Company registration number 05696165 (England and Wales)
ZOLA LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
ZOLA LIMITED
CONTENTS
Page
Strategic report
1 - 2
Director's report
3 - 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 - 24
ZOLA LIMITED
COMPANY INFORMATION
Director
Mr KI Patel
Company number
05696165
Registered office
Elthorne Gate
64 High Street
Pinner
England
HA5QA
Auditor
Aequitas Accountants Ltd
Elthorne Gate
64 High Street
Pinner
Middlesex
HA5 5QA
ZOLA LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 1 -

The director presents the strategic report for the year ended 31 May 2024.

Review of the business

The convenience store sector has faced significant competition from larger supermarkets. Despite these market challenges, the company has demonstrated steady growth, driven by its strategic decision to operate under well-established brands such as Costcutter and Bargain Booze (Bestway).

During the year, the company successfully acquired five new retail stores and has outlined plans for further expansion through the acquisition of smaller retail outlets. This continuous growth strategy, combined with targeted acquisitions, has enabled the company to strengthen its market position and remain competitive against larger supermarket chains. As a result, the revenue, margins and profits have all increased compared to the previous year.

Future Developments

The company anticipates facing continued challenges from larger supermarket chains and rising costs from major suppliers. These factors have led to the closure of many smaller retailers or their acquisition by larger competitors.

Additionally, the company expects an increase in staff costs and challenges in customer retention. In response, the company is implementing a strategic expansion plan through acquisitions while focusing on competitive pricing to attract and retain customers.

As a result of these initiatives, the company has a reasonable expectation for a continued growth in revenue and profitability over the next 12 months and in the years to follow.

Principal risks and uncertainties

The principal risks are the level of competition from larger chain of super markets, rising costs and the customer retention.

Credit risk

The company maintains a rigorous approach to credit risk management and considers its existing credit assessment policies to be effective in mitigating exposure. Operations are conducted on an immediate cash receipt basis, minimising trade receivables and reducing credit risk from customers. The company possesses adequate net assets to fulfil its debt obligations within the agreed payment terms.

Furthermore, the company does not have any significant concentrations of credit risk. The amounts presented in the balance sheet reflect the maximum potential credit risk exposure, assuming other parties fail to meet their financial obligations under existing financial instruments.

Liquidity risk

The company risk to liquidity is as a result of funds available to cover future commitments. The company manages liquidity risk through on ongoing review of future commitments and credit facilities.

Key performance indicators

The Company's key financial and other performance indicators during the year were as follows:

 

2024 2023

£ £

Turnover 14,156,703 10,563,706

Gross profit 3,381,991 2,423,991

EBITDA 481,691 423,713    

ZOLA LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 2 -

On behalf of the board

Mr KI Patel
Director
20 June 2025
ZOLA LIMITED
DIRECTOR'S REPORT
FOR THE YEAR ENDED 31 MAY 2024
- 3 -

The director presents his annual report and financial statements for the year ended 31 May 2024.

Principal activities

The company's principal business activity continues to be that of operation of multiple convenience stores, including well-known brands such as Costcutter and Bargain Booze.

Results and dividends

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

Total ordinary share dividends declared and paid for the year was £210,326.

Director

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

Mr KI Patel
Statement of director's responsibilities

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:

 

 

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.

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.

ZOLA LIMITED
DIRECTOR'S REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 4 -
On behalf of the board
Mr KI Patel
Director
20 June 2025
ZOLA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZOLA LIMITED
- 5 -
Opinion

We have audited the financial statements of Zola Limited (the 'company') for the year ended 31 May 2024 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 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.

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 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:

ZOLA LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF ZOLA LIMITED (CONTINUED)
- 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 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:

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.

Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to industry sector regulations and unethical and prohibited business practices, 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 preparation of the financial statements such as the Companies Act 2006 and UK Tax Legislation. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls). Appropriate audit procedures in response to these risks were carried out. These procedures included:

 

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

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.

Other matters

The comparatives are not audited. Accordingly, we do not express an opinion on the corresponding figures for that period

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.

