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Registered number: 04104163 CITIZEN WATCH UNITED KINGDOM, LTD ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
CITIZEN WATCH UNITED KINGDOM, LTD COMPANY INFORMATION
Directors | S Juri (appointed 1 April 2025)
| H Utsunomiya (resigned 1 September 2025)
| Y Yajima
Company secretary | B P Gillingham
Registered number | 04104163
Registered office | Citizen House
| 7 Ashville Way
| Wokingham
| Berkshire
| RG41 2PL
Independent auditor | Shaw Gibbs (Audit) Limited
| Statutory Auditor
| Wey Court West
| Union Road
| Farnham
| Surrey
| GU9 7PT
CITIZEN WATCH UNITED KINGDOM, LTD CONTENTS
| Page
Strategic Report | 1 - 3
Directors' Report | 4 - 5
Independent Auditor's Report | 6 - 9
Statement of Income and Retained Earnings | 10
Statement of Financial Position | 11
Statement of Cash Flows | 12
Analysis of Net Debt | 13
Notes to the Financial Statements | 14 - 28
CITIZEN WATCH UNITED KINGDOM, LTD STRATEGIC REPORT FOR THE YEAR ENDED 31 MARCH 2026
Principal activity
The company's principal activity is the sale and distribution of watches.
Business review
Our 25/26 report highlights the continued success of our group brands. During 25/26, we saw strong brand growth and a notable increase in profit over the previous year. We are pleased to announce a turnover of £36,789,665 for the 25/26 financial year (Year Ending 31st March 2025: £33,964,715). During the year, we celebrated Bulova's 150th anniversary with a wide range of special-edition products that generated not only sales but also extensive press coverage and consumer interest. We worked with many of our key retail partners to enhance this celebration, resulting in strong sell-through and an increase in market share. Throughout 2025/26, we continued our investment in both point-of-sale display materials and digital assets to maximise our main brand stories and excite consumers at store level with innovative and eye-catching displays. As revenue increased and expenses remained tightly controlled, the company's operating profit rose to £2,522,602 up from last year's (2025: £2,263,524). The results for the year are shown in the income statement on page 10.
Financial key performance indicators
| Year ended 31 March 2026 | Year ended 31 March 2025 | Change | Change
| £ | £ | £ | %
Revenue | 36,789,665 | 33,964,715 | 2,824,950 | 8
Operating profit | 2,522,602 | 2,263,524 | 259,078 | 11
The directors use revenue and operating profit to assess the company's performance.
Page 1
CITIZEN WATCH UNITED KINGDOM, LTD STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2026
2026/27 Outlook
As we look to celebrate 50 years of our pioneering Eco-Drive technology, we are cautiously optimistic about the year ahead. Anticipating challenges arising from political and economic factors, we continue to invest in our brands, our people, and our retail partners to drive sales and market share. With an exciting line-up of new product collections across our brands launching throughout the year, we are confident that, in conjunction with our advertising campaigns and sponsorships, our brands will continue to thrive, even amid consumer uncertainty. The UK management team has consistently recognised the need to invest in the business's future. Our recent move to a new office complex post year end is a testament to this commitment. In 26/27, we will see key initiatives in IT and our Digital Capabilities, as well as the development of our in-store branded furniture supplied to our key retailers. The continued success of the business is a reflection of the drive, enthusiasm, and passion of our people, with many employees celebrating milestone service achievements this year. As such, the Directors wish to express their gratitude for their outstanding dedication and support. Furthermore, the contribution and support of our retail partners and suppliers have been instrumental in the company's continued achievements.
Objectives and strategies
The company's objective is to continue offering long-term value to its customers and shareholders by increasing business turnover and profitability. The company's strategy is to sustain and grow the business and increase our market share wherever possible, including new revenue channels.
