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Registered number: 02456984
MITSUBISHI ELECTRIC FINANCE EUROPE PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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COMPANY INFORMATION
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Chartered Accountants & Statutory Auditor
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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CONTENTS
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Independent Auditor's Report
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Statement of Comprehensive Income
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Statement of Changes in Equity
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Notes to the Financial Statements
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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STRATEGIC REPORT
FOR THE YEAR ENDED 31 MARCH 2026
To comply with the Companies Act 2006, the company has provided below a review of the development and performance of the business during the year, including key financial performance indicators and a description of the principal risks and uncertainties facing the company.
The strategic review contains forward looking statements and opinions that involve risks and uncertainties. These risks and uncertainties could cause results to differ materially from expectations. The principal risk factors are discussed in more detail below.
Mitsubishi Electric Finance Europe PLC (MEFE) is a wholly owned subsidiary of Mitsubishi Electric Corporation (MELCO).
MELCO is a global organisation, based in Japan, which heads a large group of companies that develop, manufacture and distribute an extensive range of electric products in business fields.
MEFE is one of the group finance companies responsible for EMEA region and provides financial services to MELCO and MELCO group companies.
MEFE has continued to function as a treasury-hub for MELCO and plays an important role in MELCO’s financial activities.
For the fiscal year ended 31 March 2026, the global economic environment remained uncertain, with ongoing geopolitical tensions including the Russia-Ukraine conflict and instability in the Middle East, policy uncertainty in the U.S. following the return of the Trump administration, political developments in Europe, and China’s economic slowdown, all of which directly or indirectly impacted business activities.
During the year, major central banks continued to reduce interest rates as inflationary pressures eased, while the Bank of Japan maintained its gradual monetary policy normalization. These developments affected intercompany deposits and loans, as detailed in the Performance section below. The company is continuing to work hard to fulfil its responsibility as a group financial company.
Key performance indicators
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Total turnover increased by 20.2% compared to the prior year.
Funding requirements from the UK, Turkish, and Italian affiliates decreased during the year. Consistent with the trend observed in the previous year, the U.S. affiliate had no material funding requirements and was able to return a larger portion of surplus funds. In addition, increased USD funding demand from the parent company in the latter half of FY25 resulted in higher interest income compared with JPY loans.
Interest rate cuts in EUR, USD, and GBP continued throughout FY25, enabling the company to secure funding at relatively low cost while maintaining stable interest income from long-term loans issued at historically higher rates, as loan tenors were generally longer than those of deposits.
On the other hand, swap profits from EUR-JPY/USD-JPY swaps decreased significantly due to interest rate movements.
As a result, profit after tax increased by £201k.
The company's cash liquidity position remains good and third-party borrowing has not been required for several years. Key balance sheet indicators, including a current ratio of 1.0 (2025: 1.0), have remained stable.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Principal risks and uncertainties
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The company enters into derivative transactions to manage the interest rate and currency risks arising from the company's operations and its sources of finance, principally through holding interest rate swaps, currency swaps and forward currency exchange contracts.
Interest rate risks remain the principal risk factor to the company but these are regularly monitored for any adverse movements.
As the company maintains its accounting records in pounds sterling, the company's Balance Sheet can be significantly affected by movements in exchange rates. The company takes steps to reduce the potential for such effects by managing its currency exposures through the use of exchange contracts by maintaining asset and liability exposures in matched currencies, and by the use of currency swap contracts. Foreign exchange open positions are kept near zero as much as possible and therefore do not pose such high risk.
The main risks arising from the company's financial instruments are interest rate risk, liquidity risk, foreign currency risk, credit risk, market risk, price risk and Cash flow risk. The board considers these risks, and agrees policies for managing each of them, in order to ensure the long-term stability of the company's operations.
Price Risk (Interest rate risk)
Interest rate risk profile of financial assets and financial liabilities
Wherever practicable interest payable profiles are matched with interest receivable profiles, particularly for longer term investment and borrowing. Where this is not possible on a direct allocation basis consideration is given, dependent upon market conditions, to taking out interest rate swaps to limit the interest rate risk. Interest rate trends are constantly monitored, although unexpected interest rate movement cannot be predicted, any risk is limited by the term of the exposures which normally do not exceed three months.
