Braime Group PLC Annual Report 2012

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FY2012 Annual Report · Braime Group PLC

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Contents

Company information

Notice of meeting

Chairman’s statement

Directors’ report

Directors’ remuneration report

Independent auditors’ report

Consolidated income statement

Consolidated statement of
comprehensive income

Consolidated balance sheet

Consolidated cash flow statement

Consolidated statement of
changes in equity

Notes to the accounts

Company balance sheet

Notes to the company accounts

Five year record

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors

O. N. A. Braime, MA, (Oxon.), M.B.I.M. (Chairman)
P. J. O. Alcock, B. Eng. (Non-executive director)
A. W. Walker MA, (Cantab.) (Non-executive director)
A. Q. Braime, ACA, BA (Hons.)
C. O. Braime, BSc, MA
M. L. Mills, ACA

Secretary

M. L. Mills, ACA

Registered office

Hunslet Road,
Leeds,
LS10 1JZ.

Independent auditors

Bankers

Stockbrokers

Kirk Newsholme,
Chartered Accountants and Statutory Auditors,
4315 Park Approach,
Thorpe Park,
Leeds,
LS15 8GB.

National Westminster Bank PLC,
8 Park Row,
Leeds,
LS1 1QS.

W. H. Ireland,
Zurich House,
Canal Wharf,
Leeds,
LS11 5DB.

Company registration
number

488001 (England and Wales)

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notice of meeting

Notice is hereby given that the SIXTY THIRD
Annual General Meeting of the members of
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. will be
held at the registered office of the company, Hunslet
Road, Leeds, LS10 1JZ on 30th May 2013 at 11.45am.

NOTES

1. A member entitled to vote at the meeting is entitled
to appoint a proxy to attend and vote in his stead. A
proxy need not also be a member of the company.

1. To receive and adopt the report of the directors,
the statement of accounts and the directors’
remuneration report, for the year ended 31st
December 2012, and the report of the auditors
thereon.

2. To confirm dividends.

3. To re-elect directors.

4. To re-appoint the auditors, Kirk Newsholme.

5. To authorise the directors to fix the remuneration

of the auditors.

6. To transact any other business which may be

transacted at this meeting.

By order of the board,
M. L. Mills Secretary
Hunslet Road, Leeds, LS10 1JZ

11th April 2013

2. In accordance with the company’s articles of

association holders of the Cumulative Preference
shares are not entitled to attend or vote at this
meeting.

3. There will be available for inspection at the

registered office during the company’s usual
business hours (Saturday excepted) from the date
of this notice until the date of the Annual General
Meeting and for at least fifteen minutes prior to and
during the meeting:

A statement for the period of twelve months to 31st
December 2012 of all transactions of each director
and, so far as he can reasonably ascertain, of his
family interests in the Ordinary shares of the
company.

4. There were no contracts of service in respect of the
executive directors who were employed by the
company as at 31st December 2012 other than for
M. L. Mills. P. J. O. Alcock’s service contract
expired on 10th January 2013 and was renewed for
a further twelve months.

5. CREST members who wish to appoint a proxy or
proxies through the CREST electronic proxy
appointment service may do so for the AGM and
any adjournment(s) thereof by using the
procedures described in the CREST Manual. CREST
Personal Members or other CREST sponsored
members, and those CREST members who have
appointed a service provider(s), should refer to
their CREST sponsor or voting service provider(s),
who will be able to take the appropriate action on
their behalf.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notice of meeting continued

The Company may treat as invalid a CREST Proxy
Instruction in the circumstances set out in
Regulation 35(5)(a) of the Uncertificated
Securities Regulations 2001.

In order for a proxy appointment or instruction
made using the CREST service to be valid, the
appropriate CREST message (a ‘CREST Proxy
Instruction’) must be properly authenticated in
accordance with CRESTCo’s specifications, and
must contain the information required for such
instruction, as described in the CREST Manual. The
message, regardless of whether it constitutes the
appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy
must, in order to be valid, be transmitted so as to be
received by the issuer’s agent (ID 7RA11) by
11.30am on 28th May 2013. For this purpose, the
time of receipt will be taken to be the time (as
determined by the timestamp applied to the
message by the CREST Application Host) from
which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner
prescribed by CREST. After this time any change of
instructions to proxies appointed through CREST
should be communicated to the appointee through
other means.

CREST members and, where applicable, their
CREST sponsors, or voting service providers should
note that CRESTCo does not make available special
procedures in CREST for any particular message.
Normal system timings and limitations will,
therefore, apply in relation to the input of CREST
Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the CREST
member is a CREST personal member, or sponsored
member, or has appointed a voting service provider,
to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be
necessary to ensure that a message is transmitted
by means of the CREST system by any particular
time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting
system providers are referred, in particular, to those
sections of the CREST Manual concerning practical
limitations of the CREST system and timings.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Chairman’s statement

Performance of group companies

Sales revenue increased again in 2012 by 5.7% to £21.2m
despite the global recession. However, the profit before
tax declined from £1.24m in 2011 to £678,000 in 2012,
and the profit after tax almost halved from £814,000 to
£427,000.

Given the group’s dependency on exports, the principal
cause for the fall in profitability was that gross margins
were adversely affected by the rise in the value of sterling
against both the US dollar and the euro during 2012.
Furthermore, the group faced even fiercer competition in
the recession hit Euro zone, which also impacted on
profits.

The level of the group’s inventories has remained largely
unchanged, which together with an improvement in
debtors and trade creditor funding has resulted in the
group being highly cash positive in the year. This situation
has been further boosted by net proceeds of £378,000
from the sale of the US property. Having chosen to repay
loans of £247,000 during the year, the group’s closing
cash and cash equivalents were £934,000 compared to
£261,000 at the end of 2011.

Trading across the group at the start of 2013 has been
positive, and as an exporter the recent exchange rates
movements have been to the group’s favour.

In these circumstances, the board decided to pay a
second dividend of 5.40p on 4th April 2013, making a
total dividend for the tax year ended 5th April 2013 of
7.80p, unchanged from the previous year.

Braime Pressings Limited, manufacturer of
deep drawn metal presswork

Some of the new work planned to come on stream in
2012 did not materialise, consequently the loss in this
subsidiary increased. A decision was made in the year
to reduce the cost base by making a number of
redundancies at shop floor level and, in January 2013,
at management level. The board does not anticipate that
any further reductions in staff will be necessary.

However, the company did secure a significant new
customer account which has already begun generating
sales. Furthermore, the board are more confident that
revenues from one of the existing accounts, delayed last
June, will come on stream later in 2013.

The company is modernising its web site and continues to
actively search for new business. Seeking to achieve
increased efficiencies through process improvement and
carefully selected investment will also remain a focus.

4B division, distributor worldwide of components
and monitoring systems for the material handling
industry

Much of the division’s business is generated from either
the processing of industrial commodities, or from the
handling, storage and processing of cereal crops. As a
result, the business had seemed to be largely immune
from the global recession. However, in the last quarter of
2012, there was a large reduction in business as existing
projects were completed and new projects were delayed,
as customers waited for bank finance. This drop in
business in the last quarter of 2012, together with the
continuing steep rise in the value of the sterling, had a
major negative effect on the overall result for 2012.

The division still benefited from a good result in 4B
Components in the USA, even though the net result was
slightly down on 2011.

