final stage, the proposal was shelved but could still happen at a later stage. The planned offer would have asked existing shareholders to increase their stake in the club.

Bowden says that manager Joe Royle will not be forced to sell during the transfer window: "Unless there's an extraordinarily good football reason for players to leave in January there will be no movement. There's absolutely no financial pressure at all on the manager to sell a player and if anything we'd like to bring more players in between now and January.

"It could be a combination of both loanees or permanent signings. We'll take a view at the end of December based on attendances, and we may even have a good cup draw by then. If there's more money in the club, then more money will be made available to Joe."

The club's AGM will be held at Suffolk College on Thursday, December 1st when shareholders will vote on the appointment to the board of financial director Anna Hughes and sales and marketing director Andrew Goulborn, as well as the re-elections of existing board members Derek Bowden, Kevin Beeston and Holly Bellingham.

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