Baik Agency Limited - Limited company accounts 25.1

REGISTERED NUMBER: 04848319 (England and Wales)

GROUP STRATEGIC REPORT,

REPORT OF THE DIRECTORS AND

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2024

FOR

BAIK AGENCY LIMITED

Page

Company Information

1

Group Strategic Report

2

Report of the Directors

4

Statement of Directors' Responsibilities

6

Report of the Independent Auditors

7

Consolidated Statement of Profit or Loss

11

Consolidated Statement of Profit or Loss and Other

Comprehensive Income

12

Consolidated Statement of Financial Position

13

Company Statement of Financial Position

15

Consolidated Statement of Changes in Equity

16

Company Statement of Changes in Equity

17

Consolidated Statement of Cash Flows

18

Notes to the Consolidated Statement of Cash Flows

19

Notes to the Consolidated Financial Statements

20

DIRECTORS:

Mrs N I Cohen

Mr T A V Cohen

Ms C D V Cohen

REGISTERED OFFICE:

19-20 Bourne Court

Southend Road

Woodford Green

Essex

IG8 8HD

REGISTERED NUMBER:

04848319 (England and Wales)

AUDITORS:

Xeinadin Audit Limited, Statutory Auditor

8th Floor, Becket House

36 Old Jewry

London

EC2R 8DD

The directors present their strategic report of the company and the group for the year ended 31 December 2024.

REVIEW OF BUSINESS

The results for the year and financial position of the group are shown in the annexed financial statements.

Financial Performance Summary

In 2024, group sales increased from ¥6,205 million to ¥6,534 million. However, profitability has seen fall from ¥749 million to loss of ¥10 million.

Economic and Market Overview

The initial expectation was that inflation in Europe and the US would be controlled by mid-2023, allowing the Federal Reserve and the European Central Bank to lower interest rates. This, in turn, was hoped to strengthen the Japanese yen. Contrary to these expectations, the yen depreciated due to a wider interest rate gap with the US and Eurozone, prompting a vigorous carry trade and necessitating price adjustments by JET to offset the weakening yen.

Impact on Business Segments

Cheese: The depreciation of the yen has put pressure on our cheese segment, resulting in a decline in overall margins. However, it is worth noting that we successfully maintained our volume performance at 2023 levels.

Tomato Products: Sales in tomato products experienced a significant drop of 25%, driven by steep price increases and limited supply following the poor harvest of 2023.

Olive Oil: Despite facing a 40% rise in costs due to consecutive poor harvests in Spain, JET managed to pass these increases on to consumers, achieving a 13% growth in sales volume and gaining market share. However, a four-month delay in implementing these price adjustments impacted overall margins, despite the uptick in sales.

Truffles: The truffle segment saw a slight growth in volume, but higher costs during the critical November white truffle sales dampened value gains.

Wine: Although the wine market contracted by 15% in 2023 and stabilised at these lower levels in 2024, JET maintained its volume through the introduction of wine in Tetrapak and growth in premium brands, particularly Spumant Ferrari.

Key Performance Indicators (Group)

2024

2023

¥

Revenue

6,534,543,369

6,205,815,072

Profit/(Loss) before tax

(5,832,170)

749,504,266

Total equity

1,127,205,586

1,275,902,885

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks faced by the group are as follows:

Currency Fluctuation: The primary risk remains the continued depreciation of the yen. The persisting interest rate differential between Japan and the US poses a significant challenge, compelling us to adjust pricing, which historically lags, impacting our profitability. Our customers, both businesses and consumers, are becoming increasingly resistant to price hikes.

Agricultural Yield Risks: Poor harvests, exacerbated by climate change, have significantly impacted the supply and pricing of key products like tomatoes, olive oil, and certain wines. Although climate change is a persistent threat, favourable harvests in 2023 are crucial to alleviate price pressures for 2024.

INTERNAL CONTROL AND RISK MANAGEMENT

The directors are responsible for the group's system of internal financial control and also for identifying the major business risks faced by the group. The system of internal financial control is designed to provide reasonable, but not absolute, assurance against material misstatement or loss. In fulfilling these responsibilities, the board has reviewed the effectiveness of the system of internal financial control. The directors have established procedures for planning, budgeting and monitoring the performance of the group on a regular basis and for determining the appropriate course of action to manage any major business risk.

ON BEHALF OF THE BOARD:

Mr T A V Cohen - Director

26 September 2025

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

PRINCIPAL ACTIVITY

The principal activity of Baik Agency Limited group is the distribution of European food and beverages into Japan.

DIVIDENDS

Interim dividend was paid during the year is ¥101,381,771.

FUTURE DEVELOPMENTS

At the start of 2024, JET embarked on a strategic restructuring by appointing a new leadership team, referred to as the "President's Room" (ShachoShitsu). Comprised of four seasoned managers with a combined 105 years of experience, this team will operate on a rotational leadership model to ensure collaborative and effective decision-making across the company.

In 2025, each manager will take on an enhanced role in horizontal management within their market segments-HOTERES, Wholesaler, and Retailer-aiming to establish a more unified national sales and marketing strategy.

Looking ahead, the 2024/2025 olive oil harvest appears promising, which may contribute to improved margins, though much depends on competitor pricing strategies. We also plan to concentrate efforts on expanding sales of premium wines and targeting the hotel sector to leverage the rising inbound business.

Given the market's resistance to further price hikes after three consecutive years of increases, we have opted not to raise prices in 2025. Instead, we are relying on an anticipated 8% strengthening of the yen to enhance overall margins without imposing additional costs on consumers.

DIRECTORS

The directors shown below have held office during the whole of the period from 1 January 2024 to the date of this report.

Mrs N I Cohen

Mr T A V Cohen

Ms C D V Cohen

GOING CONCERN

The directors, having made due and careful enquiry, are of the opinion that the group has or will have access to sufficient funding in order to execute its operations over the next 12 months. The directors, therefore, have made an informed judgment, at the time of approving the financial statements, that there is a reasonable expectation that the group has adequate resources to continue in operational existence for the foreseeable future. As a result, the directors have adopted the going concern basis of accounting in the preparation of the annual financial statements.

INDEMNITY PROVISION

Director and officer’s insurance is not in place to indemnify the directors against liabilities arising from the discharge of the duties as a director.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006) of which the group's auditors are unaware, and each director has taken all the steps that he or she ought to have taken as a director in order to make himself or herself aware of any relevant audit information and to establish that the group's auditors are aware of that information.