During 2012 the US business was re-located into a new
53,000 sq ft. warehouse and office facility, which was
fitted out to the very high specification required to gain
maximum efficiencies and provide for potential significant
expansion. In the short-term this was a major challenge,
but was successfully achieved with minimum disruption
to the level of sales. Long-term the new facility offers a
strong platform to continue growing this business.

Meanwhile, the subsidiaries with significant Euro zone
sales, although increasing sales volumes, delivered
disappointing results. 2013 has begun more positively as
a result of the favourable movement in exchange rates
which will help restore margins.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Chairman’s statement continued

Marcus Mills joined the group in February 2012 as
Financial Director Designate and Company Secretary,
and his position was confirmed as Financial Director in
October. Marcus qualified with PricewaterhouseCoopers
in 1999. Before joining the group, he was the Financial
Director of ALNO UK Limited and, although then only 38,
brings with him considerable finance and business
experience in European distribution.

During 2012 several new managers and trainee engineers
have been recruited. We welcome them to the group.
Our staff at all levels are our most important asset, and we
thank them for their continuing support as their tasks
become ever more challenging.

Outlook

The year has begun positively in spite of the continuing
recession, and exchange rates have moved in the group’s
favour. Investment continues in machinery, facilities, new
product development, employee training and the
improvement of processes which the directors believe
will enable a better result in 2013 to be achieved.

However, as seen in 2012, predicting future economic or
business conditions is difficult, particularly as an
international business manufacturing a large proportion of
its products in the UK, which is exposed to changes in
exchange rates.

O. N. A. Braime
11th April 2013

In addition to investing in new facilities, both in the US
and 4B Africa, the division has continued to invest heavily
in new products. In particular, investment was made in
tooling for a new major bucket range, which has been
successfully launched in February 2013 at the GEAPS
exposition in the USA.

Investment

Including the investment in the new offices and
distribution facilities and in new tooling, the group made
fixed asset additions totalling £824,000 in 2012.

This included some major additions to the manufacturing
plant at Braime Pressings and further investments are
planned for 2013.

During 2012, a new ERP computer system was
successfully implemented in the central UK arm of the 4B
division. This system will be rolled out across all
subsidiaries in 2013 and 2014, enabling the group to
improve operating efficiencies and to fully integrate the
subsidiaries across the world.

Banking facility

Following a detailed review of the group’s banking
facilities, a decision was made to consolidate the banking
arrangements with HSBC. This process was completed in
January 2013. This has given the group wider access to
lines of finance, as well as providing improved
international reach. The board believes that these new
arrangements will support future growth.

Staff

David Brown, group Financial Director, retired on 10th
April 2012. The board would like to thank him for his
considerable service to the company during 31 years,
latterly coping with the growing complexity of both the
business and the regulatory requirements of a listed
company. The directors wish him well in his retirement.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ report

The directors present their annual report and financial
statements for the year ended 31st December 2012.

The steps that the group take to protect itself in terms
of credit risk, currency fluctuation and financial facility
are contained in note 15.

ACTIVITIES

The principal activities of the group are the
manufacture of metal presswork and the distribution of
bulk material handling components, trading from
locations in Australia, England, France, South Africa,
Thailand and the United States.

The principal activity of the company is that of a
holding company and a lessor of land and buildings to
group companies.

REVIEW OF THE BUSINESS

A summary of the results of the year’s trading is given
on page 18 of the accounts. The chairman’s statement
on pages 6 and 7 reviews the development of the
business and is adopted as part of this report.

Principal risks and uncertainties

The market for subcontract metal presswork remains
challenging as the manufacturing sector in this country
reduces in size. The retention of the TS16949 standard
is important to the group as it allows us access to
growing markets. Long term supply agreements are
made with major customers. Rising steel prices are a
risk to the group, however we have seen prices
stabilising this year. With certain customers, materials
are supplied either free issue or the price of the
material is negotiated by the customer which reduces
potential risk to the company.

The elevator components companies trade in six
countries and each export to other countries. Whilst
there is considerable price competition in the market
the companies maintain their competitive edge by
providing engineering expertise. In addition ranges of
ancillary products, which provide higher margins, are
sold into different industries. These products, often
related to safety, are developed and improved on a
regular basis.

Key performance indicators

Turnover and product profit margins are reviewed on a
monthly basis. Stock levels are reviewed monthly and
slow moving stock on a quarterly basis. The group has
performed to the expected level and is discussed in
further detail in the chairman’s statement.

Environment

The group’s policy with regard to the environment is
that we understand and effectively manage the actual
and potential environmental impact of our activities.
Our operations are conducted such that we comply
with all legal requirements relating to the environment
in all areas where we carry out our business. During
the period of this report the group have not incurred
any fines or penalties or been investigated for any
breach of environmental regulations.

Employees

The quality and commitment of our people have
played a major role in our business success. This has
been demonstrated in many ways including
improvements in customer satisfaction, the
development of our product lines and the flexibility
they have shown in adapting to changing business
requirements. Employee performance is aligned to the
achievement of goals set within each subsidiary and is
rewarded accordingly. Employees are encouraged to
use their skills to best effect and are offered training
either externally or internally to achieve this.

RESULTS AND DIVIDENDS

The profit for the year after taxation and transferred
to reserves was £426,875 (2011 – £814,021). No
dividend is to be proposed at the Annual General
Meeting.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ report continued

DIRECTORS

The directors who served during the year and their beneficial interests in the shares of the company
are detailed below:

31st December 2012

1st January 2012

O. N. A. Braime
Preference shares
Ordinary shares
‘A’ Ordinary shares
P. J. O. Alcock
Ordinary shares
‘A’ Ordinary shares
A. W. Walker
Ordinary shares
‘A’ Ordinary shares
A. Q. Braime
Ordinary shares
C. O. Braime
Ordinary shares
M. L. Mills
‘A’ Ordinary shares

100
143,400
0

1,000
5,000

100
300

35,175

400

100
143,400
3,900

1,000
5,000

100
300

35,175

In accordance with the company’s Articles of Association A. Q. Braime retires by rotation and, being eligible
offers himself for re-election. M. L. Mills was appointed to the board on 10th October 2012 and having been
appointed since the last Annual General Meeting, also offers himself for re-election.

D. H. Brown resigned on 10th April 2012 and ceased to be a director from this date.

None of the directors had a beneficial interest in any contract to which the company or a subsidiary company was
a party during the financial year.

The company has made qualifying third party indemnity provisions for the benefit of its directors and officers.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ report continued

SUBSTANTIAL SHAREHOLDINGS

The company has been notified that as at 11th April 2013, apart from the directors, only the following persons
are beneficially interested in more than 3% of the Ordinary shares of the company:

J M Finn Nominees Limited
Ferlim Nominees Limited Des. POOLED
Mrs P. V. Smith
Mrs L. V. Deacon
Mr. M. C. J. Barnes

Ordinary
shares held
73,500
46,883
27,500
24,000
16,555

Percentage
15.31
9.77
5.73
5.00
3.45

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ report continued

CORPORATE GOVERNANCE

As an AIM listed group T.F. & J.H. Braime (Holdings)
P.L.C. is not required to comply with the Combined Code
2010. However, the group applies those principles of
good governance it believes appropriate to a group of
this size.

number of customers and suppliers across different
geographic areas and industries. The group’s forecasts
and projections, taking account of reasonably possible
changes in trading performance, show that there is not a
substantial doubt that the group should be able to
operate within the level of its current facilities.

