Joseph Homes Ltd - Limited company accounts 20.1

REGISTERED NUMBER: 06601040 (England and Wales)

REPORT OF THE DIRECTORS AND

UNAUDITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 MAY 2020

FOR

JOSEPH HOMES LTD

Page

Company Information

1

Report of the Directors

2

Consolidated Income Statement

4

Consolidated Balance Sheet

5

Company Balance Sheet

7

Consolidated Statement of Changes in Equity

9

Company Statement of Changes in Equity

10

Notes to the Consolidated Financial Statements

11

DIRECTORS:

Mr J V T Rajah

Mr P Dipino

REGISTERED OFFICE:

8 Waterloo Court

10 Theed Street

London

SE1 8ST

REGISTERED NUMBER:

06601040 (England and Wales)

ACCOUNTANTS:

Raffingers LLP

Chartered Certified Accountants

19-20 Bourne Court

Southend Road

Woodford Green

Essex

IG8 8HD

The directors present their report with the financial statements of the company and the group for the year ended 31 May 2020.

PRINCIPAL ACTIVITY

The principal activity of the group in the year under review was that of the developer of real estate in the UK, in line with its LIVE WELL® Manifesto.

REVIEW OF BUSINESS

The business is pleased to present the results of the activities of the group to 31st May 2020, resulting in a profit of £2.4m for the period.

As Joseph Homes (''JH'') celebrates its 12th year trading, the business continues to pursue its risk adjusted returns across a balanced portfolio, guided by our LIVE WELL® Manifesto.

JH has a set an ambitious but achievable programme of delivery for acquisitions, planning, development, and sales to meet our higher-level intent of controlled profitable growth. This growth is purposeful and in line with our counter-cyclical strategy that has been employed since inception in 2008. Further to this is a continuance of the diversification strategy employed in 2019 to bring 25% of its activity [by profit] under its 'Alternatives' definition - BTR, Student, Hotel, Office and Industrial use classes.

The translation of this plan into a category of business means that JH is going from an SME housebuilder to a property development company, maintaining housebuilding as its core competency.

The group has entered into agreements that will provide long term regeneration opportunities with developments in Gravesend, Highams Park and Kentish Town identified in the period. These will provide a backbone of strategic schemes that deliver this diversification strategy, taking the group into urban regeneration schemes of scale.

Our schemes at Balham and Millbrook continue towards completion and whilst being impacted by both COVID and Brexit, are proving to be developments we can be proud of, with product that meets our LIVE WELL manifesto objectives with positive impact on our Customers, Team, Neighbourhoods and Planet.

We had several developments proceeding through the planning process at Rockingham Street, Sylvan Grove and Parkhouse Street during the year, whilst planning permission has been obtained on the Veneer Building at Hayes in the period.

We are proud to be able to announce our acceptance as a B Corp registered business, a significant achievement closely aligned to our LIVE WELL manifesto. It's a certification that confirms we meet the highest standards of verified social and environmental performance, transparency, and legal accountability in our mission to balance profit and purpose. Being the first UK housebuilder to become a B Corporation, we feel very much at home being part of this community, where all the businesses involved have a strong commitment to people and the environment.

Principal Risks and Opportunities

As mentioned above, the business has been subjected to key business risks in the period with the impact of both Brexit and COVID 19. Brexit provided increasing political and economic uncertainty in the initial part of the year, impacting sales rates and market volatility. COVID 19 impacted upon our construction activity and has led to delays in each element of our business. We have been in constant dialogue with our bankers and Joint Venture partners and continue to navigate through the challenges presented, with both being highly supportive of the strategies implemented. With each of our assets reflected at the lower of cost and NRV, we believe there is considerable uplift between book and market value of our schemes.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 June 2019 to the date of this report.

Mr J V T Rajah

Mr P Dipino

POLITICAL DONATIONS AND EXPENDITURE

During the year, the company made donations amounting to £3,140.

This report has been prepared in accordance with the provisions of Part 15 of the Companies Act 2006 relating to small companies.

