Company registration number 05102663 (England and Wales)
ZAAN GROUP LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
ZAAN GROUP LIMITED
CONTENTS
Page
Strategic report
2 - 3
Director's report
4 - 5
Director's responsibilities statement
6
Independent auditor's report
7 - 9
Statement of comprehensive income
10
Statement of financial position
11
Statement of changes in equity
12
Statement of cash flows
13
Notes to the financial statements
14 - 27
ZAAN GROUP LIMITED
COMPANY INFORMATION
- 1 -
Director
B Mumtaz
Company number
05102663
Registered office
28 London Road
Rainham
KENT
ME8 6YX
Auditor
King & King
Chartered Accountants & Statutory Auditors
5th Floor
Watson House
54-60 Baker Street
London
W1U 7BU
Bankers
HSBC Bank PLC
9 Rose Lane
Canterbury
Kent
CT1 2JP
ZAAN GROUP LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 2 -
The director presents the strategic report for the year ended 30 April 2024.
Review of the business
The company's turnover remained strong at £22.5m for the year ending 30 April 2024, reflecting a 3.72% increase from £21.7m in 2023. Sales remained steady across all franchise stores, demonstrating consistency in performance. Despite challenging market conditions, the company achieved its sales targets and maintained solid cash generation for another consecutive year.
The delivered food market is expected to grow at just under 10%, with the Domino’s franchise remaining one of the leading brands in the sector. The directors are of the opinion that in additions to operating within such an attractive, growing segment of the market, the company also have the opportunity to improve capabilities, drive efficiencies and become more innovative in how the business operates.
The company reported a cash inflow from operating activities of £1.02m (2023: £0.19m cash outflow), driven by a 4.32% increase in gross profit, largely due to inflationary rises in food costs. Net debt increased by £0.26m, while the company maintained a strong liquidity position with net current assets of £1.17m and total net assets of £3.79m.
The directors remain committed to closely monitoring overhead expenditure and maximizing the efficient use of company resources.
Principal risks and uncertainties
Economic risk - The company is exposed to any slowdown in the UK economy, arising from level of employment, disposable income, interest rates and consumer confidence. The risk is mitigated by maintaining a wide customer basis and a competitive offering in the market through management's close relationship with the franchise operator.
Regulatory risks - The company's operations require compliance with a wide range of regulations: such as health and safety and hygiene procedures. The company has implemented a rigorous regime of standards and safety checks (including food) to ensure each store is operating at the highest of standards.
Consumer taste - Any material change in the consumer taste of the pizza delivery industry could adversely affect the company. The company works alongside the franchise operator at assessing demographic trends, ensuring innovation and fresh products are available to customers.
Liquidity risks - In order to maintain liquidity to ensure sufficient funds are available for ongoing operations and future developments, the company uses a mixture of long term and short term debt finance.
The company does not in general expose itself to fluctuations in changes in foreign currency exchange rates. Due to the nature of the business, there is little exposure to credit risk either, and therefore no specific policies are required in respect of trade receivables.
ZAAN GROUP LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 3 -
Future developments
The top priority for the upcoming year is driving a transformation led by Domino’s to support overall growth while enhancing efficiency and cost-effectiveness across the business. With strong operational and digital success, the directors see a significant opportunity to build on this momentum as consumer demand for digital ordering continues to rise.
Domino’s remains committed to maximizing market opportunities, including introducing a healthier menu strategy with transparent nutritional information, aligning with government policies aimed at reducing obesity. Additionally, the company continues to strengthen its digital capabilities and enhance brand presence.
As part of its digital strategy, Domino’s has heavily invested in its app and digital infrastructure, supported by a newly formed expert team with experience in online industries. This has resulted in 90% of orders being placed digitally, with 73.8% coming through the app. Domino’s will continue to drive further adoption and innovation in this space.
Dominos’ is also working closely with franchisees to improve the in-store collection experience by enhancing food offerings, tailoring products for collection customers, redesigning the collection process, and rolling out targeted promotions to boost engagement.
As a Domino’s franchisee partner, the company is fully committed to aligning with Domino’s sustainable business strategy to ensure long-term growth and success.
Key performance indicators
Sales growth
Like for like system sales growth represents a measure of our competitiveness in the market and our ability to drive increased value from the existing stores. It is an accepted performance metric across all retailing sectors. It is measured by comparing 2024 sales with 2023 sales for stores opened in 2023 or earlier, which have not been affected by splits in the previous 12 months.