INTERNAL CONTROLS

The board is responsible for the group’s system of
internal control and reviewing its effectiveness.
Identification and evaluation of risks is an integral part of
the board’s planning process. Controls within the group
are designed to provide the board with reasonable
assurance regarding the maintenance of proper
accounting records, the reliability of financial information
and the safeguarding of assets. The group’s system of
internal control is designed to manage rather than
eliminate the risk of failure to achieve business objectives.
It can only provide reasonable and not absolute assurance
against material loss or misstatement. The board
considers that the size of the group does not justify an
internal audit function, but continues to keep the need for
an internal audit function under review. The board has
conducted a review of the effectiveness of the company’s
risk management and internal control systems.

GOING CONCERN

The group’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the chairman’s statement on pages
6 to 7. The financial position of the group, its cash flows,
liquidity position and borrowing facilities are described in
the chairman’s statement on pages 6 to 7. In addition,
note 15 to the financial statements includes the group’s
objectives, policies and processes for managing its capital;
its financial risk management objectives; details of its
financial instruments and hedging activities; and its
exposure to credit risk and liquidity risk.

Current economic conditions create uncertainty over the
level of demand for the group’s products and services.
The exchange rate between sterling, the US dollar and
the euro provides further uncertainty.

The group, after consolidating its banking arrangements,
has improved access to financial resources which are
currently adequate. The group has contracts with a

After due consideration, the directors confirm that they
have a reasonable expectation that the company and the
group have adequate resources to continue in operational
existence for the foreseeable future. Accordingly, they
continue to adopt the going concern basis in preparing
the company’s and the group’s financial statements.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

The directors are responsible for preparing the annual
report, the directors’ report, the directors’ remuneration
report and the financial statements in accordance with
applicable laws and regulations.

Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have prepared the group financial statements in
accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union and
the rules of the London Stock Exchange for companies
trading on the AIM. The directors have chosen to prepare
financial statements for the company in accordance with
UK Generally Accepted Accounting Practice. Under
company law the directors must not approve the financial
statements unless they are satisfied that they give a true
and fair view of the state of affairs of the group and the
company and of the profit or loss of the group for that
period.

In preparing these financial statements, the directors are
required to:

• select suitable accounting policies and then apply them

consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

• state whether applicable United Kingdom Accounting
Standards have been followed by the parent company
and applicable IFRSs as adopted by the European
Union have been followed by the group, subject to any
material departures disclosed and explained in the
financial statements; and

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ report continued

• 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 group’s and company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the group and company and enable them to ensure that
the financial statements and the directors’ remuneration
report comply with the Companies Act 2006 and, as
regards the group financial statements, Article 4 of the
IAS Regulation. They are also responsible for
safeguarding the assets of the group and the company
and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.

The directors are responsible for the maintenance and
integrity of the company’s website. Legislation in the
United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.

Each of the directors at the date of this report
confirms that:

(a) so far as the director is aware, there is no relevant

audit information of which the company’s auditors are
unaware; and

(b) he has taken all the steps that he ought to have taken
as a director in order to make himself aware of any
relevant audit information and to establish that the
company’s auditors are aware of that information.

This confirmation is given and should be interpreted in
accordance with the provision of Section 418 of the
Companies Act 2006.

RESEARCH AND DEVELOPMENT

The group continues to invest in research and
development. This has resulted in improvements in the
products which will benefit the group in the medium to
long term.

SUBSCRIPTIONS AND DONATIONS

Charitable donations amounting to £2,403 (2011 -
£2,072) were paid during the year. There were no
donations to political organisations.

LAND AND BUILDINGS

The directors are of the opinion that the market value of
the group’s interests in land and buildings substantially
exceeds its book value of £494,000. The directors believe
that the value of those properties in current condition and
for similar use could exceed £1.4m.

PAYMENT TO SUPPLIERS

It is the company’s policy to agree terms of payment with
its suppliers when agreeing the terms of a business
transaction or transactions. All suppliers are aware of this
procedure and the company abides by the agreed
payment terms subject to the terms and conditions being
met by the supplier.

Wherever possible UK subsidiaries follow the same policy
and overseas subsidiaries are encouraged to adopt similar
policies, by applying local best practices.

The number of days’ purchases outstanding at the end of
the financial year, calculated in accordance with the
statutory instrument, for the group is 51 days (2011 – 47
days). The calculation does not however, take into
account the fact that the year end position is not
representative of the level of trading throughout the year.
The calculation is not applicable to the holding company.

FINANCIAL INSTRUMENTS

The group’s policy relating to the use of financial
instruments is disclosed in note 15 to the accounts.

AUDITORS

A resolution proposing Kirk Newsholme be re-appointed
as auditors of the company will be put to the Annual
General Meeting.

By order of the board
M. L. Mills, Director

11th April 2013

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ remuneration report

INFORMATION NOT SUBJECT TO AUDIT

Service contracts

The purpose of this report is to inform shareholders of
the company’s policy with regard to executive
remuneration and to provide full details of the salary
and other benefits received by individual directors.
The directors have adopted the principles of good
governance as set out in the Combined Code and the
Directors’ Remuneration Report Regulations 2002.
However, following the company’s move to AIM
compliance with this report is no longer mandatory.

Other than Mr. M. L. Mills, the executive directors do
not have service contracts with the company or its
subsidiaries. The executive directors are subject to
election by the shareholders at the first Annual
General Meeting following their appointment and
thereafter at least at every third subsequent Annual
General Meeting. No compensation other than that
prescribed by legislation is payable on termination of
their employment.

Mr. P. J. O. Alcock’s service contract, as a non-
executive director, expires annually on 10th January.
The renewal of this contract is subject to approval of
the whole board and has been approved for a further
twelve months to 10th January 2014. The remaining
term of the contract will be payable on its early
termination.

Mr. A. W. Walker’s service contract expired on
30th March 2013. The renewal of this contract is
subject to approval of the whole board and has
been approved for a further three years to
30th March 2016.

Remuneration committee

Executive directors’ pay is subject to the decision of
the whole board and not of a separate remuneration
committee. The directors believe that this is adequate
for a group of this size.

Statement of company’s policy on
directors’ remuneration

The board’s policy is that the remuneration of the
directors should reflect market rates applicable to a
business of its size and complexity. This information is
assessed by the board based on their commercial
contacts within the industry and the local business
community. It is intended that this policy will remain in
place for the following financial year and subsequent
periods.

There are no formal performance related elements,
entitlements to share options or entitlements under
long-term incentive plans in directors’ remuneration.
All employees of the group, including directors, may
however receive a discretionary bonus which reflects
the results of the group.

The only elements of remuneration that are
pensionable are salary and bonuses.

