REGISTERED NUMBER: 00930058 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

MONARCH KNITTING MACHINERY

(UK) LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Report of the Independent Auditors

6

Consolidated Income Statement

9

Consolidated Other Comprehensive Income

10

Consolidated Balance Sheet

11

Company Balance Sheet

13

Consolidated Statement of Changes in Equity

15

Company Statement of Changes in Equity

16

Consolidated Cash Flow Statement

17

Notes to the Consolidated Cash Flow Statement

18

Notes to the Consolidated Financial Statements

20

DIRECTORS:

Mr DJ Brunton

Mr CD Pernick

Mr MF Brunton

SECRETARY:

Mrs JM Marlow

REGISTERED OFFICE:

74 Boston Road

Beaumont Leys

Leicester

Leicestershire

LE4 1BG

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

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

The principal activity of the group 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 group will continue to trade profitably for the foreseeable future.

This year has seen the growth of the group with the inclusion of the Monarch Turkey to go alongside the existing portfolio.

This group consolidation includes all of the companies of the group and the intermediate parent company, Monarch Knitting Machinery (UK) Limited.

Monarch Knitting Machinery (UK) Limited owns 100% of the issued share capital of Monarch Monitoring Systems Limited.

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 loss for the year before taxation was £1,059,950 (2023 - £713,347 profit). The group's balance sheet position as at the year end is considered to be strong. The net assets at the year end were £20,374,460 (2023 - £20,259,172)

KPI's £

2024

2023

Turnover

8,156

13,240

Gross Profit %

34.64

38.09

Operating Profit %

-13.03

5.75

Net Profit/(Loss)

-1,060

713

Net Assets

20,374

20,259

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 group 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

25 August 2025

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2024.

DIVIDENDS

The total distribution of dividends for the year ended 31 December 2024 will be £120,795 (2023 - £961,718).

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mr DJ Brunton

Mr CD Pernick

Mr MF Brunton

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The directors are responsible for preparing the Group 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 the group and of the profit or loss of the group 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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group 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 group'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 group's auditors are aware of that information.

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

25 August 2025

Opinion

We have audited the financial statements of Monarch Knitting Machinery (UK) Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Income Statement, Consolidated Other Comprehensive Income, Consolidated Balance Sheet, Company Balance Sheet, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Cash Flow Statement and Notes to the Consolidated 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 group's and of the parent company affairs as at 31 December 2024 and of the group's loss 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 group 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 group's and the parent 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 Group 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.

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 Group 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 Group 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 group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group 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 by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company 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 four, 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 group's and the parent 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 group or the parent company or to cease operations, or have no realistic alternative but to do so.

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

4 September 2025

TURNOVER

3

8,156,360

13,239,998

Cost of sales

5,330,895

8,196,559

GROSS PROFIT

2,825,465

5,043,439

Distribution costs

272,434

430,560

Administrative expenses

3,616,052

3,851,061

3,888,486

4,281,621

OPERATING (LOSS)/PROFIT

5

(1,063,021

)

761,818

Interest receivable and similar income

62,484

40,300

(1,000,537

)

802,118

Interest payable and similar expenses

6

29,413

61,771

Other finance costs

22

30,000

27,000

59,413

88,771

(LOSS)/PROFIT BEFORE TAXATION

(1,059,950

)

713,347

Tax on (loss)/profit

7

(607,401

)

15,223

(LOSS)/PROFIT FOR THE FINANCIAL YEAR

(452,549

)

698,124

(Loss)/profit attributable to:

Owners of the parent

(452,549

)

698,124

(LOSS)/PROFIT FOR THE YEAR

(452,549

)

698,124

OTHER COMPREHENSIVE INCOME

Actuarial gain/(Deficit) on pension

(12,770

)

(276,250

)

Revaluation of property

1,105,080

-

Income tax relating to components of other comprehensive income

(403,678

)

55,250

OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX

688,632

(221,000

)

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

236,083

477,124

Total comprehensive income attributable to:

Owners of the parent

236,083

477,124

FIXED ASSETS

Intangible assets

10

166,690

167,261

Tangible assets

11

6,583,728

5,331,371

Investments

12

-

-

6,750,418

5,498,632

CURRENT ASSETS

Stocks

13

8,783,944

8,989,804

Debtors

14

3,430,508

6,622,368

Cash at bank and in hand

3,913,985

3,671,530

16,128,437

19,283,702

CREDITORS

Amounts falling due within one year

15

1,859,669

3,417,999

NET CURRENT ASSETS

14,268,768

15,865,703

TOTAL ASSETS LESS CURRENT LIABILITIES

21,019,186

21,364,335

CREDITORS

Amounts falling due after more than one year

16

(21,009

)

