I notice that the little transformer has no power or current rating. Maybe it is overloaded.
If the mains is really 220V RMS and if the transformer is made by a company who know how to make a good transformer then it will have a 12V RMS sinewave when it has its rated load.
The peak voltage of 12VAC is 16.97V and the diodes in the bridge rectifier will reduce it to 14.97V. The 1 ohm resistor will reduce it to maybe 13.8V. Ripple because the capacitor does not have a very high capacitance might reduce the average output to 12.0VDC.
The Rl load draws 340mA. The zener diode has (12V - 5.1V)/15 ohms minus 340mA= 120mA and heats with 0.6W.
The 12V transformer should be rated at (16.97V X 340mA=) 5.77VA or (5.77VA/12V=) 481mA. Add 15mA of the red LED.