ON BEHALF OF THE BOARD:

Mr T A V Cohen - Director

26 September 2025

The directors are responsible for preparing the Group Strategic Report, the Report of the Directors 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 UK-adopted international accounting standards. 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 the group and of the profit or loss of the group for that period. In preparing these financial statements, the directors are required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	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 and the group's transactions and disclose with reasonable accuracy at any time the financial position of the company and the group 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 the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Opinion

We have audited the financial statements of Baik Agency Limited (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2024 which comprise the Consolidated Statement of Profit or Loss, the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of Changes in Equity, the Company Statement of Changes in Equity, the Consolidated Statement of Cash Flows and Notes to the Consolidated Statement of Cash Flows, 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 International Financial Reporting Standards (IFRSs) as adopted by the UK.

In our opinion:

-	the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2024 and of the group's profit for the year then ended;

-	the group financial statements have been properly prepared in accordance with IFRSs as adopted by the UK;

-	the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the UK and as applied in accordance with the provisions of the Companies Act 2006; and

-	the financial statements 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 group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and the parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The directors are responsible for the other information. The other information comprises the information in the Group Strategic Report, the Report of the Directors and the Statement of Directors' Responsibilities, but does not include the financial statements and our Report of the Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, 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 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Directors for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Directors have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the Directors.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of directors' remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of directors

As explained more fully in the Statement of Directors' Responsibilities set out on page six, 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 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 group's and the parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

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 a Report of the Auditors 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.

The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below:

- We obtained an understanding of the group and parent company and the sector in which it operates to identify laws and regulations that could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this regard through discussions with management, sector research, application of cumulative audit knowledge and experience.

- We determined the principal laws and regulations relevant to the group in this regard to be those arising from Companies Act 2006, international accounting standards, tax legislation, health and safety legislation and relevant employee legislation in the countries that the group operates and employs staff.

- We designed our audit procedures to ensure the audit team considered whether there were any indications of non-compliance by the group with those laws and regulations. These procedures included, but were not limited to enquiries of management, review of minutes and review of work carried out by component auditors.

- We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to the non-rebuttable presumption of a risk of fraud arising from management override of controls, the potential for management bias was identified in relation to the amount of provisions relating to the group’s accounts receivables. We addressed this by challenging the assumptions and judgements made by management when auditing the accounting estimate.

- As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit procedures which included, but were not limited to the testing of journals; reviewing accounting estimates for evidence of bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.

- As part of the group audit, we have communicated with component auditors the fraud risks associated with the group and the need for the component auditors to address this in their testing. To ensure that this has been completed, we have reviewed component auditor working papers in this area and obtained responses to our group instructions from the component auditors.

Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.

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 Report of the Auditors.

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 a Report of the Auditors 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.

Mr Thurairatnam Sudarshan (Senior Statutory Auditor)

for and on behalf of Xeinadin Audit Limited, Statutory Auditor

8th Floor, Becket House

36 Old Jewry

London

EC2R 8DD

26 September 2025

CONTINUING OPERATIONS

Revenue

6,534,543,369

6,205,815,072

Cost of sales

(4,792,081,967

)

(4,304,680,486

)

GROSS PROFIT

1,742,461,402

1,901,134,586

Other operating income

60,072,649

827,702,611

Distribution costs

(292,040,858

)

(312,689,694

)

Administrative expenses

(1,490,192,627

)

(1,649,284,246

)

OPERATING PROFIT

20,300,566

766,863,257

Finance costs

4

(27,172,142

)

(19,904,450

)

Finance income

4

1,039,406

2,545,459

(LOSS)/PROFIT BEFORE INCOME TAX

5

(5,832,170

)

749,504,266

Income tax

6

21,195,170

(62,822,974

)

PROFIT FOR THE YEAR

15,363,000

686,681,292

Profit attributable to:

Owners of the parent

15,363,000

686,681,292

PROFIT FOR THE YEAR

15,363,000

686,681,292

OTHER COMPREHENSIVE INCOME

Items that will not be reclassified to profit or loss:

Deferred movement in derivative under hedge

6,536,826

(15,362,648

)

Exchange difference on translation of foreign operations

(69,215,354

)

(3,014,342

)

Movement in legal reserves

-

8,198,682

Income tax relating to items that will not be reclassified to

profit or loss

-

OTHER COMPREHENSIVE INCOME

FOR THE YEAR, NET OF INCOME TAX

(62,678,528

)

(10,178,308

)

TOTAL COMPREHENSIVE INCOME

FOR THE YEAR

(47,315,528

)

676,502,984

Total comprehensive income attributable to:

Owners of the parent

(47,315,528

)

1,329,360,078

Non-controlling interests

-

(652,857,094

)

(47,315,528

)

676,502,984

ASSETS

NON-CURRENT ASSETS

Goodwill

9

112,047

-

Intangible assets

10

10,739,127

13,229,955

Property, plant and equipment

11

491,946,928

568,831,184

Investments

12

-

Right of use asset

13

83,088,102

143,986,664

Trade and other receivables

15

199,148,536

189,944,775

Deferred tax

23

154,108,205

119,102,163

939,142,945

1,035,094,741

CURRENT ASSETS

Inventories

14

1,890,045,688

1,707,331,362

Trade and other receivables

15

1,928,188,205

1,982,814,044

Investments

16

-

154,645,282

Cash and cash equivalents

17

1,022,810,844

912,403,807

4,841,044,737

4,757,194,495

TOTAL ASSETS

5,780,187,682

5,792,289,236

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

18

399

Legal reserves

19

21,393,540

Hedge reserves

19

-

(6,536,826

)

Foreign currency translation

reserve

19

(76,219,507

)

(7,004,153

)

Retained earnings

19

1,182,031,154

1,268,049,925

TOTAL EQUITY

1,127,205,586

1,275,902,885

LIABILITIES

NON-CURRENT LIABILITIES

Trade and other payables

20

467,485,391

355,224,724

Lease liabilities

29

17,774,323

75,284,659

485,259,714

430,509,383

CURRENT LIABILITIES

Trade and other payables

20

1,608,084,000

1,851,032,681

Lease liabilities

29

65,777,085

70,091,051

Financial liabilities - borrowings

Interest bearing loans and borrowings

21

2,455,365,323

2,072,884,608

Tax payable

29,871,447

85,291,207

Provisions

22

8,624,527

6,577,421

4,167,722,382

4,085,876,968

TOTAL LIABILITIES

4,652,982,096

4,516,386,351

TOTAL EQUITY AND LIABILITIES

5,780,187,682

5,792,289,236

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2025 and were signed on its behalf by:

