FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
COMPANY INFORMATION
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PEOPLE UMBRELLA LIMITED
CONTENTS
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PEOPLE UMBRELLA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2020
People Umbrella Ltd (formerly RACS Collective Plus Limited) commenced trading in September 2017 and has quickly become a market leading UK payroll solutions provider. The Company specialises in providing a range of payroll services to the contingent workforce industry via a portfolio of specialist products that are transparent to agencies and contractors and fully compliant with both the letter and intent of HMRC laws and regulations. These products enable contractors to be paid in a timely and tax efficient manner while also providing peace of mind for both agencies and contractors that they are fully compliant.
In July 2019 the Company was acquired by the PEOPLE GROUP, a group of companies that offer a variety of different products to the contingent workforce sector, including payroll, compliance and workforce management, all backed by new industry leading technology. Post acquisition, People Group carried out a significant restructure of the Group which has resulted in additional costs being incurred. However this restructure has provided the respective companies with the necessary tools and placed it in the best possible position to not only meet the future challenges of the industry, but also to take full advantage to the opportunities created by these challenges through embracing technology.
During the year the Company achieved turnover of £43,449k and operating loss of £693k. Included within the loss are costs relating to the integration of the Company into People Group and the subsequent restructure.
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PEOPLE UMBRELLA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
The Group Directors consider, both individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the success of the Group for the benefit of its members as a whole and having regard (amongst other matters) to factors (a) to (f) S172 Companies Act 2006, in the decisions taken during the year ended 31 March 2020. Specifically, the Board ensure in all decisions taken that:
∙
Business is conducted morally and ethically, in line with the Group’s Code of Conduct
∙
Short-term gains do not have an adverse consequence on the Group’s long-term strategy, success and benefits
∙
Employee welfare, training and interests are taken care of
∙
Customer and supplier relationships are strong, mutually beneficial and comply with Group’s policies (such as anti-bribery and corruption, anti-slavery and human trafficking and corporate social responsibility)
∙
Any community and environmental impacts as a result of the Group’s operations are considered
During the financial year, the company:
∙
Worked closely with its suppliers and customers to ensure that the cashflow impact of Covid was mitigated to the greatest extent possible for the benefit of all parties
∙
Continued to invest in its infrastructure throughout the last financial year, notwithstanding the significant financial pressures, in order to improve the customer experience
∙
Informally and formally consulted with its employees continually throughout the Covid pandemic to ensure its workspaces and working practices were Covid compliant, staff felt safe in their working environment, be that at home, the office or elsewhere, and on staff’s mental wellbeing.
This report was approved by the board
and signed on its behalf.
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PEOPLE UMBRELLA LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2020
The directors present their report and the financial statements for the year ended 31 March 2020.
The directors are responsible for preparing the Strategic report, the Directors' report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year
. Under that law the directors have elected to prepare the financial statements in accordance with applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the directors are required to:
∙
select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙
make judgements and accounting estimates that are reasonable and prudent;
∙
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The loss for the year, after taxation, amounted to £
734,800
(2019:
loss
£
940,465
)
.
No dividends were paid during the year.
The directors who served during the year were:
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PEOPLE UMBRELLA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
During the year ended 31 March 2020 the company made a net loss of £734,800 and as at 31 March 2020 had net liabilities of £1,935,444. These net assets include a net balance of £1,685,462 owed by other group companies. In the period since the Balance Sheet date the Management accounts of the company to 28 Feb 2021 show a net loss and net liablities position of £2,074,105. The company is therefore reliant on the ongoing support of its fellow group companies, and in turn its funders and shareholders.
The wider group to which the company belongs, People Group Operations Limited, in the period 31 March 2019 to 28 Feb 2021 incurred losses resulting in Balance Sheet Net liabilities of £1,873,403 representing an increase of £5,196 from 31 Match 2020. Since the year end (31 March 2020) the impact of the Covid-19 pandemic presents a risk to the company and the Group. The pandemic presents both risks to the Group's internal operations and a revenue risk in that it impacts on the demand for its services given the restrictions on contractors and employees being able to work, presenting a reduction in employment services the Group is able to provide. To help offset the impact of the pandemic the Group has reduced its overall cost base and have taken advantage of Government support schemes, such as VAT deferral and the Coronavirus Job Retention Scheme. In addition, the Group has implemented innovative strategies to support its contractor and temporary employee base through making such support schemes available to them. Whilst this has not been done without risk to the Group it is envisaged this will promote longer term employment, loyalty amongst the contractor base as well as being the "right thing" to do. Having regard to the Financial Statements contained herein the Director(s) has considered the financial position of the company and events since Balance Sheet date up to and including the date of the signing of the Financial Statements and the Directors Report. During the period under review Management:
∙
Have confirmed and validated all stated Third Party liabilities as at Balance Sheet date have been discharged
∙
Confirm that all Third Party Liabilities are current and approved Debts are paid when due
∙
Confirm that all Trade Debtors have been received
∙
Continue to carefully manage Cashflows and the Working Capital for the Group and all Group companies.
