In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of Jarvis Commercial Properties Limited for the year ended 30 April 2021 set out on pages to 16 from the company’s accounting records and from information and explanations you have given us.
As a practising member firm of the Institute of Chartered Accountants in England and Wales (ICAEW), we are subject to its ethical and other professional requirements which are detailed at http://www.icaew.com/en/members/regulations-standards-and-guidance .
This report is made solely to the Board of Directors of Jarvis Commercial Properties Limited, as a body, in accordance with the terms of our engagement letter dated 20 April 2017. Our work has been undertaken solely to prepare for your approval the financial statements of Jarvis Commercial Properties Limited and state those matters that we have agreed to state to the Board of Directors of Jarvis Commercial Properties Limited, as a body, in this report in accordance with ICAEW Technical Release 07/16 AAF. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than Jarvis Commercial Properties Limited and its Board of Directors as a body, for our work or for this report.
It is your duty to ensure that Jarvis Commercial Properties Limited has kept adequate accounting records and to prepare statutory financial statements that give a true and fair view of the assets, liabilities, financial position and loss of Jarvis Commercial Properties Limited. You consider that Jarvis Commercial Properties Limited is exempt from the statutory audit requirement for the year.
We have not been instructed to carry out an audit or a review of the financial statements of Jarvis Commercial Properties Limited. For this reason, we have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us and we do not, therefore, express any opinion on the statutory financial statements.
T he directors of the group have elected not to include a copy of the income statement within the financial statements.
For the financial year ended
Directors' responsibilities under the Companies Act 2006 :
The members have not required the company to obtain an audit of its financial statements for the year in question in accordance with section 476;
The directors acknowledge their responsibilities for complying with the requirements of the Act with respect to accounting records and the preparation of financial statements.
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £695,617 (2020: £366,300 profit).
Jarvis Commercial Properties Limited (“the company”) is a private limited company incorporated in England and Wales . The registered office is No 1 Waterside, Station Road, Harpenden, Hertfordshire, AL5 4US.
The group consists of Jarvis Commercial Properties Limited and all of its subsidiaries.
These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006 as applicable to companies subject to the small companies regime. The disclosure requirements of section 1A of FRS 102 have been applied other than where additional disclosure is required to show a true and fair view.
The financial statements are prepared in sterling , which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The company is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The company has therefore taken advantage of exemptions from the following disclosure requirements for parent company information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instrument Issues’ : Interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in profit or loss and in other comprehensive income ;
Section 26 ‘Share based Payment’ : Share-based payment expense charged to profit or loss, reconciliation of opening and closing number and weighted average exercise price of share options, how the fair value of options granted was measured, measurement and carrying amount of liabilities for cash-settled share-based payments, explanation of modifications to arrangements ;
Section 33 ‘Related Party Disclosures’ : Compensation for key management personnel .
As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £695,617 (2020: £366,300 profit).
The group financial statements incorporate those of Jarvis Commercial Properties Limited and all of its subsidiaries (i . e . entities that the g roup controls through its power to govern the financial and operating policies so as to obtain economic benefits). Their results are incorporated from the date that control passes.
All financial statements are made up to 30 April 2021 . Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Turnover represents amounts receivable in relation to rental and other property income, net of VAT and trade discounts.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.
Basic financial assets, which include debtors and cash at bank balances , are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest m ethod unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss , are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors , bank loans and loans from fellow group , are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future paymen ts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.
The tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets .
Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
An analysis of the group's turnover is as follows:
The average monthly number of persons (including directors) employed by the group during the year was
Their aggregate remuneration comprised:
Investment property comprises of 10 buildings split into multiple rental units. The investment properties had been valued in 2021 by Brasier Freeth LLP Chartered Surveyors, who are not connected with the group. The valuation was made on an open market value basis by reference to market evidence of transaction prices for similar properties.
Details of the company's subsidiaries at 30 April 2021 are as follows:
As at 30 April 2021 the amount drawn down on the facility was £950,000 (2020: £1,150,000).
The long-term loan was secured by fixed charges over two investment properties:
Jarvis House, Number 1 Waterside, Cold Harbour Lane, Harpenden, Hertfordshire, AL5 4UN
Station Masters, Station Road, Harpenden, Hertfordshire, AL5 4SP.
Deferred tax assets and liabilities are offset where the group or company has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:
The other reserve contains the premium arising on the issue of equity shares, net of expenses.
The profit and loss reserve represents cumulative profit or loss, net of dividends paid and other adjustments.
After the balance sheet date management entered into an agreement to acquire John Hill Holdings Limited and its subsidiaries, which completed on 19 November 2021.
Group
During the year Jarvis Commercial Properties Group received rental income of £217,500 (2020: £217,500) from Jarvis Group Limited and its subsidiaries. Included in administrative expenses this year are management fees of £30,000 (2020: £30,000) paid to Jarvis Group Limited. Jarvis Group Limited share common directors with Jarvis Commercial Properties Limited.
During the year management fees of £47,000 (2020: £47,000) were charged by Jarvis Homes Limited. At the year end included within other debtors is an amount of £nil (2020: £26) owed from Jarvis Homes Limited. Jarvis Homes Limited is a wholly owned subsidiary of Jarvis Group Limited, who shares common directors with Jarvis Commercial Properties Limited.
Company
The company has taken advantage of the exemptions available under Financial Reporting Standard 102 Section 33 whereby it has not disclosed transactions with group companies on the grounds that consolidated financial statements are prepared by the ultimate parent company. A copy of the consolidated results of Jarvis Commercial Properties Limited may be obtained from the company's registered office, Number 1 Waterside, Station Road, Harpenden, Hertfordshire, AL5 4US.
During the year rental income of £190,000 (2020: £190,000) was received from Jarvis Group Limited. Included in administrative expenses, management fees of £30,000 (2020: £30,000) were charged by Jarvis Group Limited. Jarvis Group Limited share common directors of Jarvis Commercial Properties Limited.
During the year rental income of £27,500 (2020: £27,500) was received from Jarvis Homes Limited. Included in administrative expenses, management fees of £47,000 (2020: £47,000) were charged by Jarvis Homes Limited. At the year end included within other debtors is an amount £nil (2020: £26) owed by Jarvis Homes Limited. Jarvis Homes Limited is a wholly owned subsidiary of Jarvis Group Limited who share common directors of Jarvis Commercial Properties Limited.