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Registered number: 02400282










HARADA INDUSTRIES (EUROPE) LIMITED










ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
COMPANY INFORMATION


Directors
Y Miyake 
S Harada 
S Kamiyama 
K Morimoto 




Registered number
02400282



Registered office
2 Bell Heath Way
Woodgate Business Park

Clapgate Lane

Birmingham

B32 3BZ




Independent auditors
Blick Rothenberg Audit LLP

16 Great Queen Street

Covent Garden

London

WC2B 5AH




Bankers
Mizuho Bank Limited
Mizuho House

30 Old Bailey

London

EC4M 7AU





HSBC Bank plc

130 New Street

PO Box 68

Birmingham

B2 4IU




Solicitors
George Green LLP
195 High Street

Cradley Heath

West Midlands

B64 SHW





 
HARADA INDUSTRIES (EUROPE) LIMITED
 

CONTENTS



Page
Strategic report
1 - 3
Directors' report
4 - 7
Independent auditors' report
8 - 11
Statement of comprehensive income
12
Balance sheet
13
Notes to the financial statements
14 - 26


 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

Introduction
 
Harada Industries (Europe) Limited is part of an international group of companies. The group’s headquarters are in Japan. Harada Industries (Europe) Limited is the only UK-based company operating within the wider group. Their UK operational activities involve the sale and distribution of antennae to the automotive sector. The UK sales and distribution facility is located at Bell Heath Way, Birmingham, B32 3BZ.
The directors present their strategic report and the financial statements for the year ended 31 December 2024.

Business review
 
The company’s principal activity during the year continued to be the supply of car antenna systems to the UK and continental European car industries.
The key financial and other performance indicators during the year were as follows:
ole48ad.png
During the year, overall sales value was 41.12% lower due to lower global sales for component parts for the Harada group production location and end of production for Major OE vehicles.
Gross margin in 2024 was 0.87% percentage points lower than 2023 and with the similar Cost of Sales the gross profit decreased by £1,823,919.
The average head count in 2024 had a decrease of 1 from 2023.
Shareholders’ funds increased by £9,576,417 due to a debt for equity swap and issuing of £11,014,537 shares in July 2024. Cash reserves decreased from £5,654,513 to £1,312,883 and short-term loans from the parent company decreased to £1,957,955. Trade debtors balance owed to third parties as of 31 December 2024 was £3,567,175, a decrease of £195,604 from the previous year. Inventory values increased by £1,861,567 over the same period.
The products sold by the company have minimal environmental impact. However, the board believes that good environmental practices support the board’s strategy by enhancing the reputation of the company.

Page 1

 
HARADA INDUSTRIES (EUROPE) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Principal risks and uncertainties
 
The company has a risk committee that meets quarterly and which evaluates the company’s exposure to risks.
The principal area of risk for the company is the exposure to fluctuating foreign currency exchange rates.
The company has foreign currency income and assets not fully matched to expenditure and liabilities in those particular currencies. The differences are therefore exposed to fluctuations in currency exchange rates.
During 2024 the company continued to review the areas within the enlarged scope of activities controlled by J-SOX and the results were satisfactory.
There is a small credit risk that a customer will cause a financial loss by failing to discharge an obligation. Company policies are aimed at minimising such losses and require that deferred terms are only granted to customers who demonstrate an appropriate payment history and satisfactory creditworthiness procedures. More than 86% of sales are made to the global car companies.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company aims to mitigate liquidity risk by managing cash generation by its Operations, applying cash collection targets. The company also manages liquidity risk via revolving credit facilities from the parent company.

Directors’ statement of responsibilities under Section 172 Companies Act 2006
 
The directors have the following comments regarding the performance of their duties to promote the success of the company:
Interests of members of the company 
The company is a wholly owned subsidiary of Harada Industry Co. Ltd of Japan and as such relies on their support and governance.
The board of directors is made up of three representatives from the parent company and one seconded Managing Director who resides locally.
In common with many private companies the interests of the board and the shareholders are broadly aligned in that the company should create value for the Parent. It does this by holding regular management meetings & risk assessments, the results of these along with monthly, quarterly and annual financial results are provided to the parent, who then review these with annual financial & managing director meetings.
The interests of the workforce
The company considers long term agency staff in the same way as its permanent staff and supports its workforce as it considers a knowledgeable and skilled workforce as vital to deliver its products to time and quality.
The company holds regular staff meetings and carries out annual appraisals. The company encourages feedback from its staff via a suggestion scheme and looks to up skill its workforce.
The company offers competitive remuneration packages and all staff members have the opportunity to join the company's Group Personal Pension Plan. 



