REGISTERED NUMBER: |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
REGISTERED NUMBER: |
STRATEGIC REPORT, |
REPORT OF THE DIRECTORS AND |
FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
FOR |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
CONTENTS OF THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Page |
Company Information | 1 |
Strategic Report | 2 |
Report of the Directors | 3 |
Report of the Independent Auditors | 5 |
Income Statement | 8 |
Other Comprehensive Income | 9 |
Balance Sheet | 10 |
Statement of Changes in Equity | 12 |
Cash Flow Statement | 13 |
Notes to the Cash Flow Statement | 14 |
Notes to the Financial Statements | 16 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
COMPANY INFORMATION |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
DIRECTORS: |
SECRETARY: |
REGISTERED OFFICE: |
REGISTERED NUMBER: |
SENIOR STATUTORY AUDITOR: |
AUDITORS: |
and Statutory Auditors |
Granville Hall |
Granville Road |
Leicester |
LE1 7RU |
BANKERS: |
Town Hall Square |
Leicester |
LE1 9AA |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
STRATEGIC REPORT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their strategic report for the year ended 31 December 2023. |
The principal activity of the company in the year under review was that of the sale and service of knitting machinery and equipment. |
REVIEW OF BUSINESS |
The directors consider that the results for the year are satisfactory and that the company will continue to trade profitably for the foreseeable future. |
Financial Key Performance Indicators |
We consider that our key financial performance indicators are those that communicate the financial performance and strength of the company as a whole, these being revenue, gross margin and net assets. |
The profit for the year before taxation was £713,347 (2022 - £4,195,910). The company's balance sheet position as at the year end is considered to be strong. The net assets at the year end were £20,259,172 (2022 - £20,743,766). |
KPI's £ | 2023 | 2022 |
Turnover | 13,240 | 23,661 |
Gross Profit % | 43.65 | 39.06 |
Operating Profit % | 5.75 | 17.95 |
Net Profit | 713 | 4,196 |
Net Assets | 20,259 | 20,744 |
PRINCIPAL RISKS AND UNCERTAINTIES |
These figures are affected by both direct competition to the company and by competition to its customers, changes in foreign currency exchange rates and also by changes in the international fashion and clothing industries as a whole. |
The business environment in which the company operates continues to be challenging. The company itself faces competition from foreign suppliers of knitwear machinery and its customers also face competition from knitwear manufacturers in the Far East. The majority of the company's purchases and sales are in foreign currencies; movements in the relevant exchange rates can have a considerable impact on both its turnover and gross margin. |
With these risks and uncertainties in mind, we are aware that any plans for the future development of the business may be subject to unforeseen events outside of our control. |
ON BEHALF OF THE BOARD: |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
The directors present their report with the financial statements of the company for the year ended 31 December 2023. |
DIVIDENDS |
The total distribution of dividends for the year ended 31 December 2023 will be £961,718 (2022 - £1,450,302). |
DIRECTORS |
The directors shown below have held office during the whole of the period from 1 January 2023 to the date of this report. |
QUALIFYING THIRD PARTY INDEMNITY PROVISION |
There is a qualifying third party indemnity provision in force in respect of the company's directors. |
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. |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
REPORT OF THE DIRECTORS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
AUDITORS |
The auditors, Mark J Rees LLP Chartered Accountants, will be proposed for re-appointment at the forthcoming Annual General Meeting. |
ON BEHALF OF THE BOARD: |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
Opinion |