Delivered on time
Customer service is key to the long term success of the business, and one of the most important aspects is speed of delivery. The quicker our customers receive their order, the better tasting the pizza and the more likely they are to order again.
We aim to deliver pizzas to customers within 30 minutes of being ordered.
B Mumtaz
Director
27 February 2025
ZAAN GROUP LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 30 APRIL 2024
- 4 -
The director presents his annual report and financial statements for the year ended 30 April 2024.
Principal activities
The principal activity of the company continued to be that of a Domino's pizza franchise.
Results and dividends
The results for the year are set out on page 10.
Ordinary dividends were paid amounting to £120,000. The director does not recommend payment of a final dividend.
Director
The director who held office during the year and up to the date of signature of the financial statements was as follows:
B Mumtaz
Qualifying third party indemnity provisions
The company has made qualifying third party indemnity provisions for the benefit of its director during the year. These provisions remain in force at the reporting date.
Disabled persons
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event of members of staff becoming disabled, every effort is made to ensure that their employment within the company continues and that the appropriate training is arranged. It is the policy of the company that the training, career development and promotion of disabled persons should, as far as possible, be identical to that of other employees.
Employee involvement
The company's policy is to consult and discuss with employees, at meetings, matters likely to affect employees' interests.
Information about matters of concern to employees is given through information bulletins and reports which seek to achieve a common awareness on the part of all employees of the financial and economic factors affecting the company's performance.
There is no employee share scheme at present, but the directors are considering the introduction of such a scheme as a means of further encouraging the involvement of employees in the company's performance.
Auditor
The auditor, King & King, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
Strategic report
The company has chosen in accordance with Companies Act 2006, s. 414C(11) to set out in the company's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report. It has done so in respect of future developments.
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.
ZAAN GROUP LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 5 -
Going concern
The director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus he continues to adopt the going concern basis in preparing the financial statements.
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
B Mumtaz
Director
27 February 2025
ZAAN GROUP LIMITED
DIRECTOR'S RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 30 APRIL 2024
- 6 -
The director is responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the director to prepare financial statements for each financial year. Under that law the director has 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 director must not approve the financial statements unless he is 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 director is required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The director is 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. He is 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.
ZAAN GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZAAN GROUP LIMITED
- 7 -
Opinion
We have audited the financial statements of Zaan Group Limited (the 'company') for the year ended 30 April 2024 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, 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:
give a true and fair view of the state of the company's affairs as at 30 April 2024 and of its loss for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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 director's 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 director with respect to going concern are described in the relevant sections of this report.
The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The director is 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:
the information given in the strategic report and the director's report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the director's report have been prepared in accordance with applicable legal requirements.
ZAAN GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZAAN GROUP LIMITED (CONTINUED)
- 8 -
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 director's 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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of director
As explained more fully in the director's responsibilities statement, the director is 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 director determines 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 director is 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 director either intends to liquidate the company or to cease operations, or has 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.
ZAAN GROUP LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZAAN GROUP LIMITED (CONTINUED)
- 9 -
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to other food regulations, waste regulations, health and safety regulations and non-compliance with employment regulations, and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006 and tax legislation. We have evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including risk of override of controls), and determined that the principal risk were related to posting inappropriate journal entries to improve financial performance, and management bias in accounting estimates and judgements. Audit procedures performed by the audit engagement team included:
challenging assumptions and judgements made by management in their significant accounting estimates (because of the risk of management bias), in particular around property plant and equipment and goodwill;
discussions with management including known or suspected instances of non-compliance with laws and regulation or fraud;
enquired with the management of actual and potential litigation and claims;
auditing the tax computations to ensure compliance with tax legislation; and
identifying and testing journal entries, in particular any journal entries posted with unusual account combinations.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in financial statements. Also, the risk of non detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
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.
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.
Shakeel Parkar (Senior Statutory Auditor)
For and on behalf of King & King, Statutory Auditor
Chartered Accountants
5th Floor
Watson House
54-60 Baker Street
London
W1U 7BU
27 February 2025
ZAAN GROUP LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 APRIL 2024
- 10 -
2024
2023
Notes
£
£
Revenue
3
22,529,081
21,721,211
Cost of sales
(8,075,374)
(7,865,931)
Gross profit
14,453,707
13,855,280
Administrative expenses
(14,368,375)
(13,524,864)
Operating profit
4
85,332
330,416
Finance costs
7
(80,768)
(64,279)
Profit before taxation
4,564
266,137
Tax on profit
8
(190,330)
(149,088)
(Loss)/profit for the financial year
(185,766)
117,049
The income statement has been prepared on the basis that all operations are continuing operations.
