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MGR HOLDINGS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE 15 MONTH PERIOD ENDED 31 DECEMBER 2025
2.Accounting policies (continued)
The Company acts as a holding company to MGR Foamtex Limited. The principal market of MGR Foamtex Limited is that of the airline industry. MGR Foamtex Limited has seen significantly improved turnover in the year ended 31 December 2025, and achieved a profit for the year for a second consecutive year. The Directors anticipate the business will continue to grow its revenues and profits over the foreseeable future.
The Directors have prepared forecasts and projections using what they consider to be reasonable assumptions relating to the Company’s financial performance, current financial position and existing financial resources for a period of at least 12 months from signing of the financial statements which show the Company to be a going concern. These forecasts include assessments in relation to MGR Foamtex Limited's outstanding loan facility and covenants contained therein as well as assessments in relation to the subsidiary's invoice discounting facility since the Company is reliant on the performance of its subsidiary.
The Company has received a letter of support from its immediate parent, Adhefin SAS, indicating that financial support will be made available, if required, for at least 12 months from the date of the audit report for the period ended 31 December 2025, to enable the Company to meet its liabilities as they fall due and continue trading.
Based on the above, the Directors are of the opinion that the going concern principle is applicable and that the Company, and its subsidiary, has the necessary resources to continue as a going concern for the foreseeable future.
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.
Revenue represents recharges of management charges to the Company's subsidiary.
Investments in subsidiaries are measured at cost less accumulated impairment.
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.
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Cash and cash equivalents
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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.
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.
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