 
Page 2

 
HARADA INDUSTRIES (EUROPE) LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

The interests of our customers 
Our customers are Global Automotive Manufacturers and are at the centre of everything we do as they are essential to the success of our business.
Customer feedback is received continually via daily, weekly and monthly reporting giving an indication of how the company is performing in the market. Areas reviewed included Innovation, technical abilities, quality of service and company ability to meet all regulatory requirements. We would be unable to create a roadmap for future developments and long-term investment.
It is this feedback, which resulted in the board’s decision to open a permanent establishment on Germany.
The interests of our suppliers 
The company purchases all of its finished goods from its sister companies, located around the world. It also procures components manufactured in the EU, under a group purchasing policy, which it supplies to its sister companies, in order to minimise prices paid for these components.
It is important that the company receives products that we sell to our OE customers in a timely fashion, as there are potential heavy penalties for line stoppages. Likewise, it is important that the component parts are supplied to our manufacturing plants in time for when they are needed, to optimise production performance.
The company holds regular meetings with all of its supplier to balance the needs of the supply chain, both inbound and outbound. It will also supply long term forecasts, so that all suppliers can optimise production planning.


This report was approved by the board and signed on its behalf.



K Morimoto
Director

Date: 18 June 2025

Page 3

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024

The directors present their report and the financial statements for the year ended 31 December 2024.

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;

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

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the 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 2006They 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 loss for the year, after taxation, amounted to £1,438,121 (2023 - loss £16,243).

The directors do not recommend a payment of dividend (2023 – £0).

Directors

The directors who served during the year were:

Y Miyake 
S Harada 
S Kamiyama 
K Morimoto 

Page 4

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024

Future developments

To strengthen European Sales of Next Generation products, WPT Monitoring Wi-Fi Antenna, Invisible Hidden Antenna, DTV-G-Amplifiers, ITS Antenna, SG Single Instrument Panel Antenna, V2X Hidden Antenna, 5D Dual Panel Mount Antenna, Low Profile Shark-Fin, Noise Cancelling Antenna, we will employ two new CAD Engineers and an Antenna Design Engineer to support our product integration into new vehicle designs.
We have entered into an agreement with a European Logistics Company to reduce delivery times to continental European Customers and the use of this company will be expanded to more customers.
We aim to increase new business generation with these two incentives following the exit of the UK from the European Union.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company's greenhouse gas emissions and energy consumption for the year are summarised below.

ole4731.png
* Annual quantity of energy consumed for employee business travel activities in the UK. This 
represents employee expense claims for business miles travelled in their own vehicles, as 
reimbursed by the organisation, which is used as a proxy for fuel purchases for the purpose of kWh 
and CO2e calculations.
** Annual turnover in £m as reported through financial accounting mechanisms.
Organisational and operational boundary
This information relates to business transport emissions and energy consumption at Harada Industries (Europe) Limited’s sole UK site. It covers all onsite purchases of mains electricity and natural gas which are used for space heating and cooling, lighting, administration, and warehousing activities. Transport fuel used for employee business road travel is also included.
 
Page 5

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024


Energy efficiency measures
The reporting period is the 1st of January 2024 to 31st December 2024 which corresponds directly with the organisation’s financial reporting period.
Harada Industries (Europe) Ltd. operates an environmental management system (EMS) which is certified to the ISO14001 standard. The EMS implements various processes and procedures to facilitate the continual improvement of the organisation’s environmental performance. Energy efficiency measures and objectives are implemented.
The organisation records energy consumption data. Consumption data is used to monitor progress towards targets. Opportunities to improve energy efficiency are also informed through these monitoring activities.
Energy efficiency measures implemented over recent years include the installation of energy efficient lighting and comfort-cooling system upgrades. Regular servicing and maintenance of process equipment is also scheduled. Employee engagement activities also focus on energy efficiency, with associated initiatives including a ‘switch off’ electrical equipment when not in use policy. 

Future planned measures include the installation of a new energy efficient boiler for space and 
water heating. 

