Company Registration No. 01662295 (England and Wales)
Kitagawa Europe Limited
Annual report and
group financial statements
for the year ended 31 December 2025
Kitagawa Europe Limited
Company information
Directors
Mark Jones
Robert Murray Threipland
Kazunori Kitagawa
Yuji Wada
Alexander Murry Threipland
Kimio Okano
Norihito Matsuba
Secretary
Mark Jones
Company number
01662295
Registered office
Unit 1 The Headlands
Downton
Salisbury
Wiltshire
SP5 3JJ
Independent auditor
Saffery LLP
Midland House
2 Poole Road
Bournemouth
Dorset
BH2 5QY
Bankers
Lloyds Bank plc
38 Blue Boar Row
Salisbury
Wiltshire
SP1 1DB
Kitagawa Europe Limited
Contents
Page
Strategic report
1
Directors' report
2
Directors' responsibilities statement
3
Independent auditor's report
4 - 7
Group income statement
8
Group statement of comprehensive income
9
Group statement of financial position
10
Company statement of financial position
11
Group statement of changes in equity
12
Company statement of changes in equity
13
Group statement of cash flows
14
Notes to the financial statements
15 - 34
Kitagawa Europe Limited
Strategic report
For the year ended 31 December 2025
1

The directors present the strategic report for the year ended 31 December 2025.

Fair review of the business

The results for the Group show a pre tax profit of £651,757 (20 24: £1,1 29,675) for the year and sales of £17,424,899 (20 24: £15,426,627).

Principal risks and uncertainties

The company’s management are risk averse and regularly monitor the risk levels to ensure that risks are within acceptable levels. Management have determined that the principal risks to the business are macro-economic factors, including foreign exchange risk.

Foreign exchange risk was impacted by the general worldwide economic uncertainties throughout the year. Management have sought to reduce the risks associated with foreign currency fluctuations through a combination of cash flow management and the use of natural hedging for Euros and Japanese Yen.

The current economic climate has many associated risks and uncertainties. The key areas that the Directors are continually monitoring are:

- Sales forecasts

- Cash flow forecasts

- Stock purchases

- Overheads

- Exchange rates

Future development and performance

Management have continued to invest in the group's operations in India and Germany with a view to accessing new customers and growing market share in India and mainland Europe.

Key performance indicators

The Directors monitor the performance of the Group using the following Key Performance Indicators (KPIs):

2025
2024
Sales movement
12.95%
2.54%
Year on year sales growth expressed as a percentage
Gross margin
34.11%
38.68%
The ratio of gross profit expressed as a percentage of sales
Pre-tax margin
3.74%
7.32%
The ratio of pre-tax profit expressed as a percentage of sales
Sales per employees
£191,482
£171,407
Total turnover divided by the average number of employees
Stock turnover
2.25 times
1.79 times
Number of times the value of stock is turned over in a year comparing closing stock to cost of sales

On behalf of the board

Mark Jones
Director
17 April 2026
Kitagawa Europe Limited
Directors' report
For the year ended 31 December 2025
2
The Directors present their report and financial statements for the year ended 31 December 2025.
Principal activities
The principal activity of the group continued to be that of the import, distribution and export of work holding and machine tool accessories.
Results and dividends

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

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

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

Mark Jones
Robert Murray Threipland
Kazunori Kitagawa
Yuji Wada
Alexander Murry Threipland
Kimio Okano
Gary Morgan
(Resigned 31 December 2025)
Norihito Matsuba
Auditor

The auditor, Saffery LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Strategic report

The true group has, in accordance with Companies Act 2006, s. 414C(11), set out in the group's strategic report information required by Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008, Sch. 7 to be contained in the directors' report.

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 auditor of the company 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 auditor of the company is aware of that information.

On behalf of the board
Mark Jones
Director
17 April 2026
Kitagawa 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 (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 group and company, 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;

- state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group and company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s and company’s transactions and disclose with reasonable accuracy at any time the financial position of the group and 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 group and company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Kitagawa Europe Limited
Independent auditor's report
To the members of Kitagawa Europe Limited
4
Opinion

We have audited the financial statements of Kitagawa Europe Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2025 which comprise the group income statement, the group statement of comprehensive income, the group statement of financial position, the company statement of financial position, the group statement of changes in equity, the company statement of changes in equity, the group statement of cash flows 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 group and of the parent company's affairs as at 31 December 2025 and of the group's 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 group and the parent 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 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 included in the annual report, other than the financial statements and our auditor’s report 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.

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 or a material misstatement of the other information. 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.

