JNF Holdings Limited - Limited company accounts 20.1

REGISTERED NUMBER: SC543651 (Scotland)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2021

FOR

JNF HOLDINGS LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

to

6

Consolidated Income Statement

7

Consolidated Other Comprehensive Income

8

Consolidated Balance Sheet

9

Company Balance Sheet

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Cash Flow Statement

13

Notes to the Consolidated Cash Flow Statement

14

to

15

Notes to the Consolidated Financial Statements

16

to

31

DIRECTORS:

Mrs C M Smith

Mr J B Smith Jnr

SECRETARY:

Masson Glennie LLP

REGISTERED OFFICE:

Little Mains

Crichie Woods

Stuartfield

PETERHEAD

Aberdeenshire

AB42 5DY

REGISTERED NUMBER:

SC543651 (Scotland)

AUDITORS:

Bain Henry Reid

Statutory Auditors

Chartered Accountants

4 West Craibstone Street

Bon-Accord Square

ABERDEEN

AB11 6YL

The directors present their strategic report of the company and the group for the year ended 31 December 2021.

The principal activity of the Group is the building and sale of residential property, sale of kitchen and bathrooms and letting of commercial and residential properties. The principal activity of the Company is that of a holding company.

REVIEW OF BUSINESS

The directors are satisfied with the results for the year. A number of developments are currently progressing well and the group continues to seek out suitable development sites. The group remains in a strong financial position at the year end. Financial key performance indicators are discussed below.

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and execution of the group's strategy are subject to a number of risks. The key business risks and uncertainties facing the group are considered below. The company and group considers itself to be structured appropriately to plan for and mitigate these risks.

Competitive Risk

The group operates in highly competitive markets and therefore a key factor is the ability to retain key customers, attract and develop skilled personnel and grow the business. The geographical spread of operations allows the group to be competitive and reduces the possible effect of failing to retain contracts.

Credit Risk

This is primarily attributed to trade debtors. All clients who wish to trade on credit terms are subject to credit verification procedures. To mitigate the credit risk, trade debtors are monitored on a regular basis and large contracts are set up to include the requirement for stage payments to ensure the level of bad debt risk is minimised.

Liquidity Risk

Due to the nature of contracts in the construction industry, liquidity and cashflow management require careful monitoring and control. The group has ensured they have adequate working capital and longer term funding facilities in place to allow operations to continue.

FINANCIAL KEY PERFORMANCE INDICATORS

In assessing the financial performance of the group, the directors monitor gross profit at development level as well as rental yield on properties. A summary of the results is as follows:

2021

2020

Movement

Turnover

£17.8m

£14.8m

20%

Gross profit

£3.0m

£3.0m

-

Gross profit margin

16.6%

20.4%

(3.8%)

ON BEHALF OF THE BOARD:

Mr J B Smith Jnr - Director

28 September 2022

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2021.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2021 will be £100,000 (2020: £70,000).

FUTURE DEVELOPMENTS

The directors continue to seek out sites for potential developments and remain confident in the company's future prospects. Sales remain strong and we expect to have turnover in the region of £19-20m for the year we are currently in. The main challenges going forward are the rising costs due to covid and war in Ukraine.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2021 to the date of this report.

Mrs C M Smith

Mr J B Smith Jnr

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group and 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

AUDITORS

The auditors, Bain Henry Reid, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr J B Smith Jnr - Director

28 September 2022

Opinion

We have audited the financial statements of JNF Holdings Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated Cash Flow Statement, Notes to the Financial Statements, 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:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 December 2021 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC'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.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors 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 this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

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 a Report of the Auditors 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

We obtained an understanding of the legal and regulatory frameworks applicable to the group and the company and the sector in which they operate. We determined that the following laws and regulations were most significant: the Companies Act 2006, health and safety legislation, the building regulations applicable to Scotland and planning laws and regulations applicable to Scotland.

We obtained an understanding of how the group and the company has complied with those legal and regulatory frameworks by making enquiries of management. We corroborated our enquiries through our enquiries of the group's legal advisers.

Assessing the design and effectiveness of controls management has in place to detect fraud, and understanding how those charged with governance have considered the potential for override of those controls, or other inappropriate influence over the financial reporting process.

We assessed the susceptibly of the company's and the group's financial statements to material misstatement, including how fraud might occur. Audit procedures performed during the company's audit included:

- Challenging assumptions and judgements made by management in its significant accounting estimates.

- Identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.

- Assessing the extent of compliance with the relevant laws and regulations.

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 Report of the Auditors.

Use of our report

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 a Report of the Auditors 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.

Karen E Gardiner BA CA CTA (Senior Statutory Auditor)

for and on behalf of Bain Henry Reid

Statutory Auditors

Chartered Accountants

4 West Craibstone Street

Bon-Accord Square

ABERDEEN

AB11 6YL

28 September 2022

TURNOVER

3

17,808,091

14,753,481

Cost of sales

14,857,145

11,749,433

GROSS PROFIT

2,950,946

3,004,048

Administrative expenses

2,140,797

2,166,518

810,149

837,530

Other operating income

79,744

635,522

OPERATING PROFIT

5

889,893

1,473,052

Income from other participating interests

56,250

56,250

Interest receivable and similar income

1,130

13,665

57,380

69,915

947,273

1,542,967

Interest payable and similar expenses

7

76,412

165,265

PROFIT BEFORE TAXATION

870,861

1,377,702

Tax on profit

8

135,077

273,442

PROFIT FOR THE FINANCIAL YEAR

735,784

1,104,260

Profit attributable to:

Owners of the parent

542,018

714,321

Non-controlling interests

193,766

389,939

735,784

1,104,260

PROFIT FOR THE YEAR

735,784

1,104,260

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

735,784

1,104,260

Total comprehensive income attributable to:

Owners of the parent

542,018

714,321

Non-controlling interests

193,766

389,939

735,784

1,104,260

FIXED ASSETS

Tangible assets

11

2,645,432

2,291,522

Investments

12

5,547

5,547

Investment property

13

1,510,713

1,510,713

4,161,692

3,807,782

CURRENT ASSETS

Stocks

14

20,702,213

19,927,652

Debtors

15

2,402,404

2,035,335

Cash at bank and in hand

2,048,515

1,857,233

25,153,132

23,820,220

CREDITORS

Amounts falling due within one year

16

17,207,227

16,796,662

NET CURRENT ASSETS

7,945,905

7,023,558

TOTAL ASSETS LESS CURRENT LIABILITIES

12,107,597

10,831,340

CREDITORS

Amounts falling due after more than one year

17

(2,847,300

)

(2,325,614

)

PROVISIONS FOR LIABILITIES

21

(247,510

)

(128,721

)

NET ASSETS

9,012,787

8,377,005

CAPITAL AND RESERVES

Called up share capital

22

1,336

1,336

Share premium

23

3,634,725

3,634,725

Retained earnings

23

2,224,858

1,782,842

SHAREHOLDERS' FUNDS

5,860,919

5,418,903

NON-CONTROLLING INTERESTS

3,151,868

2,958,102

TOTAL EQUITY

9,012,787

8,377,005

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2022 and were signed on its behalf by:

Mr J B Smith Jnr - Director

FIXED ASSETS

Tangible assets

11

14,984

17,629

Investments

12

4,627,781

4,627,781

Investment property

13

-

-

4,642,765

4,645,410

CURRENT ASSETS

Debtors

15

2,375,988

100,120

Cash at bank

22,081

102,353

2,398,069

202,473

CREDITORS

Amounts falling due within one year

16

2,488,171

349,278

NET CURRENT LIABILITIES

(90,102

)

(146,805

)

TOTAL ASSETS LESS CURRENT LIABILITIES

4,552,663

4,498,605

PROVISIONS FOR LIABILITIES

21

492

478

NET ASSETS

4,552,171

4,498,127

CAPITAL AND RESERVES

Called up share capital

22

1,336

1,336

Share premium

23

3,380,838

3,380,838

Retained earnings

23

1,169,997

1,115,953

SHAREHOLDERS' FUNDS

4,552,171

4,498,127

Company's profit for the financial year

154,044

162,258

The financial statements were approved by the Board of Directors and authorised for issue on 28 September 2022 and were signed on its behalf by:

Mr J B Smith Jnr - Director

Called up

share

Retained

Share

capital

earnings

premium

£

£

£

Balance at 1 January 2020

1,336

1,138,521

3,634,725

Changes in equity

Dividends

-

(70,000

)

-

Total comprehensive income

-

714,321

-

Balance at 31 December 2020

1,336

1,782,842

3,634,725

Changes in equity

Dividends

-

(100,000

)