Reporting methodology and rationale
Inventory Boundary
The data used in this report relate to the UK consumption of energy (purchased supplies and fuel) at Harada Industries (Europe) Limited’s sole UK site, located at Bell Heath Way, Birmingham, B32 3BZ. All onsite purchases of electricity and natural gas from energy suppliers are included. All mileage claimed through the employee expense system as business travel is included. 
Exclusions
Energy consumption data used for the preparation of this report relate only to the energy directly consumed by the organisation (Scope 1 and 2), along with transport fuel purchases. Energy consumption over which the organisation has no direct control is excluded from this report. This includes energy consumed within the organisation’s value-chain, embedded emissions in products and non-UK energy which may be consumed by international subsidiaries and the parent company etc. No data is included in relation to other travel which may be provided by third parties to the organisation, including that of couriers, hauliers, and public transport providers. 

Disclosure of information to auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of fellow directors and the company’s auditor, each director has taken all the steps that they are obliged to take as a director in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.




 
Page 6

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024


Going concern
The companies' business activities together with the factors likely to affect its future development, performance and position are set out above.
The Company has sufficient resources and operates in a known market. As a consequence, the directors believe the Company is well placed to manage its business risks.
The directors have a reasonable expectation that the company has adequate resources to continue operational existence for the foreseeable future of at least 12 months from the date the financial statements are approved. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Harada Industries Co., Ltd, the ultimate parent company, has confirmed its intention to provide ongoing financial support for the foreseeable future and for a minimum period of at least 12 months from the date the financial statements are approved.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The Company’s auditor which was appointed during the financial year, Greenback Alan LLP, ceased to operate as a registered auditor on 31 March 2025 and its business was transferred to Blick Rothenberg. Accordingly, the Company appointed Blick Rothenberg Audit LLP as its auditor in accordance with section 485 of the Companies Act 2006.
A resolution to reappoint Blick Rothenberg Audit LLP as auditors will be put to the members at the Annual General Meeting.

This report was approved by the board on 18 June 2025 and signed on its behalf.
 





K Morimoto
Director

Page 7

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARADA INDUSTRIES (EUROPE) LIMITED
 

Opinion


We have audited the financial statements of Harada Industries (Europe) Limited (the 'Company') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Balance sheet and the related notes, including a summary of significant accounting policiesThe financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).


In our opinion the financial statements:


give a true and fair view of the state of the Company's affairs as at 31 December 2024 and of its loss 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 Auditors' 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 8

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARADA INDUSTRIES (EUROPE) LIMITED (CONTINUED)


Other information


The other information comprises the information included in the Annual Report other than the financial statements and our Auditors' report thereon. The directors are responsible for the other information contained within the Annual ReportOur 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 9

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARADA INDUSTRIES (EUROPE) LIMITED (CONTINUED)


Auditors' 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 Auditors' 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:
• the engagement partner ensured that the engagement team collectively had the appropriate competence, 
capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;
• we identified the laws and regulations applicable to the company through discussions with directors and 
other management, and from our commercial knowledge and experience of the automotive sector;
• we focused on specific laws and regulations which we considered may have a direct material effect on the 
financial statements or the operations of the company, including the Companies Act 2006, taxation 
legislation and data protection, anti-bribery, employment, environmental and health and safety legislation;
• we assessed the extent of compliance with the laws and regulations identified above through making 
enquiries of management and inspecting legal correspondence; and 
• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.
We assessed the susceptibility of the company’s financial statements to material misstatement, including 
obtaining an understanding of how fraud might occur, by:
• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud; and 
• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
• performed analytical procedures to identify any unusual or unexpected relationships;
• tested a sample of journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the accounting estimates set out in note 3 were indicative of potential bias; and
• investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures
which included, but were not limited to:
• agreeing financial statement disclosures to underlying supporting documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and claims; and
• reviewing correspondence with HM Revenue and Customs and the company’s legal advisors.
There are inherent limitations in our audit procedures described above. The more removed that laws and 
regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. 
Auditing standards require that we identify non-compliance with laws and regulations through enquiry of the 
directors and other management and the inspection of regulatory and legal correspondence, if any, as well as 
any additional procedures deemed necessary.
 
Page 10

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF HARADA INDUSTRIES (EUROPE) LIMITED (CONTINUED)


Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they 
may involve deliberate concealment or collusion.


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 Auditors' 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 2006Our 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 Auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.