Kitagawa Europe Limited
Independent auditor's report (continued)
To the members of Kitagawa 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 the 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 group and the parent company and their 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 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 directors' r esponsibilities s tatement set out on page 3, 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 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.

Kitagawa Europe Limited
Independent auditor's report (continued)
To the members of Kitagawa Europe Limited
6
Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the group and parent company 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.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.

Identifying and assessing risks related to irregularities:

We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the group and parent company by discussions with directors, communication with component auditors and by updating our understanding of the sector in which the group and parent company operate.

Laws and regulations of direct significance in the context of the group and parent company include The Companies Act 2006, and UK Tax legislation as well as similar laws and regulations prevailing in each country in which we identified a significant component.

Audit response to risks identified:

We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of group and parent company financial statement disclosures. We reviewed the parent company’s minutes of meetings and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the parent company’s policies and procedures for compliance with laws and regulations with members of management responsible for compliance.

During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.

Kitagawa Europe Limited
Independent auditor's report (continued)
To the members of Kitagawa Europe Limited
7

As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at group and component level according to their particular circumstances. Our communications included a request to identify instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the group financial statements in addition to our risk assessment.

There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it. 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 or intentional 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.

Use of our report

This report is made solely to the parent 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 parent company's members those matters we are required to state to them in an auditors 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 parent company and the parent company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jamie Lane
Senior Statutory Auditor
For and on behalf of
21 April 2026
Saffery LLP
Statutory Auditors
Midland House
2 Poole Road
Bournemouth
Dorset
BH2 5QY
Kitagawa Europe Limited
Group income statement
For the year ended 31 December 2025
8
2025
2024
Notes
£
£
Turnover
3
17,424,899
15,426,627
Cost of sales
(11,480,934)
(9,459,432)
Gross profit
5,943,965
5,967,195
Distribution costs
(3,675,146)
(3,685,279)
Administrative expenses
(1,484,506)
(755,745)
Other operating income
13,163
489
Operating profit
4
797,476
1,526,660
Interest receivable and similar income
8
6,126
7,785
Interest payable and similar expenses
9
(151,845)
(404,770)
Profit before taxation
651,757
1,129,675
Tax on profit
10
(250,440)
(34,259)
Profit for the financial year
22
401,317
1,095,416
Profit for the financial year is attributable to:
- Owners of the parent company
401,009
1,093,942
- Non-controlling interests
308
1,474
401,317
1,095,416

The income statement has been prepared on the basis that all operations are continuing operations.

Kitagawa Europe Limited
Group statement of comprehensive income
For the year ended 31 December 2025
9
2025
2024
£
£
Profit for the year
401,317
1,095,416
Other comprehensive income
Currency translation loss taken to retained earnings
(84,823)
(52,778)
Total comprehensive income for the year
316,494
1,042,638
Total comprehensive income for the year is attributable to:
- Owners of the parent company
316,186
1,041,164
- Non-controlling interests
308
1,474
316,494
1,042,638
Kitagawa Europe Limited
Group statement of financial position
As at 31 December 2025
10
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
312,094
737,151
Investments
12
8,275
9,327
320,369
746,478
Current assets
Stocks
14
5,092,098
5,279,323
Debtors
15
3,638,798
3,613,397
Cash at bank and in hand
1,504,154
1,050,316
10,235,050
9,943,036
Creditors: amounts falling due within one year
16
(5,781,404)
(6,637,993)
Net current assets
4,453,646
3,305,043
Total assets less current liabilities
4,774,015
4,051,521
Creditors: amounts falling due after more than one year
17
-
(1,394,000)
Net assets
4,774,015
2,657,521
Capital and reserves
Called up share capital
21
375,000
225,000
Share premium account
1,650,000
-
0
Capital redemption reserve
250,000
250,000
Profit and loss reserves
22
2,496,428
2,180,242
Equity attributable to owners of the parent company
4,771,428
2,655,242
Non-controlling interests
2,587
2,279
4,774,015
2,657,521

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

The financial statements were approved by the board of directors and authorised for issue on 17 April 2026 and are signed on its behalf by:
17 April 2026
Mark Jones
Director
Company registration number 01662295 (England and Wales)
Kitagawa Europe Limited
Company statement of financial position
As at 31 December 2025
31 December 2025
11
2025
2024
Notes
£
£
£
£
Fixed assets
Tangible assets
11
98,059
89,863
Investments
12
72,099
72,099
170,158
161,962
Current assets
Stocks
14
2,328,832
2,893,881
Debtors
15
1,694,522
3,365,785
Cash at bank and in hand
514,671
10,106
4,538,025
6,269,772
Creditors: amounts falling due within one year
16
(2,308,196)
(4,628,148)
Net current assets
2,229,829
1,641,624
Total assets less current liabilities
2,399,987
1,803,586
Creditors: amounts falling due after more than one year
17
-
(1,394,000)
Net assets
2,399,987
409,586
Capital and reserves
Called up share capital
21
375,000
225,000
Share premium account
1,650,000
-
0
Capital redemption reserve
250,000
250,000
Profit and loss reserves
22
124,987
(65,414)
Total equity
2,399,987
409,586

As permitted by s408 Companies Act 2006, the c ompany has not presented its own profit and loss account and related notes. The c ompany’s profit for the year was £190,401 (2024 - £250,994 profit).

