Zapi Uk Limited - Limited company accounts 23.1

REGISTERED NUMBER: 02376439 (England and Wales)

ZAPI UK LIMITED

STRATEGIC REPORT, REPORT OF THE DIRECTORS AND

FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2022

Page

Company Information

1

Strategic Report

2

Report of the Directors

3

Report of the Independent Auditors

4

Statement of Comprehensive Income

7

Balance Sheet

8

Statement of Changes in Equity

9

Notes to the Financial Statements

10

DIRECTORS:

F Gatti

G Jones

G Zanichelli

REGISTERED OFFICE:

Unit 2

Halesfield 17

Telford

Shropshire

TF7 4PW

REGISTERED NUMBER:

02376439 (England and Wales)

AUDITORS:

Burrows Scarborough Limited

(Statutory Auditor)

Sovereign House

12 Warwick Street

Coventry

CV5 6ET

The directors present their strategic report for the year ended 31 December 2022.

The company's principle activities are to import, distribute and support Zapi Group products into the UK. The primary application of our products and services, is electrification of industrial vehicles.

REVIEW OF BUSINESS

2022 was very positive for the company, with a record revenue year. The company turnover grew by 28% to £13.6 million (2021: £10.7 million), resulting in a gross profit margin of 13.7% (2021: 11%). The growth was mainly seen from new projects. Profit before tax increased to £1.400 million compared to £0.927 million in 2021. Net assets increased to £6.511 million at the year-end (2021: £5.366 million), while net cash and cash equivalents have increased to £2.910 million (2021: £2.088 million).

Our main target markets in order of success; Material Handling, Construction Equipment, Access Work Platforms and OPE/Turf. Supporting customers with system integration and design of sub-assemblies remains a key activity for the company.

PRINCIPAL RISKS AND UNCERTAINTIES

The company monitors risks in line with our ISO 9001 accreditation. Risks are evaluated and actions to mitigate are carried out and reviewed.

The principle risk to the company is around a potential slow down in the market place, driven by customer overstocking. The risk of supply chain disruption is decreasing and as a result OEM's could start to relax their schedules. This risk is being mitigated by new projects in new applications.

FUTURE DEVELOPMENTS AND R&D

The company is engaged in multiple projects which will assist the move to a 'net zero' future. The company believes in this and is using its existing experience around electrification, to enable our customers to electrify their machines.

The company will be further expanding the scope of supply, that it offers to its customer base, as the group acquires companies to increase the product portfolio. The latest additions bring more capability and products in the automation and system integration sectors, which the company will use to further grow the business.

ON BEHALF OF THE BOARD:

G Jones - Director

31 July 2023

The directors present their report with the financial statements of the company for the year ended 31 December 2022.

PRINCIPAL ACTIVITY

The principal activity of the company in the year under review was that of manufacture of electrical control equipment.

DIVIDENDS

No dividends will be distributed for the year ended 31 December 2022.

There have been no dividends since the year end up to the date of this report.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2022 to the date of this report.

F Gatti

G Jones

G Zanichelli

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Strategic Report, the Report of the Directors 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;

-	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.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the company's auditors are unaware, and each director has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the company's auditors are aware of that information.

AUDITORS

The auditors, Burrows Scarborough Limited, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

ON BEHALF OF THE BOARD:

G Jones - Director

31 July 2023

Opinion

We have audited the financial statements of Zapi Uk Limited (the 'company') for the year ended 31 December 2022 which comprise the Statement of Comprehensive Income, Balance Sheet, Statement of Changes in Equity and Notes to the Financial Statements, including a summary of 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 December 2022 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 Auditors' 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 directors are responsible for the other information. The other information comprises the information in the Strategic Report and the Report of the Directors, but does not include the financial statements and our Report of the Auditors thereon.

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.

In connection with our audit of the financial statements, 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 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 the audit:

-	the information given in the Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

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 Report of the Directors.