We have audited the financial statements of Monarch Knitting Machinery (U.K.) Limited (the 'company') for the year ended 31 December 2023 which comprise the Income Statement, Other Comprehensive Income, Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Cash Flow Statement, 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 2023 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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
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. |
REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED |
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: |
We have determined that the principal risk areas where material irregularities could occur were related to posting manual journal entries to manipulate financial performance, revenue recognition, stock valuation and significant one-off or unusual transactions. |
Our audit procedures were designed to respond in particular to these identified risks (including non compliance with laws and regulations and fraud). |
Our audit procedures included but were not limited to: |
- A review of a sample of stock lines to ensure the valuation of stock is at the lower of cost and net realisable value and testing the stock write down valuation is in line with the company policy along with attendance at stocktake to sample the stock count of stock lines. |
- A review of a sample of orders received in the year to ensure these were correctly recorded in revenue and detailed cut off testing around the year end to ensure revenue is correctly recognised. |
- A review of laws and regulations the company is subject to is followed by compliance checks and discussion with management to ensure no instances of non compliance. |
- Addressing the risks of fraud through management override of controls by performing journal entry test. |
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. |
for and on behalf of |
and Statutory Auditors |
Granville Hall |
Granville Road |
Leicester |
LE1 7RU |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
INCOME STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
TURNOVER | 4 |
Cost of sales |
GROSS PROFIT |
Distribution costs |
Administrative expenses |
5,017,922 | 4,998,367 |
OPERATING PROFIT | 6 |
Interest receivable and similar income |
802,118 | 4,256,277 |
Interest payable and similar expenses | 7 |
Other finance costs | 23 |
88,771 | 60,367 |
PROFIT BEFORE TAXATION |
Tax on profit | 8 |
PROFIT FOR THE FINANCIAL YEAR |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
OTHER COMPREHENSIVE INCOME |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
PROFIT FOR THE YEAR |
OTHER COMPREHENSIVE INCOME |
Actuarial gain/(deficit) on pension | ( |
) | ( |
) |
Revaluation of property |
Income tax relating to other comprehensive income |
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX |
( |
) |
( |
) |
TOTAL COMPREHENSIVE INCOME FOR THE YEAR |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
BALANCE SHEET |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
FIXED ASSETS |
Intangible assets | 10 |
Tangible assets | 11 |
Investments | 12 |
CURRENT ASSETS |
Stocks | 13 |
Debtors | 14 |
Cash at bank and in hand |
CREDITORS |
Amounts falling due within one year | 15 |
NET CURRENT ASSETS |
TOTAL ASSETS LESS CURRENT LIABILITIES |
CREDITORS |
Amounts falling due after more than one year | 16 | ( |
) | ( |
) |
PROVISIONS FOR LIABILITIES | 20 | ( |
) | ( |
) |
PENSION LIABILITY | 23 | ( |
) | ( |
) |
NET ASSETS |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
BALANCE SHEET - continued |
31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ | £ | £ |
CAPITAL AND RESERVES |
Called up share capital | 21 |
Revaluation reserve | 22 |
Retained earnings | 22 |
SHAREHOLDERS' FUNDS |
The financial statements were approved by the Board of Directors and authorised for issue on |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
STATEMENT OF CHANGES IN EQUITY |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
Called up |
share | Retained | Revaluation | Total |
capital | earnings | reserve | equity |
£ | £ | £ | £ |
Balance at 1 January 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 31 December 2022 |
Changes in equity |
Dividends | - | ( |
) | - | ( |
) |
Total comprehensive income | - | ( |
) |
Balance at 31 December 2023 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
2023 | 2022 |
Notes | £ | £ |
Cash flows from operating activities |
Cash generated from operations | 1 |
Interest paid | ( |
