Company registration number 07710348 (England and Wales)
ZEBRAK LONDON LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
ZEBRAK LONDON LIMITED
COMPANY INFORMATION
Directors
Mr A Zebrak
Ms T Zebrak
Company number
07710348
Registered office
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
Auditor
RDP Newmans LLP
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
Business address
34 St George Street
Mayfair
London
United Kingdom
W1S 2FN
Bankers
Barclays Bank PLC
1 Churchill Place
London
E14 5HP
ZEBRAK LONDON LIMITED
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3
Directors' responsibilities statement
4
Independent auditor's report
5 - 7
Statement of income and retained earnings
8
Balance sheet
9
Statement of cash flows
10
Notes to the financial statements
11 - 23
ZEBRAK LONDON LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 1 -

The directors present the strategic report for the year ended 31 July 2023.

 

The principal activity of the company continued to be that of operating in the jewellery market.

Review of the business

The results for the year and the financial position at the year end were considered satisfactory by the directors given the prevailing market conditions. They expect to improve on these in the foreseeable future. See Key Performance Indicators section for detail.

Principal risks and uncertainties

As a result of various government legislation regulating the company operations, there are potential risks associated with any infringement by the company with regard to these laws. The operations of the company are continually monitored by management by introducing and implementing proper controls and safeguards to ensure that risks are kept to a minimum.

 

The company's main financial risks relate to the working capital of the company to meet its business needs and also fluctuations in the interest rates. The financial risks are continuously monitored by the directors to manage these risks in relation to the company's business needs.

 

Liquidity risk

The company manages its cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the company has sufficient liquid resources to meet the operating needs of the business.

 

Foreign currency risk

The company's principal foreign currency exposures arise from trading with overseas companies. Company policy permits but does not demand that these exposures may be hedged in order to fix the cost in sterling.

 

Credit risk

Investments of cash surpluses and borrowings are made through banks and companies which must fulfill credit rating criteria approved by the Board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

 

The war in Ukraine

Markets across the world have reacted with huge volatility to the Russian invasion of Ukraine, with prices of oil and gas rising. However, the jewellery market has not yet seen an impact due to this. The company's management are monitoring the situation closely.

 

Development and performance

At the year end the company's current ratio is 1.65 compared to 1.45 in 2022. This indicates the company's short term working capital position has improved during the year. This is due to a larger increase in current assets than the increase in current liabilities.

ZEBRAK LONDON LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 2 -
Key performance indicators

The Key Performance Indicators of Zebrak London Limited over the last two years are detailed below:

 

2023      2022

Turnover             27,642,248 23,115,474

Gross profit %         28.01      34.06

Operating profit%      23.16     30.76

Current ratio         1.65         1.45

 

Turnover has increased in 2023 due to the uplift of Covid-19 travel restrictions and trade shows being able to operate for the full period of the financial year. The directors are confident that this increase is not temporary and that the company's sales will improve even more in the foreseeable future.

 

The gross profit margin has decreased in the year due to a higher level of purchases being made.. However, given the nature of the industry and the high-end items being sold, it is not uncommon for the gross profit margin to fluctuate from year to year.

 

The operating profit margin has decreased in comparison with the prior year due to an increase in administrative expenses at a higher proportion than the increase in sales.

 

 

On behalf of the board

Mr A Zebrak
Director
24 July 2024
ZEBRAK LONDON LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 JULY 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 July 2023.

Results and dividends

The results for the year are set out on page 8.

No ordinary dividends were paid. The directors do not recommend payment of a final dividend.

 

Please refer to the Strategic Report for detailed information on the company's principal risks and the review of the business.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr A Zebrak
Ms T Zebrak
Auditor

The auditor, RDP Newmans LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

Medium-sized companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the medium-sized companies exemption.

On behalf of the board
Mr A Zebrak
Director
24 July 2024
ZEBRAK LONDON LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 JULY 2023
- 4 -

The directors are responsible for preparing the annual report 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 of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company 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 hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors are responsible for the maintenance and integrity of the company website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

ZEBRAK LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZEBRAK LONDON LIMITED
- 5 -
Opinion

We have audited the financial statements of Zebrak London Limited (the 'company') for the year ended 31 July 2023 which comprise the statement of income and retained earnings, the balance sheet, the statement of cash flows and notes to the financial statements, including 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:

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 Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company 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 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 other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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 our audit:

ZEBRAK LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZEBRAK LONDON LIMITED
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

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

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 is 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 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 company or to cease operations, or have no realistic alternative but to do so.

Auditor's 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 an auditor's report 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.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

ZEBRAK LONDON LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF ZEBRAK LONDON LIMITED
- 7 -

To address the risk of fraud through management bias and override of controls, we:

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

No instances of material non-compliance were identified. However, the likelihood of detecting irregularities, including fraud, is limited by the inherent difficulty in detecting irregularities, the effectiveness of the entity’s controls, and the nature, timing and extent of the audit procedures performed. There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

 

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

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 an auditor's report 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.