We have nothing to report in respect of the following matters where 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.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page three, 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 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.

Auditors' 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 a Report of the Auditors 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:

It is the primary responsibility of management, with the oversight of those charged with governance, to ensure that the company's operations are conducted in accordance with the provisions of laws and regulations and for the prevention and detection of fraud.

In identifying and assessing risks of material misstatement in respect of irregularities, including fraud, the audit engagement team:

- obtained an understanding of the nature of the industry and sector, including the legal and regulatory frameworks that the company operates in and how the company is complying with the legal and regulatory frameworks;

- enquired of management, and those charged with governance, about their own identification and assessment of the risks of irregularities, including any known actual, suspected or alleged instances of fraud;

- discussed matters about non-compliance with laws and regulations and how fraud might occur including assessment of how and where the financial statements may be susceptible to fraud.

As a result of these procedures we consider the most significant laws and regulations that have a direct impact on the financial statements are the health and safety legislation, FRS 102 and the Companies Act 2006 regulations. We performed audit procedures to detect non-compliances which may have a material impact on the financial statements, which included:

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, evaluating the business rationale in relation to significant, unusual transactions and transactions entered into outside the normal course of business and assessing whether the judgements made in making accounting estimates are indicative of potential bias.

- Enquiring of management around actual and potential litigation and claims, including health and safety.

- Enquiring of company's staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of management.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

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 a Report of the Auditors 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.

Adam Bexon MChem FCA (Senior Statutory Auditor)

for and on behalf of Burrows Scarborough Limited

(Statutory Auditor)

Sovereign House

12 Warwick Street

Coventry

CV5 6ET

31 July 2023

TURNOVER

3

13,645,430

10,659,065

Cost of sales

11,773,097

9,483,099

GROSS PROFIT

1,872,333

1,175,966

Administrative expenses

528,422

309,743

1,343,911

866,223

Other operating income

55,729

60,933

OPERATING PROFIT

5

1,399,640

927,156

Interest receivable and similar income

2,318

86

1,401,958

927,242

Interest payable and similar expenses

6

1,994

579

PROFIT BEFORE TAXATION

1,399,964

926,663

Tax on profit

7

254,463

145,902

PROFIT FOR THE FINANCIAL YEAR

1,145,501

780,761

OTHER COMPREHENSIVE INCOME

Revaluation of Land and buildings

-

312,800

Income tax relating to other comprehensive income

-

(69,580

)

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

-

243,220

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,145,501

1,023,981

FIXED ASSETS

Tangible assets

8

996,813

944,785

CURRENT ASSETS

Stocks

9

2,554,677

2,034,150

Debtors

10

3,516,222

2,338,695

Cash at bank

2,909,768

2,088,413

8,980,667

6,461,258

CREDITORS

Amounts falling due within one year

11

3,334,557

1,943,414

NET CURRENT ASSETS

5,646,110

4,517,844

TOTAL ASSETS LESS CURRENT LIABILITIES

6,642,923

5,462,629

PROVISIONS FOR LIABILITIES

13

131,882

97,089

NET ASSETS

6,511,041

5,365,540

CAPITAL AND RESERVES

Called up share capital

14

40,000

40,000

Revaluation reserve

329,361

336,685

Retained earnings

6,141,680

4,988,855

SHAREHOLDERS' FUNDS

6,511,041

5,365,540

The financial statements were approved by the Board of Directors and authorised for issue on 31 July 2023 and were signed on its behalf by:

G Jones - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2021

40,000

4,205,970

95,589

4,341,559

Changes in equity

Total comprehensive income

-

780,761

243,220

1,023,981

Depreciation on revaluation

-

2,124

(2,124

)

-

Balance at 31 December 2021

40,000

4,988,855

336,685

5,365,540

Changes in equity

Total comprehensive income

-

1,145,501

-

1,145,501

Depreciation on revaluation

-

7,324

(7,324

)

-

Balance at 31 December 2022

40,000

6,141,680

329,361

6,511,041

1.	STATUTORY INFORMATION

Zapi Uk Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the Company Information page.