Mr T A V Cohen - Director

ASSETS

NON-CURRENT ASSETS

Goodwill

9

112,047

-

Intangible assets

10

-

Property, plant and equipment

11

-

Investments

12

609,484,254

Right of use asset

13

-

609,596,301

609,484,254

CURRENT ASSETS

Trade and other receivables

15

147,570,293

145,664,201

Cash and cash equivalents

17

103,417,399

203,106,276

250,987,692

348,770,477

TOTAL ASSETS

860,583,993

958,254,731

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital

18

399

Retained earnings

19

467,187,056

528,343,709

TOTAL EQUITY

467,187,455

528,344,108

LIABILITIES

CURRENT LIABILITIES

Trade and other payables

20

250,343,215

3,878,275

Financial liabilities - borrowings

Interest bearing loans and borrowings

21

143,053,323

426,032,348

393,396,538

429,910,623

TOTAL LIABILITIES

393,396,538

429,910,623

TOTAL EQUITY AND LIABILITIES

860,583,993

958,254,731

The financial statements were approved by the Board of Directors and authorised for issue on 26 September 2025 and were signed on its behalf by:

Mr T A V Cohen - Director

Called up

share

Retained

Legal

Hedge

capital

earnings

reserves

¥

Balance at 1 January 2023

399

778,914,904

13,194,858

8,825,822

Changes in equity

Dividends

-

(197,546,271

)

-

Total comprehensive income

-

686,681,292

8,198,682

(15,362,648

)

Balance at 31 December 2023

399

1,268,049,925

21,393,540

(6,536,826

)

Changes in equity

Dividends

-

(101,381,771

)

-

Total comprehensive income

-

15,363,000

-

6,536,826

Balance at 31 December 2024

399

1,182,031,154

21,393,540

-

Foreign

currency

translation

Non-controlling

Total

reserve

Total

interests

equity

¥

Balance at 1 January 2023

(3,989,811

)

796,946,172

652,857,094

1,449,803,266

Changes in equity

Dividends

-

(197,546,271

)

-

(197,546,271

)

Total comprehensive income

(3,014,342

)

676,502,984

(652,857,094

)

23,645,890

Balance at 31 December 2023

(7,004,153

)

1,275,902,885

-

1,275,902,885

Changes in equity

Dividends

-

(101,381,771

)

-

(101,381,771

)

Total comprehensive income

(69,215,354

)

(47,315,528

)

-

(47,315,528

)

Balance at 31 December 2024

(76,219,507

)

1,127,205,586

-

1,127,205,586

Called up

share

Retained

Total

capital

earnings

equity

¥

Balance at 1 January 2023

399

371,906,944

371,907,343

Changes in equity

Dividends

-

(197,546,271

)

(197,546,271

)

Total comprehensive income

-

353,983,036

Balance at 31 December 2023

399

528,343,709

528,344,108

Changes in equity

Dividends

-

(63,418,600

)

(63,418,600

)

Total comprehensive income

-

2,261,947

Balance at 31 December 2024

399

467,187,056

467,187,455

Cash flows from operating activities

Cash generated from operations

1

(355,127,299

)

868,548,509

Interest paid

(20,632,677

)

(19,844,111

)

Lease interest paid

(6,539,465

)

(60,339

)

Provisions

2,047,106

-

Tax paid

(34,224,590

)

(1,671,091

)

Net cash from operating activities

(414,476,925

)

846,972,968

Cash flows from investing activities

Purchase of goodwill

(124,497

)

-

Purchase of intangible fixed assets

(240,000

)

(5,631,836

)

Purchase of tangible fixed assets

(16,209,148

)

(53,567,934

)

Purchase of current asset investments

-

(144,970,205

)

Sale of tangible fixed assets

107,818,663

12,348,773

Sale of fixed asset investments

154,645,282

-

Investment in subsidiary

-

(245,015,854

)

Interest received

1,039,406

2,545,459

Net cash from investing activities

246,929,706

(434,291,597

)

Cash flows from financing activities

New loans in year

382,480,715

58,652,592

Repayment of lease

(4,313,966

)

(71,996,507

)

Equity dividends paid

(101,381,771

)

(197,546,271

)

Net cash from financing activities

276,784,978

(210,890,186

)

Increase in cash and cash equivalents

109,237,759

201,791,185

Cash and cash equivalents at beginning of

year

2

912,403,807

710,612,622

Effect of foreign exchange rate changes

1,169,278

-

Cash and cash equivalents at end of year

2

1,022,810,844

912,403,807

1.	RECONCILIATION OF (LOSS)/PROFIT BEFORE INCOME TAX TO CASH GENERATED FROM OPERATIONS

2024

2023

¥

(Loss)/profit before income tax

(5,832,170

)

749,504,266

Depreciation charges

54,328,225

75,304,036

Loss on revaluation of fixed assets

-

13,112,809

Foreign exchange

(70,384,633

)

(1,698,609

)

Lease interest

-

(60,339

)

Derivatives movement

6,536,826

(15,362,648

)

Deferred tax movement

(35,006,042

)

(61,595,039

)

Subsidiary investment & exceptional item

-

(437,605,728

)

Finance costs

27,172,142

19,904,450

Finance income

(1,039,406

)

(2,545,459

)

(24,225,058

)

338,957,739

Increase in inventories

(182,714,326

)

(40,977,709

)

(Increase)/decrease in trade and other receivables

(9,203,761

)

109,147,267

(Decrease)/increase in trade and other payables

(138,984,154

)

461,421,212

Cash generated from operations

(355,127,299

)

868,548,509

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of these Statement of Financial Position amounts:

Year ended 31 December 2024

31.12.24

1.1.24

¥

Cash and cash equivalents

1,022,810,844

912,403,807

Year ended 31 December 2023

31.12.23

1.1.23

¥

Cash and cash equivalents

912,403,807

710,612,622

1.	STATUTORY INFORMATION

Baik Agency Limited is a private company, limited by shares , registered in England and Wales. The company's registered number and registered office address can be found on the General Information page.

2.	ACCOUNTING POLICIES

Basis of preparation

These financial statements have been prepared in accordance with UK-adopted international accounting standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

The accounts have been prepared in Japanese Yen as it is the functional and presentation currency of the group.

The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed below.

