The directors present the strategic report for the period ended 31 December 2023.
The nature of the business conducted by the Company shall be solely to directly or indirectly through one or more subsidiaries and substantially dedicated to activities of lease of owned commercial real estate.
It is primarily engaged in operating as a holding company, holding interest in the capital of other companies substantially dedicated to activities of construction, development, purchase and sale of residential and commercial properties, purchase and sale of goods, lease of owned commercial real estate, rendering of administration services, operation of hotel, gastronomy and tourist activities in general.
Some information on the main Company´s subsidiaries are as follows:
JHSF Uruguay S.A. (Fasano Las Piedras) - In 2010, the opening of Hotel Fasano Punta del Este, in Uruguay, marked the international expansion of the Fasano brand. With an award-winning architectural project conceived by a famous architect, which effortlessly interacts with the breathtaking natural landscape, the first Fasano outside of Brazil is widely known as one of the most beautiful resorts in the world. Overlooking the Maldonado river, the property occupies a preserved area of 490 hectares in La Barra.
815 Fifth Avenue LLC. (Fasano Fifth Avenue) - The second international project, this time in the United States, in front of Central Park, in Manhattan. Located on Fifth Avenue between 62 street and 63 street.
Fasano Fifth Avenue has 15 floors and is divided in duplex apartments, with approximately 3,552 square feet each, Clubhouse Suites, Garden Suites, Park Avenue Suites and Central Park Suites, most of them with a panoramic view of Central Park and the Manhattan skyline.
Traymore Hotel LLC. (Fasano Miami Beach - under development) - Acquired in June 21st, 2021, for the purchase price of USD70,000, the hotel situated in Miami-Dade County and located at 2445 Collins Avenue, Miami Beach, Florida 33140 is currently undergoing a retrofit and should be opened in 2025.
Credit risk
The Company is subject to credit risk related to accounts receivable from buyers of properties (lots).
Price risk and market conditions
The Company’s revenues directly depend on the capacity to sell the real estate properties (lots), the capacity to occupy the available rooms in its hotels and the flow of people in its restaurants.
Adverse conditions as well as periods of recession and/or negative perception of customers with respect to security, convenience and attractiveness of areas where the ventures are located, may reduce the level of commercial transactions of its businesses. Management constantly monitors these risks to minimize the impacts on its business.
The credit risk concentration of accounts receivable for the segments of hotels and restaurants is minimized due to the dispersion of customer portfolio, since the Company does not have a customer or even a business conglomerate representing more than 10% of its consolidated revenue.
For the real estate business segment (sale of lots), the Company does not have a customer or even a business conglomerate representing more than 10% of its consolidated revenue.
Liquidity risk
Cash flow is individually projected for each company of the consolidated financial statements. The Company monitors the continuous forecasts for liquidity requirements of these companies to ensure that they have sufficient cash to meet their operating needs.
2023 presented an increase in revenue vs prior years mostly due to Uruguay’s plots sales, which led to a consolidated 61.37% growth. On the other hand, the Fasano Fith Avenue project inauguration on late 2022 contributed to a increase in costs on 2023, since the costs and investments related to this projected were no longer capitalized. The increase in plots sold also generated increased recognition of costs related to these lands.
The goal for 2024 is to keep the growth presented in the current business, as well as further developments of Traymore Hotel focusing in its opening date
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2023.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
In order to assist you to fulfil your duties under the Companies Act 2006, we have prepared for your approval the financial statements of JHSF UK Limited for the period ended 31 December 2023 which comprise the group profit and loss account, the group statement of comprehensive income, the group balance sheet, the company balance sheet, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows and the related notes from the accounting records and from information and explanations you have given us.
This report is made solely to the board of directors of JHSF UK Limited, as a body, in accordance with the terms of our engagement letter dated 4 July 2024. Our work has been undertaken solely to prepare for your approval the financial statements of JHSF UK Limited and state those matters that we have agreed to state to the board of directors of JHSF UK 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 JHSF UK Limited and its board of directors as a body, for our work or for this report.
It is your duty to ensure that JHSF UK 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 profit of JHSF UK Limited. You consider that JHSF UK Limited is exempt from the statutory audit requirement for the period.
We have not been instructed to carry out an audit or a review of the financial statements of JHSF UK 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.
