The directors present the strategic report for the year ended 31 May 2025.

The principal activity of the group continued to be that of property management, development, investment, maintenance and other related activities.

Turnover for the year amounted to £37.4 million (2024: £37.5 million), representing a 0.3% decrease on the prior year. The reduction reflects marginal changes in occupancy levels and rental adjustments made to maintain competitiveness in key property segments.

The company’s gross profit decreased to £6.05 million (2024: £9.07 million). This decrease primarily arises from an increase in rent payable and other direct costs, reflecting inflationary pressures and higher service charges across the property portfolio.

Operating profit for the year was £5.07 million (2024: £8.16 million), a reduction of approximately 37.87%, due to higher rental expenses and the absence of fair value gains on investment properties recognized in the prior year. Administrative costs have remained broadly consistent year-on-year, reflecting continued cost discipline despite inflationary pressures.

Overall, profit before taxation was £4.92 million (2024: £8.19 million).

Overall net assets have increased by 42% to £10.61 million (2024: £7.47 million). The increase reflects improved collection of receivables from councils, and positive operating cash flows. There were no significant changes in the company’s capital structure, and the growth in net assets is largely attributable to these operating results and the accumulation of retained profits.

The principal risks and uncertainties facing the business include:

Market Risk – The company’s performance is sensitive to changes in rental market conditions, including demand fluctuations and tenant defaults. Management continuously monitors tenant exposure and seeks to diversify the tenant base to mitigate concentration risk.

Interest Rate and Financing Risk – Rising interest rates may increase borrowing costs. The company monitors market conditions closely and seeks to maintain prudent levels of gearing.

Regulatory and Compliance Risk – The property sector is subject to ongoing regulatory and tax changes. The company engages with external advisers to ensure compliance and mitigate exposure to regulatory changes.

Operational Risk – Disruption to property management operations or IT systems could affect revenue streams. Regular maintenance, insurance, and system upgrades are undertaken to manage this risk.

Fair Value Movements – The valuation of investment properties can fluctuate with market conditions, potentially impacting reported profits.

The company remains focused on sustaining rental income through active property management and selective investment in high-quality assets. Management will continue to explore opportunities to enhance returns through portfolio optimisation, lease renewals, and operational efficiencies.

Continued emphasis will be placed on cost control and ensuring compliance with emerging property and environmental regulations.

The Board monitors the performance of the company using the following key financial indicators:

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 May 2025.

The principal activity of the group continued to be that of property management, development, investment, maintenance and other related activities.

Ordinary dividends were paid amounting to £550,000. The directors do not recommend payment of a further dividend.

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

The company’s treasury function is responsible for managing its liquidity, interest rate, foreign currency, and credit risks. It oversees the financial instruments used in the company’s operations, including cash deposits, trade debtors, trade creditors, and borrowings, to ensure sound financial management and support sustainable growth.

The company actively manages its cash and borrowing requirements to ensure it maintains sufficient liquid resources to meet operational and capital commitments as they fall due. Cash flow forecasts are reviewed regularly to optimize interest income and minimize borrowing costs. The company’s policy is to maintain adequate headroom in available facilities to support its ongoing trading activities.

The company is exposed to interest rate risk through its interest-bearing borrowings and cash deposits. The treasury function manages this exposure by maintaining an appropriate balance between fixed and variable rate debt, reviewing market conditions regularly, and assessing the impact of potential interest rate movements on future cash flows. The overall sensitivity to interest rate changes is not considered material.

The company’s principal foreign currency exposure arises from trading with international customers and suppliers. Although the use of hedging instruments is not mandatory, the company may enter into foreign exchange forward contracts to mitigate short-term fluctuations and to stabilise sterling-denominated costs. The exposure to foreign exchange movements is monitored on an ongoing basis.

Credit risk arises primarily from trade receivables and deposits held with financial institutions. The company manages its exposure by conducting business with creditworthy counterparties that meet board-approved credit criteria. Trade receivables are subject to ongoing credit evaluations, and provisions are made for doubtful debts where required. Cash balances are maintained with reputable banks that have strong credit ratings.