Basis of consolidation

The group's financial undertakings consolidate the financial statements of the company and its subsidiary undertakings. The purchase method of accounting has been adopted in accordance with IFRS 3 ‘Business Combinations’ Under this method the results of all the subsidiary undertakings are included in the consolidated income statement from the date of acquisition or up to date of disposal. Intra-group sales and profits are eliminated on consolidation and all sales and profit and loss figures relate to external transactions only. The group recognises any non-controlling interest in the acquire on an acquisition-by-acquisition basis, at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Going concern

The preparation of financial statements requires an assessment of the validity of the going concern assumption.

The group managed to revive its business development as pre covid period; actions discussed under the review of business in Strategic Report. The group focused mainly on developing the sales on two main products: oil and sparkling wine. The group's projections, taking account of reasonably possible changes in trading performance, continue to show that the group is expected to expand and meet future targets by investing in hiring more specialist people in its team. Although, the current economic conditions continue to create uncertainty.

In assessing the going concern, the directors have prepared forecasts for a period of at least 12 months. The forecasts are based on factors including historical experience and expectation of future events which the directors believe to be reasonable.

The directors are of the opinion that current cash resources will provide the cash necessary to support the working capital requirements of the group to allow it to meet its liabilities as they fall due over the next 12 months from the approval of these financial statements. The group therefore continues to adopt the going concern basis in preparing its consolidated financial statements.

Critical accounting judgements and key sources of estimation uncertainty

In the process of applying the group and company’s accounting policies above, management necessarily makes judgements and estimates that have a significant effect on the amounts recognised in the financial statements. Changes in the assumptions underlying the estimates could result in a significant impact on the financial statements. The most critical of these accounting judgements and estimates are as follows:

- Allowance for doubtful receivables

The allowance for doubtful receivables is management’s best estimate of the amount of probable credit losses in the group’s existing accounts receivable. As for the individual high- risk accounts, the company reviews its allowance for doubtful receivables individually for collectability.

Ifrs 15, revenue from contracts with customers

IFRS 15 establishes principles for reporting useful information to users of financial statements about the nature, amount, timing, and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard is effective for annual periods beginning on or after 1 January 2018 and supersedes IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers, and SIC-31 Revenue-Barter Transactions Involving Advertising Services. The standard establishes a five-step principle-based approach for revenue recognition and is based on the concept of recognising an amount that reflects the consideration for performance obligations only when they are satisfied, and the control of goods or services is transferred.

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of the group’s activities. Revenue is shown net of discounts, value-added tax, other sales-related taxes, and after the elimination of sales within the group.

Performance obligations are recognised at a point in time; revenue is recognised at the point the product is received by the customer.

The group adopted IFRS 15 "Revenue from Contracts with Customers" with effect from 1 January 2018.

No adjustment is made for the effects of financing, as the group expects, at contract inception, that the period between when the goods and services are transferred to the customer and when the customer pays, will be one year or less.

Warranties are of short duration and only cover defective goods. No additional services are committed to which generate a performance obligation.

If the revenue recognised for goods and services rendered by the group exceeds amounts that the group is entitled to bill the customer, a contract asset is recognised. If amounts billed exceed the revenue recognised for goods and services rendered, a contract liability is recognised.

Incremental costs of obtaining a contract are expensed as incurred.

Cash and cash equivalents

Cash represents cash in hand and deposits held on demand with financial institutions. Cash equivalents are short-term, highly-liquid investments with original maturities of three months or less (as at their date of acquisition). Cash equivalents are readily convertible to known amounts of cash and subject to an insignificant risk of change in that cash value.

In the presentation of the Statement of Cash Flows, cash and cash equivalents also include bank overdrafts. Any such overdrafts are shown within borrowings under ‘current liabilities’ on the Statement of Financial Position.

Tangible fixed assets

Property, plant, and equipment are shown at cost, net of depreciation and any provision for impairment, depreciation is charged so as to write off the costs of the assets, less estimated residual value, over their estimated useful lives using the straight-line method as follows:

The range of useful lives is principally:

- 5 to 6 years for motor vehicles

- 3 to 15 years for fixtures and fittings

- 10 years for plant and machinery

- Long leaseholds are not depreciated

- 3 to 5 years right of use asset

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Intangible assets

Intangible assets that are purchased in the normal course of the business are initially recognised at cost.

Development costs are capitalised at the point where technical feasibility and commercial viability are confirmed. Subsequent to initial recognition, intangible assets are reported at cost less accumulated amortisation and accumulated impairment losses.

Computer software licenses are capitalised on the basis of the costs incurred to acquire and bring the specific software into use.

Amortisation is charged so as to write off the fair value over their estimated useful lives using straight line method.

The range of useful lives is principally:

- 3 to 5 years for computer software and development costs

Patents and licences have an indefinite useful life or intangible assets not ready to use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). Prior impairments of non-financial assets (other than goodwill) are reviewed for possible reversal at each reporting date.

Financial instruments

Financial assets and financial liabilities are recognised on the statement of financial position when the company becomes a party to the contractual provisions of the instrument.

Inventories

Inventories are stated at cost, determined by using the first-in first-out method (FIFO) carried at the lower of cost and net realisable value.

The cost of inventories comprises raw materials, direct labour and other direct costs. It excludes borrowing costs (IAS 23). Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on the taxable profit for the period. Taxable profit differs from net profit as reported in the income statement, because it excludes items of income and expense that are tax deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted by the statement of financial position date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation taxable profit, and it accounted for using the statement of financial position liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible differences can be utilised. Such assets and liabilities are not recognised if the temporary differences arises from the original recognition of other assets and liabilities in a transaction that affects neither the tax nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity in which case the deferred tax is dealt with in equity.

Foreign currency translation

The results and financial position of all the group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

- assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that Statement of Financial Position;

- income and expenses for each Statement of Comprehensive Income presented are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

- all exchange gains and losses from translation are recognised in the other comprehensive income.

Trade payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are stated at their nominal value plus interest where appropriate.

Trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business. They do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimates irrecoverable amounts.

Other receivables

These amounts generally arise from transactions outside the usual operating activities of the group. Interest could be charged at commercial rates where the terms of repayment exceed six months.

Financial liabilities and equity

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

Equity instruments

Equity instruments issues by the group are recorded at the proceeds received.

Provisions

Provisions are recognised when the company has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

Derivatives and hedging activities

The effective portion of the gain or loss on hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the Income Statement. The cash flow hedge reserve is adjusted to the lower of the cumulative gain or loss on the hedging instrument and the cumulative change in fair value of the hedged item.