Paresh Radia FCA
Senior Statutory Auditor
For and on behalf of RDP Newmans LLP
24 July 2024
Chartered Accountants
Statutory Auditor
Lynwood House
373-375 Station Road
Harrow
Middlesex
HA1 2AW
ZEBRAK LONDON LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 JULY 2023
- 8 -
2023
2022
Notes
£
£
Turnover
3
27,642,248
23,115,474
Cost of sales
(19,899,536)
(15,243,413)
Gross profit
7,742,712
7,872,061
Administrative expenses
(1,363,404)
(775,809)
Other operating income
22,387
14,075
Operating profit
4
6,401,695
7,110,327
Interest receivable and similar income
7
27,675
1,533
Interest payable and similar expenses
8
(37,985)
(34,497)
Profit before taxation
6,391,385
7,077,363
Tax on profit
9
(1,360,289)
(1,354,626)
Profit for the financial year
5,031,096
5,722,737
Retained earnings brought forward
11,488,382
5,765,645
Retained earnings carried forward
16,519,478
11,488,382

The profit and loss account has been prepared on the basis that all operations are continuing operations.

ZEBRAK LONDON LIMITED
BALANCE SHEET
AS AT 31 JULY 2023
31 July 2023
- 9 -
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
10
445,488
481,873
Investments
11
50
50
445,538
481,923
Current assets
Stocks
14
29,633,199
25,170,527
Debtors
15
9,561,126
8,216,340
Cash at bank and in hand
1,850,005
2,231,965
41,044,330
35,618,832
Creditors: amounts falling due within one year
16
(24,936,538)
(24,584,818)
Net current assets
16,107,792
11,034,014
Total assets less current liabilities
16,553,330
11,515,937
Provisions for liabilities
Deferred tax liability
18
33,752
27,455
(33,752)
(27,455)
Net assets
16,519,578
11,488,482
Capital and reserves
Called up share capital
20
100
100
Profit and loss reserves
16,519,478
11,488,382
Total equity
16,519,578
11,488,482

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 24 July 2024 and are signed on its behalf by:
Mr A Zebrak
Ms T Zebrak
Director
Director
Company registration number 07710348 (England and Wales)
ZEBRAK LONDON LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 JULY 2023
- 10 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
25
971,020
3,582,021
Interest paid
(4,784)
(34,497)
Income taxes paid
(1,343,560)
(498,660)
Net cash (outflow)/inflow from operating activities
(377,324)
3,048,864
Investing activities
Purchase of tangible fixed assets
(15,600)
(13,250)
Interest received
27,675
1,533
Net cash generated from/(used in) investing activities
12,075
(11,717)
Financing activities
Repayment of bank loans
-
0
(1,000,000)
Net cash used in financing activities
-
(1,000,000)
Net (decrease)/increase in cash and cash equivalents
(365,249)
2,037,147
Cash and cash equivalents at beginning of year
2,001,565
(35,582)
Cash and cash equivalents at end of year
1,636,316
2,001,565
Relating to:
Cash at bank and in hand
1,850,005
2,231,965
Bank overdrafts included in creditors payable within one year
(213,689)
(230,400)
ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 JULY 2023
- 11 -
1
Accounting policies
Company information

Zebrak London Limited is a private company limited by shares incorporated in England and Wales. The registered office is Lynwood House, 373-375 Station Road, Harrow, Middlesex, HA1 2AW.

1.1
Accounting convention

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.

1.2
Going concern

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company 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. The validity of this assumption depends on the continued support of the company's directors, lenders and creditors.

 

If the company were unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify fixed assets as current assets.

1.3
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods 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.

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.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Land and buildings leasehold
15 years straight line (buildings only)
Plant and machinery
25% reducing balance
Fixtures, fittings & equipment
10 years straight line
Computer equipment
25% reducing balance

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 credited or charged to profit or loss.

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 12 -
1.5
Fixed asset investments

Interests in subsidiaries and associates are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the company. 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 company considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

1.6
Impairment of fixed assets

At each reporting period end date, the company 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.

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.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition.

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 13 -
1.9
Financial instruments

The company 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 company's balance sheet when the company becomes party to the contractual provisions of the instrument.

 

Financial assets and liabilities are offset, with 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

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

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.

Impairment of financial assets

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.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company 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.

Classification of financial liabilities

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 company after deducting all of its liabilities.

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 14 -
Basic financial 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.

Other financial liabilities

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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the company 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 company.

1.11
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
1
Accounting policies
(Continued)
- 15 -
Deferred tax

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 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.

1.12
Employee benefits

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.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

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.