ON BEHALF OF THE BOARD:

Mr J V T Rajah - Director

23 December 2021

TURNOVER

4,153,927

1,760,992

Cost of sales

(1,233,275

)

(826,110

)

GROSS PROFIT

2,920,652

934,882

Administrative expenses

(4,186,418

)

(2,879,586

)

(1,265,766

)

(1,944,704

)

Other operating income

41,949

57,494

GROUP OPERATING LOSS

5

(1,223,817

)

(1,887,210

)

Share of operating profit/(loss) in

Associates

32,723

(17,536

)

Gain on disposal of

investment property

6

1,300,000

-

Impairment of stock

6

(1,988,447

)

643,653

Investments written off

6

-

(643

)

(1,879,541

)

(1,261,736

)

Interest receivable and similar income

171

1,028

(1,879,370

)

(1,260,708

)

Loans written off

1,850,000

-

(29,370

)

(1,260,708

)

Interest payable and similar expenses

(363,374

)

(233,677

)

LOSS BEFORE TAXATION

(392,744

)

(1,494,385

)

Tax on loss

2,793,184

85,276

PROFIT/(LOSS) FOR THE FINANCIAL YEAR

2,400,440

(1,409,109

)

Profit/(loss) attributable to:

Owners of the parent

2,400,506

(1,400,274

)

Non-controlling interests

(66

)

(8,835

)

2,400,440

(1,409,109

)

FIXED ASSETS

Intangible assets

8

6,597

-

Tangible assets

9

26,167

12,521

Investments

10

Interest in associate

1,915,193

1,882,470

Investment property

11

225,000

-

2,172,957

1,894,991

CURRENT ASSETS

Stocks

17,018,486

14,085,565

Debtors

12

5,657,581

4,874,426

Cash at bank and in hand

162,539

24,398

22,838,606

18,984,389

CREDITORS

Amounts falling due within one year

13

25,345,238

23,668,940

NET CURRENT LIABILITIES

(2,506,632

)

(4,684,551

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(333,675

)

(2,789,560

)

CREDITORS

Amounts falling due after more than one year

14

(100,000

)

-

PROVISIONS FOR LIABILITIES

(9,500

)

-

NET LIABILITIES

(443,175

)

(2,789,560

)

CAPITAL AND RESERVES

Called up share capital

1

1

Fair value reserve

194,494

-

Retained earnings

(628,769

)

(2,780,726

)

SHAREHOLDERS' FUNDS

(434,274

)

(2,780,725

)

NON-CONTROLLING INTERESTS

16

(8,901

)

(8,835

)

TOTAL EQUITY

(443,175

)

(2,789,560

)

The company and the group are entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 May 2020.

The members have not required the company and the group to obtain an audit of its financial statements for the year ended 31 May 2020 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the group keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company and the group as at the end of each financial year and of the group's profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company and the group.

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 23 December 2021 and were signed on its behalf by:

Mr J V T Rajah - Director

FIXED ASSETS

Intangible assets

8

-

-

Tangible assets

9

26,167

12,521

Investments

10

600,155

600,124

Investment property

11

-

-

626,322

612,645

CURRENT ASSETS

Stocks

793,186

475,661

Debtors

12

7,192,771

3,797,797

Cash at bank

53,335

12,579

8,039,292

4,286,037

CREDITORS

Amounts falling due within one year

13

13,505,737

8,670,903

NET CURRENT LIABILITIES

(5,466,445

)

(4,384,866

)

TOTAL ASSETS LESS CURRENT LIABILITIES

(4,840,123

)

(3,772,221

)

CAPITAL AND RESERVES

Called up share capital

1

1

Retained earnings

(4,840,124

)

(3,772,222

)

SHAREHOLDERS' FUNDS

(4,840,123

)

(3,772,221

)

Company's loss for the financial year

(1,067,902

)

(2,009,610

)

The company is entitled to exemption from audit under Section 477 of the Companies Act 2006 for the year ended 31 May 2020.