) | ( |
) |
Interest element of hire purchase payments paid |
( |
) |
Tax paid | ( |
) | ( |
) |
Net cash from operating activities |
Cash flows from investing activities |
Purchase of intangible fixed assets | ( |
) | ( |
) |
Purchase of tangible fixed assets | ( |
) | ( |
) |
Sale of tangible fixed assets |
Interest received |
Net cash from investing activities | ( |
) | ( |
) |
Cash flows from financing activities |
New loans in year |
Loan repayments in year | ( |
) | ( |
) |
Capital repayments in year | ( |
) | ( |
) |
Equity dividends paid | ( |
) | ( |
) |
Net cash from financing activities | ( |
) | ( |
) |
Decrease in cash and cash equivalents | ( |
) | ( |
) |
Cash and cash equivalents at beginning of year |
2 |
6,508,865 |
Cash and cash equivalents at end of year | 2 | 3,671,530 | 5,062,994 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS |
2023 | 2022 |
£ | £ |
Profit before taxation |
Depreciation charges |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Finance costs | 88,771 | 60,367 |
Finance income | (40,300 | ) | (13,275 | ) |
948,319 | 4,431,653 |
Increase in stocks | ( |
) | ( |
) |
Decrease/(increase) in trade and other debtors | ( |
) |
Decrease in trade and other creditors | ( |
) | ( |
) |
Cash generated from operations |
2. | CASH AND CASH EQUIVALENTS |
The amounts disclosed on the Cash Flow Statement in respect of cash and cash equivalents are in respect of these Balance Sheet amounts: |
Year ended 31 December 2023 |
31.12.23 | 1.1.23 |
£ | £ |
Cash and cash equivalents | 3,671,530 | 5,062,994 |
Year ended 31 December 2022 |
31.12.22 | 1.1.22 |
£ | £ |
Cash and cash equivalents | 5,062,994 | 6,508,865 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE CASH FLOW STATEMENT |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ANALYSIS OF CHANGES IN NET FUNDS |
At 1.1.23 | Cash flow | At 31.12.23 |
£ | £ | £ |
Net cash |
Cash at bank and in hand | 5,062,994 | (1,391,464 | ) | 3,671,530 |
5,062,994 | ( |
) | 3,671,530 |
Debt |
Finance leases | (12,515 | ) | 12,515 | - |
Debts falling due within 1 year | (500,000 | ) | 104,995 | (395,005 | ) |
Debts falling due after 1 year | (375,000 | ) | 330,507 | (44,493 | ) |
(887,515 | ) | 448,017 | (439,498 | ) |
Total | 4,175,479 | (943,447 | ) | 3,232,032 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
1. | STATUTORY INFORMATION |
Monarch Knitting Machinery (UK) Limited is a private limited company, limited by shares, registered in England and Wales (registered number 00930058), which is incorporated and domiciled in the UK. The address of the registered office is 47 Friar Lane, Leicester, LE1 5QX. |
The principal activity of Monarch Knitting Machinery (UK) Limited is the sale and service of knitting machinery and equipment. |
2. | STATEMENT OF COMPLIANCE |
3. | ACCOUNTING POLICIES |
Basis of preparing the financial statements |
The financial statements are presented in Sterling (£). |
Significant judgements and estimates |
There were no areas in which the preparation of the financial statements required management to make significant judgements or estimates. |
Turnover |
Revenue comprises the fair value for the sale of goods excluding value added taxes and represents net invoice value less estimated rebates, returns and settlement discounts. |
The company supplies products to customers from its manufacturing sites and warehouses, under standard terms and conditions. In all cases revenue is recognised when the risks and rewards of ownership are transferred and this is defined to be on dispatch of the goods. Turnover is also the total amount receivable by the company for services provided during the year, excluding value added tax. |
Intangible assets |
Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses. |
Tangible fixed assets |
Depreciation is provided at the following annual rates in order to write off the cost, less estimated residual value, of each asset over its estimated useful life:- |
Freehold building - 2% on valuation of building excluding land |
Plant and machinery - 33.3% on cost and 15 % on reducing balance |
Fixtures and equipment - 20% on cost and 15% on reducing balance |
Motor vehicles - 25% on reducing balance |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Investments in subsidiaries |
