Company registration number 04297595 (England and Wales)
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
COMPANY INFORMATION
Directors
Toshihiko Motohori
Hidehiko Sakayama
Ryuji Yamamoto
Dario Gallottini
Hiroaki Oki
Company number
04297595
Registered office
1st Floor The Foundry
77 Fulham Palace Road
London
United Kingdom
W6 8AF
Auditor
UHY Hacker Young
Quadrant House
4 Thomas More Square
London
E1W 1YW
Business address
1st Floor The Foundry
77 Fulham Palace Road
London
United Kingdom
W6 8AF
Solicitors
Speechly Birchman
6 St Andrew Street
London
EC4A 3LX
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
CONTENTS
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Profit and loss account
8
Statement of comprehensive income
9
Balance sheet
10
Statement of changes in equity
11
Notes to the financial statements
12 - 22
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 1 -

The directors present the strategic report and the audited financial statements of Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) for the year ended 31 December 2025.

Fair review of the business

The results for the period under review and the financial position at the period end were considered satisfactory by the directors.

As shown in the company's profit and loss account set out on page 8, the company made a profit after tax of £712,096 (20 24: £953,495).

The company's balance sheet on page 10 shows that its financial position remains strong with net assets valued at £5,987,976 (20 24: £5,275,880).

Financial risk management

The principal risk and uncertainties facing the company are its reliance on the parent company, Kubota Corporation, for supply of its products. Kubota Corporation's objective is to expand sales of its submerged membrane units in Europe, Latin America, Middle East and Africa through the company's operations and it is Kubota Corporation's intention to provide continued financial support to the company in order to meet its objective. The price of crude oil and stainless steel affects the price of some component parts of the products supplied.

Foreign exchange transactional currency exposure

The company is exposed to currency exchange rate risk due to a significant proportion of its receivables and operating expenses being denominated in non-sterling currencies. The net exposure of each currency is monitored and managed by the directors.

Customer credit exposure

The company may offer credit terms to its customers which allow payment of the debt after delivery of the goods or services. The company is at risk to the extent that a customer may be unable to pay the debt on the specified due date. This risk is mitigated by the strong on-going customer relationships as well as periodical and proper credit analysis both by Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) and Kubota Corporation.

Key performance indicators

The gross profit margin and net profit margin is the key financial performance indicator as this has increased compared to prior year.

During the year, the company's turnover increased by 8% to £16,089,753 (2024: £14,910,350).

The company's turnover for the year ended 31 December 2025 has increased from the previous year mainly due to advertisement and promotional activities resulting in increase in sales.

The gross margin achieved on sales was 20.89% (2024: 20.78%).

Going Concern

The company will continue to sell its products and build its customer base to maintain sustainability and future growth.

The directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and so continue to prepare these financial statements on the going concern basis.

On behalf of the board

Dario Gallottini
Director
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 2 -
The directors present their reports and financial statements for the year ended 31 December 2025.
Principal activities

The principal activity of the company continued to be that of promoting and selling of submerged membrane units and parts for municipal and industrial use in Europe, Latin America, Middle East and Africa.

The company operates branches in the UAE & Italy to support promotions and sales of products.

Directors

The directors who held office during the year and up to the date of approval of the financial statements were as follows:

Toshihiko Motohori
Hidehiko Sakayama
Ryuji Yamamoto
Dario Gallottini
Hiroaki Oki
Results and dividends

The results for the year are set out on page 8.

Ordinary dividends were paid amounting to £Nil (2024: £2,000,000). The directors do not recommend payment of further dividend.
Auditor

The auditors, UHY Hacker Young, are deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

On behalf of the board
Dario Gallottini
Director
1 April 2026
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 3 -

The directors are responsible for preparing the Annual Report 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 (Financial Reporting Standard 102) 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.

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; and

- 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.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
- 4 -
Opinion

We have audited the financial statements of Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) (the 'company') for the year ended 31 December 2025 which comprise the profit and loss account, the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including 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 2025 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 Auditor's 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. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as going concern.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. 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. 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 course of 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.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
- 5 -

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

- the information given in the strategic report and the directors' r eport for the financial year for which the financial statements are prepared is consistent with the financial statements; and

- the strategic report and the directors' report 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 identifie d material misstatements in the strategic report or the directors' r eport.

We have nothing to report in respect of the following matters in relation to which 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 directors' r esponsibilities s tatement, 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 is 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.

Auditor's 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 an auditor's report 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.

Our approach to identifying and assessing the risks of material misstatements in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

- the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

- we identified the laws and regulations applicable to the company through discussions with directors and other management, from our commercial knowledge and experience of the sector;

- we focused on specific laws and regulations which we considered may have a direct material effect on the operations of the company, the financial statements or the operations of the company, including the UK Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, environmental and health and safety legislation.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
- 6 -

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

- making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and

- considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.

