Merc Clothing Limited

	Page
Balance Sheet	1—2
Notes to the Financial Statements	3—6

1. General Information

Merc Clothing Limited is a private company, limited by shares, incorporated in England & Wales, registered number 04143968 . The registered office is 15 Hanover Street, London, London, W1S 1YJ.

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 have been prepared on the historical cost basis, as modified by the revaluation of certain financial assets and liabilities and investment properties measured at fair value through profit or loss.

The financial statements are prepared in sterling, which is the functional currency of the entity.

2.2. Going Concern Disclosure

The financial statements have been prepared on the going concern basis. Despite the company's current Financial position, the directors and shareholders have committed to providing ongoing financial support. This support includes:

Deferral of Liabilities: Certain liabilities, including loans and trade payables, will be deferred or renegotiated to alleviate immediate financial pressures.

Operational Adjustments: The company has implemented cost-saving measures and operational efficiencies to improve its financial position.

The directors have assessed the company's financial forecasts and believe that, with this support, the company will be able to continue its operations for the foreseeable future.

2.3. 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.

2.4. Intangible Fixed Assets and Amortisation - Other Intangible

Other intangible assets was Websit Development. It is amortised to the profit and loss account over its estimated economic life of 4 years.

2.5. 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% reducing balance

2.6. 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.

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Merc Clothing Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 January 2026

2.7. Financial Instruments

A financial asset or a financial liability is recognised only when the company becomes a party to the contractual provisions of the instrument.

Basic financial instruments are initially recognised at the transaction price, unless the arrangement constitutes a financing transaction, where it is recognised at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Debt instruments are subsequently measured at amortised cost.

Where investments in non-convertible preference shares and non-puttable ordinary shares or preference shares are publicly traded or their fair value can otherwise be measured reliably, the investment is subsequently measured at fair value with changes in fair value recognised in profit or loss. All other such investments are subsequently measured at cost less impairment.

Other financial instruments, including derivatives, are initially recognised at fair value, unless payment for an asset is deferred beyond normal business terms or financed at a rate of interest that is not a market rate, in which case the asset is measured at the present value of the future payments discounted at a market rate of interest for a similar debt instrument.

Other financial instruments are subsequently measured at fair value, with any changes recognised in profit or loss, with the exception of hedging instruments in a designated hedging relationship.

Financial assets that are measured at cost or amortised cost are reviewed for objective evidence of impairment at the end of each reporting date. If there is objective evidence of impairment, an impairment loss is recognised in profit or loss immediately.

For all equity instruments regardless of significance, and other financial assets that are individually significant, these are assessed individually for impairment. Other financial assets or either assessed individually or grouped on the basis of similar credit risk characteristics.

Any reversals of impairment are recognised in profit or loss immediately, to the extent that the reversal does not result in a carrying amount of the financial asset that exceeds what the carrying amount would have been had the impairment not previously been recognised.

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.

3. Average Number of Employees

Average number of employees, including directors, during the year was: 3 (2025: 4)

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Merc Clothing Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 January 2026

4. Intangible Assets

	Development Costs
	£
Cost
As at 1 February 2025	35,325

As at 31 January 2026	35,325

Amortisation
As at 1 February 2025	35,325

As at 31 January 2026	35,325

Net Book Value
As at 31 January 2026	-

As at 1 February 2025	-

5. Tangible Assets

	Plant & Machinery
	£
Cost
As at 1 February 2025	80,853
Additions	1,332

As at 31 January 2026	82,185

Depreciation
As at 1 February 2025	79,541
Provided during the period	661

As at 31 January 2026	80,202

Net Book Value
As at 31 January 2026	1,983

As at 1 February 2025	1,312

6. Stocks

	2026	2025
	£	£
Stock	653,365	664,717

7. Debtors

	2026	2025
	£	£
Due within one year
Trade debtors	100,584	94,486
Other debtors	1,996	1,178

	102,580	95,664

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Merc Clothing Limited

Notes to the Financial Statements (continued)

For The Year Ended 31 January 2026

8. Creditors: Amounts Falling Due Within One Year

	2026	2025
	£	£
Trade creditors	5,815	(3,127 )
Bank loans and overdrafts	25,363	52,447
Other loans	87,276	57,149
Other creditors	53,962	73,015
Taxation and social security	53,689	82,399

	226,105	261,883

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

	2026	2025
	£	£
Bank loans	-	17,622
Other creditors	584,701	544,589

	584,701	562,211

10. Share Capital

	2026	2025
	£	£
Allotted, Called up and fully paid	794,139	794,139

11. Related Party Transactions

As at the balance sheet date a balance of £584,701 was owed to Merc Investments Limited (formerly Crownwest Limited) (2025 - £544,589), a Company registered in England and Wales, of which Mr Javid Alavi is a Director.

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		2026		2025
	Notes	£	£	£	£
FIXED ASSETS
Tangible Assets	5		1,983		1,312

			1,983		1,312
CURRENT ASSETS
Stocks	6	653,365		664,717
Debtors	7	102,580		95,664
Cash at bank and in hand		11,683		12,450

		767,628		772,831
Creditors: Amounts Falling Due Within One Year	8	(226,105 )		(261,883 )

NET CURRENT ASSETS (LIABILITIES)			541,523		510,948

TOTAL ASSETS LESS CURRENT LIABILITIES			543,506		512,260

Creditors: Amounts Falling Due After More Than One Year	9		(584,701 )		(562,211 )

NET LIABILITIES			(41,195 )		(49,951 )

CAPITAL AND RESERVES
Called up share capital	10		794,139		794,139
Profit and Loss Account			(835,334 )		(844,090 )

SHAREHOLDERS' FUNDS			(41,195)		(49,951)