Where borrowings are in one currency and lending in another the interest risk is fully hedged by the use of currency and interest rate swaps.
Cash Flow Risk (Liquidity risk)
The company's policy is to match the maturities of assets and liabilities as far as possible. The company utilises group funds and bank facilities.
Foreign currency risk
As a result of the significant international transactions in US dollars, euros, Japanese yen and other foreign currencies, and the fact that the company currently maintains its accounting records in pounds sterling, the company's Balance Sheet can be significantly affected by movements in exchange rates. The company takes steps to reduce the potential for such effects by managing its currency exposures through the use of exchange contracts by maintaining asset and liability exposures in matched currencies, and by the use of currency swap contracts.
As at 31 March 2026 after taking into account the effects of hedging and forward foreign exchange contracts the company had no material currency exposures.
Credit risk
Counterparty credit risk is carefully managed by the company through the setting of limits and frequent monitoring of exposures.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Principal risks and uncertainties (continued)
Market risk
Assets and liabilities are stated in the Balance Sheet at amounts which the company expects to receive or pay at maturity, taking into consideration current exchange rates. The company does not take unhedged positions in quoted market instruments for trading purposes and as such any market volatility should not affect the carrying values of the company's assets or liabilities. Those asset/liability instruments used as hedging tools given by their very nature a neutral effect to the company on any market change.
This report was approved by the board and signed on its behalf.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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DIRECTORS' REPORT
FOR THE YEAR ENDED 31 MARCH 2026
The directors present their Directors' Report and the financial statements for the year ended 31 March 2026.
The company's main activity continues to be the financing of the Mitsubishi Electric Group companies. As in past years the company continues to seek new business within the group and in this reporting year the company expanded its operations. As we have reported before, the efficient management of group funds is very important, and the company continues to enhance its activities.
The profit for the year, after taxation, amounted to £3,609,000 (2025: £3,408,000).
The directors do not recommend the payment of a dividend (2025: £Nil).
The directors who served during the year, and up to the date of signing this report, were:
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H Fujisawa (resigned 1 April 2026)
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K Shimizu (resigned 1 April 2026)
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K Yagi was appointed as director after the year end on 01 April 2026.
None of the directors who held office at the end of the financial year had any disclosable interest in the shares of the company.
Directors' Responsibilities Statement
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The directors are responsible for preparing the Strategic Report and 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 United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law, including FRS 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 and profit or loss of the company for that period. In preparing these financial statements, the directors are required to:
∙select suitable accounting policies and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
Qualifying third party indemnity provisions
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There are no qualifying third party indemnity provisions to disclose.
The net current assets were £35,932k (2025: £32,323k) as at 31 March 2026 and the profit for the year ended 31 March 2026 was £3,609k (2025: £3,408k). The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
The directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds.
Those forecasts are dependent on Mitsubishi Electric Corporation continuing to provide financial and other support during that period. Mitsubishi Electric Corporation has indicated its intention to continue to make available funds needed by the company for the period covered by the forecasts. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
Policy and practice on payment of creditors
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It is the company's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the company and its suppliers, provided that all trading terms and conditions have been complied with.
At 31 March 2026, the company had no outstanding amounts payable to non-fellow subsidiary undertakings in respect of trade purchases (2025: £Nil).
Political and charitable donations
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The company made no political or charitable donations in the year (2025: £Nil).
The company has no significant future developments to report.
There have been no significant events affecting the company since the reporting date.
Disclosure of information to auditor
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The directors confirm that:
∙so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and
∙the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company's auditor is aware of that information.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 MARCH 2026
The auditor, Grant Thornton UK LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board and signed on its behalf.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MITSUBISHI ELECTRIC FINANCE EUROPE PLC
We have audited the financial statements of Mitsubishi Electric Finance Europe Plc (the 'company') for the year ended 31 March 2026, which comprise the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in Equity and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
In our opinion:
∙the financial statements give a true and fair view of the state of the company's affairs as at 31 March 2026 and of its profit for the year then ended;
∙the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
∙the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the 'Auditor's responsibilities for the audit of the financial statements' section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
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We are responsible for concluding on the appropriateness of the directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
In our evaluation of the directors' conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as fluctuating interest rates, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MITSUBISHI ELECTRIC FINANCE EUROPE PLC (CONTINUED)
Conclusions relating to going concern (continued)
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.