Principal risks and uncertainties
The market for wrist-watches remains a highly competitive market and is a continuing risk for the company, which could result in it losing sales to its key competitors. The company manages this risk by providing added value service to its customers, having fast response times not only in the supplying of products but in customer service, and by maintaining strong relationships with customers. Page 2
CITIZEN WATCH UNITED KINGDOM, LTD STRATEGIC REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2026
Financial instruments
Credit risk Credit risk is the risk of financial loss to the company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The company is mainly exposed to credit risk from credit sales. It is the company policy to assess the credit risk of new customers before entering contracts. Each new customer is analysed individually for creditworthiness before the company's standard payment and delivery terms and conditions are offered. Purchase limits are established using Graydon finance reports and financial statements for each customer, which represents the maximum open amount without requiring approval. A monthly review of trade receivables' ageing analysis is undertaken and customers' credit is reassessed periodically. Existing customers that become "high risk" as a result of the periodic reassessment are placed in a restricted customer list and future credit sales are only made with the approval of the local management, otherwise payment in advance is required. Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial institutions, only independently rated parties with minimum rating "A" are accepted. Liquidity risk Liquidity risk arises from the company's management of working capital. It is a risk that the company will encounter difficulty in meeting its financial obligations as they fall due. In order to maintain liquidity to maintain sufficient funds are available for ongoing operations and future developments, the company maintains sufficient cash balances and monitors its cash on a timely basis. Market risk Market risk arises from the company's use of foreign currency financial instruments. It is the risk that the fair value or future cash flows or a financial instrument will fluctuate because of changes in foreign exchange. Foreign exchange risk Foreign exchange risk arises when the company enters into transactions denominated in a currency other than its functional currency. The company is predominantly exposed to currency risk on purchases made from a major intercompany supplier based at the group headquarters in Japan. Purchases from this supplier are made in US dollars. This report was approved by the board and signed on its behalf.
S Juri Director
Date: 9 July 2026
Page 3
CITIZEN WATCH UNITED KINGDOM, LTD DIRECTORS' REPORT FOR THE YEAR ENDED 31 MARCH 2026 The directors present their report and the financial statements for the year ended 31 March 2026.
Directors' responsibilities statement
The directors are responsible for preparing the Strategic Report, the Directors' 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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing these financial statements, the directors are required to: ∙select suitable accounting policies for the Company's financial statements and then apply them consistently; ∙make judgments and accounting estimates that are reasonable and prudent; ∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Results and dividends
The profit for the year, after taxation, amounted to £2,073,502 (2025 - £1,828,178). No dividends have been paid in the year nor have any been recommended (2025- £Nil)
Directors
The directors who served during the year were:
S Juri (appointed 1 April 2025)
H Utsunomiya (resigned 1 September 2025)
Y Yajima
Matters covered in the Strategic Report
The company has chosen, in accordance with s414C(11) Companies Act 2006, to set out in the company's strategic report information required by Schedule 7 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 to be contained in the directors' report. It has done so in respect of future developments and financial instruments. Page 4
CITIZEN WATCH UNITED KINGDOM, LTD DIRECTORS' REPORT (CONTINUED) FOR THE YEAR ENDED 31 MARCH 2026
Disclosure of information to auditor
Each of the persons who are directors at the time when this Directors' Report is approved has confirmed that: ∙so far as the director is aware, there is no relevant audit information of which the Company's auditor is unaware, and ∙the director has taken all the steps that ought to have been taken as a director in order to be aware of any relevant audit information and to establish that the Company's auditor is aware of that information. This report was approved by the board and signed on its behalf.