ZAAN GROUP LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT
30 APRIL 2024
30 April 2024
- 11 -
2024
2023
Notes
£
£
£
£
Non-current assets
Goodwill
10
1,760,000
2,187,500
Property, plant and equipment
11
2,594,593
1,127,193
4,354,593
3,314,693
Current assets
Inventories
12
100,109
90,081
Trade and other receivables
13
3,045,158
3,348,023
Cash and cash equivalents
1,041,269
1,496,832
4,186,536
4,934,936
Current liabilities
14
(3,012,640)
(2,805,540)
Net current assets
1,173,896
2,129,396
Total assets less current liabilities
5,528,489
5,444,089
Non-current liabilities
15
(1,549,917)
(1,350,081)
Provisions for liabilities
Deferred tax liability
17
190,330
(190,330)
-
Net assets
3,788,242
4,094,008
Equity
Called up share capital
19
9,000
9,000
Retained earnings
3,779,242
4,085,008
Total equity
3,788,242
4,094,008
These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.
The financial statements were approved and signed by the director and authorised for issue on 27 February 2025
B Mumtaz
Director
Company registration number 05102663 (England and Wales)
ZAAN GROUP LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 APRIL 2024
- 12 -
Share capital
Retained earnings
Total
Notes
£
£
£
Balance at 1 May 2022
9,000
4,087,959
4,096,959
Year ended 30 April 2023:
Profit and total comprehensive income
-
117,049
117,049
Dividends
9
-
(120,000)
(120,000)
Balance at 30 April 2023
9,000
4,085,008
4,094,008
Year ended 30 April 2024:
Loss and total comprehensive income
-
(185,766)
(185,766)
Dividends
9
-
(120,000)
(120,000)
Balance at 30 April 2024
9,000
3,779,242
3,788,242
ZAAN GROUP LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 APRIL 2024
- 13 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
24
1,240,735
315,233
Interest paid
(80,768)
(64,279)
Income taxes paid
(140,972)
(438,954)
Net cash inflow/(outflow) from operating activities
1,018,995
(188,000)
Investing activities
Purchase of property, plant and equipment
(1,622,413)
(8,555)
Net cash used in investing activities
(1,622,413)
(8,555)
Financing activities
Repayment of borrowings
(50,000)
(100,000)
Proceeds from new bank loans
925,000
Repayment of bank loans
(607,795)
(504,827)
Dividends paid
(120,000)
(120,000)
Net cash generated from/(used in) financing activities
147,205
(724,827)
Net decrease in cash and cash equivalents
(456,213)
(921,382)
Cash and cash equivalents at beginning of year
1,093,896
2,015,278
Cash and cash equivalents at end of year
637,683
1,093,896
Relating to:
Cash at bank and in hand
1,041,269
1,496,832
Bank overdrafts included in creditors payable within one year
(403,586)
(402,936)
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 APRIL 2024
- 14 -
1
Accounting policies
Company information
Zaan Group Limited is a private company limited by shares incorporated in England and Wales. The registered office is 28 London Road, Rainham, KENT, ME8 6YX.
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 director has a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the director continues to adopt the going concern basis of accounting in preparing the financial statements.
1.3
Revenue
Revenue 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.
Contract with customers for the sale of products to end consumers include one performance obligation. The company has concluded that revenue from the sale of products should be recognised at a point in time when control of the goods are transferred to the consumer, which is the point of delivery or collection. Revenue is measured at the menu price less any discounts offered.
1.4
Intangible fixed assets - goodwill
Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is considered to have a finite useful life and is amortised on a systematic basis over its expected life, which is 10 years.
For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
1.5
Property, plant and equipment
Property, plant and equipment 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:
Leasehold land and buildings
20 years
Plant and equipment
15% reducing balance
Fixtures and fittings
10% reducing balance
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 15 -
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.
1.6
Impairment of non-current assets
At each reporting period end date, the company reviews the carrying amounts of its tangible and intangible 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
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first in, first out basis. Net realisable value is based on estimated selling price less any further costs expected to be incurred to disposal.
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.
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 statement of financial position 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.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 16 -
Basic financial assets
Basic financial assets, which include trade and other receivables 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.
Basic financial liabilities
Basic financial liabilities, including trade and other payables, 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 payables 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 payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 17 -
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 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 company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
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 income statement, 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.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
1
Accounting policies
(Continued)
- 18 -
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 non-current 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 director is 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.
Critical judgements
The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.