-

Total comprehensive income

-

542,018

-

Balance at 31 December 2021

1,336

2,224,860

3,634,725

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 January 2020

4,774,582

2,568,163

7,342,745

Changes in equity

Dividends

(70,000

)

-

(70,000

)

Total comprehensive income

714,321

389,939

1,104,260

Balance at 31 December 2020

5,418,903

2,958,102

8,377,005

Changes in equity

Dividends

(100,000

)

-

(100,000

)

Total comprehensive income

542,018

193,766

735,784

Balance at 31 December 2021

5,860,921

3,151,868

9,012,789

Called up

share

Retained

Share

Total

capital

earnings

premium

equity

£

£

£

£

Balance at 1 January 2020

1,336

1,023,695

3,380,838

4,405,869

Changes in equity

Dividends

-

(70,000

)

-

(70,000

)

Total comprehensive income

-

162,258

-

162,258

Balance at 31 December 2020

1,336

1,115,953

3,380,838

4,498,127

Changes in equity

Dividends

-

(100,000

)

-

(100,000

)

Total comprehensive income

-

154,044

-

154,044

Balance at 31 December 2021

1,336

1,169,997

3,380,838

4,552,171

Cash flows from operating activities

Cash generated from operations

1

1,353,084

2,868,007

Interest paid

(59,864

)

(147,254

)

Interest element of hire purchase payments paid

(16,548

)

(18,011

)

Tax paid

(183,050

)

(248,186

)

Net cash from operating activities

1,093,622

2,454,556

Cash flows from investing activities

Purchase of tangible fixed assets

(865,338

)

(229,441

)

Sale of tangible fixed assets

292,256

2,241

Gain on revaluation of investments

-

44,662

Interest received

1,130

13,665

Dividends received

56,250

56,250

Net cash from investing activities

(515,702

)

(112,623

)

Cash flows from financing activities

New loans in year net of repayments

(815,136

)

(1,324,671

)

New finance leases net of repayments

438,498

(64,850

)

Amount introduced by directors

270,000

-

Amount withdrawn by directors

(180,000

)

(50,000

)

Equity dividends paid

(100,000

)

(70,000

)

Net cash from financing activities

(386,638

)

(1,509,521

)

Increase in cash and cash equivalents

191,282

832,412

Cash and cash equivalents at beginning of year

2

1,857,233

1,024,824

Cash and cash equivalents at end of year

2

2,048,515

1,857,233

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2021

2020

£

£

Profit before taxation

870,861

1,377,702

Depreciation charges

334,473

328,921

(Profit)/loss on disposal of fixed assets

(115,300

)

1,890

Gain on revaluation of fixed assets

-

(44,662

)

Finance costs

76,412

165,265

Finance income

(57,380

)

(69,915

)

1,109,066

1,759,201

(Increase)/decrease in stocks

(774,561

)

548,109

Increase in trade and other debtors

(360,603

)

(164,146

)

Increase in trade and other creditors

1,379,182

724,843

Cash generated from operations

1,353,084

2,868,007

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts:

Year ended 31 December 2021

31/12/21

1/1/21

£

£

Cash and cash equivalents

2,048,515

1,857,233

Year ended 31 December 2020

31/12/20

1/1/20

£

£

Cash and cash equivalents

1,857,233

1,024,824

3.	ANALYSIS OF CHANGES IN NET DEBT

At 1/1/21

Cash flow

At 31/12/21

£

£

£

Net cash

Cash at bank and in hand

1,857,233

191,282

2,048,515

1,857,233

191,282

2,048,515

Debt

Finance leases

(245,713

)

(438,498

)

(684,211

)

Debts falling due within 1 year

(4,716,779

)

762,643

(3,954,136

)

Debts falling due after 1 year

(1,696,904

)

52,491

(1,644,413

)

(6,659,396

)

376,636

(6,282,760

)

Total

(4,802,163

)

567,918

(4,234,245

)

**	LAST YEAR - MOVEMENT IN CASH AND CASH EQUIVALENTS

AS CALCULATED IN CONSOLIDATED CASH FLOW STATEMENT

DOES NOT AGREE TO MOVEMENT PER BALANCE SHEET

COMPARE MOVEMENT ON CONSOLIDATED CASH FLOW STATEMENT

=

832,412

TO

MOVEMENT PER BALANCE SHEET

CASH AND CASH EQUIVALENTS

=

832,409