B P Gillingham Secretary
Date: 9 July 2026
Page 5
CITIZEN WATCH UNITED KINGDOM, LTD INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CITIZEN WATCH UNITED KINGDOM, LTD
Opinion
We have audited the financial statements of Citizen Watch United Kingdom, Ltd (the 'Company') for the year ended 31 March 2026, which comprise the Statement of Income and Retained Earnings, the Statement of Financial Position, the Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice). In our opinion the financial statements: ∙give a true and fair view of the state of the Company's affairs as at 31 March 2026 and of its profit for the year then ended; ∙have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and ∙have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the Company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue. Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. Page 6
CITIZEN WATCH UNITED KINGDOM, LTD INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CITIZEN WATCH UNITED KINGDOM, LTD (CONTINUED)
Other information
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion 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.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the 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, or returns adequate for our audit have not been received from branches not visited by us; or ∙the financial statements are not in agreement with the accounting records and returns; or ∙certain disclosures of directors' remuneration specified by law are not made; or ∙we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors' Responsibilities Statement set out on page 4, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so. Page 7
CITIZEN WATCH UNITED KINGDOM, LTD INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CITIZEN WATCH UNITED KINGDOM, LTD (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 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 extent to which our procedures are capable of detecting irregularities, including fraud is detailed below: We gained an understanding of the legal and regulatory framework applicable to the company and the industry in which it operates, and considered the risk of acts by the company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that 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. We focused on laws and regulations which could give rise to a material misstatement in the financial statements, including, but not limited to, the Companies Act 2006 and UK tax legislation. Our tests included agreeing the financial statement disclosures to underlying supporting documentation and enquiries with management. 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. We did not identify any key audit matters relating to irregularities, including fraud. As in all our audits, we also addressed the risk of management override of internal controls, including testing journals and evaluating whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud. A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report. Page 8
CITIZEN WATCH UNITED KINGDOM, LTD INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CITIZEN WATCH UNITED KINGDOM, LTD (CONTINUED)
Use of our report
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed. Mark Dickinson (Senior Statutory Auditor) for and on behalf of Shaw Gibbs (Audit) Limited Statutory Auditor Wey Court West Union Road Farnham Surrey GU9 7PT 9 July 2026 Page 9
CITIZEN WATCH UNITED KINGDOM, LTD STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED 31 MARCH 2026
| 2026 | 2025
Note | £ | £
Turnover | 4 | 36,789,665 | 33,964,715
Cost of sales |  | (21,305,476) | (20,161,647)
Gross profit |  | 15,484,189 | 13,803,068
Administrative expenses |  | (12,961,587) | (11,539,544)
Operating profit | 5 | 2,522,602 | 2,263,524
Interest receivable and similar income |  | 230,031 | 238,319
Other finance income/(charges) |  | 54,040 | (74,221)
Profit before tax |  | 2,806,673 | 2,427,622
Tax on profit | 10 | (733,171) | (599,444)
Profit after tax |  | 2,073,502 | 1,828,178
Retained earnings at the beginning of the year |  | 18,455,196 | 16,627,018
|  | 18,455,196 | 16,627,018
Profit for the year |  | 2,073,502 | 1,828,178
Retained earnings at the end of the year |  | 20,528,698 | 18,455,196
The notes on pages 14 to 28 form part of these financial statements.
Page 10
CITIZEN WATCH UNITED KINGDOM, LTD REGISTERED NUMBER: 04104163 STATEMENT OF FINANCIAL POSITION AS AT 31 MARCH 2026
|  | 2026 |  | 2025
Note |  | £ |  | £
Fixed assets |  |  |  |  |
Tangible assets | 11 |  | 2,087,965 |  | 2,179,096
|  |  | 2,087,965 |  | 2,179,096
Current assets |  |  |  |  |
Stocks | 12 | 11,714,152 |  | 11,202,280 |
Debtors: amounts falling due within one year | 13 | 4,785,624 |  | 4,420,279 |
Cash at bank and in hand |  | 9,950,033 |  | 8,459,545 |
|  | 26,449,809 |  | 24,082,104 |
Creditors: amounts falling due within one year | 14 | (6,473,574) |  | (6,337,206) |
Net current assets |  |  | 19,976,235 |  | 17,744,898
Total assets less current liabilities |  |  | 22,064,200 |  | 19,923,994
Provisions for liabilities |  |  |  |  |
Deferred tax | 15 | (305,111) |  | (307,377) |
Other provisions | 16 | (530,391) |  | (461,421) |
|  |  | (835,502) |  | (768,798)
Net assets |  |  | 21,228,698 |  | 19,155,196
Capital and reserves |  |  |  |  |
Called up share capital | 17 |  | 700,000 |  | 700,000
Profit and loss account | 18 |  | 20,528,698 |  | 18,455,196
|  |  | 21,228,698 |  | 19,155,196
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 9 July 2026.