The financial statements were approved by the board of directors and authorised for issue on 17 April 2026 and are signed on its behalf by:
17 April 2026
Mark Jones
Director
Company registration number 01662295 (England and Wales)
Kitagawa Europe Limited
Group statement of changes in equity
For the year ended 31 December 2025
12
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total controlling interest
Non-controlling interest
Total
Notes
£
£
£
£
£
£
£
Balance at 1 January 2024
225,000
-
0
250,000
1,139,078
1,614,078
805
1,614,883
Year ended 31 December 2024:
Profit for the year
-
-
-
1,093,942
1,093,942
1,474
1,095,416
Other comprehensive income:
Currency translation differences
-
-
-
(52,778)
(52,778)
-
(52,778)
Total comprehensive income
-
-
-
1,041,164
1,041,164
1,474
1,042,638
Balance at 31 December 2024
225,000
-
0
250,000
2,180,242
2,655,242
2,279
2,657,521
Year ended 31 December 2025:
Profit for the year
-
-
-
401,009
401,009
308
401,317
Other comprehensive income:
Currency translation differences
-
-
-
(84,823)
(84,823)
-
(84,823)
Total comprehensive income
-
-
-
316,186
316,186
308
316,494
Issue of share capital
21
150,000
1,650,000
-
-
1,800,000
-
1,800,000
Balance at 31 December 2025
375,000
1,650,000
250,000
2,496,428
4,771,428
2,587
4,774,015
Kitagawa Europe Limited
Company statement of changes in equity
For the year ended 31 December 2025
13
Share capital
Share premium account
Capital redemption reserve
Profit and loss reserves
Total
Notes
£
£
£
£
£
Balance at 1 January 2024
225,000
-
0
250,000
(316,408)
158,592
Year ended 31 December 2024:
Profit and total comprehensive income for the year
-
-
-
250,994
250,994
Balance at 31 December 2024
225,000
-
0
250,000
(65,414)
409,586
Year ended 31 December 2025:
Profit and total comprehensive income
-
-
-
190,401
190,401
Issue of share capital
21
150,000
1,650,000
-
-
1,800,000
Balance at 31 December 2025
375,000
1,650,000
250,000
124,987
2,399,987
Kitagawa Europe Limited
Group statement of cash flows
For the year ended 31 December 2025
14
2025
2024
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from/(absorbed by) operations
27
1,496,274
(937,721)
Interest paid
(151,845)
(404,770)
Income taxes paid
(250,440)
(34,259)
Net cash inflow/(outflow) from operating activities
1,093,989
(1,376,750)
Investing activities
Purchase of tangible fixed assets
(164,774)
(400,772)
Proceeds from disposal of tangible fixed assets
364,881
107,586
Proceeds from disposal of investments
1,052
100
Interest received
6,126
7,785
Net cash generated from/(used in) investing activities
207,285
(285,301)
Financing activities
Proceeds from issue of shares
900,000
-
Increase/(repayment) of borrowings
(1,500,000)
2,017,100
Payment of finance leases obligations
(1,227)
(143,773)
Net cash (used in)/generated from financing activities
(601,227)
1,873,327
Net increase in cash and cash equivalents
700,047
211,276
Cash and cash equivalents at beginning of year
824,650
639,853
Effect of foreign exchange rates
(20,543)
(26,479)
Cash and cash equivalents at end of year
1,504,154
824,650
Relating to:
Cash at bank and in hand
1,504,154
1,050,316
Bank overdrafts included in creditors payable within one year
-
(225,666)
Kitagawa Europe Limited
Notes to the financial statements
For the year ended 31 December 2025
15
1
Accounting policies
Company information

Kitagawa Europe Limited (“the company”) is a private limited company incorporated in England and Wales. The registered office is Unit 1 The Headlands, Downton, Salisbury, Wiltshire, SP5 3JJ.

1.1
Accounting convention

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary a mounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention, modified to include certain financial instruments at fair value. The principal accounting policies adopted are set out below.