Assessing indicators of impairment
In assessing whether there have been any indicators of impairment of assets, the director has considered both internal and external sources of information such as market conditions, counterparty credit ratings and experience recoverability. There have been no indicators of impairments identified during the current financial period.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
2
Judgements and key sources of estimation uncertainty
(Continued)
- 19 -
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.
Estimating value in use
Where an indication of impairment exists the directors will carry out an impairment review to determine the recoverable amount, which is the higher of fair value less cost to sell and value in use. The value in use calculation requires the director to estimate the future cash flows expected to arise from the asset or the cash generating unit and a suitable discount rate in order to calculate present value.
Determining residual values and useful economic lives of property, plant and equipment
The company depreciate tangible assets over their estimated useful lives. The estimation of the useful lives of assets is based on historic performance as well as expectations about future use and therefore requires estimates and assumptions to be applied by management. The actual lives of these assets can vary depending on a variety of factors, including technological innovation, product life cycles and maintenance programmes. Judgement is applied by management when determining the residual values for plant, machinery and equipment. When determining the residual value management aim to assess the amount that the company would currently obtain for the disposal of the assets, if it were already of the condition expected at the end of its useful economic life. Where possible this is done with reference to external market prices.
3
Revenue
2024
2023
£
£
Revenue analysed by class of business
Food sales
22,529,081
21,721,211
2024
2023
£
£
Revenue analysed by geographical market
United Kingdom
22,529,081
21,721,211
4
Operating profit
2024
2023
Operating profit for the year is stated after charging:
£
£
Fees payable to the company's auditor for the audit of the company's financial statements
18,000
16,000
Depreciation of owned property, plant and equipment
155,013
133,600
Amortisation of intangible assets
427,500
427,500
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 20 -
5
Employees
The average monthly number of persons (including directors) employed by the company during the year was:
2024
2023
Number
Number
Restaurant team
554
498
Managers
20
20
Total
574
518
Their aggregate remuneration comprised:
2024
2023
£
£
Wages and salaries
8,227,026
7,140,895
Social security costs
565,251
487,804
Pension costs
107,992
96,210
8,900,269
7,724,909
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
57,921
52,436
7
Finance costs
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
79,922
49,833
Other finance costs:
Other interest
846
14,446
80,768
64,279
8
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
149,088
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
8
Taxation
2024
2023
£
£
(Continued)
- 21 -
Deferred tax
Origination and reversal of timing differences
190,330
Total tax charge
190,330
149,088
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:
2024
2023
£
£
Profit before taxation
4,564
266,137
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2023: 19.49%)
1,141
51,878
Effect of change in corporation tax rate
30,279
Permanent capital allowances in excess of depreciation
(1,141)
66,931
Deferred Tax expesne
190,330
Taxation charge for the year
190,330
149,088
9
Dividends
2024
2023
£
£
Interim paid
120,000
120,000
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 22 -
10
Intangible fixed assets
Goodwill
£
Cost
At 1 May 2023 and 30 April 2024
4,275,000
Amortisation and impairment
At 1 May 2023
2,087,500
Amortisation charged for the year
427,500
At 30 April 2024
2,515,000
Carrying amount
At 30 April 2024
1,760,000
At 30 April 2023
2,187,500
More information on impairment movements in the year is given in note .
11
Property, plant and equipment
Leasehold land and buildings
Plant and equipment
Fixtures and fittings
Total
£
£
£
£
Cost
At 1 May 2023
635,035
1,115,462
138,557
1,889,054
Additions
1,507,952
98,695
15,766
1,622,413
At 30 April 2024
2,142,987
1,214,157
154,323
3,511,467
Depreciation and impairment
At 1 May 2023
123,648
592,665
45,548
761,861
Depreciation charged in the year
59,911
85,219
9,883
155,013
At 30 April 2024
183,559
677,884
55,431
916,874
Carrying amount
At 30 April 2024
1,959,428
536,273
98,892
2,594,593
At 30 April 2023
511,387
522,797
93,009
1,127,193
12
Inventories
2024
2023
£
£
Raw materials and consumables
100,109
90,081
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 23 -
13
Trade and other receivables
2024
2023
Amounts falling due within one year:
£
£
Trade receivables
215,086
588,861
Amounts owed by related undertakings
2,393,719
2,395,672
Other receivables
17,694
15,006
Prepayments and accrued income
418,659
348,484
3,045,158
3,348,023
Amounts owed by related undertakings are unsecured, interest free, have no fixed date of repayment and are repayable on demand.