1.13
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

2
Judgements and key sources of estimation uncertainty

In the application of the company’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.

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
2
Judgements and key sources of estimation uncertainty
(Continued)
- 16 -
Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Stock provision

The company's stock levels are subject to changing consumer demands. As a result it is necessary to consider the recoverability of the cost of stock and the associated provisioning required. When calculating the stock provision, management considers the nature and condition of the stock, as well as applying assumptions around anticipated saleability of finished goods. See note 14 for the net carrying amount of the stock and associated provision.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2023
2022
£
£
Turnover analysed by class of business
Jewellery sales
27,642,248
23,115,474
2023
2022
£
£
Turnover analysed by geographical market
United Kingdom
8,742,115
8,214,365
European Union
1,086,126
260,163
Rest of the world
17,814,007
14,640,946
27,642,248
23,115,474
2023
2022
£
£
Other revenue
Interest income
27,675
1,533
4
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
176,473
(305,157)
Depreciation of owned tangible fixed assets
51,985
51,199
ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 17 -
5
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
27,300
22,250
6
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Directors
2
2
Staff
5
5
Total
7
7
2023
2022
£
£
Wages and salaries
195,459
155,969
Social security costs
16,663
16,778
Pension costs
3,860
3,160
215,982
175,907

 

7
Interest receivable and similar income
2023
2022
£
£
Interest income
Interest on bank deposits
27,675
1,533
2023
2022
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
27,675
1,533
ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 18 -
8
Interest payable and similar expenses
2023
2022
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
4,269
34,497
Other finance costs:
Other interest
33,716
-
0
37,985
34,497
9
Taxation
2023
2022
£
£
Current tax
UK corporation tax on profits for the current period
1,353,992
1,356,727
Deferred tax
Origination and reversal of timing differences
6,297
(2,101)
Total tax charge
1,360,289
1,354,626

As of 1 April 2023, the main rate of UK corporation tax increased from 19% to 25%. As the company’s financial year straddles this date, a blended corporation tax rate of 21.01% has been applied which is calculated by apportioning the two tax rates on a weighted basis for the proportion of the financial year for which each main tax rate was applicable.

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2023
2022
£
£
Profit before taxation
6,391,385
7,077,363
Expected tax charge based on the standard rate of corporation tax in the UK of 21.01% (2022: 19.00%)
1,342,541
1,344,699
Tax effect of expenses that are not deductible in determining taxable profit
3,883
5,573
Depreciation on assets not qualifying for tax allowances
10,920
9,728
Deferred tax
6,297
(2,101)
Capital allowances
(3,352)
(3,273)
Taxation charge for the year
1,360,289
1,354,626
ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 19 -
10
Tangible fixed assets
Land and buildings leasehold
Plant and machinery
Fixtures, fittings & equipment
Computer equipment
Total
£
£
£
£
£
Cost
At 1 August 2022
403,384
5,508
178,956
28,240
616,088
Additions
-
0
-
0
10,072
5,528
15,600
At 31 July 2023
403,384
5,508
189,028
33,768
631,688
Depreciation and impairment
At 1 August 2022
66,010
4,202
53,685
10,318
134,215
Depreciation charged in the year
26,892
327
18,902
5,864
51,985
At 31 July 2023
92,902
4,529
72,587
16,182
186,200
Carrying amount
At 31 July 2023
310,482
979
116,441
17,586
445,488
At 31 July 2022
337,374
1,306
125,271
17,922
481,873
11
Fixed asset investments
2023
2022
Notes
£
£
Investments in associates
12
50
50
Fixed asset investments are carried at cost less impairment.

 

Movements in fixed asset investments
Shares in group undertakings and participating interests
£
Cost or valuation
At 1 August 2022 & 31 July 2023
50
Carrying amount
At 31 July 2023
50
At 31 July 2022
50
12
Associates

Details of the company's associates at 31 July 2023 are as follows:

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
12
Associates
(Continued)
- 20 -
Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Star Zebrak Limited
England & Wales
Ordinary
50.00

The investment in associates is accounted for in accordance with the cost model. The associate is dormant. Therefore no dividends or income have been generated from the associate in the year.

13
Financial instruments
2023
2022
£
£
Carrying amount of financial assets
Debt instruments measured at amortised cost
9,367,242
8,160,936
Carrying amount of financial liabilities
Measured at amortised cost
23,550,708
23,180,488
14
Stocks
2023
2022
£
£
Finished goods and goods for resale
29,633,199
25,170,527

Stock is stated after provisions for impairment of £12,924,374 (2022: £10,364,327).