The consolidated group financial statements consist of the financial statements of the parent company Kitagawa Europe Limited together with all entities controlled by the parent company (its subsidiaries).

All financial statements are made up to 31 December 2025. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the g roup.

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

1.2
Going concern

The group has net assets on its balance sheet at 31 December 2025. The directors are of the opinion that they have a reasonable expectation that the company has adequate resources to continue in operation for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparation of the financial statements.

1.3
Turnover
Turnover, all of which relates to the principal activity, represents amounts receivable for goods and services excluding value added tax.

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue is recognised net of any discounts provided to the buyer.
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.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
1
Accounting policies (continued)
16

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:

Leasehold improvements
Over the life of the lease
Plant and machinery
3 to 15 years straight line
Motor vehicles
3 years straight line

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 recognised in the income statement.

Depreciation is allocated to distribution costs and administrative expenses in the statement of profit or loss, based on the function of the underlying asset.

1.5
Fixed asset investments

I n the parent company financial statements, investments in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment losses.

A subsidiary is an entity controlled by the group. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

1.6
Impairment of fixed assets

At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount 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) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.7
Stocks

Stocks are stated at the lower of cost and estimated selling price less costs to complete and sell. 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.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
1
Accounting policies (continued)
17

At each reporting date, an assessment is made for impairment. Any excess of the carrying amount of stocks over its estimated selling price less costs to complete and sell is recognised as an impairment loss in profit or loss. Reversals of impairment losses are also recognised in profit or loss.

1.8
Cash at bank and in hand

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.

1.9
Financial instruments

The group 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 instruments are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets

Basic financial assets, which include debtors, 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. Financial assets classified as receivable within one year are not amortised.

Other financial assets

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

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.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
1
Accounting policies (continued)
18
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 group 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.

Classification of financial liabilities

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.

Basic 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 paymen ts 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. Amounts 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.

Derecognition of financial liabilities

Financial liabilities are derecognised when the group's contractual obligations expire or are discharged or cancelled.

1.10
Equity instruments

Equity instruments issued by the group are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the group.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
1
Accounting policies (continued)
19
1.11
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 income statement 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 group’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 tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.12
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 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.

1.13
Retirement benefits

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

1.14
Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessees. All other leases are classified as operating leases.

Assets held under finance leases are recognised as assets at the lower of the assets fair value at the date of inception and the present value of the minimum lease payments. The related liability is included in the statement of financial position as a finance lease obligation. Lease payments are treated as consisting of capital and interest elements. The interest is charged to profit or loss so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
1
Accounting policies (continued)
20

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 d asset are consumed.

Rental income from operating leases is recognised on a straight line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight line basis over the lease term.

1.15
Foreign exchange

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the balance sheet date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account.

Monetary assets and liabilities of overseas subsidiaries are translated at the closing rate of exchange for the year. Differences on exchange arising from the translation of the opening net investment in subsidiary companies, and from the translation of the results of those companies at the closing rate, are taken to reserves and are reported in the statement of total recognised gains and losses.

1.16

Non-controlling interests

Non-controlling interests represent the share of the profits less losses on ordinary activities attributable to the interests of equity shareholders in subsidiaries which are not wholly owned by the Group.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
21
2
Critical accounting judgements and key sources of estimation uncertainty

In the application of the group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

Critical judgements

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

Stock provision

The group has recognised a provision for impairment of inventory which has been calculated using criteria based on usage and turnover of stock items. This has been calculated on a consistent basis, although management use judgement to flex the calculated provision for certain core product lines. The adjustments made by management reflect their knowledge of the business and the group’s existing sales order book and pipeline. The total provision remains an estimate made using the directors’ judgement.

Bad debt provision

The group has recognised a provision for impairment of trade debtors. In assessing the level of provision required management consider the size and nature of the outstanding receivable balances, aging compared to agreed credit terms and, for long-standing customers, experience of prior trading relationships. For related party debtors, management also consider any additional information available to the group by virtue of the related party relationship.

To mitigate the risk of bad debt losses, management maintain robust credit control procedures and undertake credit reference checks for new customers. The total provision remains an estimate made using the directors’ judgement.

Deferred taxation

The group has not recognised a significant deferred tax asset that would arise due to UK corporation tax losses carried forward. Although the directors remain confident of utilising these losses with future profits, the level of uncertainty in the market has led to a judgement not to recognise this asset.

Key sources of estimation uncertainty

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

Carrying amounts of assets and liabilities

Determining the carrying amount of some assets and liabilities requires estimation of the effects of uncertain future events, for example in the absence of observable market prices, future-oriented estimates are necessary to measure the recoverable amount of classes of tangible fixed assets and effect of potential technical obsolescence on the valuation of stocks.

