IRIS Accounts Production v24.2.0.383 00930058 Board of Directors Board of Directors 1.1.23 31.12.23 31.12.23 the sale and service of knitting machinery and equipment. true false true true false false false true false Defined benefit pension plans Original 1.00000 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REGISTERED NUMBER: 00930058 (England and Wales)






























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: Mr DJ Brunton
Mr CD Pernick
Mr MF Brunton


SECRETARY: Philip J Hammond & Sons


REGISTERED OFFICE: 47 Friar Lane
Leicester
LE1 5QX


REGISTERED NUMBER: 00930058 (England and Wales)


SENIOR STATUTORY AUDITOR: Mr P Bott FCA


AUDITORS: Mark J Rees LLP Chartered Accountants
and Statutory Auditors
Granville Hall
Granville Road
Leicester
LE1 7RU


BANKERS: Barclays Bank plc
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:





Mr DJ Brunton - Director


13 August 2024

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.

Mr DJ Brunton
Mr CD Pernick
Mr MF Brunton

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:





Mr DJ Brunton - Director


13 August 2024

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.




Mr P Bott FCA (Senior Statutory Auditor)
for and on behalf of Mark J Rees LLP Chartered Accountants
and Statutory Auditors
Granville Hall
Granville Road
Leicester
LE1 7RU

14 August 2024

MONARCH KNITTING MACHINERY
(U.K.) LIMITED (REGISTERED NUMBER: 00930058)

INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2023

2023 2022
Notes £    £    £    £   

TURNOVER 4 13,239,998 23,661,240

Cost of sales 7,460,258 14,419,871
GROSS PROFIT 5,779,740 9,241,369

Distribution costs 1,166,861 1,633,801
Administrative expenses 3,851,061 3,364,566
5,017,922 4,998,367
OPERATING PROFIT 6 761,818 4,243,002

Interest receivable and similar income 40,300 13,275
802,118 4,256,277

Interest payable and similar expenses 7 61,771 60,367
Other finance costs 23 27,000 -
88,771 60,367
PROFIT BEFORE TAXATION 713,347 4,195,910

Tax on profit 8 15,223 728,399
PROFIT FOR THE FINANCIAL YEAR 698,124 3,467,511

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 698,124 3,467,511


OTHER COMPREHENSIVE INCOME
Actuarial gain/(deficit) on pension (276,250 ) (690,200 )
Revaluation of property
Income tax relating to other comprehensive
income

55,250

110,200
OTHER COMPREHENSIVE INCOME
FOR THE YEAR, NET OF INCOME TAX

(221,000

)

(580,000

)
TOTAL COMPREHENSIVE INCOME
FOR THE YEAR

477,124

2,887,511

MONARCH KNITTING MACHINERY
(U.K.) LIMITED (REGISTERED NUMBER: 00930058)

BALANCE SHEET
31 DECEMBER 2023

2023 2022
Notes £    £    £    £   
FIXED ASSETS
Intangible assets 10 167,261 101,297
Tangible assets 11 5,331,371 5,282,947
Investments 12 100 100
5,498,732 5,384,344

CURRENT ASSETS
Stocks 13 8,989,804 7,731,963
Debtors 14 6,622,368 9,783,987
Cash at bank and in hand 3,671,530 5,062,994
19,283,702 22,578,944
CREDITORS
Amounts falling due within one year 15 3,418,099 6,093,561
NET CURRENT ASSETS 15,865,603 16,485,383
TOTAL ASSETS LESS CURRENT
LIABILITIES

21,364,335

21,869,727

CREDITORS
Amounts falling due after more than one year 16 (44,493 ) (375,000 )

PROVISIONS FOR LIABILITIES 20 (251,670 ) (189,961 )

PENSION LIABILITY 23 (809,000 ) (561,000 )
NET ASSETS 20,259,172 20,743,766

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 21 200,000 200,000
Revaluation reserve 22 1,613,308 1,628,644
Retained earnings 22 18,445,864 18,915,122
SHAREHOLDERS' FUNDS 20,259,172 20,743,766


The financial statements were approved by the Board of Directors and authorised for issue on 13 August 2024 and were signed on its behalf by:




Mr DJ Brunton - Director



Mr CD Pernick - Director


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 200,000 17,463,956 1,642,601 19,306,557