There are no performance conditions relating to the
non-executive directors’ fees.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ remuneration report continued

INFORMATION SUBJECT TO AUDIT

Directors’ remuneration
The remuneration of the individual directors who served during the period was as follows:

Estimated
taxable
value of
benefits
in kind
£

Total
2012
£

Total
2011
£

2,990
624
900
858
327

156,585
29,398
61,590
60,980
20,682

152,328
101,385
57,103
55,535
-

Pension
contributions
2011
£

2012
£

2,236
1,169
5,119
5,120
1,225

2,236
1,169
4,556
4,558
-

Fees
£

150
-
150
150
50

Salary
£

153,445
28,774
60,540
59,972
20,305

15,125
15,125
30,750

-
-
323,036

-
-
5,699

15,125
15,125
359,485

13,750
13,750
393,851

-
-
14,869

-
-
12,519

Executive directors
O. N .A. Braime
D. H. Brown
A. Q. Braime
C. O. Braime
M. L. Mills

Non-executive directors

P. J. O. Alcock
A. W. Walker

Paid by the company

30,450

27,700

The estimated taxable value of benefits in kind includes private medical cover. Pension contributions represent
amounts paid to defined contribution pension schemes.

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:48 Page 15

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Directors’ remuneration report continued

Pension benefits
Benefits under the defined benefits scheme are as follows:

Accrued
benefit
£
68,750

Increase
in accrued
benefit
£
3,000

Transfer value of accrued benefit
2011
£
1,765,172

2012
£
1,974,171

Increase
in accrued
benefit
(excluding
inflation)
£
1,291

Transfer value
(less director’s
contributions)
of the increase
in accrued benefit
£
33,586

Increase in the transfer value
of the accrued benefit
(less director’s contributions)
£
208,999

O. N. A. Braime

Since October 2008 transfer values are no longer calculated in accordance with actuarial guidance (GN11).
The trustees are now required to set the assumptions on which transfer values are based. The trustees have
adopted a new method proposed by the scheme actuary which complies with the new regulations.There
were no other changes in benefits during the year.

Approval

The directors’ remuneration report was approved by the board on 11th April 2013.

O. N. A. Braime, Director

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:48 Page 16

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Independent auditors’ report

TO THE SHAREHOLDERS OF T.F. &
J.H. BRAIME (HOLDINGS) P.L.C.
We have audited the financial statements of T.F. & J.H.
Braime (Holdings) P.L.C. for the year ended 31st
December 2012 which comprise the consolidated
income statement, the consolidated statement of
comprehensive income, the consolidated and parent
company balance sheets, the consolidated cash flow
statement, the consolidated statement of changes in
equity and the related notes. The financial reporting
framework that has been applied in the preparation of
the group financial statements is applicable law and
International Financial Reporting Standards (IFRSs) as
adopted by the European Union. The financial
reporting framework that has been applied in the
preparation of the parent company financial
statements is applicable law and United Kingdom
Accounting Standards (United Kingdom Generally
Accepted Accounting Practice).

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.

Respective responsibilities of directors
and auditors
As explained more fully in the statement of directors'
responsibilities set out on pages 11 and 12, the
directors are responsible for the preparation of the
financial statements and for being satisfied that they
give a true and fair view. Our responsibility is to audit
and express an opinion on the financial statements in
accordance with applicable law and International
Standards on Auditing (UK and Ireland). Those
standards require us to comply with the Auditing
Practices Board's Ethical Standards for Auditors.

Scope of the audit of the financial statements
An audit involves obtaining evidence about the
amounts and disclosures in the financial statements
sufficient to give reasonable assurance that the
financial statements are free from material
misstatement, whether caused by fraud or error. This
includes an assessment of: whether the accounting
policies are appropriate to the group’s and the parent
company's circumstances and have been consistently
applied and adequately disclosed; the reasonableness
of significant accounting estimates made by the
directors; and the overall presentation of the financial
statements. In addition we read all the financial and
non-financial information in the Annual Report to
identify material inconsistencies with the audited
financial statements. If we become aware of any
apparent material misstatements of inconsistencies
we consider the implications for our report.

Opinion on financial statements
In our opinion:
• the financial statements give a true and fair view

of the group’s and of the parent company’s affairs
as at 31st December 2012 and of the group’s
profit and the parent company’s profit for the
year then ended;

• the group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union;

• the parent company financial statements have
been properly prepared in accordance with
United Kingdom Generally Accepted Accounting
Practice; and

• the financial statements have been prepared in
accordance with the requirements of the
Companies Act 2006; and, as regards the group
financial statements, Article 4 of the IAS
Regulation.

Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
• the information given in the Report of the

Directors for the financial year for which the
financial statements are prepared is consistent
with the financial statements.

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:48 Page 17

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Independent auditors’ report continued

Matters on which we are required
to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required 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.

Other matters
The company voluntarily prepares a directors’
remuneration report in accordance with the provisions
of the Companies Act 2006. The directors have
requested that we audit the part of the directors
remuneration report specified by the Companies Act
2006 to be audited as if the company were a listed
company. In our opinion the part of the directors
remuneration report to be audited has been properly
prepared in accordance with the Companies Act
2006.

Mark Templeton BSc FCA
(Senior Statutory Auditor),
for and on behalf of Kirk Newsholme,
Chartered Accountants and Statutory Auditors,
4315 Park Approach,
Thorpe Park,
Leeds,
LS15 8GB.

11th April 2013

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:48 Page 18

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Consolidated income statement
for the year ended 31st December 2012

Revenue

Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Employee benefits costs
Depreciation expense
Other expenses

Profit from operations

Profit on disposal of tangible fixed assets
Finance costs
Finance income

Profit before tax

Tax expense

Profit for the year attributable to equity
shareholders of the parent company

Note

2012
£

2011
£

21,211,887

20,067,905

(23,484)
(11,849,425)
(4,587,039)
(464,539)
(3,628,799)

777,134
(11,791,200)
(4,132,824)
(395,200)
(3,232,150)

658,601

1,293,665

100,435
(101,541)
20,726

21,617
(82,455)
11,406

678,221

1,244,233

(251,346)

(430,212)

426,875

814,021

4
4

Basic and diluted earnings per share

29.64p

56.53p

Consolidated statement of comprehensive income
for the year ended 31st December 2012

Note

2012
£

2011
£

Profit for the year

Actuarial losses recognised directly in equity
Foreign exchange (losses)/gains on re-translation of overseas operations
Adjustment in respect of minimum funding requirement per IFRIC 14
Other comprehensive income for the year
Total comprehensive income for the year

426,875

814,021

(7,000)
(57,608)
10,000
(54,608)
372,267

(50,000)
48,467
(31,000)
(32,533)
781,488

The foreign currency movements arise on the re-translation of overseas subsidiaries’ opening balance sheets at
closing rates.

Following the change in IAS19 implemented as a consequence of a European Directive and first adopted in respect
to the financial statements to 31st December 2009, the pension scheme asset can no longer be recognised.