Revenue and cash flow forecasts

The directors’ going concern assessment requires estimation of the effects of uncertain future events. Management have prepared forecasts of future revenue and cash flows and have assessed the impacts of current economic uncertainty.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
22
3
Turnover and other revenue

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

2025
2024
£
£
Turnover analysed by class of business
Product sales
17,424,899
15,426,627
2025
2024
£
£
Turnover analysed by geographical market
United Kingdom
1,759,780
1,781,222
European Union
6,174,466
6,406,923
Rest of World
9,490,653
7,238,482
17,424,899
15,426,627
2025
2024
£
£
Other revenue
Interest income
6,126
7,785
Sundry income
13,163
-
4
Operating profit
2025
2024
£
£
Operating profit for the year is stated after charging/(crediting):
Exchange losses
336,896
8,021
Depreciation of owned tangible fixed assets
160,928
159,889
Depreciation of tangible fixed assets held under finance leases
1,463
21,774
(Profit)/loss on disposal of tangible fixed assets
(1,721)
9,837
Operating lease charges
301,963
372,739
5
Auditor's remuneration
2025
2024
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
41,120
46,660
For other services
Taxation compliance services
3,940
3,750
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
23
6
Employees

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

Group
Company
2025
2024
2025
2024
Number
Number
Number
Number
Sales, marketing and distribution
38
36
14
16
Administration
38
42
14
14
Technical support
15
12
5
5
Total
91
90
33
35

Their aggregate remuneration comprised:

Group
Company
2025
2024
2025
2024
£
£
£
£
Wages and salaries
3,118,673
3,043,015
1,712,500
1,695,403
Social security costs
367,972
356,919
214,397
184,951
Pension costs
181,315
174,737
181,315
174,737
3,667,960
3,574,671
2,108,212
2,055,091
7
Directors' remuneration
2025
2024
£
£
Remuneration for qualifying services
375,731
265,325
Company pension contributions to defined contribution schemes
61,226
50,705
436,957
316,030
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2025
2024
£
£
Remuneration for qualifying services
132,748
131,920
Company pension contributions to defined contribution schemes
12,720
12,720

Key management personnel comprises the directors. Accordingly the compensation paid to key management personnel for employee services is £436,957 (2024 - £316,030).

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
24
8
Interest receivable and similar income
2025
2024
£
£
Interest income
Interest on bank deposits
6,126
7,785
9
Interest payable and similar expenses
2025
2024
£
£
Interest on financial liabilities measured at amortised cost:
Interest on bank overdrafts and loans
15,648
33,375
Interest payable to group undertakings
-
0
40,995
Other interest on financial liabilities
113,909
137,892
129,557
212,262
Other finance costs:
Interest on finance leases and hire purchase contracts
313
3,641
Other interest
21,975
188,867
Total finance costs
151,845
404,770
10
Taxation
2025
2024
£
£
Current tax
Adjustments in respect of prior periods
(12,508)
-
0
Foreign current tax on profits for the current period
262,948
34,259
Total current tax
250,440
34,259
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
10
Taxation (continued)
25

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
651,757
1,129,675
Expected tax charge based on the standard rate of corporation tax in the UK of 25.00% (2024: 25.00%)
162,939
282,419
Tax effect of expenses that are not deductible in determining taxable profit
4,071
3,068
Tax effect of utilisation of tax losses not previously recognised
(48,321)
(10,643)
Change in unrecognised deferred tax assets
-
0
(275,612)
Effect of overseas tax rates
144,482
34,619
Other tax adjustments
(224)
408
Other temporary timing difference
(12,507)
-
0
Taxation charge
250,440
34,259

Tax losses of £289,344 (2024: £477,159) are carried forward and not recognised as deferred tax assets due to uncertainty in reversal.