Yusuke Takanishi (Senior statutory auditor)
  
for and on behalf of
Blick Rothenberg Audit LLP
 
16 Great Queen Street
Covent Garden
London
WC2B 5AH

18 June 2025
Page 11

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024

2024
2023
Note
£
£

  

Turnover
 4 
28,757,979
48,837,948

Cost of sales
  
(26,752,784)
(45,008,834)

Gross profit
  
2,005,195
3,829,114

Distribution costs
  
(567,167)
(522,194)

Administrative expenses
  
(2,518,544)
(2,595,721)

Other operating income
  
1,214
37,140

Operating (loss)/profit
 5 
(1,079,302)
748,339

Interest receivable and similar income
  
129,268
239,279

Interest payable and similar expenses
  
(534,285)
(956,378)

(Loss)/profit before tax
  
(1,484,319)
31,240

Tax on (loss)/profit
 11 
46,198
(47,483)

Loss for the financial year
  
(1,438,121)
(16,243)

There were no recognised gains and losses for 2024 or 2023 other than those included in the statement of comprehensive income.

There was no other comprehensive income for 2024 (2023:£NIL).

The notes on pages 14 to 26 form part of these financial statements.

Page 12

 
HARADA INDUSTRIES (EUROPE) LIMITED
REGISTERED NUMBER: 02400282

BALANCE SHEET
AS AT 31 DECEMBER 2024

2024
2023
Note
£
£

Fixed assets
  

Tangible assets
 12 
635,088
715,886

  
635,088
715,886

Current assets
  

Stocks
 13 
8,772,741
6,911,174

Debtors
 14 
6,627,057
6,795,750

Cash at bank and in hand
 15 
1,312,883
5,654,513

  
16,712,681
19,361,437

Creditors: amounts falling due within one year
 16 
(8,575,440)
(20,881,411)

Net current assets/(liabilities)
  
 
 
8,137,241
 
 
(1,519,974)

Total assets less current liabilities
  
8,772,329
(804,088)

  

Net assets/(liabilities)
  
8,772,329
(804,088)


Capital and reserves
  

Called up share capital 
 18 
14,214,537
3,200,000

Profit and loss account
  
(5,442,208)
(4,004,088)

Total equity
  
8,772,329
(804,088)


The financial statements were approved and authorised for issue by the board and were signed on its behalf on 18 June 2025.




K Morimoto
Director

The notes on pages 14 to 26 form part of these financial statements.

Page 13

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

1.


General information

Harada Industries (Europe) Limited is a private company limited by shares that is incorporated and domiciled in England and Wales. The Registered Office is 2 Bell Heath Way, Woodgate Business Park, Clapgate Lane, Birmingham, B32 3BZ.

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 following principal accounting policies have been applied:

 
2.2

Going concern

The Company's business activities together with the factors likely to affect its future development, performance and position are set out in the strategic report.
The Company has sufficient resources and operates in a known market. As a consequence, the directors believe the Company is well placed to manage its business risks.
The directors have a reasonable expectation that the company has adequate resources to continue operational existence for the foreseeable future of at least 12 months from the date the financial statements are approved. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements.
Harada Industries Co., Ltd, the ultimate parent company, has confirmed its intention to provide ongoing financial support for the foreseeable future and for a minimum period of at least 12 months from the date the financial statements are approved.

  
2.3

Disclosure exemptions adopted under FRS 102

The Company has taken advantage of the following disclosure exemptions under FRS 102:
Statement of cash flows
The Company has used the exemption under FRS 102 1.12 (b), not to prepare a statement of cash flows as it is a wholly owned subsidiary and 100% consolidated in the publicly available financial statements of its ultimate parent undertaking, Harada Industries Co., Ltd.
Sections 11 and 12
The Company has used the exemption under FRS 102 1.12 (d), not to present disclosures required under Section 11 paragraphs 11.39 to 11.48A and Section 12 paragraphs 12.26 to 12.29A.
Related parties
The Company has used the exemption under FRS 102 1.12 (e), not to present disclosures required under Section 33 paragraph 33.7 relating to key management personnel compensation. Related party transactions are conducted at arm's length where those terms can be substantiated.

Page 14

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.4

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.

 
2.5

Revenue recognition

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.

 
2.6

Operating leases: the Company as lessee

Assets held under finance leases and hire purchase contracts, which are those where substantially all the risks and rewards of ownership of the asset have passed to the Company, are capitalised in the balance sheet and are depreciated over their useful lives.
The interest element of the rental obligations is charged to the profit and loss account over the period of the lease and represents a constant proportion of the balance of capital repayments outstanding.
Rentals paid under operating leases are charged to the profit and loss account on a straight-line basis over the lease term.