To address the risk of fraud through management bias and override of controls, we:

- performed analytical procedures to identify any unusual or unexpected relationships;

- tested journal entries to identify unusual transactions;

- assessed whether judgements and assumptions made in determining the accounting estimates set out in note 2 were indicative of potential bias; and

- investigated the rationale behind significant or unusual transactions.

To address the risk of non-compliance with laws and regulations, we communicated identified laws and regulations throughout our team and remained alert to any indications of non-compliance throughout the audit. The potential effect of these laws and regulations on the financial statements varies considerably.

The company is subject to laws and regulations that directly affect the financial statements including financial reporting legislation (including related companies legislation) and taxation legislation (including payroll taxes) and we assessed the extent of compliance with these laws and regulations as part of our procedures on the related financial statements items.

The company is subject to other laws and regulations where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation or the loss of the Company’s license to operate. We identified the following areas as those most likely to have such an effect: UK Company law that regulates corporations formed under the Companies Act 2006 and HMRC laws and regulations relating to submissions of applicable taxes and documents. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.

We communicated identified fraud risks and non-compliance with laws and regulations with those charged with governance, throughout the audit team and remained alert to any indications throughout the audit.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery, misrepresentations or through collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
- 7 -

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 an auditor's report 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.

Harriet Hodgson-Grove
(Senior Statutory Auditor)
For and on behalf of UHY Hacker Young
Statutory Auditor
Quadrant House
4 Thomas More Square
London
E1W 1YW
1 April 2026
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2025
- 8 -
2025
2024
Notes
£
£
Turnover
3
16,089,753
14,910,350
Cost of sales
(12,728,914)
(11,812,690)
Gross profit
3,360,839
3,097,660
Administrative expenses
(2,492,236)
(1,923,759)
Operating profit
4
868,603
1,173,901
Interest receivable and similar income
7
88,623
105,763
Interest payable and similar expenses
8
(4,103)
(2,756)
Profit before taxation
953,123
1,276,908
Tax on profit
9
(241,027)
(323,413)
Profit for the financial year
712,096
953,495

The profit and loss account has been prepared on the basis that all operations are continuing operations.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2025
- 9 -
2025
2024
£
£
Profit for the year
712,096
953,495
Other comprehensive income
-
-
Total comprehensive income for the year
712,096
953,495
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
BALANCE SHEET
AS AT 31 DECEMBER 2025
31 December 2025
- 10 -
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
28,247
22,804
Current assets
Stocks
12
719,810
1,457,386
Debtors
13
5,895,292
4,709,199
Cash at bank and in hand
5,146,971
6,501,324
11,762,073
12,667,909
Creditors: amounts falling due within one year
14
(5,795,282)
(7,409,132)
Net current assets
5,966,791
5,258,777
Total assets less current liabilities
5,995,038
5,281,581
Provisions for liabilities
Deferred tax liability
15
7,062
5,701
(7,062)
(5,701)
Net assets
5,987,976
5,275,880
Capital and reserves
Called up share capital
18
500,000
500,000
Profit and loss reserves
19
5,487,976
4,775,880
Total equity
5,987,976
5,275,880

These financial statements have been prepared in accordance with the provisions relating to medium-sized companies.

The financial statements were approved by the board of directors and authorised for issue on 1 April 2026 and are signed on its behalf by:
Dario Gallottini
Director
Company registration number 04297595 (England and Wales)
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2025
- 11 -
Share capital
Profit and loss reserves
Total
Notes
£
£
£
Balance at 1 January 2024
500,000
5,822,385
6,322,385
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
953,495
953,495
Dividends
10
-
(2,000,000)
(2,000,000)
Balance at 31 December 2024
500,000
4,775,880
5,275,880
Year ended 31 December 2025:
Profit and total comprehensive income for the year
-
712,096
712,096
Balance at 31 December 2025
500,000
5,487,976
5,987,976
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2025
- 12 -
1
Accounting policies
Company information

Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) is a private company limited by shares incorporated in England and Wales. The registered office is 1st Floor The Foundry, 77 Fulham Palace Road, London, United Kingdom, W6 8AF.

1.1
Accounting convention

These financial statements for the year ended 31 December 2025 for Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) are prepared in accordance with United Kingdom Accounting Standards, including FRS 102, The Financial Reporting Standards applicable in the UK and Republic of Ireland(UK GAAP), and the Companies Act 2006.