The other information comprises the information included in the Annual Report and financial statements, other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report and financial statements. 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 audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
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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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MITSUBISHI ELECTRIC FINANCE EUROPE PLC (CONTINUED)
Matter on which we are required to report under the Companies Act 2006
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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.
Matters on which we are required to report by exception
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
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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.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MITSUBISHI ELECTRIC FINANCE EUROPE PLC (CONTINUED)
Auditor's responsibilities for the audit of the financial statements
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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. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below:
∙We obtained an understanding of the legal and regulatory frameworks applicable to the company and determined that the following laws and regulations were most significant: Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable to the UK and Republic of Ireland’ and the Companies Act 2006.
∙We obtained an understanding of the legal and regulatory frameworks applicable to the company and the industry in which it operates through our general and commercial and sector experience, discussions with management. We obtained an understanding of how the company is complying with those legal and regulatory frameworks by making inquiries of management who are responsible for legal and compliance procedures. We corroborated our inquiries through our review of board minutes.
∙We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures performed by the engagement team included:
−Identifying and assessing the design and implementation of controls management has in place to prevent and detect fraud;
−Challenging assumptions and judgements made by management in its significant accounting estimates; and
−Identifying and testing journal entries, in particular those considered unusual by the engagement team.
∙These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it.
∙The engagement partner's assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team's:
−Understanding of, and practical experience with, audit engagements of a similar nature and complexity, through appropriate training and participation; and
−Knowledge of the industry in which the company operates.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF MITSUBISHI ELECTRIC FINANCE EUROPE PLC (CONTINUED)
Auditor's responsibilities for the audit of the financial statements (continued)
∙Team communications in respect of potential non-compliance with laws and regulations and fraud included the potential for fraud perpetrated through management override of controls.
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.
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.
James Andersen
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Glasgow
6 August 2026
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2026
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Interest payable and similar expenses
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Profit for the financial year
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There were no recognised gains and losses for 2026 or 2025 other than those included in the Statement of Comprehensive Income.
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The notes on pages 15 to 25 form part of these financial statements.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
REGISTERED NUMBER:02456984
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BALANCE SHEET
AS AT 31 MARCH 2026
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Debtors: amounts falling due within one year
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Creditors: amounts falling due within one year
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The financial statements were approved and authorised for issue by the board and were signed on its behalf by:
The notes on pages 15 to 25 form part of these financial statements.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2026
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Comprehensive income for the year
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Total comprehensive income for the year
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Comprehensive income for the year
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Total comprehensive income for the year
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The notes on pages 15 to 25 form part of these financial statements.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
Mitsubishi Electric Finance Europe PLC is a public company limited by shares, incorporated in England and Wales. Its registered number is 02456984, and its registered head office is located at Travellers Lane, Hatfield, Hertfordshire, United Kingdom, AL10 8XB.
2.Accounting policies
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Basis of preparation of financial statements
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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 judgement in applying the company's accounting policies (see note 3).
The following principal accounting policies have been applied:
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Financial Reporting Standard 102 - reduced disclosure exemptions
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The company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
∙the requirements of Section 7 Statement of Cash Flows;
∙the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
∙the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47, 11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
∙the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a), 12.29(b) and 12.29A; and
∙the requirements of Section 33 Related Party Disclosures paragraph 33.7.
This information is included in the consolidated financial statements of Mitsubishi Electric Corporation, Japan as at 31 March 2026 and these financial statements may be obtained from 7-3 Marunouchi 2-chome Chiyodaku Tokyo, Japan.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.Accounting policies (continued)
The net current assets were £35,932k (2025: £32,323k) as at 31 March 2026 and the profit for the year ended 31 March 2026 was £3,609k (2025: £3,408k). The financial statements have been prepared on a going concern basis which the directors consider to be appropriate for the following reasons.
