Denim Merchants (UK) Limited

	Page
Balance Sheet	1—2
Notes to the Financial Statements	3—9

1. General Information

Denim Merchants (UK) Limited is a private company, limited by shares, incorporated in England & Wales, registered number 07717862 . The registered office amd principal place of business is Unit 5.02 Boat Shed, 24 Exchange Quay, Manchester, M5 3EQ.

2. Accounting Policies

2.1. Basis of Preparation of Financial Statements

The financial statements have been prepared 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 have been prepared under the historical cost convention as modified by the revaluation of certain assets.

The financial statements are presented in pounds sterling which is the functional currency of the Company and rounded to the nearest £.

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, turnover principally consists of the sale of denim clothing,

Other income

Other income represents interest received on related party loans at an agreed interest rate which is recognised in the profit or loss; in addition, other income also includes rental income which is recognised on a straight line basis over the lease term.

2.3. Tangible Fixed Assets and Depreciation

Tangible fixed assets are stated at cost less accumulated depreciation and accumulated impairment losses.

Long leasehold property is not depreciated due to the indefinite life of the lease and therefore any depreciation charge would not material to the financial statements. Depreciation on tangible fixed assets is charged to the profit and loss so as to write off their value, over their estimated useful lives, using the following methods:

Improvements to property	25% - Reducing balance
Motor Vehicles	25% - Reducing balance
Fixtures & Fittings	25% - Reducing balance
Computer Equipment	25% - Reducing balance

At each balance sheet date, the Company reviews the carrying amounts of its fixed assets to determine whetherthere is any indication that any items have suffered an impairment loss. If any such indication exists, the recoverable amount of an 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 the asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. Impairment loss is recognised as an expense immediately.

2.4. Investment Properties

The investment property is a property held to earn rentals and/or for capital appreciation. The property is initially measured at cost, including transaction costs; subsequently the investment property is measured at fair value. Gains and losses arising from changes in the fair value of the investment property are included in the profit and loss account in the period which they arise.

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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

2.5. 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.

Leasing - as a lessor

Lease are classified as operating leases.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

2.6. Stocks and Work in Progress

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. Costs, which comprise direct production costs, are based on the method most appropriate to the type of inventory class, but usually on a first-in-first-out basis. Overheads are charged to profit or loss as incurred.

At each balance sheet date, the Company reviews the valuation of stocks to determine whether there is any indication that any items require a provision. If any such indication exists, the recoverable amount of an item is estimated in order to determine the extent of the provision loss, if any. If the recoverable amount of an item is estimated to be less than its cost amount, the amount of the item is reduced to its recoverable amount and stock provision loss is recognised as an expense immediately.

2.7. Foreign Currencies

Monetary 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 ruling on the date of the transaction. Exchange differences are taken into account in arriving at the operating profit.

2.8. 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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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

2.9. Pensions

The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in other creditors as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

2.10. Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand. Bank borrowings are included in creditors.

2.11. Trade and other debtors

Trade and other debtors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method, less impairment losses for bad and doubtful debts except where the effect of discounting would be immaterial. In such cases, the receivables are stated at cost less impairment losses for bad and doubtful debts.

2.12. Trade and other creditors

Trade and other creditors are initially recognised at fair value and thereafter stated at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

2.12. Invoice discounting

The trade debtors balance includes amounts which are covered by an invoice discounting arrangement. These assets have not been derecognised from the balance sheet because the company remains ultimately responsible for any unpaid balances, so the directors consider significant risks to have been retained.

3. Average Number of Employees

Average number of employees, including directors, during the year was: 6 (2024: 10)

4. Tangible Assets

	Land & Property
	Improvements to property	Leasehold	Motor Vehicles	Fixtures & Fittings
	£	£	£	£
Cost or Valuation
As at 1 August 2024	65,218	2,125,000	688,872	113,676
Additions	-	3,230	406,000	-
Disposals	(65,218 )	-	(615,621 )	(100,075 )

As at 31 July 2025	-	2,128,230	479,251	13,601

Depreciation
As at 1 August 2024	50,853	-	303,348	107,632
Provided during the period	-	-	30,365	576
Disposals	(50,853 )	-	(283,890 )	(96,337 )

As at 31 July 2025	-	-	49,823	11,871

Net Book Value
As at 31 July 2025	-	2,128,230	429,428	1,730

As at 1 August 2024	14,365	2,125,000	385,524	6,044

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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025


	Computer Equipment	Total
	£	£
Cost or Valuation
As at 1 August 2024	105,167	3,097,933
Additions	-	409,230
Disposals	(76,126 )	(857,040 )

As at 31 July 2025	29,041	2,650,123

Depreciation
As at 1 August 2024	88,353	550,186
Provided during the period	1,400	32,341
Disposals	(64,900 )	(495,980 )

As at 31 July 2025	24,853	86,547

Net Book Value
As at 31 July 2025	4,188	2,563,576

As at 1 August 2024	16,814	2,547,747

Included above are assets held under finance leases or hire purchase contracts with a initial cost as follows:

	2025	2024
	£	£
Motor Vehicles	457,250	688,872

Cost or valuation as at 31 July 2025 represented by:

	Land & Property
	Improvements to property	Leasehold	Motor Vehicles	Fixtures & Fittings
	£	£	£	£
At cost	-	3,082,671	479,251	13,601
At valuation	-	(954,441)	-	-

	-	2,128,230	479,251	13,601


	Computer Equipment	Total
	£	£
At cost	29,041	3,604,564
At valuation	-	(954,441)

	29,041	2,650,123

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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

5. Investment Property

	2025
	£
Fair Value
As at 1 August 2024	332,500
Revaluations	17,500

As at 31 July 2025	350,000

If investment property had been accounted for under historical cost accounting rules, the amounts would be:

	2025	2024
	£	£
Cost	372,217	372,217

Investment properties, which are leasehold, were revalued to fair value at 31 July 2025 based on valuations performed by the directors.

6. Stocks

	2025	2024
	£	£
Stock	196,713	331,734

7. Debtors

	2025	2024
	£	£
Due within one year
Trade debtors	81,257	974,116
Other debtors	3,356,630	4,878,552

	3,437,887	5,852,668

Deferred tax has been included in other debtors of £248,053 (2024: £311,971).

8. Creditors: Amounts Falling Due Within One Year

	2025	2024
	£	£
Net obligations under finance lease and hire purchase contracts	44,283	165,268
Trade creditors	649,597	2,084,087
Bank loans and overdrafts	22,659	27,997
Other loans	171,667	-
Other creditors	478,859	656,417
Taxation and social security	-	97,490

	1,367,065	3,031,259

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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

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

	2025	2024
	£	£
Net obligations under finance lease and hire purchase contracts	273,162	259,969
Bank loans	1,378,369	1,608,759

	1,651,531	1,868,728

Of the creditors falling due after more than one year the following amounts are due after more than five years.

	2025		2024
	£		£
Bank loans	1,287,732		1,470,629

10. Secured Creditors

Together Commercial Finance Limited holds a fixed and floating charge dated 30 October 2025 over the undertaking and all property and assets present and future.

Together Commercial Finance Limited also have a fixed charge dated 5 October 2023 secured against both the investment property and leasehold property held on the balance sheet.

Of the creditors the following amounts are secured.

	2025	2024
	£	£
Net obligations under finance lease and hire purchase contracts	317,445	425,238
Bank loans and overdrafts	1,401,028	1,636,755
Other Creditors	-	22,709

11. Obligations Under Finance Leases and Hire Purchase

	2025	2024
	£	£
The future minimum finance lease payments are as follows:
Not later than one year	44,283	165,268
Later than one year and not later than five years	273,162	259,969

	317,445	425,237

	317,445	425,237

12. Share Capital

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

13. Other Commitments

The total of future minimum lease payments under non-cancellable operating leases are as following:

	2025	2024
	£	£
Not later than one year	35,766	77

	35,766	77

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Denim Merchants (UK) Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 July 2025

14. Related Party Transactions

During the year, the company undertook the following transactions with companies under the control of members of the director's close family:

2025 2024

£ £

Loan interest received 205,955 281,057

Purchases 17,768 272,249

Rental costs - 117,000

Bad debts - 93,505

Forgiveness of Debt 500,000 -

At the reporting date, included in other debtors, are amounts owed from companies under common control of £2,859,595 (2024: £4,485,914).

At the reporting date, included in other creditors, are amounts owed to companies under common control of £189,150 (2024: £Nil).

The company owed the director £282,171 (2024: £596,146) at the year end which is repayable on demand. Despite, the company owing the Director this amount, interest has been charged to the Director of £89,329 on the drawings that have been taken during the year.

15. Ultimate Controlling Party

The company's ultimate controlling party is Mrs M Farhan by virtue of her ownership of 100% of the issued share capital in the company.

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		2025		2024
	Notes	£	£	£	£
FIXED ASSETS
Tangible Assets	4		2,563,576		2,547,747
Investment Properties	5		350,000		332,500

			2,913,576		2,880,247
CURRENT ASSETS
Stocks	6	196,713		331,734
Debtors	7	3,437,887		5,852,668
Cash at bank and in hand		84,623		16,396

		3,719,223		6,200,798
Creditors: Amounts Falling Due Within One Year	8	(1,367,065 )		(3,031,259 )

NET CURRENT ASSETS (LIABILITIES)			2,352,158		3,169,539

TOTAL ASSETS LESS CURRENT LIABILITIES			5,265,734		6,049,786

Creditors: Amounts Falling Due After More Than One Year	9		(1,651,531 )		(1,868,728 )

NET ASSETS			3,614,203		4,181,058

CAPITAL AND RESERVES
Called up share capital	12		100		100
Profit and Loss Account			3,614,103		4,180,958

SHAREHOLDERS' FUNDS			3,614,203		4,181,058