Pankaj Patel
Senior Statutory Auditor
For and on behalf of Aequitas Accountants Ltd
20 June 2025
Chartered
Statutory Auditor
Elthorne Gate
64 High Street
Pinner
Middlesex
HA5 5QA
ZOLA LIMITED
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE YEAR ENDED 31 MAY 2024
- 8 -
2024
2023
Notes
£
£
Turnover
3
14,156,703
10,563,706
Cost of sales
(10,774,712)
(8,139,715)
Gross profit
3,381,991
2,423,991
Administrative expenses
(3,245,339)
(2,211,579)
Other operating income
125,450
75,310
Operating profit
262,102
287,722
Interest receivable and similar income
7
291
123
Interest payable and similar expenses
8
(218,658)
(101,288)
Profit before taxation
43,735
186,557
Tax on profit
9
(73,029)
(47,381)
(Loss)/profit for the financial year
(29,294)
139,176
Retained earnings brought forward
652,990
581,571
Dividends
10
(210,263)
(67,757)
Retained earnings carried forward
413,433
652,990

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

ZOLA LIMITED
BALANCE SHEET
AS AT 31 MAY 2024
31 May 2024
- 9 -
2024
2023
Notes
£
£
£
£
Fixed assets
Goodwill
11
790,649
505,962
Tangible assets
12
831,456
581,847
Investments
13
4,944
4,944
1,627,049
1,092,753
Current assets
Stocks
15
958,056
496,040
Debtors
16
230,497
157,702
Cash at bank and in hand
354,204
488,499
1,542,757
1,142,241
Creditors: amounts falling due within one year
17
(1,370,221)
(716,501)
Net current assets
172,536
425,740
Total assets less current liabilities
1,799,585
1,518,493
Creditors: amounts falling due after more than one year
18
(1,253,548)
(805,928)
Provisions for liabilities
Deferred tax liability
21
132,504
59,475
(132,504)
(59,475)
Net assets
413,533
653,090
Capital and reserves
Called up share capital
23
100
100
Distributable profit and loss reserves
413,433
652,990
Total equity
413,533
653,090

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 20 June 2025
Mr KI Patel
Director
Company registration number 05696165 (England and Wales)
ZOLA LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 MAY 2024
- 10 -
2024
2023
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
26
145,298
637,058
Interest paid
(218,658)
(101,288)
Income taxes paid
(50,903)
(47,455)
Net cash (outflow)/inflow from operating activities
(124,263)
488,315
Investing activities
Purchase of intangible assets
(335,312)
-
0
Purchase of tangible fixed assets
(418,280)
(87,648)
Proceeds from disposal of tangible fixed assets
-
0
39,388
Interest received
291
123
Dividends received
28,286
-
0
Net cash used in investing activities
(725,015)
(48,137)
Financing activities
Repayment of bank loans
778,008
475,325
Payment of finance leases obligations
132,865
(707,737)
Dividends paid
(210,263)
(67,757)
Net cash generated from/(used in) financing activities
700,610
(300,169)
Net (decrease)/increase in cash and cash equivalents
(148,668)
140,009
Cash and cash equivalents at beginning of year
482,886
342,877
Cash and cash equivalents at end of year
334,218
482,886
Relating to:
Cash at bank and in hand
354,204
488,499
Bank overdrafts included in creditors payable within one year
(19,986)
(5,613)
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MAY 2024
- 11 -
1
Accounting policies
Company information

Zola Limited is a private company limited by shares incorporated in England and Wales. The registered office is Elthorne Gate, 64 High Street, Pinner, England, HA5QA.

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 as applicable to companies subject to the medium-sized companies regime.

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, [modified to include the revaluation of freehold properties and to include investment properties and certain financial instruments at fair value]. The principal accounting policies adopted are set out below.

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
Turnover

Turnover is recognised at the fair value of the consideration received or receivable for goods and services provided in the normal course of business, and is shown net of VAT and other sales related taxes. The fair value of consideration takes into account trade discounts, settlement discounts and volume rebates.

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
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 twenty 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
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.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 12 -

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
5% on cost
Fixtures and fittings
25% on reducing balance
Motor vehicles
25% on 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.

1.6
Fixed asset investments

Interests in subsidiaries, associates and jointly controlled entities 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.

Entities in which the company has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.7
Impairment of fixed 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.

Where a reasonable and consistent basis of allocation can be identified, assets are allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 13 -

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.

1.8
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.

 

Stocks held for distribution at no or nominal consideration are measured at the lower of cost and replacement cost, adjusted where applicable for any loss of service potential.

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.

1.9
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.