Investments in subsidiary undertakings are recognised at cost. |
Stocks and work-in-progress |
Stocks are stated at the lower of cost and estimated selling price less costs to sell, which is equivalent to the net realisable value. Costs include materials, direct labour and attributable proportion of manufacturing overheads based on normal levels of activity. Cost is calculated using the FIFO (first-in, first-out) method. Provision is made for obsolete, slow-moving or defective items where appropriate. |
Taxation |
Taxation for the year comprises current and deferred tax. Tax is recognised in the Income Statement, 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 taxation |
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. Gains and losses on forward exchange contracts are included in the accounts on the date the contracts mature but see the policy for derivative financial instruments below. |
Hire purchase commitments |
Assets held under hire purchase contracts are capitalised in the balance sheet and depreciated over their expected useful lives. |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
3. | ACCOUNTING POLICIES - continued |
Pension costs and other post-retirement benefits |
Defined Contribution Schemes: |
The pension costs charged against profits represent the amounts of the contributions payable to the schemes in respect of the accounting period. |
Defined Benefit Scheme (closed): |
The costs charged against profits represent the FRS102 adjustments for the year (as notified by the scheme actuary), in respect of gains and losses on settlements and curtailments, net finance charges, etc. |
Derivative financial instruments |
Derivative financial instruments are recognised at fair value using a valuation technique with any gains or losses being reported in profit or loss. Outstanding derivatives at reporting date are included under the appropriate format heading depending on the nature of the derivative. |
Debtors |
Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently, where material, at amortised cost using the effective interest method, less any impairment. |
Creditors |
Short term creditors are measured at transaction price, less any impairment. Other financial liabilities, including bank loans are measured initially at fair value, net of transaction costs, and are measured subsequently, where material, at amortised cost using the effective interest method, less any impairment. |
Going concern |
After reviewing the company's forecasts and projections, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. The company therefore continues to adopt the going concern basis in preparing its financial statements. |
4. | TURNOVER |
The turnover and profit before taxation are attributable to the one principal activity of the company. |
An analysis of turnover by geographical market is given below: |
2023 | 2022 |
£ | £ |
UK and Europe | 5,060,018 | 6,645,163 |
Africa | 992,431 | 1,647,967 |
Rest of the World | 7,187,549 | 15,368,110 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
5. | EMPLOYEES AND DIRECTORS |
2023 | 2022 |
£ | £ |
Wages and salaries |
Social security costs |
Other pension costs |
The average number of employees during the year was as follows: |
2023 | 2022 |
Management and administration | 7 | 8 |
Production | 19 | 20 |
Selling | 2 | 2 |
2023 | 2022 |
£ | £ |
Directors' remuneration |
The number of directors to whom retirement benefits were accruing was as follows: |
Money purchase schemes |
Information regarding the highest paid director is as follows: |
2023 | 2022 |
£ | £ |
Emoluments etc |
6. | OPERATING PROFIT |
The operating profit is stated after charging/(crediting): |
2023 | 2022 |
£ | £ |
Depreciation - owned assets |
Depreciation - assets on hire purchase contracts |
Profit on disposal of fixed assets | ( |
) | ( |
) |
Computer software amortisation |
Auditors remuneration |
Foreign exchange differences | ( |
) |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
7. | INTEREST PAYABLE AND SIMILAR EXPENSES |
2023 | 2022 |
£ | £ |
Bank loan interest |
Interest on bills payable and |
letter of credit |
HMRC interest | ( |
) |
Hire purchase | ( |
) |
8. | TAXATION |
Analysis of the tax charge |
The tax charge on the profit for the year was as follows: |
2023 | 2022 |
£ | £ |
Current tax: |