As permitted by s408 Companies Act 2006, the company has not presented its own profit and loss account and related notes. The company’s loss for the year was £5,100.
JHSF UK Limited (“the company”) is a private limited company domiciled and incorporated in England and Wales. The registered office is .
The group consists of JHSF UK Limited and all of its subsidiaries.
The company was incorporated on the 20 July 2022 and therefore these financial statements relate to a period of more than 12 months.
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.
The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The consolidated group financial statements consist of the financial statements of the parent company JHSF UK Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.
All financial statements are made up to 31 December 2023. 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 group.
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.
Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.
Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.
Investments in joint ventures and associates are carried in the group balance sheet at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.
If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.
Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.
At the time of approving the financial statements, the directors have a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
An associate is an entity, being neither a subsidiary nor a joint venture, in which the company holds a long-term interest and where the company has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.
Investments in associates are initially recognised at the transaction price (including transaction costs) and are subsequently adjusted to reflect the group’s share of the profit or loss, other comprehensive income and equity of the associate using the equity method. Any difference between the cost of acquisition and the share of the fair value of the net identifiable assets of the associate on acquisition is recognised as goodwill. Any unamortised balance of goodwill is included in the carrying value of the investment in associates.
Losses in excess of the carrying amount of an investment in an associate are recorded as a provision only when the company has incurred legal or constructive obligations or has made payments on behalf of the associate.
In the parent company financial statements, investments in associates are accounted for at cost less impairment.
Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The carrying amount of the investments accounted for using the equity method is tested for impairment as a single asset. Any goodwill included in the carrying amount of the investment is not tested separately for impairment.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
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 balance sheet 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 and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method 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.
Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.
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, loans from fellow group companies and preference shares that are classified as debt, 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 payments 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.
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 profit and loss account 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. Deferred tax is charged or credited in the profit and loss account, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset if, and only if, there is 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.
In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The average monthly number of persons (including directors) employed by the group and company during the period was:
Their aggregate remuneration comprised:
The actual charge for the period can be reconciled to the expected charge/(credit) for the period based on the profit or loss and the standard rate of tax as follows:
The addition of the investment shown in the separate company relates to the investment provided in the group subsidiaries as at 13 June 2023.
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as of 31 December 2023. Control is achieve when the Group is exposed, or has rights, to variable returns from its involvemnet with the investee and has the ability to affect those returns through its power over the investee. Specifically, the gorup controls an investee if, and only if, the Group has:
Power over the investee (ie, existing rights that give it the current ability to direct the relevant activities of the investee)
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee including:
The contratual arrangement(s) with teh other vote holders of the investee
Rights arising from other contractual arrangements
The Group's voting rights and potential voting rights.
Control
The Group controls an entity when it is exposed to, or has the right to, the variable returns arising from its involvement with the entity and has the ability to affect these returns by excerising its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which the Group obtains control until the date on which control ceases to exist.
Loses Control
When an entity loses control over a subsidiary, the Group derecognises the assets and liabiliteis and any non-controlling interest and otehr components recorded in equity relating to that subsidiary. Any gain or loss arising from the loss of control is recognised in profit and loss. If the Group retaines any interst in the former subsidiary, this interst is measured at its fair value on the date on which controll is lost.
Intra-group balances and transactions, and any unrealised income or expenses (except for gains or losses from foreign curreny transactions) arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with investees registered under the quity method are eliminated against the investment in proportion to the Group's interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidencfe of impairment loss.
Details of the company's subsidiaries at 31 December 2023 are as follows:
The directors are consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
The long-term loans are secured by fixed charges over property held in the group.
The Group has entered into long term debt with effective rates of interst ranging between 1.7%-5.09% the majority of the debt is due for repayment in 2024, leaving a mortgage ongoing until September 2028.
As at the year end JHSF UK Limited owed the parent £42,614,991 in respect of the investments in the subsidiaries.
The group as a whole, owed JAN investments, £51,514,910 which is the ultimate parent company.
At the balance sheet date the group was owed £20,332 by JHSF Malls SA, a connected party of the group.
At the balance sheet date the group was owed £17,244 by Fasano, a connected party of the group.
At the balance sheet date the group was owed £102,321 by Flatly Global, a connected party of the group.
At the balance sheet date the group was owed £758 by Miami, a connected party of the group.