(44,493

)

PROVISIONS FOR LIABILITIES

19

(33,717

)

(251,670

)

PENSION LIABILITY

22

(590,000

)

(809,000

)

NET ASSETS

20,374,460

20,259,172

CAPITAL AND RESERVES

Called up share capital

20

200,000

200,000

Revaluation reserve

21

2,302,997

1,613,308

Retained earnings

21

17,871,463

18,445,864

SHAREHOLDERS' FUNDS

20,374,460

20,259,172

The financial statements were approved by the Board of Directors and authorised for issue on 25 August 2025 and were signed on its behalf by:

Mr DJ Brunton - Director

Mr CD Pernick - Director

FIXED ASSETS

Intangible assets

10

150,494

167,261

Tangible assets

11

6,436,384

5,331,371

Investments

12

114,321

100

6,701,199

5,498,732

CURRENT ASSETS

Stocks

13

8,747,220

8,989,804

Debtors

14

3,667,485

6,622,368

Cash at bank and in hand

3,782,343

3,671,530

16,197,048

19,283,702

CREDITORS

Amounts falling due within one year

15

1,843,991

3,418,099

NET CURRENT ASSETS

14,353,057

15,865,603

TOTAL ASSETS LESS CURRENT LIABILITIES

21,054,256

21,364,335

CREDITORS

Amounts falling due after more than one year

16

(21,009

)

(44,493

)

PROVISIONS FOR LIABILITIES

19

(33,717

)

(251,670

)

PENSION LIABILITY

22

(590,000

)

(809,000

)

NET ASSETS

20,409,530

20,259,172

CAPITAL AND RESERVES

Called up share capital

20

200,000

200,000

Revaluation reserve

21

2,302,997

1,613,308

Retained earnings

21

17,906,533

18,445,864

SHAREHOLDERS' FUNDS

20,409,530

20,259,172

Company's (loss)/profit for the financial year

(417,479

)

698,124

The financial statements were approved by the Board of Directors and authorised for issue on 15 August 2025 and were signed on its behalf by:

Mr DJ Brunton - Director

Mr CD Pernick - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

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

Changes in equity

Dividends

-

(120,795

)

-

(120,795

)

Total comprehensive income

-

(453,606

)

689,689

236,083

Balance at 31 December 2024

200,000

17,871,463

2,302,997

20,374,460

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 January 2023

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

Changes in equity

Dividends

-

(120,795

)

-

(120,795

)

Total comprehensive income

-

(418,536

)

689,689

271,153

Balance at 31 December 2024

200,000

17,906,533

2,302,997

20,409,530

Cash flows from operating activities

Cash generated from operations

1

1,090,336

815,906

Interest paid

(37,309

)

(61,887

)

Interest element of hire purchase or finance lease rental payments paid

-

116

Tax paid

-

(475,275

)

Net cash from operating activities

1,053,027

278,860

Cash flows from investing activities

Purchase of intangible fixed assets

(59,349

)

(128,016

)

Purchase of tangible fixed assets

(352,385

)

(292,276

)

Sale of tangible fixed assets

55,042

119,403

Interest received

62,484

40,300

Net cash from investing activities

(294,208

)

(260,589

)

Cash flows from financing activities

New loans in year

-

130,631

Loan repayments in year

(375,000

)

(500,000

)

Capital repayments in year

(20,569

)

(78,648

)

Equity dividends paid

(120,795

)

(961,718

)

Net cash from financing activities

(516,364

)

(1,409,735

)

Increase/(decrease) in cash and cash equivalents

242,455

(1,391,464

)

Cash and cash equivalents at beginning of year

2

3,671,530

5,062,994

Cash and cash equivalents at end of year

2

3,913,985

3,671,530

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2024

2023

£

£

(Loss)/profit before taxation

(1,059,950

)

713,347

Depreciation charges

240,211

219,671

Profit on disposal of fixed assets

(30,226

)

(33,070

)

Defined benefit pension adjustment

(276,000

)

-

Finance costs

59,413

88,771

Finance income

(62,484

)

(40,300

)

(1,129,036

)

948,419

Decrease/(increase) in stocks

205,860

(1,257,841

)

Decrease in trade and other debtors

3,199,756

3,325,828

Decrease in trade and other creditors

(1,186,244

)

(2,200,500

)

Cash generated from operations

1,090,336

815,906

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 2024

31.12.24

1.1.24

£

£

Cash and cash equivalents

3,913,985

3,671,530

Year ended 31 December 2023

31.12.23

1.1.23

£

£

Cash and cash equivalents

3,671,530

5,062,994