Management have prepared Cashflow forecasts for the period to 31 March 2022, as well as Budgeted Trading and Profit & Loss figures for the same period , which have been prudently prepared including the conservative assumption of ZERO growth in relation to contractor numbers. These forecasts demonstrate and Management have indicated that the Company and the Group will retain an ability to successfully manage Cash Flow and discharge all liabilities when due over the next 13 months and any requirements for additional funding will be met by the support from the Shareholder and the Groups funders. The Directors’ assumptions and outlook assumes that the Covid-19 pandemic disruption will continue to have a material impact until July 2021 with any recovery occurring steadily over the remaining forecast period to 31 March 2022 The financial statements do not reflect the adjustments that would be necessary should the ability of the Company or the wider Group to trade be further jeopardised 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. In addition to the above People Group Operations Limited, and it’s fellow group companies, have entered into a legally binding 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. 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.
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PEOPLE UMBRELLA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
Post acquisition, the company continued to invest in new Technology and product development. This includes on going re-modelling of products including products to cater for the changes in relation to IR35 which will become effective from April 6th 2021.
The company places considerable value on the involvement of its employees and has continued to keep them informed on matters affecting them as employees and on the various factors affecting the performance of the company. This is achieved through formal and informal meetings. Employee representatives are consulted regularly on a wide range of matters affecting their current and future interests.
The Company also places considerable value on the relationship it holds with suppliers, customers and other stakeholders.
Our customers are essential to our business and the Company works openly and transparently in fostering long-term customer relationships. Our business decisions and priorities are based on a good understanding of our customers and their requirements. We hold regular meetings with most of our customers at all levels within the business including the supply chain and commercial teams. Directors are involved in many of these meetings as and when required. The Company fosters open and transparent dialogue with the regulatory and industry bodies relevant to the Company’s business operations and products it produces. This also applies in its relationship with other key stakeholders such as its bankers, other funders, and external advisors.
The company is a low energy user, and therefore is exempt from the requirement to disclose actual energy usage.
Each of the persons who are
directors at the time when this Directors' report is approved has confirmed that:
The auditors, Bishop Fleming Bath Limited, will be proposed for reappointment in accordance with
section 485 of the Companies Act 2006.
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PEOPLE UMBRELLA LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2020
This report was approved by the board and signed on its behalf.
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PEOPLE UMBRELLA LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PEOPLE UMBRELLA LIMITED
We have audited the financial statements of People Umbrella Limited (the 'Company') for the year ended 31 March 2020, which comprise the Statement of income and retained earnings, the Statement of financial position, the Statement of cash flows
and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion the financial statements:
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to note 2.2 in the financial statements, which indicates that the wider group to which the company belongs, People Group Operations Limited ("Group" or "The Group"), had Balance Sheet Net Liabilities totalling £893,686 as at 31 March 2020. Since the year end the Covid-19 pandemic has further impacted the company and group financial position with the Group's unaudited management accounts recording further losses in the period to 28 February 2021. As stated in note 2.2, these events or conditions, along with the other matters as set forth in note 2.2, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.
The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our Auditors' report thereon. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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PEOPLE UMBRELLA LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PEOPLE UMBRELLA LIMITED (CONTINUED)
In our opinion, based on the work undertaken in the course of the audit:
∙
the information given in the Strategic report and the Directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙
the Strategic report and the Directors' report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors' report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
As explained more fully in the Directors' responsibilities statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
. This description forms part of our Auditors' report.
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PEOPLE UMBRELLA LIMITED
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF PEOPLE UMBRELLA LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body,
in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Chartered Accountants
Statutory Auditors
Minerva House
Lower Bristol Road
BA2 9ER
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PEOPLE UMBRELLA LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
REGISTERED NUMBER:
10831716
STATEMENT OF FINANCIAL POSITION
AS AT
31 MARCH 2020
The financial statements were approved and authorised for issue by the board and were signed on its behalf by
:
The notes on pages 14 to 22 form part of these financial statements.