The members have not required the company to obtain an audit of its financial statements for the year ended 31 May 2020 in accordance with Section 476 of the Companies Act 2006.

The directors acknowledge their responsibilities for:

(a)	ensuring that the company keeps accounting records which comply with Sections 386 and 387 of the Companies Act 2006 and

(b)

preparing financial statements which give a true and fair view of the state of affairs of the company as at the end of each financial year and of its profit or loss for each financial year in accordance with the requirements of Sections 394 and 395 and which otherwise comply with the requirements of the Companies Act 2006 relating to financial statements, so far as applicable to the company.

The financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved by the Board of Directors and authorised for issue on 23 December 2021 and were signed on its behalf by:

Mr J V T Rajah - Director

Called up

Fair

share

Retained

value

capital

earnings

reserve

£

£

£

Balance at 1 June 2018

1

(1,410,464

)

-

Prior year adjustment

-

40,816

-

As restated

1

(1,369,648

)

-

Changes in equity

Total comprehensive income

-

(1,411,078

)

-

Balance at 31 May 2019

1

(2,780,726

)

-

Changes in equity

Total comprehensive income

-

2,151,957

194,494

Balance at 31 May 2020

1

(628,769

)

194,494

Non-controlling

Total

Total

interests

equity

£

£

£

Balance at 1 June 2018

(1,410,463

)

(10,804

)

(1,421,267

)

Prior year adjustment

40,816

-

40,816

As restated

(1,369,647

)

(10,804

)

(1,380,451

)

Changes in equity

Total comprehensive income

(1,411,078

)

(8,835

)

(1,419,913

)

Elimination of non-controlling

interest on disposal of

subsidiary

-

10,804

10,804

Balance at 31 May 2019

(2,780,725

)

(8,835

)

(2,789,560

)

Changes in equity

Total comprehensive income

2,346,451

(66

)

2,346,385

Balance at 31 May 2020

(434,274

)

(8,901

)

(443,175

)

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 June 2018

1

(1,803,428

)

(1,803,427

)

Prior year adjustment

-

40,816

40,816

As restated

1

(1,762,612

)

(1,762,611

)

Changes in equity

Total comprehensive income

-

(2,009,610

)

(2,009,610

)

Balance at 31 May 2019

1

(3,772,222

)

(3,772,221

)

Changes in equity

Total comprehensive income

-

(1,067,902

)

(1,067,902

)

Balance at 31 May 2020

1

(4,840,124

)

(4,840,123

)

1.	STATUTORY INFORMATION

Joseph Homes Ltd is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	STATEMENT OF COMPLIANCE

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" including the provisions of Section 1A "Small Entities" and the Companies Act 2006.

3.	ACCOUNTING POLICIES

Basis of preparing the financial statements

The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Basis of consolidation

The consolidated financial statements include the financial statements of the company and its subsidiary undertakings made up to 31 May 2020. A subsidiary is an entity that is controlled by the parent. The results of subsidiary undertakings are included in the consolidated profit and loss account from the date that control commences until the date that control ceases. Control is established when the company has the power to govern the operating and financial policies of an entity so as to obtain benefits from its activities. In assessing control, the group takes into consideration potential voting rights that are currently exercisable.

Under Section 408 of the Companies Act 2006 the company is exempt from the requirement to present its own profit and loss account.

In the parent financial statements, investments in subsidiaries are carried at cost less impairment.

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

Goodwill

Goodwill, being the amount paid in connection with the acquisition of a business in 2019, is being reviewed annually for any impairment.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Fixtures and fittings

-

20% on cost

Computer equipment

-

33% on cost

Investments in associates

Investments in associate undertakings is initially recognised at the transaction price (including transaction costs) and is subsequently adjusted to reflect the investor's share of the profit or loss and other comprehensive income.

Investment property

Investment properties are properties held to earn rentals and for capital appreciation. Investment properties are initially measured at cost, including transaction costs. Subsequently investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise.