S Juri
Director
The notes on pages 14 to 28 form part of these financial statements. Page 11
CITIZEN WATCH UNITED KINGDOM, LTD STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 MARCH 2026
|  |  | 2026 | 2025
|  |  | £ | £
Cash flows from operating activities |  |
Profit for the financial year | 2,073,502 | 1,828,178
Adjustments for: |  |
Depreciation of tangible assets | 731,803 | 761,428
Loss on disposal of tangible assets | 46,997 | -
Interest received | (230,031) | (238,319)
Taxation charge | 733,171 | 599,444
(Increase)/decrease in stocks | (511,872) | 446,829
(Increase) in debtors | (365,347) | (601,023)
Increase in creditors | 627,325 | 439,240
(Decrease) in amounts owed to groups | (477,824) | (3,120,189)
Increase/(decrease) in provisions | 68,970 | (108,013)
Corporation tax (paid)/received | (748,568) | -
Net cash generated from operating activities | 1,948,126 | 7,575
Cash flows from investing activities |  |
Purchase of tangible fixed assets | (687,649) | (510,627)
Sale of tangible fixed assets | (20) | (69)
Interest received | 230,031 | 238,319
Net cash from investing activities | (457,638) | (272,377)
Net increase/(decrease) in cash and cash equivalents | 1,490,488 | (264,802)
Cash and cash equivalents at beginning of year | 8,459,545 | 8,724,347
Cash and cash equivalents at the end of year | 9,950,033 | 8,459,545
Cash and cash equivalents at the end of year comprise: |  |
Cash at bank and in hand | 9,950,033 | 8,459,545
| 9,950,033 | 8,459,545
The notes on pages 14 to 28 form part of these financial statements.
Page 12
CITIZEN WATCH UNITED KINGDOM, LTD ANALYSIS OF NET DEBT FOR THE YEAR ENDED 31 MARCH 2026
|  | At 1 April 2025 | Cash flows | At 31 March 2026
|  | £ | £ | £
Cash at bank and in hand | 8,459,545 | 1,490,488 | 9,950,033
Debt due within 1 year | (28,478) | (5,093) | (33,571)
| 8,431,067 | 1,485,395 | 9,916,462
The notes on pages 14 to 28 form part of these financial statements.
Page 13
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
1. | General information
Citizen Watch United Kingdom, Ltd (04104163) is a private company limited by shares and incorporated in England and Wales under the Companies Act 2006. The registered office is Citizen House, 7 Ashville Way, Wokingham, Berkshire, RG41 2PL. The nature of the company's operations and its principal activity are set out in the strategic report. 2.Accounting policies
| 2.1 | Basis of preparation of financial statements
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006. The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 3). The presentational and functional currency of these financial statements is GBP. Values are rounded to the nearest pound. The following principal accounting policies have been applied:
| 2.2 | Foreign currency translation
Functional and presentation currency The Company's functional and presentational currency is GBP. Transactions and balances Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions. At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss except when deferred in other comprehensive income as qualifying cash flow hedges. Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Income and Retained Earnings within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'. Page 14
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 2.Accounting policies (continued)
| 2.3 | Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised: Sale of goods Revenue from the sale of goods is recognised when all of the following conditions are satisfied: ∙the Company has transferred the significant risks and rewards of ownership to the buyer; ∙the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; ∙the amount of revenue can be measured reliably; ∙it is probable that the Company will receive the consideration due under the transaction; and ∙the costs incurred or to be incurred in respect of the transaction can be measured reliably. Rendering of services Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied: ∙the amount of revenue can be measured reliably; ∙it is probable that the Company will receive the consideration due under the contract; ∙the stage of completion of the contract at the end of the reporting period can be measured reliably; and ∙the costs incurred and the costs to complete the contract can be measured reliably.
| 2.4 | Operating leases: the Company as lessee
Rentals paid under operating leases are charged to profit or loss on a straight-line basis over the lease term.
| 2.5 | Interest income
Interest income is recognised in profit or loss using the effective interest method.