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PEOPLE UMBRELLA LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
People Umbrella Limited is a limited liability company incorporated in England and Wales. The registered office is People Group House, Three Horseshoes Walk, Warminster, Wiltshire, BA12 9BT.
2.
ACCOUNTING POLICIES
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in
the UK and the Republic of Ireland and the Companies Act 2006
.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
During the year ended 31 March 2020 the company made a net loss of £734,800 and as at 31 March 2020 had net liabilities of £1,935,444. These net assets include a net balance of £1,685,462 owed by other group companies. The company is therefore reliant on the ongoing support of its fellow group companies, and in turn its funders and shareholders.
Since the year end (31 March 2020) the impact of the Covid-19 pandemic presents a risk to the company and the Group. The pandemic presents both risks to the Group's internal operations and a revenue risk in that it impacts on the demand for its services given the restrictions on contractors and employees being able to work, presenting a reduction in employment services the Group is able to provide. To help offset the impact of the pandemic the Group has reduced its overall cost base and have taken advantage of Government support schemes, such as VAT deferral and the Coronavirus Job Retention Scheme. In addition, the Group has implemented innovative strategies to support its contractor and temporary employee base through making such support schemes available to them. Whilst this has not been done without risk to the Group it is envisaged this will promote longer term employment, loyalty amongst the contractor base as well as being the "right thing" to do. Having regard to the Financial Statements contained herein the Director(s) has considered the financial position of the company and events since Balance Sheet date up to and including the date of the signing of the Financial Statements and the Directors Report. During the period under review Management: Management have prepared Cashflow forecasts for the period to 31 March 2022, as well as Budgeted Trading and Profit & Loss figures for the same period , which have been prudently prepared including the conservative assumption of ZERO growth in relation to contractor numbers. These forecasts demonstrate and Management have indicated that the Company and the Group will retain an ability to successfully manage Cash Flow and discharge all liabilities when due over the next 13 months and any requirements for additional funding will be met by the support from the Shareholder and the Groups funders. The Directors’ assumptions and outlook assumes that the Covid-19 pandemic disruption will continue
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
ACCOUNTING POLICIES (continued)
to have a material impact until July 2021 with any recovery occurring steadily over the remaining forecast period to 31 March 2022 The financial statements do not reflect the adjustments that would be necessary should the ability of the Company or the wider Group to trade be further jeopardised 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.
In addition to the above People Group Operations Limited, and it’s fellow group companies, have entered into a legally binding 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. 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.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:
Rendering of services
Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:
Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
ACCOUNTING POLICIES (continued)
DEFINED CONTRIBUTION PENSION PLAN
The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.
The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of financial position. The assets of the plan are held separately from the Company in independently administered funds.
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to their size or incidence.
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
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.
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
In the Statement of cash flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.
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.
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.
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
2.
ACCOUNTING POLICIES (continued)
Financial assets and liabilities are offset and the net amount reported in the Statement of financial position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Preparation of the financial statements requires management to make significant judgements and estimates.
Trade debt provision Management have considered risk of bad debts, and review debtor recovery positions monthly, any suspected bad debts based upon client knowledges and historical outcomes are provided for immediately. Recoverability of intercompany debt Management have assessed the recoverability of intercompany debt. Given that all debt is between companies that are 100% owned by People Group Operations Limited, there is no concern over the recoverability on the basis that each group company remains a going concern (see note 2.3). Amortisation of intangible assets excluding goodwill Management have assessed the period over which the intangible assets of the company such of software developed and trademarks will provide a benefit to the group. These assets are reviewed for any signs of impairment on a regular basis, and recognised as necessary. Recognition of deferred tax The tax computation for some group companies calculated a deferred tax asset as at 31 March 2020. On the basis that there is uncertainty of whether this asset would ever be realised, management have decided not to recognise a deferred tax asset in the financial statements.
The whole of the turnover is attributable to the companies principal activity. All turnover arose within the United Kingdom.
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
8.
TAXATION (CONTINUED)
An increase in the UK Corporation tax rate from 19% to 25% (effective from 1 April 2023) was announced in the Budget on 3 March 2021.
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
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PEOPLE UMBRELLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2020
Profit and loss account
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £619,057 (2019: £648,812). Contributions totalling £239,704 (2019: £154,864) were payable to the fund at the reporting date and are included in 'Other creditors'.
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