Changes in equity
Dividends - (1,450,302 ) - (1,450,302 )
Total comprehensive income - 2,901,468 (13,957 ) 2,887,511
Balance at 31 December 2022 200,000 18,915,122 1,628,644 20,743,766

Changes in equity
Dividends - (961,718 ) - (961,718 )
Total comprehensive income - 492,460 (15,336 ) 477,124
Balance at 31 December 2023 200,000 18,445,864 1,613,308 20,259,172

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 1 815,906 759,715
Interest paid (61,887 ) (55,958 )
Interest element of hire purchase payments
paid

116

(4,409

)
Tax paid (475,275 ) (519 )
Net cash from operating activities 278,860 698,829

Cash flows from investing activities
Purchase of intangible fixed assets (128,016 ) (17,509 )
Purchase of tangible fixed assets (292,276 ) (158,821 )
Sale of tangible fixed assets 119,403 23,750
Interest received 40,300 13,275
Net cash from investing activities (260,589 ) (139,305 )

Cash flows from financing activities
New loans in year 130,631 -
Loan repayments in year (500,000 ) (500,000 )
Capital repayments in year (78,648 ) (55,093 )
Equity dividends paid (961,718 ) (1,450,302 )
Net cash from financing activities (1,409,735 ) (2,005,395 )

Decrease in cash and cash equivalents (1,391,464 ) (1,445,871 )
Cash and cash equivalents at beginning of
year

2

5,062,994

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 713,347 4,195,910
Depreciation charges 219,571 202,464
Profit on disposal of fixed assets (33,070 ) (13,813 )
Finance costs 88,771 60,367
Finance income (40,300 ) (13,275 )
948,319 4,431,653
Increase in stocks (1,257,841 ) (1,596,279 )
Decrease/(increase) in trade and other debtors 3,325,828 (1,687,024 )
Decrease in trade and other creditors (2,200,400 ) (388,635 )
Cash generated from operations 815,906 759,715

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 (1,391,464 ) 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

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006.

3. ACCOUNTING POLICIES

Basis of preparing the financial statements
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 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.

Computer software is being amortised evenly over its estimated useful life of five years.

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
13,239,998 23,661,240

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 1,820,632 2,226,246
Social security costs 197,597 283,314
Other pension costs 161,772 151,217
2,180,001 2,660,777

The average number of employees during the year was as follows:
2023 2022

Management and administration 7 8
Production 19 20
Selling 2 2
28 30

2023 2022
£    £   
Directors' remuneration 573,649 1,161,993

The number of directors to whom retirement benefits were accruing was as follows:

Money purchase schemes 2 1

Information regarding the highest paid director is as follows:
2023 2022
£    £   
Emoluments etc 443,721 1,123,035

6. OPERATING PROFIT

The operating profit is stated after charging/(crediting):

2023 2022
£    £   
Depreciation - owned assets 145,279 115,156
Depreciation - assets on hire purchase contracts 12,240 30,542
Profit on disposal of fixed assets (33,070 ) (13,813 )
Computer software amortisation 62,052 56,766
Auditors remuneration 39,500 37,250
Foreign exchange differences 560,963 (349,201 )

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 45,834 40,405
Interest on bills payable and
letter of credit 16,376 15,553
HMRC interest (323 ) -
Hire purchase (116 ) 4,409
61,771 60,367

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 5,791 357,552
Prior year
UK corporation tax (52,277 ) -
Total current tax (46,486 ) 357,552

Deferred taxation 61,709 370,847
Tax on profit 15,223 728,399

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 713,347 4,195,910
Profit multiplied by the standard rate of corporation tax in the UK of 19%
(2022 - 19%)

135,536

797,223

Effects of:
Expenses not deductible for tax purposes 11,639 4,182
Income not taxable for tax purposes (2,601 ) -
Capital allowances in excess of depreciation (3,354 ) -
Depreciation in excess of capital allowances - 68,371
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 (276,250 ) 55,250 (221,000 )
Revaluation of property
(276,250 ) 55,250 (221,000 )

2022
Gross Tax Net
£    £    £   
Actuarial gain/(deficit) on pension (690,200 ) 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 961,718 1,450,302

10. INTANGIBLE FIXED ASSETS
Computer
software
£   
COST
At 1 January 2023 284,544
Additions 128,016
At 31 December 2023 412,560
AMORTISATION
At 1 January 2023 183,247
Amortisation for year 62,052
At 31 December 2023 245,299
NET BOOK VALUE
At 31 December 2023 167,261
At 31 December 2022 101,297