 
2.7

Interest income

Interest income is recognised in profit or loss using the effective interest method.

Page 15

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.8

Finance costs

Finance costs are charged to profit or loss over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

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 Balance sheet. The assets of the plan are held separately from the Company in independently administered funds.

 
2.10

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 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.


 
2.11

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.

Page 16

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)


2.11
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.

The estimated useful lives range as follows:

Freehold property
-
over 50 years
Plant and machinery
-
over 4 or 5 years
Office equipment
-
over 3, 4, 5 or 10 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.

 
2.12

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 weighted average basis. Work in progress and finished goods include labour and attributable overheads.

At each balance sheet 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.

Cost of stock is determined as purchase cost in currency converted at previous monthly average rate plus a percentage uplift for freight and duty.
Net realisable value is based on estimated selling price less any further costs expected to be incurred to completion and disposal.

 
2.13

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.

 
2.14

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.

 
2.15

Creditors

Short-term creditors are measured at the transaction price. Other financial liabilities are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

Page 17

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

2.Accounting policies (continued)

 
2.16

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.

Financial instruments are recognised in the Company's Balance sheet when the Company becomes party to the contractual provisions of the instrument.

Basic financial assets
Basic financial assets, which include trade and other debtors, cash and bank balances, are initially measured at their transaction price 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 creditors, other creditors and loans are initially measured at their transaction price. 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.


3.


Judgments in applying accounting policies and key sources of estimation uncertainty

The Company reviews monthly the Dead & Slow Stock detail with a view to ensuring that there is adequate provision to meet any write off obligations. Said provision was increased to £790k in 2024 (2023 - £719k).
The Company also reviews Annual Price Reduction (APR) to ensure that there is adequate provision to meet the price reduction obligation. The provision was £380k in 2024 (2023 - £390k).

Page 18

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

4.


Turnover

An analysis of turnover by class of business is as follows:


2024
2023
£
£

Trade sales
24,790,659
36,776,963

Related party sales
3,967,320
12,060,985

28,757,979
48,837,948


Analysis of turnover by country of destination:

2024
2023
£
£

United Kingdom
5,931,765
12,768,404

Rest of Europe
15,158,416
23,494,499

Rest of the world
7,667,798
12,575,045

28,757,979
48,837,948



5.


Operating (loss)/profit

The operating (loss)/profit is stated after charging:
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Page 19

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

6.


Auditors' remuneration

During the year, the Company obtained the following services from the Company's auditors:


2024
2023
£
£

Fees payable to the Company's auditors for the audit of the Company's financial statements
107,500
177,500

Fees payable to the Company's auditors in respect of:

Taxation compliance services
5,700
6,000

All non-audit services not included above
33,200
26,500


7.


Employees

Staff costs, including directors' remuneration, were as follows:


2024
2023
£
£

Wages and salaries
1,295,267
1,236,094

Social security costs
136,652
201,204

Cost of defined contribution scheme
34,987
36,048

1,466,906
1,473,346


The average monthly number of employees, including the directors, during the year was as follows:


        2024
        2023
            No.
            No.







Warehouse and Logistics
8
9



Quality, Sales and Purchase
10
9



Administration
10
11

28
29

Page 20

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

8.


Directors' remuneration

2024
2023
£
£

Directors' emoluments
124,569
116,542

Amounts paid to third parties in respect of directors' services
46,677
49,157

171,246
165,699


The remuneration of the highest paid director was £171,246 (2023 - £165,701).


9.


Interest receivable

2024
2023
£
£


Other interest receivable
129,268
239,279

129,268
239,279


10.


Interest payable and similar expenses

2024
2023
£
£


Loans from group undertakings
534,285
956,378

534,285
956,378

Page 21

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

11.


