MZ Rags Ltd

	Page
Balance Sheet	1—2
Notes to the Financial Statements	3—8

1. General Information

MZ Rags Ltd is a private company, limited by shares, incorporated in England & Wales, registered number 08133041 . The registered office is 336 Pinner Road, Harrow, HA1 4LB.

2. Accounting Policies

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention and in accordance with Financial Reporting Standard 102 section 1A Small Entities "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

The financial statements are presented in Sterling (£) and figures are shown to the nearest whole pound.

2.2. Turnover

Turnover is measured at the fair value of the consideration received or receivable, net of discounts and value added taxes. Turnover includes revenue earned from the sale of goods and from the rendering of services. Turnover is reduced for estimated customer returns, rebates and other similar allowances.

Sale of goods

Turnover from the sale of goods is recognised when the significant risks and rewards of ownership of the goods has transferred to the buyer. This is usually at the point that the customer has signed for the delivery of the goods.

Rendering of services

Turnover from the rendering of services is recognised by reference to the stage of completion of the contract. The stage of completion of a contract is measured by comparing the costs incurred for work performed to date to the total estimated contract costs. Turnover is only recognised to the extent of recoverable expenses when the outcome of a contract cannot be estimated reliably.

2.3. Tangible Fixed Assets and Depreciation

Tangible fixed assets are measured at cost less accumulated depreciation and any accumulated impairment losses. Depreciation is provided at rates calculated to write off the cost of the fixed assets, less their estimated residual value, over their expected useful lives on the following bases:

Plant & Machinery	25% on cost
Motor Vehicles	10% on cost
Fixtures & Fittings	25% on cost
Computer Equipment	25% on cost

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MZ Rags Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

2.4. Leasing and Hire Purchase Contracts

Assets obtained under finance leases are capitalised as tangible fixed assets. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives. Assets acquired under hire purchase contracts are depreciated over their useful lives. Finance leases are those where substantially all of the benefits and risks of ownership are assumed by the company. Obligations under such agreements are included in the creditors net of the finance charge allocated to future periods. The finance element of the rental payment is charged to the profit and loss account so as to produce a constant periodic rate of charge on the net obligation outstanding in each period.

Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the lessor are charged to the profit and loss account as incurred.

2.5. Stocks and Work in Progress

Stocks and work in progress are valued at the lower of cost and net realisable value after making due allowance for obsolete and slow-moving stocks. Cost includes all direct costs and an appropriate proportion of fixed and variable overheads. Work-in-progress is reflected in the accounts on a contract by contract basis by recording turnover and related costs as contract activity progresses.

2.6. Taxation

Income 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 profit as reported in the statement of comprehensive income because of items of income or expense that are taxable or deductible in other years and 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 end of the reporting period.

Deferred tax is recognised on timing differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable timing differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible timing differences can be utilised. The carrying amount of deferred tax assets is reviewed at the end of each reporting period 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 assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. Deferred tax liabilities are presented within provisions for liabilities and deferred tax assets within debtors. The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax are recognised in profit or loss for the year, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case current and deferred tax are recognised in other comprehensive income or directly in equity respectively.

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MZ Rags Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

2.7. Financial instruments

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12

‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a netbasis 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.

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

3. Average Number of Employees

Average number of employees, including directors, during the year was: 11 (2024: 15)

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MZ Rags Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

4. Tangible Assets

	Plant & Machinery	Motor Vehicles	Fixtures & Fittings	Computer Equipment	Total
	£	£	£	£	£
Cost
As at 1 August 2024	99,228	76,440	8,537	3,252	187,457
Additions	-	-	-	727	727

As at 31 July 2025	99,228	76,440	8,537	3,979	188,184

Depreciation
As at 1 August 2024	95,019	24,682	8,453	2,833	130,987
Provided during the period	4,209	7,644	84	585	12,522

As at 31 July 2025	99,228	32,326	8,537	3,418	143,509

Net Book Value
As at 31 July 2025	-	44,114	-	561	44,675

As at 1 August 2024	4,209	51,758	84	419	56,470

5. Stocks

	2025	2024
	£	£
Finished goods	102,000	110,550

6. Debtors

	2025	2024
	£	£
Due within one year
Trade debtors	14,880	55,103
Amounts owed by participating interests	90,000	-
Other debtors	29,638	118,838

	134,518	173,941

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MZ Rags Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

7. Creditors: Amounts Falling Due Within One Year

	2025	2024
	£	£
Net obligations under finance lease and hire purchase contracts	12,259	12,252
Trade creditors	45,299	94,698
Bank loans and overdrafts	6,314	-
Other creditors	219,649	136,490
Taxation and social security	2,224	-

	285,745	243,440

8. Creditors: Amounts Falling Due After More Than One Year

	2025	2024
	£	£
Net obligations under finance lease and hire purchase contracts	30,703	42,970
Bank loans	21,002	32,870

	51,705	75,840

9. Loans

An analysis of the maturity of loans is given below:

	2025	2024
	£	£
Amounts falling due within one year or on demand:
Bank loans	6,314	-

	2025	2024
	£	£
Amounts falling due between one and five years:
Bank loans	21,002	32,870

10. Obligations Under Finance Leases and Hire Purchase

	2025	2024
	£	£
The future minimum finance lease payments are as follows:
Not later than one year	12,259	12,252
Later than one year and not later than five years	30,703	42,970

	42,962	55,222

	42,962	55,222

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MZ Rags Ltd

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

11. Share Capital

	2025	2024
Allotted, called up and fully paid	£	£
100 Ordinary Shares of £ 1.00 each	100	100

12. Dividends

	2025	2024
	£	£
On equity shares:
Final dividend paid	8,000	14,000

13. Related Party Disclosures

Included in other creditors is a balance of £45,100 (2024: £124,502 ) due to the director Mr Walji Mohammed Mustafa.

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		2025		2024
	Notes	£	£	£	£
FIXED ASSETS
Tangible Assets	4		44,675		56,470

			44,675		56,470
CURRENT ASSETS
Stocks	5	102,000		110,550
Debtors	6	134,518		173,941
Cash at bank and in hand		71,196		2,562

		307,714		287,053
Creditors: Amounts Falling Due Within One Year	7	(285,745 )		(243,440 )

NET CURRENT ASSETS (LIABILITIES)			21,969		43,613

TOTAL ASSETS LESS CURRENT LIABILITIES			66,644		100,083

Creditors: Amounts Falling Due After More Than One Year	8		(51,705 )		(75,840 )

NET ASSETS			14,939		24,243

CAPITAL AND RESERVES
Called up share capital	11		100		100
Profit and Loss Account			14,839		24,143

SHAREHOLDERS' FUNDS			14,939		24,243