| 2.6 | Pensions
Defined contribution pension plan The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations. The contributions are recognised as an expense in profit or loss when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds. Page 15
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 2.Accounting policies (continued)
| 2.7 | Current and deferred taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively. The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income. Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the reporting date, except that: ∙The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and ∙Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met. Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.
| 2.8 | Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. At each reporting date the Company assesses whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is determined which is the higher of its fair value less costs to sell and its value in use. An impairment loss is recognised where the carrying amount exceeds the recoverable amount. Page 16
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 2.Accounting policies (continued)
| 2.8 | Tangible fixed assets (continued)
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method. Depreciation is provided on the following basis:
|  |  |  | Leasehold improvements | - |  | over the lease term
|  |  |  | Plant and equipment | - | 20% | per annum
|  |  |  | Fixtures and fittings | - | 20% | per annum
|  |  |  | Computer equipment | - | 20% | per annum
|  |  |  | Point of purchase displays | - |  | 3 years
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
| 2.9 | Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads. At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.
| 2.10 | Debtors
Short-term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
| 2.11 | Cash and cash equivalents
Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.
| 2.12 | Creditors
Short-term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method. Page 17
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 2.Accounting policies (continued)
| 2.13 | Provisions for liabilities
Provisions are recognised when an event has taken place that gives rise to a legal or constructive obligation, a transfer of economic benefits is probable and a reliable estimate can be made. Provisions are measured as the best estimate of the amount required to settle the obligation, taking into account the related risks and uncertainties. Increases in provisions are generally charged as an expense to profit or loss.
| 2.14 | Financial instruments
The Company has elected to apply the provisions of Section 11 “Basic Financial Instruments” of FRS 102 to all of its financial instruments. Basic financial assets Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price (adjusted for transaction costs except in the initial measurement of financial assets that are subsequently measured at fair value through profit and loss) and are subsequently carried at their amortised cost using the effective interest method, less any provision for impairment, 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. Discounting is omitted where the effect of discounting is immaterial. The Company's cash and cash equivalents, trade and most other debtors due with the operating cycle fall into this category of financial instruments. 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 Company after the deduction of all its liabilities. Basic financial liabilities, which include trade and other creditors, bank loans and other loans are initially measured at their transaction price (adjusting for transaction costs except in the initial measurement of financial liabilities that are subsequently measured at fair value through profit and loss). When this constitutes a financing transaction, whereby the debt instrument is measured at the present value of the future payments discounted at a market rate of interest, discounting is omitted where the effect of discounting is immaterial. Debt instruments are subsequently carried at their amortised cost using the effective interest rate method. Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classified as current liabilities if the payment is due within one year. If not, they represent non-current liabilities. Trade creditors are initially recognised at their transaction price and subsequently are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. Other financial instruments Derivatives, including forward exchange contracts, futures contracts and interest rate swaps, are not classified as basic financial instruments. These are initially recognised at fair value on the date the Page 18
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 2.Accounting policies (continued)
| 2.14 | Financial instruments (continued)
derivative contract is entered into, with costs being charged to the profit or loss. They are subsequently measured at fair value with changes in the profit or loss. Debt instruments that do not meet the conditions as set out in FRS 102 paragraph 11.9 are subsequently measured at fair value through the profit or loss. This recognition and measurement would also apply to financial instruments where the performance is evaluated on a fair value basis as with a documented risk management or investment strategy.