1.10
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.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 14 -
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 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.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
1
Accounting policies
(Continued)
- 15 -
1.11
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.

1.12
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.

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.

1.13
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.

1.14
Retirement benefits

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

1.15
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

 

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the balance sheet as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leases asset are consumed.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 16 -
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.

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.

Impairment of goodwill

Management establishes a reliable estimate of the useful economic life of goodwill. They base their estimates on a variety of factors, such as the expected useful life of cash generating units to which goodwill is attributed, regulator or contractual provisions that can limit the useful economic life.

3
Turnover and other revenue
2024
2023
£
£
Turnover analysed by class of business
Retail convenience stores
14,156,703
10,563,706
2024
2023
£
£
Turnover analysed by geographical market
Sales in the United Kingdom
14,156,703
10,563,706
2024
2023
£
£
Other revenue
Interest income
291
123
Commissions received
79,682
66,910
4
Auditor's remuneration
2024
2023
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the company
12,500
-
0
For other services
All other non-audit services
21,682
-
0
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 17 -
5
Employees

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

2024
2023
Number
Number
138
102

Their aggregate remuneration comprised:

2024
2023
£
£
Wages and salaries
1,791,785
1,286,865
Social security costs
107,238
63,851
Pension costs
25,503
18,082
1,924,526
1,368,798
6
Director's remuneration
2024
2023
£
£
Remuneration for qualifying services
8,154
7,231
7
Interest receivable and similar income
2024
2023
£
£
Interest income
Interest on bank deposits
291
123
2024
2023
Investment income includes the following:
£
£
Interest on financial assets not measured at fair value through profit or loss
291
123
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 18 -
8
Interest payable and similar expenses
2024
2023
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
203,749
101,288
Other finance costs:
Interest on finance leases and hire purchase contracts
14,909
-
218,658
101,288
9
Taxation
2024
2023
£
£
Current tax
UK corporation tax on profits for the current period
-
0
50,903
Deferred tax
Origination and reversal of timing differences
73,029
(3,522)
Total tax charge
73,029
47,381

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
43,735
186,557
Expected tax charge based on the standard rate of corporation tax in the UK of 19.00% (2023: 20.00%)
8,310
37,311
Tax effect of expenses that are not deductible in determining taxable profit
3,670
192
Tax effect of income not taxable in determining taxable profit
-
0
(3,564)
Unutilised tax losses carried forward
19,836
-
0
Permanent capital allowances in excess of depreciation
(73,483)
(12,416)
Depreciation on assets not qualifying for tax allowances
32,048
22,184
Amortisation on assets not qualifying for tax allowances
9,619
7,196
Deferred tax charged
73,029
(3,522)
Taxation charge for the year
73,029
47,381
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 19 -
10
Dividends
2024
2023
£
£
Final paid
210,263
67,757
11
Intangible fixed assets
Goodwill
£
Cost
At 1 June 2023
757,430
Additions
335,312
At 31 May 2024
1,092,742
Amortisation and impairment
At 1 June 2023
251,468
Amortisation charged for the year
50,625
At 31 May 2024
302,093
Carrying amount
At 31 May 2024
790,649
At 31 May 2023
505,962
12
Tangible fixed assets
Leasehold land and buildings
Fixtures and fittings
Motor vehicles
Total
£
£
£
£
Cost
At 1 June 2023
351,390
882,551
13,975
1,247,916
Additions
36,303
211,122
170,855
418,280
At 31 May 2024
387,693
1,093,673
184,830
1,666,196
Depreciation and impairment
At 1 June 2023
67,099
586,629
12,341
666,069
Depreciation charged in the year
19,181
120,606
28,884
168,671
At 31 May 2024
86,280
707,235
41,225
834,740
Carrying amount
At 31 May 2024
301,413
386,438
143,605
831,456
At 31 May 2023
284,291
295,922
1,634
581,847
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
12
Tangible fixed assets
(Continued)
- 20 -

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

2024
2023
£
£
Motor vehicles
142,379
-
0
13
Fixed asset investments
2024
2023
Notes
£
£
Investments in subsidiaries
14
4,944
4,944
14
Subsidiaries

Details of the company's subsidiaries at 31 May 2024 are as follows:

Name of undertaking
Registered office
Nature of business
Class of
% Held
shares held
Direct
Mitz Limited
England and Wales
Non trading company
Ordinary
100.00
15
Stocks
2024
2023
£
£
Finished goods and goods for resale
958,056
496,040
16
Debtors
2024
2023
Amounts falling due within one year:
£
£
Trade debtors
40,798
-
0
Other debtors
185,029
157,702
Prepayments and accrued income
4,670
-
0
230,497
157,702
ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 21 -
17
Creditors: amounts falling due within one year
2024
2023
Notes
£
£
Bank loans and overdrafts
19
750,256
287,425
Obligations under finance leases
20
36,826
22,031
Trade creditors
191,949
135,300
Corporation tax
-
0
50,903
Other taxation and social security
29,989
36,210
Other creditors
161,980
176,907
Accruals and deferred income
199,221
7,725
1,370,221
716,501
18
Creditors: amounts falling due after more than one year
2024
2023
Notes
£
£
Bank loans and overdrafts
19
1,130,009
800,459
Obligations under finance leases
20
123,539
5,469
1,253,548
805,928
Amounts included above which fall due after five years are as follows:
Payable by instalments
257,955
180,845
19
Loans and overdrafts
2024
2023
£
£
Bank loans
1,860,279
1,082,271
Bank overdrafts
19,986
5,613
1,880,265
1,087,884
Payable within one year
750,256
287,425
Payable after one year
1,130,009
800,459

Bank loans and overdrafts disclosed under creditors falling due within one year and after more than one year are secured by a fixed and floating charges over the company's assets.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 22 -
20
Finance lease obligations
2024
2023
Future minimum lease payments due under finance leases:
£
£
Within one year
36,826
22,031
In two to five years
123,539
5,469
160,365
27,500

The above disclosed hire purchase contract has a fixed interest rate and is secured against the asset held under hire purchase lease commitments.

21
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
132,504
59,475
2024
Movements in the year:
£
Liability at 1 June 2023
59,475
Charge to profit or loss
73,029
Liability at 31 May 2024
132,504

The deferred tax liability set out above is expected to reverse within a few years and relates to accelerated capital allowances that are expected to mature within the same period.

22
Retirement benefit schemes
2024
2023
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
25,503
18,082

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.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 23 -
23
Share capital
2024
2023
2024
2023
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary shares of £1 each
100
100
100
100
24
Operating lease commitments
Lessee

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
196,120
93,500
Between two and five years
742,237
374,000
In over five years
923,956
396,437
1,862,313
863,937
25
Related party transactions
Transactions with related parties

During the year the company entered into the following transactions with related parties:

Purchases
Purchases
2024
2023
£
£
Entities with common shareholders
45,181
-

During the year, the Company purchased goods totalling £45,181 from KBB Custom Interiors Ltd, a related party through common shareholders. The goods acquired were utilised for the refurbishment of the Company's stores.

The following amounts were outstanding at the reporting end date:

2024
2023
Amounts due from related parties
£
£
Entities with common shareholders
16,500
1,000

Included within other debtors is the balance outstanding from KBB Custom Interiors Ltd, a related party by a common shareholder. The loan is interest-free, unsecured, and repayable on demand, and it remained outstanding as of the date of approval of the financial statements.

ZOLA LIMITED
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 MAY 2024
- 24 -
26
Cash generated from operations
2024
2023
£
£
(Loss)/profit for the year after tax
(29,294)
139,176
Adjustments for:
Taxation charged
73,029
47,381
Finance costs
218,658
101,288
Investment income
(291)
(123)
Gain on disposal of tangible fixed assets
-
(18,759)
Amortisation and impairment of intangible assets
50,625
37,872
Depreciation and impairment of tangible fixed assets
168,671
116,756
Movements in working capital:
Increase in stocks
(462,016)
(48,870)
(Increase)/decrease in debtors
(101,081)
18,898
Increase in creditors
226,997
243,439
Cash generated from operations
145,298
637,058
27
Analysis of changes in net debt
1 June 2023
Cash flows
31 May 2024
£
£
£
Cash at bank and in hand
488,499
(134,295)
354,204
Bank overdrafts
(5,613)
(14,373)
(19,986)
482,886
(148,668)
334,218
Borrowings excluding overdrafts
(1,082,271)
(778,008)
(1,860,279)
Obligations under finance leases
(27,500)
(132,865)
(160,365)
(626,885)
(1,059,541)
(1,686,426)
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