The group uses forward currency and options contracts as hedges of its exposure to foreign currency risk in forecast transactions and firm commitments. Where forward contracts are used to hedge forecast transactions, the group designates the change in fair value relating to both the spot and forward components as the hedging instrument. The company has a policy to utilise the above hedging instruments in order to reduce the group’s exposure to risk of interest rate fluctuation.

IFRS 7: Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and, if so, the nature of the item being hedged. The group designates certain derivatives as either:

- hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge);

- hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast transaction (cash flow hedge); or

- hedges of a net investment in a foreign operation (net investment hedge).

IFRS 9 (6.4.1(b)): At inception of the hedge relationship, the group documents the economic relationship between hedging instruments and hedged items, including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The group documents its risk management objective and strategy for undertaking its hedge transactions.

The fair values of various derivative instruments used for hedging purposes are disclosed in a Note. Movements on the hedging reserve in shareholders’ equity are shown in a Note. The full fair value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

IFRS 16, Leases

IFRS 16 requires lessees to recognise a lease liability reflecting future lease payments and a ‘right-of-use asset’ for virtually all lease contracts.

IFRS 16 includes an optional exemption for certain short-term leases and leases of low-value assets. IFRS 16 provides updated guidance on the definition of a lease (as well as the guidance on the combination and separation of contracts); under IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

At the lease commencement date, the group recognises a right-of-use asset and a lease liability, except for short-term leases that have a lease term of 12 months or less and leases of low-value assets, which are expensed to the profit and loss over the expense term.

The right-of-use asset is initially recognised at cost, which comprises the initial amount of the lease liability plus any lease payments made at or before the commencement date, plus any initial direct costs incurred, plus any costs associated with restoring the asset to its original condition, less any lease incentive received. The right-of-use asset is subsequently stated at cost less accumulated depreciation and impairment losses.

Lease payments included in the measurement of the lease liability comprise the following:

- fixed payments, including in-substance fixed payments;

- variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

- amounts expected to be payable under a residual value guarantee; and

- the exercise price under a purchase option that the group is reasonably certain to exercise, lease payments in an optional renewal period if the group is reasonably certain to exercise such an option to extend and penalties for early termination of a lease unless the group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. The liability recognised at inception of the lease comprises the present value of future payments payable under the lease contract, discounted at the rate implicit in the lease. If there is no discount rate implicit in the lease, then the incremental rate of borrowing is used. The liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, or there is a change in the group's estimate of the amount expected to be payable under a residual value guarantee, or there is a change arising from the reassessment of whether the group will be reasonably certain to exercise a purchase, extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if carrying amount has been reduced to zero. The group presents lease liabilities within loans and borrowings within the statement of financial position.

Note in financial statements sets out the key impacts on the Consolidated Statement of Comprehensive Profit and Loss and the Consolidated Statement of Financial Position of the standard.

Segmental reporting

The activity primarily relates to sale of olive oil, cheeses, pasta, tomatoes, and other consumer goods products. Management has concluded that all the consumer goods products are considered to be one reporting segment.

Sales in Japan Europe Trading Co Ltd is the most significant contributor to the Group’s turnover with it representing 67% of total turnover and Solleone Bio S.A. contributing 12% and Solleone Bio S.R.L contributing the remaining 21%.

3.	EMPLOYEES AND DIRECTORS

2024

2023

¥

Wages and salaries

1,035,721,151

908,025,002

Social security costs

13,938,694

12,373,166

Other pension costs

(61,325,589

)

(11,860,971

)

988,334,256

908,537,197

The average number of employees during the year was as follows:

2024

2023

Sales

68

61

Administration

27

Directors

3

98

91

2024

2023

¥

Administration

Wages

175,224,919

199,073,080

Social security

25,173,603

26,041,254

Pension costs

19,383,786

19,383,090

219,782,308

244,497,424

2024

2023

¥

Sales

Wages

396,600,375

330,826,066

Social security

60,455,943

51,403,999

Pension costs

46,384,842

41,986,173

503,441,160

424,216,238

2024

2023

¥

Director's remuneration

317,379,881

198,787,018

4.	NET FINANCE COSTS

2024

2023

¥

Finance income:

Deposit account interest

1,039,406

2,545,459

Finance costs:

Bank loan interest

20,632,677

13,148,806

Other finance expense

-

(96

)

Leasing

6,539,465

6,755,740

27,172,142

19,904,450

Net finance costs

26,132,736

17,358,991

5.	(LOSS)/PROFIT BEFORE INCOME TAX

The loss before income tax (2023 - profit before income tax) is stated after charging/(crediting):

2024

2023

¥

Cost of inventories recognised as expense

4,792,081,967

4,304,680,486

Depreciation - owned assets

34,340,233

23,908,551

Development costs amortisation

1,195,408

1,135,028

Computer software amortisation

1,535,420

1,515,420

Auditors' remuneration

5,327,362

3,878,275

Foreign exchange differences

(43,538,122

)

(80,003,301

)

6.	INCOME TAX

Analysis of tax (income)/expense

2024

2023

¥

Current tax:

Tax

16,757,447

120,034,474

Deferred tax

(37,952,617

)

(57,211,500

)

Total tax (income)/expense in consolidated statement of profit or loss

(21,195,170

)

62,822,974

Japan Europe Trading Co Ltd

The subsidiary is subject to a number of income taxes, in aggregate represent a statutory income tax rate of approximately 34.59 % for the years ended 31 December 2024 and 2023. The following is a reconciliation between the normal effective statutory tax rates and the actual effective tax rates reflected in statement of profit and loss for the year ended in 2023 and 2024.

2024

2023

%

Statutory tax rate

34.59

Regional tax on per capita basis

(0.69)

0.37

Income tax deduction due to increase in employment

-

(4.30)

Valuation allowance

-

(12.08)

Other - net

-

(2.26)

Effective tax rate

33.90%

16.32%

Solleone SA

The subsidiary's taxable profit is charged at 27.87% for year ended 31 December 2024 (2023: 18.51%) after off setting brought forward losses.

Parent Company

Analysis of tax expense

2024

2023

¥

Current tax

-

Deferred tax

-

Provision at end of period

-

Factors affecting the tax expense

The tax assessed for the year is 25% (2023: 25%), the standard rate of corporation tax in the UK.