UK corporation tax |
Prior year |
UK corporation tax | (52,277 | ) | - |
Total current tax | ( |
) |
Deferred taxation |
Tax on profit |
UK corporation tax has been charged at 19% (2022 - 19%). |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
8. | TAXATION - continued |
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: |
2023 | 2022 |
£ | £ |
Profit before tax |
Profit multiplied by the standard rate of corporation tax in the UK of (2022 - |
Effects of: |
Expenses not deductible for tax purposes |
Income not taxable for tax purposes | ( |
) |
Capital allowances in excess of depreciation | ( |
) | - |
Depreciation in excess of capital allowances | - |
Research and development expenditure | (73,720 | ) | (117,325 | ) |
Other timing differences movement | - | (24,052 | ) |
Prior year tax adjustment | (52,277 | ) | - |
Total tax charge | 15,223 | 728,399 |
Tax effects relating to effects of other comprehensive income |
2023 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial gain/(deficit) on pension | ( |
) | 55,250 | (221,000 | ) |
Revaluation of property |
(276,250 | ) | 55,250 | (221,000 | ) |
2022 |
Gross | Tax | Net |
£ | £ | £ |
Actuarial gain/(deficit) on pension | ( |
) | 110,200 | (580,000 | ) |
Revaluation of property |
(690,200 | ) | 110,200 | (580,000 | ) |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
9. | DIVIDENDS |
2023 | 2022 |
£ | £ |
Interim |
10. | INTANGIBLE FIXED ASSETS |
Computer |
software |
£ |
COST |
At 1 January 2023 |
Additions |
At 31 December 2023 |
AMORTISATION |
At 1 January 2023 |
Amortisation for year |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | TANGIBLE FIXED ASSETS |
Freehold | Fixtures |
land and | Plant and | and | Motor |
buildings | machinery | equipment | vehicles | Totals |
£ | £ | £ | £ | £ |
COST OR VALUATION |
At 1 January 2023 |
Additions |
Disposals | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Eliminated on disposal | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
Included in cost or valuation of land and buildings is freehold land of £ 625,000 (2022 - £ 625,000 ) which is not depreciated. |
Cost or valuation at 31 December 2023 is represented by: |
Freehold | Fixtures |
land and | Plant and | and | Motor |
buildings | machinery | equipment | vehicles | Totals |
£ | £ | £ | £ | £ |
Valuation in 2021 | 5,000,000 | - | - | - | 5,000,000 |
Cost | 146,658 | 110,506 | 224,691 | 359,147 | 841,002 |
5,146,658 | 110,506 | 224,691 | 359,147 | 5,841,002 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
11. | TANGIBLE FIXED ASSETS - continued |
If freehold land and buildings had not been revalued they would have been included at the following historical cost: |
2023 | 2022 |
£ | £ |
Cost | 3,761,718 | 3,729,215 |
Value of land in freehold land and buildings | 272,025 | 272,025 |
Freehold land and buildings were valued on an existing use basis on 22 July 2021 by PG Tew FRICS of Peter Tew and Company . |
Fixed assets, included in the above, which are held under hire purchase contracts are as follows: |
Motor |
vehicles |
£ |
COST OR VALUATION |
At 1 January 2023 |
Transfer to ownership | (107,068 | ) |
At 31 December 2023 |
DEPRECIATION |
At 1 January 2023 |
Charge for year |
Transfer to ownership | (70,537 | ) |
At 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
12. | FIXED ASSET INVESTMENTS |
Shares in |
group |
undertakings |
£ |
COST |
At 1 January 2023 |
and 31 December 2023 |
NET BOOK VALUE |
At 31 December 2023 |
At 31 December 2022 |
13. | STOCKS |
2023 | 2022 |
£ | £ |
Goods for resale | 8,989,804 | 7,731,963 |
14. | DEBTORS |
2023 | 2022 |
£ | £ |
Amounts falling due within one year: |
Trade debtors |
Other debtors |
Derivative Asset | 13,077 | - |
Taxation |
VAT |
Prepayments and accrued income |
Amounts falling due after more than one year: |
Trade debtors |
Aggregate amounts |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
15. | CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans and overdrafts (see note 17) |
Hire purchase contracts (see note 18) |
Trade creditors |
Taxation |
Paye/Ni payable | 62,078 | 68,357 |
Other creditors |
Amounts due to group |
undertakings | 227 | 234 |
Accruals and deferred income |
16. | CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR |
2023 | 2022 |
£ | £ |
Bank loans (see note 17) |