Stocks

Property held for resale is stated at the lower of cost, including associated costs and estimated selling price less costs to complete and sell. Other costs are recognised to the extent that they are incurred in bringing the property to its current condition.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Income Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Short term debtors and creditors

Short term debtors and creditors with no stated interest rate are recorded at transaction price. Any losses arising from impairment are recognised in the profit and loss account.

Loans and borrowings

Loans and borrowings are initially recognised at the transaction price including transactions costs. Subsequently, they are measured at amortised cost using the effective interest rate method, less impairment

Borrowing costs

Borrowing costs which are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised.

During the year, borrowings costs amounting to £266,920 (2019 - £259,920) have been capitalised as part of stocks.

Fixed asset investments

Fixed asset investments are held at cost less amounts provided for permanent diminution in value. The carrying values of fixed asset investment are reviewed for impairment where events or changes in circumstance indicate the carrying value may not be recoverable.

4.	EMPLOYEES AND DIRECTORS

The average number of employees during the year was 14 (2019 - 11 ) .

5.	OPERATING LOSS

The operating loss is stated after charging:

2020

2019

£

£

Depreciation - owned assets

7,668

5,202

6.	EXCEPTIONAL ITEMS

During the year, development cost of £1,988,447, which was included within stocks, was written off due to a development project being aborted.

During the year, a loan of £1,850,000 due to Delft Limited was written off as it was no longer payable. Joseph Homes Limited and Delft Limited are connected by virtue of common control.

During the previous year, loans amounting to £643,653 due by the group undertakings to Avani Construction Limited were written off. Mr J V T Rajah is a director and majority shareholder in Avani Construction Limited.

7.	INDIVIDUAL INCOME STATEMENT

As permitted by Section 408 of the Companies Act 2006, the Income Statement of the parent company is not presented as part of these financial statements.

8.	INTANGIBLE FIXED ASSETS

Group

Goodwill

£

COST

Additions

958,397

Impairments

(951,800

)

At 31 May 2020

6,597

NET BOOK VALUE

At 31 May 2020

6,597

9.	TANGIBLE FIXED ASSETS

Group

Fixtures

and

Computer

fittings

equipment

Totals

£

£

£

COST

At 1 June 2019

7,807

15,456

23,263

Additions

1,260

20,054

21,314

At 31 May 2020

9,067

35,510

44,577

DEPRECIATION

At 1 June 2019

1,953

8,789

10,742

Charge for year

1,656

6,012

7,668

At 31 May 2020

3,609

14,801

18,410

NET BOOK VALUE

At 31 May 2020

5,458

20,709

26,167

At 31 May 2019

5,854

6,667

12,521

Company

Fixtures

and

Computer

fittings

equipment

Totals

£

£

£

COST

At 1 June 2019

7,807

15,456

23,263

Additions

1,260

20,054

21,314

At 31 May 2020

9,067

35,510

44,577

DEPRECIATION

At 1 June 2019

1,953

8,789

10,742

Charge for year

1,656

6,012

7,668

At 31 May 2020

3,609

14,801

18,410

NET BOOK VALUE

At 31 May 2020

5,458

20,709

26,167

At 31 May 2019

5,854

6,667

12,521

10.	FIXED ASSET INVESTMENTS

Group

Interest

in

associate

£

COST

At 1 June 2019

1,882,470

Share of profit/(loss)

32,723

At 31 May 2020

1,915,193

NET BOOK VALUE

At 31 May 2020

1,915,193

At 31 May 2019

1,882,470

Company

Shares in

Interest

group

in

undertakings

associate

Totals

£

£

£

COST

At 1 June 2019

118

600,006

600,124

Additions

31

-

31

At 31 May 2020

149

600,006

600,155

NET BOOK VALUE

At 31 May 2020

149

600,006

600,155

At 31 May 2019

118

600,006

600,124

11.	INVESTMENT PROPERTY

Group

Total

£

FAIR VALUE

Additions

24,500,000

Disposals

(24,000,000

)

Revaluations

(275,000

)

At 31 May 2020

225,000

NET BOOK VALUE

At 31 May 2020

225,000