2024

2023

¥

Profit/(Loss) before income tax

2,261,947

353,983,036

Income from shares in group undertaking

(400,000,000)

Profit/(Loss) after income from shares in group undertaking

2,261,947

(46,016,964)

Profit/(Loss) multiplied by the standard rate of corporation tax in the UK

565,487

(11,504,241)

Effects of:

Expenses not deductible for tax purposes

1,738,384

1,898,329

Non trade relationship activity

(2,303,871

)

9,605,912

Tax expense

-

7.	PROFIT OF PARENT COMPANY

As permitted by Section 408 of the Companies Act 2006, the income statement of the parent company is not

presented as part of these financial statements. The parent company's profit for the financial year was

¥2,261,947 (2023 - ¥353,983,036).

8.

DIVIDENDS

Interim dividend was paid during the year is ¥101,381,771.

9.

GOODWILL

Group

¥

COST

Additions

124,497

At 31 December 2024

124,497

AMORTISATION

Charge for year

12,450

At 31 December 2024

12,450

NET BOOK VALUE

At 31 December 2024

112,047

Company

¥

COST

Additions

124,497

At 31 December 2024

124,497

AMORTISATION

Charge for year

12,450

At 31 December 2024

12,450

NET BOOK VALUE

At 31 December 2024

112,047

10.	INTANGIBLE ASSETS

Group

Patents

and

Development

Computer

licences

costs

software

Totals

¥

COST

At 1 January 2024

906,565

57,068,156

11,223,723

69,198,444

Additions

-

240,000

At 31 December 2024

906,565

57,068,156

11,463,723

69,438,444

AMORTISATION

At 1 January 2024

-

48,613,371

7,355,118

55,968,489

Amortisation for year

-

1,195,408

1,535,420

2,730,828

At 31 December 2024

-

49,808,779

8,890,538

58,699,317

NET BOOK VALUE

At 31 December 2024

906,565

7,259,377

2,573,185

10,739,127

At 31 December 2023

906,565

8,454,785

3,868,605

13,229,955

11.	PROPERTY, PLANT AND EQUIPMENT

Group

Fixtures

Long

Plant and

and

Motor

leasehold

machinery

fittings

vehicles

Totals

¥

COST

At 1 January 2024

368,548,333

187,378,173

360,229,614

47,342,522

963,498,642

Additions

-

5,817,387

5,958,653

4,433,108

16,209,148

Disposals

(24,110,000

)

-

(81,290,113

)

(2,418,550

)

(107,818,663

)

At 31 December 2024

344,438,333

193,195,560

284,898,154

49,357,080

871,889,127

DEPRECIATION

At 1 January 2024

-

149,918,546

214,329,666

30,419,246

394,667,458

Charge for year

-

14,428,393

11,778,391

8,133,449

34,340,233

Eliminated on disposal

-

(46,646,944

)

(2,418,548

)

(49,065,492

)

At 31 December 2024

-

164,346,939

179,461,113

36,134,147

379,942,199

NET BOOK VALUE

At 31 December 2024

344,438,333

28,848,621

105,437,041

13,222,933

491,946,928

At 31 December 2023

368,548,333

37,459,627

145,899,948

16,923,276

568,831,184

The net exchange differences arising on the translation of the financial statements from the functional

currency into presentation currency.

Intangible Assets

2024

2023

¥

Cost

12,283,369

8,596,271

Depreciation

11,455,552

8,237,315

Tangible Assets

Cost

42,286,940

30,686,680

Depreciation

32,526,719

23,311,509

12.	INVESTMENTS

Company

Shares in

group

undertakings

¥

COST

At 1 January 2024

and 31 December 2024

609,484,254

NET BOOK VALUE

At 31 December 2024

609,484,254

At 31 December 2023

609,484,254

Company

The company’s investment at the balance sheet date in the share capital of companies include the following:

Subsidiaries

Japan Europe Trading Co Ltd (JET)

Country of incorporation: Japan

Nature of business: Import and sale of European wine and food products

Address: 4th Fl., NBF Shiba koen Bldg. 2-18, Shiba 3-chome, Minato-ku, Tokyo 105-0014

Class of shares: Ordinary

100% holding

Aggregate amount of capital and reserves

¥ 1,517,040,737

Loss for the year

¥ 97,982,372

Solleone Bio SA

Country of incorporation: Switzerland

Nature of business: Import and sale of European wine and food products

Address: Via Campagna, 30 - 6982 Agno (CH) Switzerland

Class of shares: Ordinary

100% holding

Aggregate amount of capital and reserves

- €1,943,147

Profit for the year

€15,352

Solleone Bio SRL (indirect holding)

Country of incorporation: Italy

Nature of business: Import and sale of European wine and food products

Address: Via Roma 168 - 13855 Valdengo (BI) Italy

Class of shares: Ordinary

100% holding

Aggregate amount of capital and reserves

- €53,274

Profit for the year

€332,144

13.	RIGHT OF USE ASSET

2024

2023

¥

Building

83,088,102

143,986,664

14.	INVENTORIES

Group

2024

2023

¥

Finished goods

1,894,789,869

1,731,708,844

Stock loss provision

(4,744,181

)

(24,377,482

)

1,890,045,688

1,707,331,362

15.	TRADE AND OTHER RECEIVABLES

Group

Company

2024

2023

2024

2023

¥

Current:

Trade debtors

1,891,748,462

1,881,027,072

-

Amounts owed by group undertakings

-

145,663,884

Other debtors

2,548,595

4,383,670

317

VAT

13,325,898

73,823,315

-

Prepayments and accrued income

20,565,250

23,579,987

1,906,092

-

1,928,188,205

1,982,814,044

147,570,293

145,664,201

Non-current:

Other debtors

199,148,536

189,944,775

-

Aggregate amounts

2,127,336,741

2,172,758,819

147,570,293

145,664,201

The directors consider that the carrying amount of trade and other receivables approximates to their fair value. The directors consider the maximum credit risk at the balance sheet date is equivalent to the carrying value of trade and other receivables.

Full provision is made on trade debtor balances which are past due for payment. There are no trade debtor balances past due but not impaired.

The details of loans to related parties are disclosed separately in a note.

16.	INVESTMENTS

Group

2024

2023

¥

Other

-

154,645,282

During the year, Japan Europe Trading Co Ltd invested in UBS Investment trust fund.

17.	CASH AND CASH EQUIVALENTS

Group

Company

2024

2023

2024

2023

¥

Bank accounts

1,022,810,844

912,403,807

103,417,399

203,106,276

18.	CALLED UP SHARE CAPITAL

Allotted, issued and fully paid:

Number:

Class:

Nominal

2024

2023

value:

¥

399

Ordinary shares

1

399

19.