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 5,114,155 293,766 184,006 354,127 5,946,054
Additions 79,368 - 43,874 169,034 292,276
Disposals (46,865 ) (183,260 ) (3,189 ) (164,014 ) (397,328 )
At 31 December 2023 5,146,658 110,506 224,691 359,147 5,841,002
DEPRECIATION
At 1 January 2023 88,541 289,952 99,046 185,568 663,107
Charge for year 90,570 614 14,170 52,165 157,519
Eliminated on disposal (2,812 ) (182,823 ) (3,189 ) (122,171 ) (310,995 )
At 31 December 2023 176,299 107,743 110,027 115,562 509,631
NET BOOK VALUE
At 31 December 2023 4,970,359 2,763 114,664 243,585 5,331,371
At 31 December 2022 5,025,614 3,814 84,960 168,559 5,282,947

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 107,068
Transfer to ownership (107,068 )
At 31 December 2023 -
DEPRECIATION
At 1 January 2023 58,297
Charge for year 12,240
Transfer to ownership (70,537 )
At 31 December 2023 -
NET BOOK VALUE
At 31 December 2023 -
At 31 December 2022 48,771

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 100
NET BOOK VALUE
At 31 December 2023 100
At 31 December 2022 100

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 5,186,920 7,686,191
Other debtors 151,384 43,353
Derivative Asset 13,077 -
Taxation 164,209 -
VAT 6,615 290,951
Prepayments and accrued income 75,341 108,383
5,597,546 8,128,878

Amounts falling due after more than one year:
Trade debtors 1,024,822 1,655,109

Aggregate amounts 6,622,368 9,783,987

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) 395,005 500,000
Hire purchase contracts (see note 18) - 12,515
Trade creditors 2,659,923 4,141,020
Taxation - 357,552
Paye/Ni payable 62,078 68,357
Other creditors 12,850 59,305
Amounts due to group
undertakings 227 234
Accruals and deferred income 288,016 954,578
3,418,099 6,093,561

16. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE
YEAR
2023 2022
£    £   
Bank loans (see note 17) 44,493 375,000

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 395,005 500,000

Amounts falling due between one and two years:
Bank loans - 1-2 years 20,005 375,000

Amounts falling due between two and five years:
Bank loans - 2-5 years 24,488 -

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 - 12,515

19. SECURED DEBTS

The following secured debts are included within creditors:

2023 2022
£    £   
Bank loans 439,498 875,000
Hire purchase contracts - 12,515
439,498 887,515

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 251,670 175,978
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 189,961
Movement 61,709
Balance at 31 December 2023 251,670

21. CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:
Number: Class: Nominal 2023 2022
value: £    £   
200,000 Original £1 200,000 200,000

22. RESERVES
Retained Revaluation
earnings reserve Totals
£    £    £   

At 1 January 2023 18,915,122 1,628,644 20,543,766
Profit for the year 698,124 698,124
Dividends (961,718 ) (961,718 )
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 18,445,864 1,613,308 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 (4,897,000 ) (4,924,000 )
Fair value of plan assets 4,088,000 4,363,000
(809,000 ) (561,000 )
Present value of unfunded obligations - -
Deficit (809,000 ) (561,000 )
Net liability (809,000 ) (561,000 )

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 42,000 (2,313,000 )

Changes in the present value of the defined benefit obligation are as follows:

Defined benefit
pension plans
2023 2022
£    £   
Opening defined benefit obligation 4,924,000 7,198,000
Interest cost 229,000 125,000
Actuarial losses/(gains) 61,000 (1,858,000 )
Benefits paid (317,000 ) (541,000 )
4,897,000 4,924,000

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 4,363,000 7,217,000
Expected return 202,000 125,000
Actuarial gains/(losses) (160,000 ) (2,438,000 )
Benefits paid (317,000 ) (541,000 )
4,088,000 4,363,000

The amounts recognised in other comprehensive income are as follows:

Defined benefit
pension plans
2023 2022
£    £   
Actuarial gains/(losses) (221,000 ) (580,000 )
(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 4.50% 4.80%
Future pension increases 2.70% 2.60%
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:-

AmountBalance
£,000£,000

2023202220232022

1) Monarch Knitting Machinery Corporation (holding company):

Purchases of goods and services / related creditor506411

Sales of goods and services / related debtor10024600