PEOPLE CIS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2021
2.
ACCOUNTING POLICIES (continued)
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GOING CONCERN (CONTINUED)
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Management have prepared Cashflow forecasts for the period to 31 March 2023, as well as Budgeted Trading and Profit & Loss figures for the same period, which have been prudently prepared with the conservative assumption of no Contractor growth from numbers being achieved as at year end 31 March 2021. These forecasts demonstrate and Management have indicated that the Company and the Group will retain an ability to successfully manage Cash Flow and discharge liabilities when due over the next 14 months. Any requirements for additional funding will be supported by the Shareholder and the Group's funder.
The financial statements do not reflect the adjustments that would be necessary should the ability of the Company to trade be jeopardised due to a material issue with the ability of the Company or the wider Group to trade due to a material reduction in the level of revenue earned or the availability of its work force or other factors negatively impacting its working capital beyond its forecast tolerance. As such there is a material uncertainty related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business.
Accordingly on the basis of all available information and having regard to all relevant parties the Directors believe that the accounts should be drawn up on the “Going Concern” basis. This group profit and working capital forecast is partly a result of People Umbrella Limited entering into a Company Voluntary Agreement with its creditors and management forecasting compliance with its terms. Management believe this arrangement will enable the company to continue to meet its obligations going forward.
In addition to the above People Group Operations Limited, and its fellow group companies, have entered into an agreement whereby each “Group” company agrees to financially support and not withdraw funding to fellow group companies. This letter confirms support to all group companies such that intercompany balances cannot be withdrawn and funding will be provided to support the going concern basis of accounting of each company, as well as the group as a whole.
In addition, Management have obtained a letter of support from the ultimate controlling party Terence Hillier, to provide additional appropriate financial support should it be required.
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in non-puttable ordinary shares.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of income and retained earnings.
Financial assets and liabilities are offset and the net amount reported in the Statement of financial
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