The accounts of Kubota Water and Environment Europe Ltd (Formerly Kubota Membrane Europe Limited) have also adopted the following FRS 102 disclosure exemptions:

- the requirement to present a statement of cash flows and related notes;

- financial instrument disclosures, including:

- categories of financial instruments;

- items of income, expenses, gains or losses relating to financial instruments, and

- exposure to and management of financial risks.

The company has taken advantage of the exemption under FRS 102, from preparing a statement of cash flows, on the basis that it is a qualifying entity and its ultimate parent company, Kubota Corporation, includes the company’s cash flows in its own consolidated financial statements.

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

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Going concern

A true t the time of approving the financial statements, t he directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus t he directors continue to adopt the going concern basis of accounting in preparing the financial statements.

At the reporting date, the company had a net assets position of £5,987,976 (20 24: £5,275,880).

The company is able to fund its costs and meet its liabilities, through utilisation of existing cash resources, reserves. The company had cash resources amounting to £5,146,971 (2024: £6,501,324) at the year-end.

Accordingly, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future and so continue to prepare these financial statements on the going concern basis.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 13 -
1.3
Turnover

Turnover represents amounts receivable for goods and services net of VAT and trade discounts. Revenue is recognised when (a) the significant risks and rewards of ownership have been transferred to the buyer; (b) the company retains no continuing involvement or control over the goods; (c) the amount of revenue can be measured reliably; (d) it is probable that future economic benefits will flow to the entity; (e) when the specific criteria relating to company's sales channel have been met, as described below.

- Sale of goods

The sales of goods are recognised in line with either the CIP(Carriage and Insurance Paid to) or the DDP basis (Delivered duty paid) basis which is stipulated on each contract.

- Sale of warranty

Revenue from warranty income is recognised equally over the period of the extended warranty.

1.4
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Fixtures, fittings & equipment
20% / 45% and 75% reducing balance method.

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

1.5
Impairment of fixed assets

At each year end date, non - financial assets not carried at fair value are assessed to determine whether there is an indication that the asset may be impaired.

The recoverable amount of an asset is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried in at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.6
Stocks

Stocks which include finished products and goods in transit are stated at the lower of cost and net realisable value. Cost comprises direct materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the stocks to their present location and condition. Goods in transit are goods sold on Delivered duty paid basis which are in transit for customer delivery.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 14 -
1.7
Cash and cash equivalents

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.8
Financial assets

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial assets are recognised in the company's balance sheet when the company becomes party to the contractual provisions of the instrument.

Financial assets are classified into specified categories. The classification depends on the nature and purpose of the financial assets and is determined at the time of recognition.

Basic financial assets, which include trade and other debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Other financial assets classified as fair value through profit or loss are measured at fair value.

Loans and receivables

Trade debtors, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Interest is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument to the net carrying amount on initial recognition.

Impairment of financial assets

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 15 -
1.9
Financial liabilities

Basic financial liabilities, including creditors, bank loans, loans from fellow group companies and preference shares that are classified as debt, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future receipts discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. A m ounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Other financial liabilities

Debt instruments that do no meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Derecognition of financial liabilities

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.

1.10
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the profit and loss account because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax
Deferred taxation is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes.
1.11
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

The cost of any unused holiday entitlement is recognised as an expense in the period in which the employee’s services are received.

Termination benefits are recognised immediately as an expense when the company is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
1
Accounting policies
(Continued)
- 16 -
1.12
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.13
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the lease s asset are consumed.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of HMRC. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation are included in the profit and loss account for the period.

2
Judgements and key sources of estimation uncertainty

Estimates and judgments are continually evaluated and are based on histor i cal experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical judgements

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Stock

Stocks are valued at the lower cost and net realisable value. Net realisable value includes, where necessary, provisions for slow moving and obsolete stocks. Calculation of these provisions requires judgements to be made, which include forecast consumer demand, the promotional, competitive and economic environment and inventory loss trends.

3
Turnover and other revenue

An analysis of the company's turnover is as follows:

2025
2024
£
£
Turnover analysed by class of business
Sale of goods
15,863,989
14,718,216
Other income
225,764
192,134
16,089,753
14,910,350
2025
2024
£
£
Turnover analysed by geographical market
United Kingdom
2,283,512
1,369,662
Europe
6,679,787
6,532,775
Rest of the world
7,126,454
7,007,913
16,089,753
14,910,350
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 17 -
4
Operating profit
2025
2024
Operating profit for the year is stated after charging:
£
£
Exchange losses
134,088
5,435
Fees payable to the company's auditor for the audit of the company's financial statements
33,795
38,921
Depreciation of owned tangible fixed assets
15,680
3,979
(Profit)/loss on disposal of tangible fixed assets
-
6,210
Operating lease charges
62,645
-
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2025
2024
Number
Number
Sales and distribution
10
7
Administration
2
1
Total
12
8

Their aggregate remuneration comprised:

2025
2024
£
£
Wages and salaries
915,143
702,890
Social security costs
43,715
37,128
Pension costs
8,035
6,549
Benefits
59,900
37,999
1,026,793
784,566
6
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
112,335
139,634

Key management personnel are the directors of the company. The compensation paid or payable to key management for employee services is shown above.

KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 18 -
7
Interest receivable and similar income
2025
2024
£
£
Interest income
Other interest income
88,623
105,763
8
Interest payable and similar expenses
2025
2024
£
£
Other interest
4,103
2,756
9
Taxation
2025
2024
£
£
Current tax
UK corporation tax on profits for the current period
239,666
316,071
Adjustments in respect of prior periods
-
0
3,544
Total current tax
239,666
319,615
Deferred tax
Origination and reversal of timing differences
1,361
3,798
Total tax charge
241,027
323,413

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

2025
2024
£
£
Profit before taxation
953,123
1,276,908
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
238,281
319,227
Tax effect of expenses that are not deductible in determining taxable profit
2,745
-
0
Adjustments in respect of prior years
-
0
3,544
Permanent capital allowances in excess of depreciation
(1,360)
(4,709)
Deferred tax movement
1,361
3,798
Loss on sale of fixed assets
-
0
1,553
Taxation charge for the year
241,027
323,413
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
9
Taxation
(Continued)
- 19 -
10
Dividends
2025
2024
£
£
Final paid
-
0
2,000,000
11
Tangible fixed assets
Fixtures, fittings & equipment
£
Cost
At 1 January 2025
102,834
Additions
21,123
At 31 December 2025
123,957
Depreciation and impairment
At 1 January 2025
80,030
Depreciation charged in the year
15,680
At 31 December 2025
95,710
Carrying amount
At 31 December 2025
28,247
At 31 December 2024
22,804
12
Stocks
2025
2024
£
£
Finished goods and goods for resale
719,810
1,457,386
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 20 -
13
Debtors
2025
2024
Amounts falling due within one year:
£
£
Trade debtors
5,344,573
4,307,736
Amounts owed by group undertakings
26,501
6,831
Other debtors
491,779
338,965
Prepayments and accrued income
32,439
55,667
5,895,292
4,709,199

Trade debtors disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

14
Creditors: amounts falling due within one year
2025
2024
Notes
£
£
Trade creditors
82,020
37,036
Amounts due to group undertakings
4,605,073
6,643,097
Corporation tax
11,666
88,071
Other taxation and social security
344,983
52,457
Deferred income
16
190,254
275,294
Other creditors
381,087
181,282
Accruals
180,199
131,895
5,795,282
7,409,132
15
Deferred taxation

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Liabilities
Liabilities
2025
2024
Balances:
£
£
Accelerated Capital Allowances
7,062
5,701
2025
Movements in the year:
£
Liability at 1 January 2025
5,701
Charge to profit or loss
1,361
Liability at 31 December 2025
7,062
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 21 -
16
Deferred income
2025
2024
£
£
Deferred income
190,254
275,294
Current liabilities
190,254
275,294
190,254
275,294

Deferred income represents extended warranty income received prior to the year end relating to subsequent periods in which the extended warranties will be realised.

17
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
8,035
6,549

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

18
Share capital
2025
2024
£
£
Ordinary share capital
Issued and fully paid
500,000 Ordinary shares of £1 each
500,000
500,000
19
Retained earnings
2025
2024
£
£
At beginning of year
4,775,880
5,822,385
Profit for the year
712,096
953,495
Dividends
-
(2,000,000)
At end of year
5,487,976
4,775,880
KUBOTA WATER AND ENVIRONMENT EUROPE LTD (FORMERLY KUBOTA MEMBRANE EUROPE LIMITED)
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2025
- 22 -
20
Operating lease commitments

At the reporting end date the company had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

2025
2024
£
£
Within one year
102,592
49,266
Between two and five years
143,916
49,016
In over five years
-
0
4,168
246,508
102,450
21
Related party transactions

The company has taken advantage of the exemption available in FRS 102 (s33 "Related Party Disclosure"), whereby it has not disclosed transactions with the ultimate parent company or any of its wholly owned subsidiary undertakings on the grounds that the company is a wholly owned subsidiary of Kubota Corporation and consolidated financial statements are prepared by the ultimate parent company.

22
Ultimate controlling party

The ultimate parent company is Kubota Corporation, a company registered in Japan.

Kubota Corporation prepares group financial statements and copies can be obtained from its head office at 2-47, Shikitsuhigashi 1 - chome, Naniwa-ku, Osaka 556-8601, Japan.

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