3. | Judgments in applying accounting policies and key sources of estimation uncertainty
In the application of the Company's accounting policies, which are described in note 2, management is required to make judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are based upon 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 if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods. The following key sources of estimation uncertainty have had the most significant effect on the amounts recognised within the financial statements: Tangible fixed assets Tangible fixed assets are depreciated over their useful lives taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In re-assessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values. Stock provision Stocks provisions are held against the brands. The Citizen and Bulova stock are provided for when ageing is over 3 years. Warranty provision The warranty provision is calculated by estimating the number of watches that will be returned within their warranty period by customers to the company and then calculating an expected total cost to the business to rectify any issues. To assess the provision that is required the directors are required to assess a variety of factors, including historical return trends, expected repair costs and likelihood of returns being accepted as valid. Dilapidation provision The dilapidation provision represents the dilapidation costs payable at the end of the property lease. Page 19
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
4. | Turnover
The whole of the turnover is attributable to sale of watches and parts. Analysis of turnover by country of destination:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| United Kingdom | 31,432,223 | 29,159,538
| Rest of Europe | 4,885,410 | 4,648,395
| Rest of the world | 472,032 | 156,782
|  | 36,789,665 | 33,964,715
5. | Operating profit
| The operating profit is stated after charging:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Depreciation | 731,803 | 761,428
| Fees payable to the company's auditor and its associates for the audit of the company's annual financial statements | 28,570 | 29,120
| Fees payable to the company's auditor for non-audit services | 6,240 | 3,523
| Exchange differences | 117,759 | 6,501
| Operating lease rentals | 505,936 | 491,249
6. | Auditor's remuneration
| During the year, the Company obtained the following services from the Company's auditor:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Fees payable to the Company's auditor for the audit of the Company's financial statements | 28,570 | 29,120
Page 20
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
7. | Employees
| Staff costs were as follows:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Wages and salaries | 3,711,001 | 3,398,525
| Social security costs | 503,163 | 396,265
| Cost of defined contribution scheme | 201,466 | 190,141
|  | 4,415,630 | 3,984,931
| The average monthly number of employees, including the directors, during the year was as follows:
|  |  | 2026 | 2025
|  |  | No. | No.
|  | Sales staff | 13 | 13
|  | Office and management | 58 | 52
|  |  | 71 | 65
8. | Directors' remuneration
| The directors' are remunerated by the immediate holding company, Citizen Watch Company of America Inc. and the ultimate holding company, Citizen Watch Company Limited.
9. | Finance income/(charges)
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Foreign exchange movements | 54,040 | (74,221)
| The finance income/(charge) relates to foreign exchange gains or losses on an intercompany loan denominated in US dollars as well as bank balances denominated in US dollars, Euros and Swiss Francs.
Page 21
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
10. | Taxation
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Corporation tax |  |
| Current tax on profits for the year | 735,437 | 16,444
|  | 735,437 | 16,444
| Total current tax | 735,437 | 16,444
| Deferred tax |  |
| Origination and reversal of timing differences | (5,521) | 41,367
| Taxable losses | 3,255 | 541,633
| Total deferred tax | (2,266) | 583,000
| Tax on profit | 733,171 | 599,444
| Factors affecting tax charge for the year
| The tax assessed for the year is higher than (2025 - lower than) the standard rate of corporation tax in the UK of 25% (2025 - 25%). The differences are explained below:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Profit on ordinary activities before tax | 2,806,673 | 2,427,622
| Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2025 - 25%) | 701,668 | 606,906
| Effects of: |  |
| Expenses not deductible for tax purposes, other than goodwill amortisation and impairment | 1,088 | 2,254
| Capital allowances for year in excess of depreciation | 6,259 | 43,385
| Utilisation of tax losses | - | (636,630)
| Changes in provisions leading to an increase (decrease) in the tax charge | 21,890 | 529
| Deferred tax movement | 2,266 | 583,000
| Total tax charge for the year | 733,171 | 599,444
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CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026 10.Taxation (continued)