The notes on pages 22 to 48 form part of these financial statements

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:48 Page 19

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Consolidated balance sheet
at 31st December 2012

Assets
Non-current assets
Property, plant and equipment
Goodwill
Total non-current assets

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets

Liabilities
Current liabilities
Bank overdraft
Trade and other payables
Other financial liabilities
Corporation tax liability
Total current liabilities

Non-current liabilities
Financial liabilities
Total non-current liabilities
Total liabilities
Total net assets

Note

2012
£

2011
£

1,504,575
12,270

1,426,995
12,270

1,516,845

1,439,265

9
10

4,387,303
3,219,715
1,576,283

4,401,733
3,507,494
1,746,464

9,183,301
10,700,146

9,655,691
11,094,956

11
12

642,492
2,478,283
863,922
-

1,485,757
2,257,710
749,632
114,319

3,984,697

4,607,418

515,437

547,473

515,437
4,500,134
6,200,012

547,473
5,154,891
5,940,065

360,000
77,319
334,759
5,167,987
5,940,065

Capital and reserves attributable to equity holders of the parent company
Share capital
Capital reserve
Foreign exchange reserve
Retained earnings
Total equity

360,000
77,319
277,151
5,485,542
6,200,012

The financial statements on pages 18 to 48 were approved and authorised for issue by the board of directors
on 11th April 2013 and were signed on its behalf by:

O. N. A. Braime, Director

M. L. Mills, Director

Company Registration Number 488001

The notes on pages 22 to 48 form part of these financial statements

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:49 Page 20

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Consolidated cash flow statement
for the year ended 31st December 2012

Operating activities
Net profit
Adjustments for:
Depreciation
Grants amortised
Foreign exchange (losses)/gains
Finance income
Finance expense
Gain on sale of land and buildings,
plant, machinery and motor vehicles
Adjustment in respect of
defined benefits scheme
Income tax expense

Operating profit before changes
in working capital and provisions

Note

2012
£

426,875

4
4

464,539
(1,656)
(53,182)
(20,726)
101,541

(100,435)

21,000
251,346

2011
£

814,021

2011
£

395,200
(1,656)
47,391
(11,406)
82,455

(21,617)

(74,000)
430,212

662,427

846,579

1,089,302

1,660,600

Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
Increase/(decrease) in trade and other payables

363,898
14,430
444,808

(215,892)
(808,053)
(50,686)

Cash generated from operations

Income taxes paid

Investing activities
Purchases of property, plant,
machinery and motor vehicles
Sale of land and buildings, plant,
machinery and motor vehicles
Interest received

Financing activities
Proceeds from long term borrowings
Repayment of borrowings
Repayment of hire purchase creditors
Interest paid
Dividends paid

Increase/(decrease) in cash
and cash equivalents
Cash and cash equivalents,
beginning of period
Cash and cash equivalents,
end of period

823,136
1,912,438

(441,784)

(1,074,631)
585,969

(486,947)

(320,241)

21,620
4,406

(102,568)

(294,215)

133,196
-
(190,674)
(82,455)
(103,680)

(695,002)

673,084

260,707

933,791

(243,613)

(438,806)

699,513

260,707

(483,734)

378,440
2,726

-
(247,065)
(234,076)
(101,541)
(112,320)

The notes on pages 22 to 48 form part of these financial statements

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:49 Page 21

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Consolidated statement of changes in equity
for the year ended 31st December 2012

Note

Share
Capital
£
360,000

Capital
Reserve
£
77,319

Foreign
Exchange
Reserve
£
286,292

Retained
Earnings
£
4,538,646

Total
£
5,262,257

Balance at 1st January 2011

Comprehensive income
Profit

Other comprehensive
income
Actuarial losses recognised
directly in equity
Foreign exchange losses
on re-translation of
overseas operations
Adjustment in respect of
minimum funding requirement
per IFRIC 14
Total other comprehensive income

Total comprehensive income

Transactions with owners
Dividends
Total transactions with owners

-
-

814,021

(50,000)

48,467

-
48,467

(31,000)
(81,000)

(31,000)
(32,533)

48,467

733,021

781,488

-
-

(103,680)
(103,680)

Balance at 1st January 2012

360,000

77,319

334,759

5,167,987 5,940,065

Comprehensive income
Profit

Other comprehensive income
Actuarial losses recognised
directly in equity
Foreign exchange losses
on re-translation of
overseas operations
Adjustment in respect of
minimum funding requirement
per IFRIC 14
Total other comprehensive income

Total comprehensive income

Transactions with owners
Dividends
Total transactions with owners

-
-

426,875

(7,000)

(57,608)

-
(57,608)

10,000
3,000

10,000
(54,608)

(57,608)

429,875

372,267

-
-

(112,320)
(112,320)

Balance at 31st December 2012

360,000

77,319

277,151

5,485,542 6,200,012

The capital reserve arose on the listing of the company’s shares on the London Stock Exchange. The foreign exchange
reserve relates to the differences arising on the re-translation of overseas subsidiaries consolidated within the group
financial statements. The retained earnings reserve includes the cumulated profits and losses of the group.

There was no movement in the share capital of the company.

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:49 Page 22

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts

1. ACCOUNTING POLICIES
1.1 General company information
T.F. & J.H. Braime (Holdings) P.L.C. (‘the company’)
and its subsidiaries (together ‘the group’) manufacture
metal presswork and handle the distribution of bulk
material handling components through trading from
locations in Australia, England, France, South Africa,
Thailand and the United States.

The company is incorporated and domiciled in the
UK. The company’s registered number is 488001.
The address of its registered office is Hunslet Road,
Leeds, LS10 1JZ.

The company is a public limited company and has its
primary listing on the AIM division of the London
Stock Exchange.

The group consolidated financial statements were
authorised for issue by the board on 11th April 2013.

1.2 Basis of preparation
The principal accounting policies adopted in the
preparation of the consolidated financial statements
are set out below. The policies have been consistently
applied to all the years presented, unless otherwise
stated.

These consolidated financial statements have been
prepared in accordance with International Financial
Reporting Standards as adopted by the European
Union (IFRSs as adopted by the EU), IFRIC
interpretations and the Companies Act 2006
applicable to companies reporting under IFRS. The
consolidated financial statements have been prepared
under the historical cost convention.

The preparation of financial statements in conformity
with IFRS requires the use of certain critical
accounting estimates. 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 in
paragraph 1.3 below entitled critical accounting
estimates and assumptions.

The company has elected to prepare its parent
company financial statements in accordance with UK
GAAP; these are presented on pages 49 to 54.

1.3 Critical accounting estimates and
assumptions
Estimates and judgements are continually evaluated
and are based on historical experience and other
factors, including expectations of future events that
are believed to be reasonable under the
circumstances.

The group makes estimates and assumptions
concerning the future. The resulting accounting
estimates will, by definition seldom equal the actual
results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the
next financial year are discussed below:

Retirement benefit obligations
The group operates a defined benefit arrangement
(note 17). Asset valuations are based on the fair value
of the assets. The valuations of the liabilities of the
scheme are based on statistical and actuarial
calculations, using various assumptions including
discount rates, future salary and pension increases,
life expectancy of scheme members and cash
commutations. The actuarial assumptions may differ
materially from actual experience due to changes in
economic and market conditions, variations in actual
mortality, higher or lower cash withdrawal rates and
other changes in factors assessed. Any of these
differences could impact the assets or liabilities
recognised in the balance sheet in future periods.

Inventory
Inventories are stated at the lower of cost and net
realisable value. The assessment of net realisable
value requires forecasts of future demand and the
selling prices of inventory.

BRAIMESR&A_1_24_2012_Layout 1 15/04/2013 12:49 Page 23

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

1.4 Changes to accounting policy and
disclosure

(a) New and amended standards adopted by the

group.

The application of these standards and interpretations
is not expected to have a material impact on the
group’s reported financial performance or position.
However, they may give rise to additional disclosures
being made in the financial statements.

The group has adopted the following new and
amended IFRS’s as of 1st January 2012.

1.5 Revenue

Revenue arises solely from sale of goods net
of local taxes.

Revenue is recognised when the risks and rewards
of owning the goods have passed to the customer,
which is generally on delivery.