17. | LOANS |
An analysis of the maturity of loans is given below: |
2023 | 2022 |
£ | £ |
Amounts falling due within one year or on demand: |
Bank loans - less than 1 year |
Amounts falling due between one and two years: |
Bank loans - 1-2 years |
Amounts falling due between two and five years: |
Bank loans - 2-5 years |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
18. | LEASING AGREEMENTS |
Minimum lease payments under hire purchase fall due as follows: |
2023 | 2022 |
£ | £ |
Net obligations repayable: |
Within one year |
19. | SECURED DEBTS |
The following secured debts are included within creditors: |
2023 | 2022 |
£ | £ |
Bank loans |
Hire purchase contracts | - | 12,515 |
Amounts owing under hire purchase contracts are secured on the assets concerned. |
The company's bank overdraft facility is secured by a legal charge over the company's freehold land and buildings and by a debenture dated 16 September 2004 and by a right of set-off against the company's bank balances. |
Trade creditors include approximately £1,300,000 (2022 - £2,400,000) in respect of amounts due to a supplier, which are covered by an open letter of credit by the company's bankers. These commitments and guarantees provided by the company's bankers are also secured by the legal charge over the company's freehold land and buildings and by the debenture dated 16 September 2004. |
The CBIL loan guarantee is provided by the UK Government under the Coronavirus Business Interruption Loan (CBIL) scheme. |
20. | PROVISIONS FOR LIABILITIES |
2023 | 2022 |
£ | £ |
Deferred tax |
Accelerated capital allowances |
Taxation on revaluation | - | 13,983 |
251,670 | 189,961 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
20. | PROVISIONS FOR LIABILITIES - continued |
Deferred |
tax |
£ |
Balance at 1 January 2023 |
Movement | 61,709 |
Balance at 31 December 2023 |
21. | CALLED UP SHARE CAPITAL |
Allotted, issued and fully paid: |
Number: | Class: | Nominal | 2023 | 2022 |
value: | £ | £ |
Original | £1 | 200,000 | 200,000 |
22. | RESERVES |
Retained | Revaluation |
earnings | reserve | Totals |
£ | £ | £ |
At 1 January 2023 | 20,543,766 |
Profit for the year |
Dividends | ( |
) | ( |
) |
Transfer to P & L account | 15,336 | (15,336 | ) | - |
Actuarial gain / (deficit) on |
defined benefit pension |
scheme | (221,000 | ) | - | (221,000 | ) |
At 31 December 2023 | 20,059,172 |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
23. | EMPLOYEE BENEFIT OBLIGATIONS |
The company operates a defined benefit scheme for the benefit of certain employees, which was open to anyone who met certain limited conditions (of age and length of service) prior to 1 January 1996 and is funded to cover future pension liabilities in respect of service up to 30 June 2006 (see below). The assets of the scheme are administered by trustees, in a fund independent from those of the company. |
As a result of the valuation carried out as at 31 December 2004, the actuary recommended a contribution rate of 29.8% of Pensionable Salaries (with effect from 1 January 2006), compared with the existing rate of approximately 15.0%. After lengthy discussions between the company, actuary and trustees, it was decided that the scheme should be closed for future service benefits on 30 June 2006 and it would become "paid-up". As a result, the members cannot build up any further benefits based on service after 30 June 2006, but any benefits already secured under the scheme for past service up to that date will be increased during the period from 1 July 2006 to retirement in line with legislation and the Scheme Rules. |
The scheme members as at 30 June 2006 were offered alternative pension arrangements, in a defined contribution scheme, with effect from 1 July 2006. |
The last full actuarial valuation of the scheme was carried out by a qualified independent actuary as at 1 January 2023. This valuation revealed a funding shortfall of £0.7 million. As at 1 January 2024, the balance met by the Employer without reimbursement was £150,635.37. The Employer has agreed that no reimbursement is required in respect of this amount and as such this has been treated as a deficit contribution of £150,635.37, paid on 31 January 2024. |
