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

The results for the Group show a pre tax profit of £651,757 (2024: £1,129,675) for the year and sales of £17,424,899 (2024: £15,426,627).

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

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.

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

On behalf of the board

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.

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

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

The truegroup 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.

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.

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.

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.

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' report 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.

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 identified material misstatements in the strategic report or the directors' report.

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.

As explained more fully in the directors' responsibilities statement 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.

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.

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.

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

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

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

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.

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 amounts 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 group.

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.

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.

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.

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:

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.

In 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.

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.

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.

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.

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.

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, 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, 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.

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.

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.

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, 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 payments 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.

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

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.

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

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.

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

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.

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 leased 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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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

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

Their aggregate remuneration comprised:

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

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:

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

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

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

The registered office addresses of the subsidiaries are as follows:

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

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

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.

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.

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.

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.

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:

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.

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 (2024: £3,095,301). Sales to KC of £nil (2024: 2,605) were made. Recharges of £30,643 (2024: £26,997) were also made to KC. Recharges of £nil (2024: £25,556) were also made by KC to KEL. Interest on outstanding creditor balances was charged by KC amounting to £nil (2024: £175,631). At the year end, the trade balance due to KC was £3,085,766 (2024: £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 (2024: £231,570) and purchases were made from KIL of £142,057 (2024: £205,985). Sales commission of £nil (2024: £8,079) was charged to KIL during the year. At the year end a balance of £163,331 (2024: £2,265,918) was due from KIL and a balance of £81,485 (2024: £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:

Dunbeath Engineering Limited ("DEL")

Sales were made to DEL, a company owned by the Estate of S W Murray Threipland, of £180 (2024: £192). Recharges of £378 (2024: £60) were made to DEL. Purchases were made from DEL totalling £677,914 (2024: £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).

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 (2024: £774,677) and purchases of £36,815 (2024: £34,796). The company charged 1st MTA £740,728 (2024: £779,625) in respect of management charges. The balance due from 1st MTA to the company at the year end was £107,416 (2024: £12,298).

Kitagawa-Northtec Inc

The company made sales to Kitagawa-Northtec Inc, a company controlled by KC, of £32,570 (2024: £19,263). At the year end a balance of £7,142 (2024: £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 (2024: £120,000). At the year end an amount of £nil (2024: £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 (2024: £3,500,000). Interest on the outstanding loan balance from DP to KEL amounting to £111,674 (2024: £125,587) was paid to C R Murray Threipland.

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.