• IAS 12, ‘Deferred tax: Recovery of underlying

assets’ (amendment); effective from 1st January
2012

• IFRS 7, ‘Financial instruments: Disclosures’

(amendment); effective for accounting periods
commencing on or after 1st July 2011.

(b) New standards, amendments and interpretations
issued but not effective for the financial year
beginning 1st January 2012 and not early adopted.

• IFRS 9, ‘Financial instruments’; effective on or after

1st January 2015.

• IFRS 10, ‘Consolidated financial statements’;

effective on or after 1st January 2013.

• IFRS 13, ‘Fair value measurement’’ effective on or

after 1st January 2013.

• IFRS 7/IAS 32, ‘Offsetting financial assets and

financial liabilities’ (amendments); effective on or
after 1st January 2013. The amendment to IAS 32 is
effective on or after 1st January 2014.

• IFRS 11, ‘Joint arrangement’, superseding IAS 31

and SIC-13; effective on or after 1st January 2013.
• IFRS 12, ‘Disclosure of interests in other entities’;

effective on or after 1st January 2013.

• IAS 1, ‘Presentation of financial statements’
(amendment); effective from 1st July 2012.
• IAS 19, ‘Employee benefits’ (amendments);

effective on or after for accounting 1st January
2013.

• IAS 27, ‘Separate financial statements’

(amendment); effective on or after 1st January
2013.

• IAS 28, ‘Investments in associates and joint

ventures’ (amendment); effective on or after 1st
January 2013.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

1.6 Basis of consolidation

Subsidiaries are all entities (including special purpose
entities) over which the group has the power to
govern the financial and operating policies generally
accompanying a shareholding of more than one half of
the voting rights. The existence and effect of potential
voting rights that are currently exercisable or
convertible are considered when assessing whether
the group controls another entity. Subsidiaries are
fully consolidated from the date on which control is
transferred to the group. They are de-consolidated
from the date that control ceases. The consolidated
financial statements of T.F. & J.H. Braime (Holdings)
P.L.C. incorporate the financial statements of the
parent company as well as those entities controlled
by the group by full consolidation.

The group uses the acquisition method of
accounting to account for business combinations.
The consideration transferred for the acquisition of a
subsidiary is the fair values of the assets transferred,
the liabilities incurred and the equity interests issued
by the group. The consideration transferred includes
the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition
related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured
initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the group
recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net assets.

Investments in subsidiaries are accounted for at cost
less impairment. Cost is adjusted to reflect changes in
consideration arising from contingent consideration
amendments. Cost also includes direct attributable
costs of investment.

The excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree
and the acquisition date fair value of any previous
equity interest in the acquireee over the fair value of
the group’s share of the identifiable net assets

acquired is recorded as goodwill. If this is less than the
fair value of the net assets of the subsidiary acquired
in the case of a bargain purchase, the difference is
recognised directly in the statement of comprehensive
income.

Inter-company transactions, balances and unrealised
gains on transactions between group companies are
eliminated. Unrealised losses are also eliminated.
Accounting policies of subsidiaries have been
changed where necessary to ensure consistency
with the policies adopted by the group.

1.7 Foreign currency

T.F. & J.H. Braime (Holdings) P.L.C. consolidated
financial statements are presented in sterling (£),
which is also the functional currency of the parent
company.

In the separate financial statements of the
consolidated entities, foreign currency transactions
are translated into the functional currency of the
individual entity using the month end exchange rates
as an approximation to that prevailing at the dates of
the transactions (spot exchange rate). Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities at year-
end exchange rates are recognised in the income
statement under ‘other income’ or ‘other expenses’,
respectively.

In the consolidated financial statements, all separate
financial statements of subsidiaries originally
presented in a currency different from the group’s
presentation currency, have been converted into
sterling. Assets and liabilities have been translated
into sterling at the closing rate at the balance sheet
date. Income and expenses have been converted into
the group’s presentation currency using the exchange
rates prevailing at the dates of the transactions. Any
differences arising from this procedure have been
charged/(credited) to the currency translation reserve
in equity.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:51 Page 25

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

1.8 Financial assets

The group considers that its financial assets comprise
loans and receivables only. These assets are non-
derivative financial assets with fixed or determinable
payments, not quoted in an active market. They arise
principally through the provision of goods and
services to customers (trade debtors) but also
incorporate other types of contractual monetary asset.
They are carried at cost less provision for impairment.

Impairment provisions are recognised when there is
objective evidence (such as significant financial
difficulties on the part of the counterparty or default
or significant delay in payment) that the group will be
unable to collect all of the amounts due under the
terms receivable, the amount of such a provision
being the difference between the net carrying amount
and the present value of the future expected cash
flows associated with the impaired receivable.
For trade receivables, which are reported net, such
provisions are recorded in a separate allowance
account with the loss being recognised within
administrative expenses in the income statement.
On confirmation that the trade receivable will not be
collectable, the gross carrying value of the asset is
written off against the associated provision.

1.9 Financial liabilities

The group’s financial liabilities include bank loans and
overdrafts, trade and other payables, finance leasing
liabilities, irredeemable preference shares and forward
currency contracts. They are included in balance
sheet line items ‘bank overdraft’, ‘trade and other
payables’, ‘long-term financial liabilities’ and ‘other
financial liabilities’.

Financial liabilities are recognised when the group
becomes a party to the contractual agreements of the
instrument. All interest related charges are recognised
as an expense in ‘finance cost’ in the income
statement.

Bank loans are raised for support of long term funding
of the group’s operations. They are recognised at fair
value, net of direct issue costs. Finance charges,
including premiums payable on settlement or
redemption and direct issue costs, are charged to

profit or loss using the effective interest method and
are added to the carrying amount of the instrument to
the extent that they are not settled in the period in
which they arise.

Forward currency contracts are held at fair value and
are used to hedge exchange risk arising on foreign
currency transactions denominated in a currency
other than the transacting entities’ functional currency.

Trade payables are recognised initially at their fair
value and subsequently measured at amortised cost
less settlement payments.

1.10 Cash and cash equivalents

Cash and cash equivalents include cash at bank and in
hand as well as short term highly liquid investments
such as money market instruments and bank deposits.
For the purposes of the cash flow statement cash and
cash equivalents include bank overdrafts.

1.11 Borrowing costs

All borrowing costs are expensed as incurred.

1.12 Pension obligations and short term
employee benefits

Pensions to employees are provided through
a defined benefit plan as well as a defined
contribution plan.

A defined benefit plan is a pension plan that defines
an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or
more factors such as age, years of service and salary.
The legal obligation for any benefits from this kind of
pension plan remains with the group, even if the plan
assets for funding the defined benefit plan have been
acquired. Plan assets may include assets specifically
designated to a long term benefit fund as well as
qualifying insurance policies.

A defined contribution plan is a pension plan under
which the group pays fixed contributions into an
independent entity. The group has no legal or
constructive obligations to pay further contributions
after payment of the fixed contribution.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 26

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

The asset or liability recognised in the balance sheet
for defined benefit pension plans is the present value
of the defined benefit obligation (DBO) at the balance
sheet date less the fair value of plan assets, together
with adjustments for past service costs. The DBO is
calculated annually by independent actuaries using
the projected unit credit method. The present value of
the DBO is determined by discounting the estimated
future cash outflows using interest rates of high
quality corporate bonds that are denominated in the
currency in which the benefits will be paid and that
have terms to maturity approximating to the terms of
the related pension liability.