Taxation


2024
2023
£
£

Corporation tax


Current tax on profits for the year
(46,198)
39,765


(46,198)
39,765


Total current tax
(46,198)
39,765

Deferred tax


Origination and reversal of timing differences
-
7,718

Total deferred tax
-
7,718


Tax on (loss)/profit
(46,198)
47,483

Factors affecting tax charge for the year

The tax assessed for the year is the same as (2023 - lower than) the standard rate of corporation tax in the UK of 25% (2023 - 23.52%). The differences are explained below:

2024
2023
£
£


(Loss)/profit on ordinary activities before tax
(1,484,319)
31,240


(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 25% (2023 - 23.52%)
(371,080)
7,348

Effects of:


Expenses not deductible for tax purposes
469
869

Fixed asset differences
8,712
7,891

Adjustments to brought forward values
-
(698)

Adjustments to tax charge in respect of previous periods
12,137
(9,887)

Adjustments to tax charge in respect of previous periods - deferred tax
(3,034)
-

Movement in deferred tax not recognised
204,920
(8,662)

Remeasurement of deferred tax for changes in tax rates
-
970

Other differences leading to an increase in the tax charge
101,678
49,652

Total tax (refund)/charge for the year
(46,198)
47,483

Page 22

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

12.


Tangible fixed assets





Freehold property
Plant and machinery
Fixtures and fittings
Assets under construction
Total

£
£
£
£
£



Cost or valuation


At 1 January 2024
1,683,076
368,013
811,820
13,864
2,876,773


Additions
-
3,956
3,043
-
6,999


Transfers between classes
-
13,864
-
(13,864)
-



At 31 December 2024

1,683,076
385,833
814,863
-
2,883,772



Depreciation


At 1 January 2024
1,065,947
367,208
727,732
-
2,160,887


Charge for the year on owned assets
33,551
4,220
50,026
-
87,797



At 31 December 2024

1,099,498
371,428
777,758
-
2,248,684



Net book value



At 31 December 2024
583,578
14,405
37,105
-
635,088



At 31 December 2023
617,129
805
84,088
13,864
715,886


13.


Stocks

2024
2023
£
£

Raw materials
96,727
16,147

Finished goods
8,676,014
6,895,027

8,772,741
6,911,174


Page 23

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

14.


Debtors

2024
2023
£
£

Due after more than one year

Prepayments and accrued income
285,657
288,819

Due within one year

Trade debtors
3,567,175
3,762,780

Amounts owed by group undertakings
501,169
967,374

Other debtors
900,984
448,732

Prepayments and accrued income
130,786
86,759

Deferred taxation
1,241,286
1,241,286

Total debtors
6,627,057
6,795,750



15.


Cash and cash equivalents

2024
2023
£
£

Cash at bank and in hand
1,312,883
5,654,513

1,312,883
5,654,513



16.


Creditors: Amounts falling due within one year

2024
2023
£
£

Trade creditors
1,201,400
1,721,006

Amounts owed to group undertakings
6,914,258
18,796,616

Corporation tax
4,274
47,499

Other taxation and social security
40,676
46,453

Accruals and deferred income
414,832
269,837

8,575,440
20,881,411


Page 24

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

17.


Deferred taxation




2024


£






At beginning of year
1,241,286



At end of year
1,241,286

The deferred tax asset is made up as follows:

2024
2023
£
£


Fixed asset timing differences
143,592
143,592

Short term timing differences
731
731

Losses carried forward
1,096,963
1,096,963

1,241,286
1,241,286


18.


Share capital

2024
2023
£
£
Allotted, called up and fully paid



14,214,537 (2023 - 3,200,000) Ordinary Shares of £1.00 each
14,214,537
3,200,000


On 31 July 2024 a debt-to-equity swap was executed. As a result, borrowings of $4,000,000 and £7,900,000  (equivalent to £11,014,537 as of 31 July 2024) were converted into equity at £1 per share leading to the allotment of an additional 11,014,537 shares.


19.


Contingent liabilities

The Company's bank has provided a guarantee to HM Revenue and Customs for duty deferment of £350,000 (2023 - £350,000). The Company has indemnified the bank for this security without guarantee without security.


20.


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 £34,987 (2023 - £36,048). Contributions totalling £381 (2023 - £5,334) were payable to the fund at the balance sheet date and are included in creditors.

Page 25

 
HARADA INDUSTRIES (EUROPE) LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024

21.


Controlling party

The immediate and ultimate parent company is  Harada Industry Co. Ltd. a company incorporated and
registered in Japan.
Harada Industry Co. Ltd is the immediate and ultimate parent undertaking to consolidate these financial statements at 31 December 2024. Copies of the financial statements may be obtained from Harada Industry Co. Ltd, Omori Bellport B-4F, 26-2, Minami Ohi, Shinagawa-ku, Tokyo, Japan.

Page 26