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The financial statements are prepared in Sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounding to the nearest £.

The financial statements have been prepared in accordance with applicable accounting standards including Financial Reporting Standard 102 "The Financial Reporting Standard Applicable in the UK and Republic of Ireland (FRS 102)" and the Companies Act 2006. The financial statements have been prepared on a going concern basis under the historical cost convention, modified where applicable to include certain items at fair value. The financial statements are presented in sterling which is the functional currency of the company and rounded to the nearest £.

The significant accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented unless otherwise stated.

Financial Reporting Standard 102 - reduced disclosure exemptions

The company has taken advantage of the following disclosure exemption in preparing these financial statements, as permitted by FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":

•

the requirements of Section 7 Statement of Cash Flows.

Critical accounting judgements and key sources of estimation uncertainty

Many of the amounts included in the financial statements involve the use of judgement and/or estimation. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances, having regard to prior experience, but actual results may differ from the amounts included in the financial statements. Information about such judgements and estimation is contained in these accounting policies and/or the notes to the financial statements and the key areas are summarised below:

Judgements in applying accounting policies

The main judgemental area in the financial statements is the valuation of the freehold land and property.

Sources of estimation uncertainty

Depreciation rates are based on estimates of the useful lives and residual values of the assets involved (see the Tangible fixed assets accounting policy).

Slow moving stock provisions are based on estimates of the likely recoverable amounts (see the Stocks accounting policy).

Turnover

Turnover is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

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 delivery of the goods).

Revenue from contracts for the provision of professional services is recognised by reference to the stage of completion when the stage of completion, costs incurred and costs to complete can be estimated reliably. The stage of completion is calculated by comparing costs incurred, mainly in relation to contractual hourly staff rates and materials, as a proportion of total costs. Where the outcome cannot be estimated reliably, revenue is recognised only to the extent of the expenses recognised that it is probable will be recovered.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Freehold property

-

2% on revalued amount

Plant and machinery

-

25% on reducing balance

Fixtures and fittings

-

15% on reducing balance

With the exception of land and buildings, tangible fixed assets are initially measured at cost and subsequently measured at cost net of depreciation and any impairment losses.

From 31st December 2021, the revaluation model has been adopted for Land and buildings. Land and buildings are carried at the fair value at the date of revaluation less and subsequent accumulated depreciation and impairment losses. Land is not depreciated.

Revaluations shall be made with sufficient regularity to ensure that the carrying amount of land and buildings does not differ materially from the fair value at the reporting date.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Statement of Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

Pension costs and other post-retirement benefits

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme are charged to profit or loss in the period to which they relate.

3.

TURNOVER

The turnover and profit before taxation are attributable to the one principal activity of the company.

An analysis of turnover by class of business is given below:

2022

2021

£

£

Sale of goods

13,487,448

10,518,559

Sale of services

157,982

140,506

13,645,430

10,659,065

An analysis of turnover by geographical market is given below:

2022

2021

£

£

United Kingdom

6,800,674

6,124,165

Overseas

6,844,756

4,534,900

13,645,430

10,659,065

4.	EMPLOYEES AND DIRECTORS

2022

2021

£

£

Wages and salaries

661,994

578,978

Social security costs

67,760

48,309

Other pension costs

13,439

11,062

743,193

638,349

The average number of employees during the year was as follows:

2022

2021

Operations

12

8

Sales & engineering

6

5

Management & administrative

4

4

22

17

2022

2021

£

£

Directors' remuneration

123,406

81,064

Directors' pension contributions to money purchase schemes

1,321

1,319

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes

1

1

5.	OPERATING PROFIT

The operating profit is stated after charging:

2022

2021

£

£

Depreciation - owned assets

43,186

30,290

Loss on disposal of fixed assets

2,640

614

Auditors' remuneration

9,300

9,200

Foreign exchange gains

50,430

176,171

6.