14
Current liabilities
2024
2023
Notes
£
£
Bank loans and overdrafts
16
985,492
917,473
Trade payables
293,866
475,677
Corporation tax
22,562
163,534
Other taxation and social security
975,720
1,230,856
Other payables
714,000
Accruals and deferred income
21,000
18,000
3,012,640
2,805,540
15
Non-current liabilities
2024
2023
Notes
£
£
Bank loans and overdrafts
16
1,082,917
833,081
Other borrowings
16
467,000
517,000
1,549,917
1,350,081
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 24 -
16
Borrowings
2024
2023
£
£
Bank loans
1,664,823
1,347,618
Bank overdrafts
403,586
402,936
Other loans
467,000
517,000
2,535,409
2,267,554
Payable within one year
985,492
917,473
Payable after one year
1,549,917
1,350,081
The bank loan is secured on the fixed and floating charge over all assets of the company.
The bank loan is repayable over the period until December 2029. The interest rate on the loan is 2.75% to 8% per annum.
Loans from shareholders are unsecured, interest free, and are repayable on 1 May 2025.
17
Deferred taxation
The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:
Liabilities
Liabilities
2024
2023
Balances:
£
£
Accelerated capital allowances
208,141
-
Tax losses
(17,811)
-
190,330
-
2024
Movements in the year:
£
Liability at 1 May 2023
-
Charge to profit or loss
190,330
Liability at 30 April 2024
190,330
The deferred tax liability set out above is expected to reverse within 12 months and relates to accelerated capital allowances that are expected to mature within the same period.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 25 -
18
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
107,992
96,210
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.
19
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary of £1 each
9,000
9,000
9,000
9,000
20
Operating lease commitments
At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
2024
2023
£
£
Within one year
423,500
360,500
Between two and five years
1,622,500
1,392,801
In over five years
2,772,375
2,197,234
4,818,375
3,950,535
21
Related party transactions
Balances with related parties
The companies are under common ownership or management by virtue of Mr B Mumtaz being director or shareholder of the following companies.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
21
Related party transactions
(Continued)
- 26 -
Amounts owed by
Amounts owed to
related parties
related parties
2024
2023
2024
2023
£
£
£
£
Abdul Ghani GmbH
232,041
-
Hot Spot Cambridge Limited
66,500
34,000
Hot Spot Creamery Limited
15,364
15,364
Hot Spot Tunbridge Limited
117,650
25,000
Jadi Euro Limited
58,524
58,524
Key In Charge Limited
24,275
1,075
KM Partnership Limited
-
-
167,599
181,047
Naaz Limited
345,214
313,521
Ruprai Construction Limited
216,258
478,302
S & A Company London Limited
-
-
57,507
54,507
Zaan Limited
1,367,334
1,250,272
Zaan UK Limited
170,665
454,603
Zadan London Ltd
-
-
714,000
Other information
The above balances are included within Trade receivables and Amounts owed by related parties in note 12.
During the year, a company under common control has provided construction services, amounting to £1,467,500 (2023: £660,000) and companies under common control have recharged expenses, amounting to £ 45,687 (2023: £82,754 ).
22
Directors' transactions
Dividends totalling £120,000 (2023 - £120,000) were paid in the year in respect of shares held by the company's directors.
As at 30 April 2024, other creditors includes amounts owed to directors £ Nil (2023 : £ Nil).
23
Ultimate controlling party
Mr B Mumtaz is the ultimate controlling party by virtue of his shareholding.
ZAAN GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 APRIL 2024
- 27 -
24
Cash generated from operations
2024
2023
£
£
(Loss)/profit after taxation
(185,766)
117,049
Adjustments for:
Taxation charged
190,330
149,088
Finance costs
80,768
64,279
Amortisation and impairment of intangible assets
427,500
427,500
Depreciation and impairment of property, plant and equipment
155,013
133,600
Movements in working capital:
(Increase)/decrease in inventories
(10,028)
9,012
Decrease/(increase) in trade and other receivables
302,865
(810,548)
Increase in trade and other payables
280,053
225,253
Cash generated from operations
1,240,735
315,233
25
Analysis of changes in net debt
1 May 2023
Cash flows
30 April 2024
£
£
£
Cash at bank and in hand
1,496,832
(455,563)
1,041,269
Bank overdrafts
(402,936)
(650)
(403,586)
1,093,896
(456,213)
637,683
Borrowings excluding overdrafts
(1,864,618)
(267,205)
(2,131,823)
(770,722)
(723,418)
(1,494,140)
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