Actuarial gains and losses are recognised immediately
and in full in the statement of comprehensive income.
Past service costs are recognised immediately in the
consolidated income statement, unless the changes to
the pension plan are conditional on the employees
remaining in service for a specified period of time (the
vesting period). In this case, the past service costs are
amortised on a straight-line basis over the vesting
period.

The contribution recognised in respect of defined
contribution plans are expensed as they fall due.
Liabilities and assets may be recognised if
underpayment or prepayment has occurred and are
included in current liabilities or current assets as they
are normally of a short-term nature.

Short-term employee benefits are recognised for the
number of paid leave days (usually holiday
entitlement) remaining at the balance sheet date.
They are included in current pension and other
employee obligations at the undiscounted amount
that the group expects to pay as a result of the unused
entitlement.

If the group will not benefit from a scheme surplus in
the form of refunds from the plan or reduced future
contributions, no asset resulting from the above policy
is recognised.

1.13 Leased assets

Where substantially all of the risks and rewards
incidental to ownership of a leased asset have been
transferred to the group (a ‘finance lease’), the asset is
treated as if it had been purchased outright. The
amount initially recognised as an asset is the present
value of the minimum lease payments payable over
the term of the lease. The corresponding lease
commitment is shown as a liability. Lease payments
are analysed between capital and interest. The interest
element is charged to the consolidated income
statement over the period of the lease and is
calculated so that it represents a constant proportion
of the lease liability. The capital element reduces the
balance owed to the lessor.

Where substantially all of the risks and rewards
incidental to ownership are retained by the lessor (an
‘operating lease’), the total rentals payable under the
lease are charged to the income statement on a
straight-line basis over the lease term.

The land and buildings elements of property leases
are considered separately for the purposes of lease
classification.

1.14 Impairment of non-financial assets

The group’s property, plant and equipment are
subject to impairment testing.

For the purposes of assessing impairment, assets are
grouped at the lowest levels for which assets are
tested individually for impairment and some are tested
at cash-generating unit level.

Individual assets or cash-generating units with an
indefinite useful life or those not yet available for use
are tested for impairment at least annually. All
individual assets or cash-generating units are tested
for impairment whenever events or changes in
circumstances indicate that the carrying amount may
not be recoverable.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

An impairment loss is recognised for the amount by
which the asset’s or cash-generating unit’s carrying
amount exceeds it recoverable amount. The
recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell and
value in use, based on an internal discounted cash
flow evaluation. Impairment losses are charged pro-
rata to the assets in the cash-generating unit. All
assets are subsequently re-assessed for indications
that an impairment loss previously recognised may no
longer exist.

1.15 Research and development

Costs associated with research activities are expensed
in the consolidated income statement as they occur.
Costs that are directly attributable to the development
phase of new products are recognised as intangible
assets provided they meet the following recognition
requirements:

• Demonstration of technical feasibility of the
prospective product for internal use or sale.

• The intangible asset will generate probable

economic benefits through internal use or sale.

• Sufficient technical, financial and other resources

are available for completion.

• The costs to be capitalised as an intangible asset

can be reliably measured.

1.16 Income taxes

Current income tax assets and/or liabilities comprise
those obligations to, or claims from, fiscal authorities
relating to the current or prior reporting period, that
are unpaid at the balance sheet date. They are
calculated according to the tax rates and tax laws
applicable to the fiscal periods to which they relate,
based on the taxable profit for the year. All changes to
current tax assets or liabilities are recognised as a
component of tax expense in the consolidated income
statement.

Deferred income taxes are calculated using the
liability method on temporary differences. This
involves the comparison of the carrying amounts of
assets and liabilities in the consolidated financial
statements with their respective tax bases. This
applies also to temporary differences associated with
shares in subsidiaries if reversal of these temporary
differences can be controlled by the group and it is
probable that reversal will not occur in the foreseeable
future. In addition, tax losses available to be carried
forward as well as other income tax credits to the
group are assessed for recognition as deferred tax
assets.

Deferred tax liabilities are always provided for in full.
Deferred tax assets are recognised to the extent that it
is probable that they will be able to be offset against
future taxable income. Deferred tax assets and
liabilities are calculated, without discounting, at tax
rates that are expected to apply to their respective
period of realisation, provided they are enacted or
substantively enacted at the balance sheet date

Most changes in deferred tax assets or liabilities are
recognised as components of tax expense in the
income statement. Only changes in deferred tax
assets or liabilities that relate to a change in value of
assets or liabilities that are charged or credited directly
to equity are charged or credited directly to equity.

1.17 Dividends

Equity dividends are recognised when they become
legally payable. In the case of dividends to equity
shareholders, they are recognised when paid.

In the case of final dividends, this is when approved
by the shareholders at the Annual General Meeting.

Dividends on the 5% Cumulative Preference shares
are treated as finance costs and are recognised on an
accruals basis.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 28

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

1.18 Property, plant and equipment

Property, plant and equipment (other than freehold
land) are carried at acquisition cost less subsequent
depreciation and impairment losses. No depreciation
has been charged in respect of land and buildings as
the directors have assessed that those assets have
residual values equal to or greater than current
carrying values.

The useful lives of property, plant and equipment
(other than freehold land) can be summarised as
follows:

• Land and buildings

Nil

• Plant, machinery and motor vehicles
4 - 5 years on a straight line basis

1.19 Inventories

Inventories comprise raw materials, supplies and
purchased goods. Cost includes all expenses directly
attributable to the manufacturing process as well as
suitable portions of related production overheads,
based on normal operating capacity. Financing costs
are not taken into consideration. At the balance sheet
date, inventories are carried at the lower of cost and
net realisable value. Net realisable value is the
estimated selling price in the ordinary course of
business less any applicable selling expenses.

1.20 Government grants

Government grants received on capital expenditure
are generally deducted in arriving at the carrying
amount of the asset purchased. Grants for revenue
expenditure are netted against the cost incurred by
the group.

Where retention of a government grant is dependent
on the group satisfying certain criteria, it is initially
recognised as deferred income. When the criteria for
retention has been satisfied, the deferred income
balance is released to the consolidated income
statement or netted against the asset purchased as
appropriate.

1.21 Other provisions, contingent liabilities
and contingent assets

Other provisions are recognised when present
obligations will probably lead to an outflow of
economic resources from the group and they can
be estimated reliably. Restructuring provisions are
recognised only if a detailed formal plan for the
restructuring has been developed and implemented,
or management has at least announced the plan’s
main features to those affected by it. Provisions are
not recognised for future operating losses.

Provisions are measured at the estimated expenditure
required to settle the present obligation, based on the
most reliable evidence available at the balance sheet
date, including the risks and uncertainties associated
with the present obligation. Any reimbursement
expected to be received in the course of settlement of
the present obligation is recognised, if virtually certain
as a separate asset, not exceeding the amount of the
related provision. Where there are a number of similar
obligations, the likelihood that an outflow will be
required in settlement is determined by considering
the class of obligations as a whole. In addition, long
term provisions are discounted to their present values,
where time value of money is material.

All provisions are reviewed at each balance sheet date
and adjusted to reflect the current best estimate.