15
Debtors
2023
2022
Amounts falling due within one year:
£
£
Trade debtors
8,693,620
8,013,465
Other debtors
802,391
155,823
Prepayments and accrued income
65,115
47,052
9,561,126
8,216,340
16
Creditors: amounts falling due within one year
2023
2022
Notes
£
£
Bank loans and overdrafts
17
213,689
230,400
Trade creditors
7,152,405
6,719,103
Corporation tax
1,385,830
1,404,330
Other creditors
10,287,630
10,120,747
Accruals and deferred income
5,896,984
6,110,238
24,936,538
24,584,818
ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
16
Creditors: amounts falling due within one year
(Continued)
- 21 -

Barclays Bank Plc holds a fixed and floating charge over all the assets of the company.

 

Barclays Bank Plc holds a debenture in form and substance satisfactory to the bank.

 

Barclays Bank Plc holds a legal charge in form and substance satisfactory to the bank over personal properties owned by the directors.

 

There is a cross guarantee and debenture in place between Zebrak London Limited and Zebrak Property Limited, a company in which Mr A Zebrak and Ms T Zebrak are also directors. The cross guarantee is for a loan held in Zebrak Property Limited. The loan has £883,587 (2022: £1,654,545) outstanding at the year end, and is repayable in October 2023. The loan has a variable interest rate of 1.95% above the Bank of England base rate.

 

Bank overdrafts amounting to £213,689 (2022: £230,400) have been secured by way of a charge against properties owned personally by the directors, in favour of Barclays Bank PLC.

17
Loans and overdrafts
2023
2022
£
£
Bank overdrafts
213,689
230,400
Payable within one year
213,689
230,400
18
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2023
2022
Balances:
£
£
Accelerated capital allowances
33,752
27,455
2023
Movements in the year:
£
Liability at 1 August 2022
27,455
Other
6,297
Liability at 31 July 2023
33,752

 

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 22 -
19
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
3,860
3,160

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

20
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
21
Related party transactions
Remuneration of key management personnel

The company's key management personnel are considered to be the directors. No remuneration has been paid during the year.

Other information

Included within sales is a total amount of £Nil (2022: £1,399) for goods sold to Zebrak Monaco, an entity in which Ms T Zebrak is a director, registered in Monaco. Included within purchases and expenses is a total amount of £2,299,920 (2022: £1,345,768) for goods acquired from Zebrak Monaco. Included within trade debtors is an amount of nil (2022: £412,392) due from Zebrak Monaco. Included within trade creditors is an amount of £556,241 (2022: £1,181,490) due to Zebrak Monaco.

 

Included with purchases and expenses is a total amount of £254,200 (2022: £Nil) for goods acquired from Barnes Jewellers, a partnership in which Mr A Zebrak and Ms T Zebrak are partners.

 

Included within debtors is an amount of £627,747 (2022: £117,823) due from Zebrak Property Limited, a company in which Mr A Zebrak and Ms T Zebrak are directors, registered in England and Wales. Included within rent is a total amount of £340,000 (2022: £340,000) for rent charged from Zebrak Property Limited.

 

Included within debtors is an amount of £Nil (2022: £14,418) due from The Jewellery Bank Limited, a company in which Mr A Zebrak and Ms T Zebrak are directors. A bad debt provision of £14,408 was accounted for relating to this balance during the year.

 

Also within debtors is an amount of £Nil (2022: £15,230) due from 3Sixty Video Ltd, a company in which Mr A Zebrak and Ms T Zebrak have a shareholding. A bad debt provision of £27,207 was accounted for relating to this balance during the year.

 

Also within debtors is an amount of £45,875 (2022: £Nil) due from MOSMS Ltd, a company in which an employee of Zebrak London Ltd has a shareholding.

 

The balance owed to the directors at the year end amounted to £10,284,931 (2022: £10,114,263).

ZEBRAK LONDON LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 JULY 2023
- 23 -
22
Events after the reporting date

The war in Ukraine and the 2023 Israel-Hamas war

Markets across the world have reacted with huge volatility due to the ongoing wars and the rise in gas and fuel prices. The jewellery market is not predicted to see an impact regarding these events, however, the directors continue to monitor the situation closely.

23
Ultimate controlling party

There is no one ultimate controlling party.

24
Analysis of changes in net funds
1 August 2022
Cash flows
31 July 2023
£
£
£
Cash at bank and in hand
2,231,965
(381,960)
1,850,005
Bank overdrafts
(230,400)
16,711
(213,689)
2,001,565
(365,249)
1,636,316
25
Cash generated from operations
2023
2022
£
£
Profit for the year after tax
5,031,096
5,722,737
Adjustments for:
Taxation charged
1,360,289
1,354,626
Finance costs
37,985
34,497
Investment income
(27,675)
(1,533)
Depreciation and impairment of tangible fixed assets
51,985
51,199
Movements in working capital:
Increase in stocks
(4,462,672)
(5,018,673)
Increase in debtors
(1,344,786)
(2,957,205)
Increase in creditors
324,798
4,396,373
Cash generated from operations
971,020
3,582,021
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