Watford are "extremely confident of a successful outcome" when the Football League delivers its verdict on the Hornets and Laurence Bassini's misconduct charge.

The Watford Observer revealed last month that the Hertfordshire side and their former owner Bassini had been charged with misconduct after alleged breaches of the Football League’s regulations.

It relates to two separate transactions that are said to have taken place in 2011 between the Hornets and a finance company called LNOC Limited.

One of the alleged transactions concerns two transfer instalments following Danny Graham’s move to Swansea City and the other is for two promissory notes worth £1.8m.

At Watford Association Football Club Limited's AGM last night, the Hornets confirmed proceedings were indeed taking place for the first time having previously refused to comment.

The top table consisted of director Stuart Timperley, who in the absence of chairman Raffaele Riva chaired the meeting, the Hornets' chief executive Scott Duxbury, head of finance Katie Wareham, company secretary Peter Wastall and Paul Windmill, of auditors Myers Clark.

Initially Timperley stated: "You will understand that it [the Football League charge] is something that I cannot comment on because we have ongoing issues in relation to the former owner and the Football League, and the club itself, and it would be inappropriate for me to make any comment on that in a detailed way. We are facing legal issues and we do not feel it is appropriate to comment."

Timperley confirmed the charges related to a period of time prior to the Pozzo family's takeover of the club, which was finalised on June 29.

When asked about the possibility of Watford receiving a points deduction, Timperley replied: "There is the possibility of a whole series of sanctions and I think I will leave it at that."

He later added: "For a number of years I chaired Football League tribunals so that is why I am a little circumspect about commenting.

"Scott has been extremely thorough in preparing for this so we are hopeful."

Duxbury added: "There is a wide range of sanctions that can be imposed, however, we continue to cooperate with the Football League so we remain extremely confident of a successful outcome."

The Football League charged the club and Bassini with misconduct in the summer and proceedings are still ongoing. Timperley said he expected a decision "by the early part of next year".

Watford Association Football Club Limited's annual accounts, which were released last month, claim Bassini’s Watford FC Limited received £2.13m from WAFCL for the year ending June 30 2012.

In the accounts, it states "a provision has been entered for the possibility of non-payment of this debt".

After the formal business of the AGM, the top table were asked whether they would be pursuing Bassini for the money the club claims it is owed.

Timperley replied: "There are other issues that are outstanding and we will be going through many issues."

The club gave Bassini the Yellow and Red Lion Pub in Vicarage Road as part of the takeover agreement. However, ownership of the pub has yet to be transferred.

Duxbury confirmed: "The Red Lion is in the process of transfer but at the moment the club still owns it."

"The Red Lion is in transition like the club," Timperley added.