The auditor, Vision Consulting Accountants Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• 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 directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

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.

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

We have audited the financial statements of ZFA Ltd (the 'company') for the year ended 31 May 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, 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 31 May 2025 and of its profit 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.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

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

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

• 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 directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

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.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and noncompliance with laws and regulations, we considered the following:

• The nature of the industry and sector, control environment, business performance including the design of the policies and performance targets.

• Results of our enquiries of management. Any matters we identified having obtained and reviewed the entity’s documentation of their policies and procedures relating to identifying, evaluating and complying with laws and regulations such as companies act 2006 as applied to limited company and whether management were aware of any instances of non-compliance.

• Detecting and responding to the risks of fraud and whether management have knowledge of any actual, suspected or alleged fraud .

• Entity's procedures to identify related party transactions.

• The internal controls established to mitigate risks of fraud or non-compliance with laws and regulations and

• The matters discussed among the audit engagement team where fraud might occur in the financial statements and any potential indicators of fraud.

It is common with all audits under ISAs (UK), we are also required to perform specific procedures to respond to the risk of management override.

We also obtained an understanding of the legal and regulatory frameworks that the entity operates in, focusing on provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial statements. In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but compliance with which may be fundamental to the entity’s ability to operate.

As a result of performing the above, our procedures to respond to risks identified included the following:

• Reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of relevant laws and regulations having a direct effect on the financial statements.

• Enquiring the management regarding related party disclosures and transactions outside the normal course of the business.

• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud.

• Reading minutes of meetings of those charged with governance.

• In addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other adjustments.

• Assessing whether the judgments made in making accounting estimates are indicative of a potential bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

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

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

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

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

ZFA Ltd is a private company limited by shares incorporated in England and Wales. The registered office is Unit 7 Anderson Road, Woodford Green, England IG8 8ET.

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, modified to include investment properties at fair value.The principal accounting policies adopted are set out below.

The financial statements of the company are consolidated in the financial statements of ZFA Group Limited. These consolidated financial statements are available from its registered office Unit 7 Anderson Road, Woodford Green, England IG8 8ET.

Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Turnover represents rent receivable and is recognised in the profit and loss account in the period it relates to.

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.

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

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

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.

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially recognised at cost, which includes the purchase cost and any directly attributable expenditure. Subsequently it is measured at fair value at the reporting end date. Changes in fair value are recognised in profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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.

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.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

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

Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

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

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

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The 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 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 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.

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

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.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

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.

The fair value of investment property is determined based on internal valuations using observable market data to the extent available. Where market data is not readily available, estimates are based on comparable market transactions.

Valuations are inherently subjective due to the fluctuations in the market. Key assumptions used in determining fair value include:

• Comparable market prices;

• Expected future rental income;

Valuation techniques are reviewed annually and calibrated to ensure consistency with market evidence. Changes in any of the assumptions could significantly affect the fair value of investment property and the related unrealised gains or losses recognised in profit or loss.

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

Their aggregate remuneration comprised:

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:

The fair value of the investment property has been determined based on a valuation carried out by the company's directors. The valuation was conducted on an open market value basis, with reference to market evidence of transaction prices for similar properties.

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

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.

Other reserves represents fair value gains net of deferred tax on revaluation of investment property.

As part of the business model the company enters into a guaranteed rental agreements with landlords for up to five years.

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases payable from one to five years, which fall due as follows:

The remuneration of key management personnel is as follows.

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

At the reporting date, amounts were receivable from companies owned and controlled by a director/owner of the company and/or their close family members as follows. These balances are unsecured, interest-free, and repayable on demand. No guarantees or other forms of security have been provided:

Advances or credits have been granted by the company to its directors as follows:

After the year end, the company invested £1.2 million in a number of properties under the course of construction overseas. Due to worldwide events following the investment the construction of the properties has ceased and the value of their investment is uncertain. The directors are of the opinion that in due course construction should continue and they will be able to realise a profit on their investment.