11
Tangible fixed assets
Group
Leasehold improvements
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2025
362,588
1,560,068
247,360
2,170,016
Additions
33,978
95,179
35,617
164,774
Disposals
(17,997)
(491,315)
-
0
(509,312)
Exchange adjustments
(2,840)
(54,249)
(7,191)
(64,280)
At 31 December 2025
375,729
1,109,683
275,786
1,761,198
Depreciation and impairment
At 1 January 2025
318,674
934,400
179,791
1,432,865
Depreciation charged in the year
12,299
129,199
20,893
162,391
Eliminated in respect of disposals
(17,661)
(128,491)
-
0
(146,152)
At 31 December 2025
313,312
935,108
200,684
1,449,104
Carrying amount
At 31 December 2025
62,417
174,575
75,102
312,094
At 31 December 2024
43,914
625,668
67,569
737,151
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
11
Tangible fixed assets (continued)
26
Company
Leasehold improvements
Plant and machinery
Motor vehicles
Total
£
£
£
£
Cost
At 1 January 2025
320,227
481,929
39,441
841,597
Additions
14,633
29,999
-
0
44,632
Disposals
(17,512)
(42,441)
-
0
(59,953)
At 31 December 2025
317,348
469,487
39,441
826,276
Depreciation and impairment
At 1 January 2025
303,429
410,327
37,978
751,734
Depreciation charged in the year
7,795
27,178
1,463
36,436
Eliminated in respect of disposals
(17,512)
(42,441)
-
0
(59,953)
At 31 December 2025
293,712
395,064
39,441
728,217
Carrying amount
At 31 December 2025
23,636
74,423
-
0
98,059
At 31 December 2024
16,798
71,602
1,463
89,863

The net carrying value of tangible fixed assets includes the following in respect of assets held under finance leases or hire purchase contracts.

Group
Company
2025
2024
2025
2024
£
£
£
£
Motor vehicles
-
0
1,463
-
0
1,463
12
Fixed asset investments
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Investments in subsidiaries
13
-
0
-
0
72,099
72,099
Unlisted investments
8,275
9,327
-
0
-
0
8,275
9,327
72,099
72,099
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
12
Fixed asset investments (continued)
27
Movements in fixed asset investments
Group
Investments
£
Cost or valuation
At 1 January 2025
9,327
Exchange adjustments
(1,052)
At 31 December 2025
8,275
Carrying amount
At 31 December 2025
8,275
At 31 December 2024
9,327
Movements in fixed asset investments
Company
Shares in subsidiaries
£
Cost or valuation
At 1 January 2025 and 31 December 2025
72,099
Carrying amount
At 31 December 2025
72,099
At 31 December 2024
72,099
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2025 are as follows:

Name of undertaking
Address
Nature of business
Class of
% Held
shares held
Direct
Kitagawa Europe GmbH
Germany
Import, distribution & export of work holding & machine tool accessories
Ordinary
100.00
Kitagawa India Private Limited
India
Import, distribution & export of work holding & machine tool accessories
Ordinary
99.80

The registered office addresses of the subsidiaries are as follows:

Kitagawa Europe Gmbh
Borsigstrasse 3, 40880 Ratingen, Germany
Kitagawa India Private Limited
Plot No.215, 4th Phase Bommasandra Industrial Area Bommasandra Jigani Link Road, Bengaluru Balngalore KA 560099 IN
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
28
14
Stocks
Group
Company
2025
2024
2025
2024
£
£
£
£
Finished goods and goods for resale
5,092,098
5,279,323
2,328,832
2,893,881

The finished goods are stated after provision of £557,466 (2024: £557,466)

15
Debtors
Group
Company
2025
2024
2025
2024
Amounts falling due within one year:
£
£
£
£
Trade debtors
2,850,954
2,657,961
897,592
545,990
Amounts owed by group undertakings
1,667
6,259
523,589
2,474,948
VAT Recoverable
160,088
136,550
160,088
136,550
Other debtors
556,404
713,297
43,568
108,967
Prepayments and accrued income
69,685
99,330
69,685
99,330
3,638,798
3,613,397
1,694,522
3,365,785
16
Creditors: amounts falling due within one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Bank loans and overdrafts
18
-
0
225,666
-
0
225,666
Obligations under finance leases
19
-
0
1,227
-
0
1,227
Other borrowings
18
1,100,000
2,106,000
1,100,000
2,106,000
Trade creditors
802,363
1,119,359
244,649
262,762
Amounts owed to group undertakings
3,085,713
2,360,993
844,157
1,892,305
Other taxation and social security
60,999
73,658
60,999
73,658
Other creditors
673,938
684,560
-
0
-
0
Accruals and deferred income
58,391
66,530
58,391
66,530
5,781,404
6,637,993
2,308,196
4,628,148
17
Creditors: amounts falling due after more than one year
Group
Company
2025
2024
2025
2024
Notes
£
£
£
£
Other borrowings
18
-
0
1,394,000
-
0
1,394,000
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
29
18
Loans and overdrafts
Group
Company
2025
2024
2025
2024
£
£
£
£
Bank overdrafts
-
0
225,666
-
0
225,666
Other loans
1,100,000
3,500,000
1,100,000
3,500,000
1,100,000
3,725,666
1,100,000
3,725,666
Payable within one year
1,100,000
2,331,666
1,100,000
2,331,666
Payable after one year
-
0
1,394,000
-
0
1,394,000

The bank overdraft is secured by fixed and floating charges over Kitagawa Europe Limited's assets.