RESERVES

Group

Foreign

currency

Retained

Legal

Hedge

translation

earnings

reserves

reserve

Totals

¥

At 1 January 2024

1,268,049,925

21,393,540

(6,536,826

)

(7,004,153

)

1,275,902,486

Profit for the year

15,363,000

Dividends

(101,381,771

)

(101,381,771

)

Movement in period

-

6,536,826

(69,215,354

)

(62,678,528

)

At 31 December 2024

1,182,031,154

21,393,540

-

(76,219,507

)

1,127,205,187

Company

Retained

earnings

¥

At 1 January 2024

528,343,709

Profit for the year

2,261,947

Dividends

(63,418,600

)

At 31 December 2024

467,187,056

Retained earnings

This comprised all the current and prior years' retained profits and losses.

Legal reserves

According to Japanese Company law, Japan Europe Trading Co Limited is required to maintain a legal reserve up to 25% of common stock whenever a dividend is paid.

Hedge reserve

Japan Europe Trading Co Limited holds foreign currency forward contracts to hedge foreign exchange exposures for export purchases. Any realised gains/ (losses) are deferred in the deferred gain on derivatives under hedge reserve until the underlying transactions are completed.

Foreign currency translation reserve

This relates to foreign currency arising from the consolidating of entities with different reporting currencies with the parent company.

20.	TRADE AND OTHER PAYABLES

Group

Company

2024

2023

2024

2023

¥

Current:

Trade creditors

1,046,269,052

1,223,485,158

-

Other creditors

107,535,874

116,041,823

-

Deferred income

5,077,148

5,378,297

-

Accrued expenses

35,903,062

40,103,732

5,327,361

3,878,275

Directors' current accounts

413,298,864

466,023,671

245,015,854

-

1,608,084,000

1,851,032,681

250,343,215

3,878,275

Non-current:

Other creditors

467,485,391

355,224,724

-

467,485,391

355,224,724

-

Aggregate amounts

2,075,569,391

2,206,257,405

250,343,215

3,878,275

21.

FINANCIAL LIABILITIES - BORROWINGS

Group

Company

2024

2023

2024

2023

¥

Current:

Bank loans

2,359,447,409

1,976,966,694

47,135,409

Other loans

95,917,914

378,896,939

2,455,365,323

2,072,884,608

143,053,323

426,032,348

Terms and debt repayment schedule

Group

1 year or

less

¥

Bank loans

2,359,447,409

Other loans

95,917,914

2,455,365,323

Company

1 year or

less

¥

Bank loans

47,135,409

Other loans

95,917,914

143,053,323

The carrying amounts of assets collateral's long-term debt at 31 December 2024 and 2023 were as follows:

2024

2023

¥

Property, plant and equipment, net of accumulated depreciation

491,946,928

568,831,184

LONG-TERM DEBT

Bank loans - '1-2 years' consists of mainly long-term debts, less current portion.

Long-term debt at December 31, 2024 and 2023 consisted of the following:

2024

2023

¥

Loans from banks and other financial institutions, due

serially to 2024 with interest rates ranging from 0.00% to

2.45% and from 0.00% to 0.98% in 2023 :

Unsecured

414,126,000

240,878,000

-

Total

414,126,000

240,878,000

Less current portion

162,312,000

101,352,000

Long-term debt, less current portion

251,814,000

139,526,000

As is customary in Japan, the company maintains substantial deposit balances with banks with which it has borrowings. Such deposit balances are not legally or contractually restricted as to withdrawal.

General agreements with respective banks provide that additional collateral must be provided under certain circumstances if requested by such banks. Certain banks have the right to offset cash deposited with them against any long-term or short-term debt or obligation that becomes due and, in case of default and certain other specified events, against all other debt payable to the banks. The company has never been requested to provide additional collateral.

22.	PROVISIONS

Group

2024

2023

¥

Other provisions

8,624,527

6,577,421

Analysed as follows:

Current

8,624,527

6,577,421

There have been provisions in the year for Solleone Bio S.r.l is in relation to employee indemnity in the case of termination of contracts.

23.	DEFERRED TAX

Deferred tax is recognised in respect of all temporary differences that have originated but not reversed at the balance sheet date.

The analysis of deferred tax assets and liabilities is as follows:

2024

2023

Group

¥

Deferred tax assets:

- Deferred tax asset to be recovered after more than 12 months

92,588,301

75,047,306

- Deferred tax asset to be recovered within 12 months

251,663,590

220,690,669

344,251,891

295,737,974

Deferred tax liabilities:

- Deferred tax liability to be recovered after more than 12 months

(190,143,686

)

(176,635,811

)

- Deferred tax liability to be recovered within 12 months

-

(190,143,686

)

(176,635,811

)

Deferred assets (Net)

154,108,205

119,102,163

24.	RELATED PARTY DISCLOSURES

For the year ended 31 December 2023, related party transactions were as follows:

Relationship with the group:

Person with significant control of parent company

Name:

Mr Thierry Cohen

Voting rights ownership:

100% of the parent company

Details of Transaction:

Loan to Solleone Bio SA (Swiss)

Transaction amount:

¥168,283,010 (2023: ¥221,007,818) at 3.00% interest p.a

Details of Transaction:

Amount owed by BAIK Agency Limited

Transaction amount:

¥29,344,650 (2023: ¥29,344,650)

Details of Transaction:

Donation under Japan's Corporate Contribution Program

Transaction amount:

Nil (2022: ¥8,750,002)

Relationship with the group:

Director of parent company

Name:

Caroline Cohen

Details of Transaction:

Amount owed by BAIK Agency Limited

Transaction amount:

¥107,835,602 (2023: ¥107,835,602)

Relationship with the group:

Director of parent company

Name:

Nathalie Cohen

Details of Transaction:

Amount owed by BAIK Agency Limited

Transaction amount:

¥107,835,602 (2023: ¥107,835,602)

Relationship with the group:

Company whose majority shares are owned by a close relative of

a director of Japan Europe Trading Co Ltd.

Name:

Asia Links Associates Co., Ltd

Voting rights ownership:

0%

Detail of transaction:

Agent of advertisement and promotion

Transaction amount (per period):

¥77,165,000 (2023: ¥64,105,000)

Detail of transaction:

Receivable

Transaction amount:

¥16,500,000 (2023: ¥13,200,000)

Relationship with the group:

Family member of person with significant control of parent

company

Detail of transaction:

Loan receivables for payments made on behalf

Transaction amount (per period):

¥266,883 (2023: ¥334,019)

Relationship with the group:

Foundation belongs to family members of person with significant

control of parent company

Name:

Micatina Foundation

Detail of transaction:

Loan payable

Transaction amount:

¥95,917,914 (2023: ¥95,917,914)

25.	ULTIMATE CONTROLLING PARTY

The group is under the control of Mr T A V Cohen, by virtue of his majority shareholding of the parent company.