| Factors that may affect future tax charges
There were no factors that may affect future tax charges. Page 23
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
11. | Tangible fixed assets
|  | Leasehold improvements | Plant and equipment | Fixtures and fittings | Point of purchase displays | Total
|  | £ | £ | £ | £ | £
| Cost or valuation |  |  |  |  |
| At 1 April 2025 | 1,966,744 | 1,785,720 | 309,946 | 1,843,875 | 5,906,285
| Additions | - | 54,583 | 36,205 | 596,861 | 687,649
| Disposals | (93,849) | (230,429) | (158,407) | (288,429) | (771,114)
| At 31 March 2026 | 1,872,895 | 1,609,874 | 187,744 | 2,152,307 | 5,822,820
| Depreciation |  |  |  |  |
| At 1 April 2025 | 804,230 | 1,519,477 | 297,312 | 1,106,170 | 3,727,189
| Charge for the year on owned assets | 100,116 | 94,699 | 5,154 | 531,834 | 731,803
| Disposals | (48,303) | (230,429) | (156,976) | (288,429) | (724,137)
| At 31 March 2026 | 856,043 | 1,383,747 | 145,490 | 1,349,575 | 3,734,855
| Net book value |  |  |  |  |
| At 31 March 2026 | 1,016,852 | 226,127 | 42,254 | 802,732 | 2,087,965
| At 31 March 2025 | 1,162,514 | 266,243 | 12,634 | 737,705 | 2,179,096
12. | Stocks
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Finished goods and goods for resale | 11,714,152 | 11,202,280
Page 24
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
13. | Debtors
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Trade debtors | 3,958,495 | 4,070,037
| Amounts owed by group undertakings | 120 | 120
| Other debtors | 224,860 | 36,828
| Prepayments and accrued income | 602,149 | 313,294
|  | 4,785,624 | 4,420,279
14. | Creditors: Amounts falling due within one year
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Trade creditors | 662,506 | 550,180
| Amounts owed to group undertakings | 2,941,328 | 3,419,152
| Corporation tax | 3,313 | 16,444
| Other taxation and social security | 95,705 | 445,280
| Other creditors | 216,854 | 157,201
| Accruals and deferred income | 2,553,868 | 1,748,949
|  | 6,473,574 | 6,337,206
Page 25
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
15. | Deferred taxation
|  | 2026
|  | £
| At beginning of year | (307,377)
| Credited to profit or loss | 2,266
| At end of year | (305,111)
| The provision for deferred taxation is made up as follows:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Accelerated capital allowances | (329,485) | (328,377)
| Other short term timing differences | 24,374 | 21,000
|  | (305,111) | (307,377)
16. | Provisions
|  | Dilapidation | Warranty provision | Total
|  | £ | £ | £
| At 1 April 2025 | 62,580 | 398,841 | 461,421
| Charged to profit or loss | 56,466 | 12,504 | 68,970
| At 31 March 2026 | 119,046 | 411,345 | 530,391
17. | Share capital
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
|  | Allotted, called up and fully paid |  |
|  | 700,000 (2025 - 700,000) ordinary shares of £1.00 each | 700,000 | 700,000
Page 26
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
18. | Reserves
The company's capital and reserves are as follows: Called up share capital Called up share capital represents the nominal value of the shares issued. Profit and loss account The profit and loss account represents cumulative profits or losses, net of dividends paid and other adjustments.
19. | Pension commitments
The Company operates a defined contributions pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund and amounted to £201,466 (2025 - £190,141). Contributions totalling £33,642 (2025 - 28,478) were payable to the fund at the reporting date and are included in creditors.
20. | Commitments under operating leases
| At 31 March 2026 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:
|  |  |  |  | 2026 | 2025
|  |  |  |  | £ | £
| Not later than 1 year | 362,201 | 286,858
| Later than 1 year and not later than 5 years | 958,351 | 916,669
| Later than 5 years | 1,492,659 | 1,698,543
|  | 2,813,211 | 2,902,070
21. | Related party transactions
| The company has taken advantage of the exemption available in Section 33.1A of FRS 102 whereby it has not disclosed transactions with the ultimate parent company or any wholly owned subsidiary undertaking of the group. Key management personnel include all senior managers across the company who together have authority and responsibility for planning, directing and controlling activities of the company. The total compensation paid to key management personnel for services provided for the company was £737,791 (2025 - £691,651).
Page 27
CITIZEN WATCH UNITED KINGDOM, LTD NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2026
22. | Controlling party
The company is a wholly owned subsidiary undertaking of Citizen Watch Company of America Inc. incorporated in the United States of America. Their registered office is 350 Fifth Avenue, 29th Floor, New York, NY10118. The ultimate controlling party of the group is Citizen Watch Company Limited incorporated in Japan. Copies of the group accounts can be obtained from The Government Publications Service Centre, Kasumigaseki, Japan.
Page 28