INTEREST PAYABLE AND SIMILAR EXPENSES

2022

2021

£

£

Other interest

1,994

579

7.

TAXATION

Analysis of the tax charge

The tax charge on the profit for the year was as follows:

2022

2021

£

£

Current tax:

UK corporation tax

260,120

178,099

Overprovision in prior years

(40,450

)

(31,385

)

Total current tax

219,670

146,714

Deferred tax

34,793

(812

)

Tax on profit

254,463

145,902

UK corporation tax has been charged at 19% (2021 - 19%).

Reconciliation of total tax charge included in profit and loss

The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below:

2022

2021

£

£

Profit before tax

1,399,964

926,663

Profit multiplied by the standard rate of corporation tax in the UK of 19% (2021 - 19%)

265,993

176,066

Effects of:

Expenses not deductible for tax purposes

822

472

Adjustments to tax charge in respect of previous periods

(40,450

)

(31,385

)

Increase in tax rate re deferred tax

30,660

-

Effect of super deduction

(3,554

)

(923

)

Other effects

992

1,672

Total tax charge

254,463

145,902

Tax effects relating to effects of other comprehensive income

There were no tax effects for the year ended 31 December 2022.

2021

Gross

Tax

Net

£

£

£

Revaluation of Land and buildings

312,800

(69,580

)

243,220

Deferred tax:

Deferred tax included in the balance sheet is as follows:

2023

2022

£

£

Included in provisions for liabilities (note 14)

131,882

97,089

The expectation is that the deferred tax liability will reduce by £23,004 in the next financial year. £9,953 of this consists of the tax on depreciation that will be charged in excess of capital allowances to be claimed in the year to 31st December 2023 on the specific assets on the balance sheet at 31st December 2022 that are eligible for capital allowances. The remaining £13,051 relates to the deferred tax unwinding relating to the depreciation of the revalued freehold property.

8.	TANGIBLE FIXED ASSETS

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

£

£

£

£

COST OR VALUATION

At 1 January 2022

800,000

138,820

160,605

1,099,425

Additions

35,495

53,779

8,580

97,854

Disposals

-

(8,318

)

(9,296

)

(17,614

)

At 31 December 2022

835,495

184,281

159,889

1,179,665

DEPRECIATION

At 1 January 2022

-

106,459

48,181

154,640

Charge for year

15,648

12,267

15,271

43,186

Eliminated on disposal

-

(7,098

)

(7,876

)

(14,974

)

At 31 December 2022

15,648

111,628

55,576

182,852

NET BOOK VALUE

At 31 December 2022

819,847

72,653

104,313

996,813

At 31 December 2021

800,000

32,361

112,424

944,785

Included in cost or valuation of land and buildings is freehold land of £ 100,000 (2021 - £ 100,000 ) which is not depreciated.

Cost or valuation at 31 December 2022 is represented by:

Fixtures

Freehold

Plant and

and

property

machinery

fittings

Totals

£

£

£

£

Valuation in 2015

106,209

-

-

106,209

Valuation in 2021

260,000

-

-

260,000

Cost

469,286

184,281

159,889

813,456

835,495

184,281

159,889

1,179,665

If the freehold property had not been revalued it would have been included at the following historical cost:

2022

2021

£

£

Cost

469,586

433,791

Aggregate depreciation

15,648

-

Value of land in freehold land and buildings

100,000

100,000

The freehold land & building was valued on an open market basis on 31 December 2021 by Butters John Bee RICS Chartered Surveyors .

9.

STOCKS

2022

2021

£

£

Raw materials

277,796

177,985

Finished goods

2,276,881

1,856,165

2,554,677

2,034,150

The replacement cost of stocks is not materially different from the value stated above.