The directors have prepared cash flow forecasts for a period of at least 12 months from the date of approval of these financial statements which indicate that, taking account of reasonably possible downsides, the company will have sufficient funds.
Those forecasts are dependent on Mitsubishi Electric Corporation continuing to provide financial and other support during that period. Mitsubishi Electric Corporation has indicated its intention to continue to make available funds needed by the company for the period covered by the forecasts. As with any company placing reliance on other group entities for financial support, the directors acknowledge that there can be no certainty that this support will continue although, at the date of approval of these financial statements, they have no reason to believe that it will not do so.
Consequently, the directors are confident that the company will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the financial statements on a going concern basis.
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Foreign currency translation
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Functional and presentation currency
The company's functional and presentational currency is GBP and all values are rounded to the nearest thousand pounds (£000) except where otherwise stated.
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 profit or loss within 'finance income or costs'. All other foreign exchange gains and losses are presented in profit or loss within 'other operating income'.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.Accounting policies (continued)
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Turnover and interest payable
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Interest income and interest payable are recognised in profit or loss as they accrue, using the effective interest method.
Other income relates to service fee income earned under a Service Agreement with Mitsubishi Electric Corporation for the provision of finance monitoring, reporting, audit support and related treasury support services. The income recognised in the year was £259k (2025: £294k).
The company participates in a group wide pension scheme providing benefits based on final pensionable pay. From 1 March 2014 this defined benefits scheme was closed to further accrual. The assets of the scheme are held separately from those of the company. The company is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as required by paragraph 28.11 of FRS 102 'Retirement benefits', accounts for the scheme as if it were a defined contribution scheme. As a result, the amount charged to the Statement of Comprehensive Income represents the contributions payable to the scheme in respect of the accounting period.
All borrowing costs are recognised in profit or loss in the year in which they are incurred.
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 Balance Sheet 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 Balance Sheet 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 Balance Sheet date.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
2.Accounting policies (continued)
Basic financial assets
Basic financial assets, which include 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.
Financial liabilities
Basic financial liabilities, which include other creditors 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.
Cash at bank and in hand
Cash at bank and in hand comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the company's cash management are included as Bank overdrafts that are repayable on demand and form an integral part of the company's cash management are included as a component of creditors due within one year.
Derivative financial instruments
Derivative financial instruments are recognised at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss.
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Judgements in applying accounting policies and key sources of estimation uncertainty
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The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Estimates are based on historical experience and other assumptions that are considered reasonable in the circumstances. The actual amount or values may vary in certain instances from the assumptions and estimates made. Changes will be recorded, with corresponding effect in the financial statements, when, and if, better information is obtained.
Critical judgements and sources of estimation uncertainty that management have made in the process of applying accounting policies disclosed herein and that have a significant effect on the amounts recognised in the financial statements relate to the following:
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
3.Judgements in applying accounting policies (continued)
Estimates
In the process of preparing the financial statements, no significant estimates were applied.
Judgements
In the process of preparing the financial statements, no significant judgements were applied.
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The directors consider that turnover arises from a single business segment, financial operations.
Turnover represents fee income, income receivable from foreign exchange dealing and interest receivable on loans, bank deposits and investments.
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Income derived from parent and fellow subsidiary undertakings:
- Interest received
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Income derived from other sources:
- Interest received and other
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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During the year, the company obtained the following services from the company's auditor:
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Fees payable to the company's auditor for the audit of the company's financial statements
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Fees payable to the company's auditor in respect of:
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Staff costs, including directors' remuneration, were as follows:
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Cost of defined contribution scheme
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The average monthly number of employees, including the directors, during the year was as follows:
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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The highest paid director received remuneration of £268,832 (2025: £295,524).
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The value of the company's contributions paid to a defined contribution pension scheme in respect of the highest paid director amounted to £Nil (2025: £Nil).
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During the year retirement benefits were accruing to no directors (2025: £Nil) in respect of defined contribution pension schemes.