19
Finance lease obligations
Group
Company
2025
2024
2025
2024
£
£
£
£
Future minimum lease payments due under finance leases:
Within one year
-
0
1,227
-
0
1,227

Finance lease liabilities were secured over the assets to which they relate.

The charges in relation to the finance lease liabilities were satisfied on 19 November 2025.

20
Retirement benefit schemes
2025
2024
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
181,315
174,737

A defined contribution pension scheme is operated for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Pension liabilities of £nil (2024: £16,212) are included within creditors in respect of the defined contribution pension scheme.

A separate scheme is in place for the company directors.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
30
21
Share capital
Group and company
2025
2024
Ordinary share capital
£
£
Issued and fully paid
187,500 (2024: 112,500) Ordinary shares - class 'A' of £1 each
187,500
112,500
187,500 (2024: 112,500) Ordinary shares - class 'C' of £1 each
187,500
112,500
375,000
225,000

The Ordinary 'A' shares rank pari passu with the Ordinary 'C' shares in all respects.

During the year, the company issued 75,000 £1 Ordinary A shares and 75,000 £1 Ordinary C shares to its existing shareholders for total consideration of £1,800,000.

Of the total consideration £900,000 was settled in cash and £900,000 was satisfied by way of the waiver of an existing loan payable by the company.

The consideration received in excess of the par value of the shares has been included in the share premium account.

22
Profit and loss reserves

The 'Profit and loss' reserve represents the cumulative realised profit or losses net of dividends paid and other adjustments.

The 'Capital redemption' reserve represents the nominal values of the Company's shares which have previously been purchased back or cancelled.

The 'Share premium' reserve represents the amounts received on the issue of shares above nominal value. This reserve is non-distributable.

23
Operating lease commitments
Lessee

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

Group
Company
2025
2024
2025
2024
£
£
£
£
Within one year
369,015
220,579
169,000
30,000
Between two and five years
913,060
590,866
507,000
-
1,282,075
811,445
676,000
30,000
Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
31
24
Events after the reporting date

On 27 February 2026, the Board of Directors approved a rights issue to existing shareholders with the objective of raising £550,000 of additional share capital. Each holder of A Shares and C Shares was granted the right to subscribe for 176 new shares for every 1,875 shares held, at a subscription price of £15.625 per share.

Under the terms of the rights issue to shareholders, Kitagawa Corporation was offered up to 17,600 new C Shares for total cash consideration of £275,000 and S W Murray‑Threipland Will Trust were offered up to 17,600 new A Shares for total consideration of £275,000, to be settled by set‑off against amounts owed to them by the Company by the way of a debt to equity conversion.

In accordance with FRS 102 Section 32, this rights issue is classified as a non‑adjusting post balance sheet event, therefore, no adjustments have been made to the financial statements in respect of this event.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
32
25
Related party transactions

During the year the company entered into transactions with related parties. The company has taken advantage of the exemption available in Section 33 of FRS 102 to not disclose transactions and balances with wholly-owned group companies.

Kitagawa Corporation ("KC")

Purchases were made from KC, a 50% shareholder of the company, totalling £2,428,509 (202 4: £3,095,301). Sales to K C of £nil (202 4: 2,605) were made. Recharges of £30,643 (202 4: £26,997) were also made to K C. Recharges of £nil (202 4: £25,556) were also made by K C to KEL. Interest on outstanding creditor balances was charged by K C amounting to £nil (202 4: £175,631). At the year end, the trade balance due to K C was £3,085,766 (202 4: £952,366). Interest on the outstanding loan balance to KC amounting to £nil (2024: £40,995) was payable to KC. The loan balance was fully repaid in the 2024 financial year.

Kitagawa India Private Limited ("KIL")

Sales and recharges were made to KIL, a 99.8% owned subsidiary, of £111,343 (202 4: £231,570) and purchases were made from KIL of £142,057 (202 4: £205,985). Sales commission of £nil (202 4: £8,079) was charged to KIL during the year. At the year end a balance of £163,331 (202 4: £2,265,918) was due from KIL and a balance of £81,485 (202 4: £732,997) was due to KIL. In the year, KEL had issued credit notes of £nil (2024: £173,999) against recharges due from KIL.

Kitagawa Technology India Private Limited ("KTI")

The trade debtor balance due from KTI, a company controlled by KC, at year end was £16,891 (2024: £nil) and a trade creditor balance of £192,422 (2024: £nil) was due to KTI. Recharges of £78,753 (2024: £nil) were also made to KTI during the year.