26.	FINANCIAL INSTRUMENTS AND RELATED DISCLOSURES

Policy for financial

instruments

The group procures funds mainly through loans from banks in accordance with a

capital investment plan. The temporary reserve funds are invested mainly in

highly safe financial assets.

Nature and extent of risk

arising from financial

instruments

Trade notes and accounts receivables, which are operating receivables, are

exposed to the credit risk of customers. Accounts payable, which is operating

debt, is mostly due within three months. Maturities of bank loans and lease

obligations are less than seven years after the balance sheet date. Although a part

of such bank loans are exposed to market risks from changes in variable interest

rates, those risks are mitigated by interest rate swaps.

Fair value of financial

instruments

Fair values of financial instruments are based on quoted price in active markets.

If quoted prices are not available, other rational valuation techniques are

available.

December 31, 2024

Carrying

amount

Fair value

Unrealised

gain/(loss)

¥

Cash and cash equivalents

1,022,810,844

-

Receivables

1,891,748,462

-

Total

2,914,559,306

-

Short-term bank loans

2,197,135,409

-

Payables

1,046,269,052

-

Long-term debt, including current portion

414,126,000

407,094,389

7,031,611

Total

3,657,530,461

3,650,498,850

7,031,611

Cash and cash

equivalents

The carrying value of short cash and cash equivalents are approximate fair value

because of their short maturities.

Receivables and

payables

The fair values of receivables and payables are approximate their carrying amount

because of their short-term nature.

Short-term investments

The fair value of short-term investments, i.e. investments in equity and debt

securities, are determined with reference to their quoted price at the measurement

date

Short-term bank loans

The fair values of short-term bank loans approximate their carrying amount

because of their short-term nature.

Long-term debt

The fair values of these accounts are measured by the present values of principal

and interest discounted by an assumed interest rate for similar new borrowings or

lease transactions.

Derivatives

The information of the fair value for derivatives is included in disclosure.

27.	DERIVATIVES

Nature and

purpose of

derivative

financial

instruments

The company enters into derivative financial instruments ("derivatives"), including

foreign currency forward contracts to hedge foreign exchange risk associated with

certain assets and liabilities denominated in foreign currencies. The company enters into

interest rate swap agreements as a means of managing its interest rate exposures on

certain assets and liabilities.

Company's policy

to use derivatives

It is the company's policy to use derivatives only for the purpose of reducing market

risks associated with assets and liabilities. The company does not hold or issue

derivatives for trading purposes.

Risk associated

with derivatives

The counter-parties to the company's derivatives are limited to major international

financial institutions such that the company does not anticipate any losses arising from

credit risk.

Risk control

system for

derivatives

Derivative transactions entered into by the company have been made in accordance with

internal policies which stipulate the authorization and credit limit amount.

Supplementation

to quantitative

information

The contract or notional amounts of derivatives which are shown in the following table

do not represent the amounts exchanged by the parties and do not measure the

company's exposure to credit or market risk

Fair values of derivatives at December 31, 2024 consisted of the following:

Derivative transactions to which hedge accounting is applied at December 31, 2024:

Hedged item

Contract

amount

Fair market

value

Fair value gain

(loss)

¥

Foreign currency

forward contracts:

Buying euro

Payables

767,616,773

765,516,045

(2,100,728)

The fair value of derivatives transactions is measured at the quoted price obtained from the financial institution. The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts exchanged by the parties and do not measure the company's exposure to credit or market risk.

Derivative transactions to which hedge accounting is applied at December 31, 2023:

Hedged item

Contract

amount

Fair market value

Fair value

gain (loss)

¥

Foreign currency

forward contracts:

Buying euro

Payables

1,250,200,209

1,231,000,724

(19,199,485)

The fair value of derivatives transactions is measured at the quoted price obtained from the financial institution. The contract or notional amounts of derivatives which are shown in the above table do not represent the amounts exchanged by the parties and do not measure the company's exposure to credit or market risk.

28.	RETIREMENT AND PENSION PLANS

Under most circumstances, employees terminating their employment are entitled to retirement benefits determined based on the rate of pay at the time of termination, years of service and certain other factors. Such retirement benefits are made in the form of a lump-sum severance payment from the company. Employees are entitled to larger payments if the termination is involuntary, by retirement at the mandatory retirement age, by death, or by voluntary retirement at certain specific ages prior to the mandatory retirement age.

The liabilities for employees' retirement benefits at December 31, 2024 and 2023 consisted of the following:

2024

2023

¥

Projected benefit obligation

316,785,126

253,137,067

Fair value of plan assets

(52,057,038

)

(48,776,467

)

Net Liability

264,728,088

204,360,600

The retirement benefits are made in the form of a lump-sum severance payment from the Company.

The components of net periodic benefit costs for the year ended December 2024 and 2024 are as follows:

2024

2023

¥

Service Cost

65,768,628

61,344,263

Total

65,768,628

61,344,263

The projected benefit obligation of the Company was calculated using the simplified calculation method as permitted by the accounting standard for employee retirement benefits.

Financial assumptions:

Discount rate

1.55%

1.08%

Annual salary increase

3.4%

2%

29.

LEASES

As a lessee, the group has previously classified leases as operating or finance leases based on whether the lease transferred significantly all of the risks and rewards incidental to the ownership of the underlying asset. Under IFRS 16, the group recognises right-of-use assets and lease liabilities for all leases on its balance sheet.

The key impacts on the Statement of Comprehensive Income and the Statement of Financial Position are as follows:

Group

Right of Use asset

Lease liability

¥

As at 1 January 2024

149,940,942

(138,098,589

)

Additions

11,245,763

(11,245,763

)

Depreciation

(78,098,603

)

-

Lease payments

-

65,792,944

Carrying value at 31 December 2024

83,088,102

(83,551,408

)

The balance sheet shows the following amounts relating to leases:

Right-of-use assets

31 December 2024

¥

Buildings

83,088,102

Lease liabilities

Current

17,774,323

Non-current

65,777,085

(83,551,408)

30.	SUBSEQUENT EVENTS

For the group’s 31 December 2024 financial statements there have been no subsequent events that have an impact on the profit and loss.