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Interest payable and similar expenses
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Interest payable and similar expenses
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Interest payable on amounts owed to group undertakings are shown separately as Foreign exchange, Fair value gains and Fair value losses.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Current tax on profits for the year
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Factors affecting tax charge for the year
The tax assessed for the year is lower than (2025: higher than) the standard rate of corporation tax in the UK of25% (2025: 25%). The differences are explained below:
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Profit on ordinary activities before tax
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Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2025: 25%)
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Adjustments to tax charge in respect of prior periods
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Total tax charge for the year
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Factors that may affect future tax charges
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Deferred tax balances have been measured at 25%, being the enacted UK corporation tax rate applicable to future periods at the balance sheet date.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Debtors: amounts falling due within one year
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Amounts owed by group undertakings
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Other debtors and income accruals
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Other debtors and income accruals includes assets from foreign currency swaps/forwards amounting to £2,535,540 (2025: £2,937,241).
The amounts owed by group undertakings relates to unsecured loans with fixed interest rates and dates of repayment.
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Cash and cash equivalents
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Creditors: amounts falling due within one year
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Amounts owed to group undertakings
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Taxation and social security
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Accruals and deferred income
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Accruals and deferred income includes liabilities from foreign currency swaps/forwards amounted to £1,344,610 (2025: £3,272,814).
The amounts owed to group undertakings relates to unsecured loans with fixed interest rates and dates of repayment.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
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Fair values
The amounts for all financial instruments carried at fair value are as follows:
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Accrued Forward Points Swap
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Market values have been used to determine the fair value of currency swaps and forward foreign exchange contracts. The profit or loss on fair valuation of derivatives financial instruments have been recognised in the result of the company for the year.
These balances are the net positions. The gross values are included within Other debtors and income accruals and Accruals and deferred income.
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Allotted, called up and fully paid
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4,000,000 (2025: 4,000,000) Ordinary shares of £1 each
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There is a single class of ordinary shares. There are no restrictions on dividends and the repayment of capital.
The company's capital and reserves are as follows:
Profit and loss account
Includes all current and prior periods retained profits and losses.
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MITSUBISHI ELECTRIC FINANCE EUROPE PLC
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2026
The company's employees are members of a group wide pension operated by Mitsubishi Electric Europe B.V.
On 28 February 2014 the defined benefit scheme was closed to future accrual. The directors do not consider that the share of the underlying assets and liabilities of the scheme are separately identifiable, and as permitted by paragraph 28.11 of FRS102 'Retirement Benefits', the scheme has been accounted for in these financial statements as if the scheme were a defined contribution scheme.
The most recent actuarial valuation of the group's main pension scheme was at 1 April 2025. That valuation showed that the scheme's assets represented £82,461,000 which is 107.9% of the value of accrued liabilities on on-going basis of £76,432,000. The impact on the company of the net surplus of £6,029,000 is not considered by the directors to be material.
As the scheme was in surplus at the valuation date, no recovery plan was required and no deficit reduction contributions are payable. The funding strategy agreed between the Trustees and the Sponsor anticipates that the scheme will remain fully funded and continue to be in surplus.
The company’s employees are also members of the group defined contribution section of the scheme. Under the current Schedule of Contributions, contributions for members who were defined benefit section members at the date of closure comprise employee contributions of 8.0% of pensionable earnings and employer contributions of 17.1% of pensionable earnings.
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Related party transactions
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The company has taken advantage of the exemption allowed under section 33 of FRS 102 ' Related party disclosure' not to disclose transactions with other members that are wholly owned within the group.
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There have been no significant events affecting the company since the reporting date.
Mitsubishi Electric Finance Europe PLC is a wholly owned subsidiary of Mitsubishi Electric Corporation, who are the immediate and ultimate controlling party. Its principal place of business is 7-3 Marunouchi 2-chome Chiyodaku Tokyo, Japan.
Mitsubishi Electric Finance Europe PLC's accounts are consolidated into the accounts of Mitsubishi Electric Corporation, Japan, only. A copy of Mitsubishi Electric Corporation's group accounts may be obtained by written application to Mitsubishi Electric Finance Europe PLC, Travellers Lane, Hatfield, Hertfordshire, United Kingdom, AL10 8XB.
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