A subsidiary of the group entered into a Business Transfer Agreement with KTI to transfer the manufacturing segment of the business. The total consideration of the assets and liabilities transferred as part of the sale were £434,118.

The assets and liabilities transferred were as follows:

Profit & Loss | Amount(£)
Purchase Consideration | 456,479
Balance Sheet |
Property Plant and Equipment | 363,168
Other Non Current Assets(Advance to suppliers) | 36,119
Inventory | 36,111
Current Liabilities | (1,280)
Net Assets Transferred | 434,118
Fx movement on consolidation | (22,361)

Dunbeath Engineering Limited ("DEL")

Sales were made to DEL, a company owned by the Estate of S W Murray Threipland, of £180 (202 4: £192). Recharges of £378 (2024: £60) were made to DEL. Purchases were made from DEL totalling £677,914 (202 4: £1,146,822). Kitagawa Europe Limited has made payments on account to DEL meaning there is a trading balance due to DEL to the company at the year end totalling £6,516 (2024: £86).

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
25
Related party transactions (continued)
33

1st Machine Tool Accessories Limited ("1st MTA")

The company made sales to 1st MTA, a company in which the Estate of S W Murray Threipland is a director and shareholder and M Jones is a director, of £925,697 (202 4: £774,677) and purchases of £36,815 (202 4: £34,796). The company charged 1st MTA £740,728 (202 4: £779,625) in respect of management charges. The balance due from 1st MTA to the company at the year end was £107,416 (202 4: £12,298).

Kitagawa-Northtec Inc

The company made sales to Kitagawa-Northtec Inc, a company controlled by K C, of £32,570 (202 4: £19,263). At the year end a balance of £7,142 (202 4: £2,879) was due from Kitagawa-Northtec Inc.

K E Executive Pension Scheme ("KEEP")

The company was charged rent from KEEP, a scheme in which the Estate of S W Murray Threipland and R Threipland are trustees and members, amounting to £120,000 (202 4: £120,000). At the year end an amount of £nil (202 4: £72,000) was outstanding. In 2016, a loan was entered into with KEEP. Interest on the outstanding loan balance to KEEP amounting to £nil (2024: £10,131) was paid to KEEP as the loan has been satisfied. The loan was secured by a charge over the goodwill of the company.

C R Murray Threipland Trading as Dunbeath Partnership ("DP")

During the 2024 financial year a loan of £3,500,000 was made to Kitagawa Europe Limited (“KEL”) by DP, of which C R Murray Threipland is the sole owner. At the year end, the loan balance due to DP was £1,100,000 (202 4: £3,500,000). Interest on the outstanding loan balance from DP to KEL amounting to £111,674 (202 4: £125,587) was paid to C R Murray Threipland.

26
Controlling Party

The ultimate controlling parties are the parent company, Kitagawa Corporation who are a company incorporated in Japan and the S W Murray Threipland Will Trust who each own 50% of Kitagawa Europe Limited. Kitagawa Corporation group is the largest group of undertakings for which group accounts are drawn up and of which Kitagawa Europe Limited is a member.

The consolidated accounts for the Kitagawa Corporation can be obtained from the companies registered office.

Kitagawa Europe Limited
Notes to the financial statements (continued)
For the year ended 31 December 2025
34
27
Cash generated from group operations
2025
2024
£
£
Profit for the year after tax
401,317
1,095,416
Adjustments for:
Taxation charged
250,440
34,259
Finance costs
151,845
404,770
Investment income
(6,126)
(7,785)
(Gain)/loss on disposal of tangible fixed assets
(1,721)
9,837
Depreciation and impairment of tangible fixed assets
162,391
181,663
Foreign exchange gains on cash equivalents
-
(20,914)
Movements in working capital:
Decrease in stocks
187,225
315,814
(Increase)/decrease in debtors
(25,401)
1,810,553
Increase/(decrease) in creditors
376,304
(4,761,334)
Cash generated from/(absorbed by) operations
1,496,274
(937,721)
28
Analysis of changes in net funds/(debt) - group
1 January 2025
Cash flows
Other non-cash changes
Exchange rate movements
31 December 2025
£
£
£
£
£
Cash at bank and in hand
1,050,316
474,381
-
(20,543)
1,504,154
Bank overdrafts
(225,666)
225,666
-
-
-
0
824,650
700,047
-
(20,543)
1,504,154
Borrowings excluding overdrafts
(3,500,000)
1,500,000
900,000
-
(1,100,000)
Obligations under finance leases
(1,227)
1,227
-
-
-
(2,676,577)
2,201,274
900,000
(20,543)
404,154
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