In addition to the above contributions, in respect of the benefit payments paid by the Employer during the period 1 January 2024 to 31 March 2024, the Employer will not require reimbursement,subject to an overall annual contribution of £125,000 over the period 1 January 2024 to 31 December 2024. |
In accordance with the Recovery Plan, dated 18 March 2024, the Trustees and the Employer have agreed that the Employer will make contributions of £125,000 per annum, payable monthly from 1 April 2024 to 28 February 2029 to meet the shortfall by 28 February 2029. |
The Employer will continue to directly meet the Scheme’s benefit payments, from which the agreed contributions of £125,000 per annum will be deducted. The benefit payments over and above £125,000 per annum will be calculated at each 31 December and may be reimbursed to the Employer. |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
23. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
The amounts recognised in the balance sheet are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Present value of funded obligations | ( |
) | ( |
) |
Fair value of plan assets |
(809,000 | ) | (561,000 | ) |
Present value of unfunded obligations |
Deficit | ( |
) | ( |
) |
Net liability | ( |
) | ( |
) |
The amounts recognised in profit or loss are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Current service cost |
Net interest from net defined benefit asset/liability |
27,000 |
- |
Past service cost |
27,000 | - |
Actual return on plan assets | ( |
) |
Changes in the present value of the defined benefit obligation are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening defined benefit obligation |
Interest cost |
Actuarial losses/(gains) | ( |
) |
Benefits paid | ( |
) | ( |
) |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
23. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
Changes in the fair value of scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Opening fair value of scheme assets |
Expected return | 202,000 | 125,000 |
Actuarial gains/(losses) | ( |
) | ( |
) |
Benefits paid | (317,000 | ) | (541,000 | ) |
The amounts recognised in other comprehensive income are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
£ | £ |
Actuarial gains/(losses) | ( |
) | ( |
) |
(221,000 | ) | (580,000 | ) |
The major categories of scheme assets as a percentage of total scheme assets are as follows: |
Defined benefit |
pension plans |
2023 | 2022 |
Gilts | 38% | - |
Index linked gilts | 4% | - |
Absolute return funds | 14% | - |
Annuities | 12% | 13% |
Diversified growth funds | 9% | 52% |
Liability driven investments | 17% | 26% |
Diversified credit funds | 9% | 9% |
Cash | -3% | - |
100% | 100% |
MONARCH KNITTING MACHINERY |
(U.K.) LIMITED (REGISTERED NUMBER: 00930058) |
NOTES TO THE FINANCIAL STATEMENTS - continued |
FOR THE YEAR ENDED 31 DECEMBER 2023 |
23. | EMPLOYEE BENEFIT OBLIGATIONS - continued |
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages): |
2023 | 2022 |
Discount rate |
Future pension increases |
Inflation assumption | 3.10% | 3.10% |
Defined contribution scheme |
The company operates a defined contribution pension scheme for the benefit of one of the directors. The assets of the scheme are administered by trustees, in a fund independent from those of the company. |
The company also operates a group personal pension scheme, which is open to all employees on meeting certain limited conditions (of age and length of service) after 1 January 1996. The assets of this scheme are administered by trustees, in funds independent from those of the company. |
The total charge to the profit and loss account for the period, in respect of defined contribution schemes, amounted to £252,416 (2022 - £245,381). |
24. | ULTIMATE PARENT COMPANY |
The company regards Monarch Knitting Machinery Corporation, which is incorporated in the United States of America, as its controlling party. Mr CD Pernick is considered to be the company's ultimate controlling party. |
25. | RELATED PARTY DISCLOSURES |
Details of the related party transactions occurring during the year are as follows:- |
Amount | Balance |
£,000 | £,000 |
2023 | 2022 | 2023 | 2022 |
1) Monarch Knitting Machinery Corporation (holding company): |
Purchases of goods and services / related creditor | 50 | 64 | 1 | 1 |
Sales of goods and services / related debtor | 100 | 246 | 0 | 0 |