In those cases where the possible outflow of
economic resource as a result of present obligations
is considered improbable or remote, or the amount
to be provided for cannot be measured reliably,
no liability is recognised in the consolidated balance
sheet. These contingent liabilities are recognised in
the course of the allocation of purchase price to the
assets and liabilities acquired in the business
combination. They are subsequently measured at the
higher amount of a comparable provision as described
above and the amount initially recognised, less any
amortisation.

Probable inflows of economic benefits to the group
that do not yet meet the recognition criteria of an
asset are considered contingent assets.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

PROFIT FROM OPERATIONS

This has been arrived at after charging/(crediting):
Staff costs
Depreciation
Foreign exchange differences
Research and development costs
Write-down of inventory to net realisable value
Fees payable to the company’s auditor:
• for the audit of the company’s annual accounts
• the audit of the company’s subsidiaries, pursuant to legislation
• other services pursuant to legislation
Operating lease payments

Note

6
7

2012
£

2011
£

4,587,039
464,539
37,422
132,817
31,093

5,000
25,000
3,000
25,732

4,132,824
395,200
(26,218)
225,308
16,557

5,000
24,000
500
7,660

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 30

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

SEGMENTAL INFORMATION

Segmental information is presented in respect of the group’s business segments, which are based on the
group’s management and internal reporting structure as at 31st December 2012.

The chief operating decision-maker has been identified as the board of directors (‘the board’). The board
reviews the group’s internal reporting in order to assess performance and allocate resources. Management
has determined the operating segments based on these reports and on the internal reporting structure.

The board assesses performance based on a measure of earnings before tax. Other information provided to
the board is measured in a manner consistent with that in the financial statements. Total segment assets
exclude assets and liabilities that are managed on a central basis. These balances are part of the reconciliation
to the total balance sheet assets and liabilities. Inter-segment pricing is determined on an arms-length basis.

The group comprises the following segments: the manufacture of metal presswork and the distribution of
bulk material handling components.

Revenue
External
Inter company
Total

Profit
EBITDA
Gain on sale of land and buildings
Finance costs
Finance income
Depreciation
Tax expense
Profit/(loss) for the period

Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities

Central Manufacturing
2012
£

2012
£

Distribution
2012
£

Total
2012
£

-
51,390
51,390

(20,799)
94,036
(11,302)
1,105
-
(17,718)
45,322

2,992,202
3,339,322
6,331,524

18,219,685
2,300,456
20,520,141

21,211,887
5,691,168
26,903,055

253,679
-
(49,488)
19,505
(331,640)
-
(107,944)

896,659
-
(40,751)
116
(132,899)
(233,628)
489,497

1,129,539
94,036
(101,541)
20,726
(464,539)
(251,346)
426,875

625,569
-

2,250,827
439,004

7,823,750
385,546

10,700,146
824,550

458,973

1,670,820

2,370,341

4,500,134

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 31

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Revenue
External
Inter company
Total

Profit
EBITDA
Finance costs
Finance income
Depreciation
Tax expense
(Loss)/profit for the period

Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities

Central
2011
£

-
61,443
61,443

(12,901)
(14,812)
1,679
-
(23,079)
(49,113)

Manufacturing
2011
£

Distribution
2011
£

Total
2011
£

2,510,726
3,026,539
5,537,265

17,557,179
1,828,853
19,386,032

20,067,905
4,916,835
24,984,740

274,159
(301,808)
272,722
(322,728)
-
(77,655)

1,449,224
(28,835)
5
(72,472)
(407,133)
940,789

1,710,482
(345,455)
274,406
(395,200)
(430,212)
814,021

810,551
-

2,874,795
396,164

7,409,610
205,247

11,094,956
601,411

526,570

1,849,717

2,778,604

5,154,891

Geographical analysis
The group is domiciled in the UK. Analysis of revenues from external customers by country is provided below:

Canada
France
Germany
UK
USA
Other export

Revenue
2012
£,000

Non-current
assets
2012
£,000

Revenue
2011
£,000

Non-current
assets
2011
£,000

592
2,104
1,589
4,889
6,469
5,569
21,212

-
70
-
1,183
160
92
1,505

705
2,475
1,435
4,481
5,858
5,114
20,068

-
80
-
1,011
289
47
1,427

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 32

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

FINANCE INCOME AND EXPENSE

Finance expense
Bank borrowings
Hire purchase interest
Preference share dividend

Finance income
Bank interest received
Other finance income

Note

17.5

2012
£

68,104
24,437
9,000

2,726
18,000

2012
£

101,541

20,726
(80,815)

2011
£

57,354
16,101
9,000

4,406
7,000

2011
£

82,455

11,406
(71,049)

Amendment to comparative figures

Following changes to IAS 19, defined benefit interest costs have been offset against the expected return on
scheme assets disclosed within the consolidated income statement. As a consequence of this change in
treatment the comparative figures for finance expenses and income have been reduced by the value of the
defined benefit interest cost of £263,000, resulting in other finance income of £7,000.

Profit from operations disclosed within the consolidated income statement in respect of the year ended 31st
December 2011 have been reduced by £21,617 in respect of profits on disposal of tangible fixed assets which
have now been separately disclosed on the face of the consolidated income statement. This has been adjusted
in order to ensure comparability with the exceptional gains achieved on disposal in respect of the current
period.

2012
£

2011
£

TAX EXPENSE

Current tax expense
UK corporation tax
UK tax expense on profits for the year
Prior year adjustment

Foreign corporation tax
Foreign tax expense on profits for the year

251,346

326,667

Total tax charge

251,346
251,346

103,545

326,667
430,212

-
-

104,996
(1,451)

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation
tax in the UK applied to profits for the year are as follows:

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 33

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Profit before tax

Expected tax charge based on the standard rate of
corporation tax in the UK of 24.5% (2011 – 26.5%)
Expenses not deductible for tax purposes
Income not taxable
Tax credits on research and development
Profit on property disposed not taxable
Deferred tax asset not recognised
Foreign tax
Other differences
Prior year adjustment
Rate differences

2012
£
678,221

2011
£
1,244,233

166,144
3,303
(406)
(23,887)
(23,036)
14,807
118,689
(3,484)
-
(784)
251,346

329,637
11,700
(438)
(25,734)
-
(33,179)
152,021
-
(1,451)
(2,344)
430,212

No deferred tax assets arising on tax losses, accelerated depreciation in excess of capital allowances or the
pension provision have been recognised as their future recoverability is relatively uncertain. The amounts not
recognised are estimated at £64,000, £61,000 and £(8,000) respectively (2011 - £69,000, £34,000 and
£(11,000)) calculated at a rate of 23% (2011 – 25%). The deferred tax balance has not been discounted.

EMPLOYEES

6.
The average number of employees of the group during the year was made up as follows:

Office and management
Manufacturing

Staff costs (including directors) comprise:

Wages and salaries
Defined contribution pension cost
Defined benefit pension cost
Other long-term employee benefits
Ex-gratia pensions
Employer’s national insurance contributions and similar taxes

Included in other expenses

Directors’ remuneration:
Emoluments of qualifying services
Company pension contributions to money purchase schemes

Note

17.5

2012
No.
68
50
118

3,991,163
74,813
95,000
4,988
17,137
486,052
4,669,153
(82,114)
4,587,039

2011
No.
67
48
115

3,621,011
70,460
36,000
7,644
16,491
458,624
4,210,230
(77,406)
4,132,824

359,485
14,869
374,354

393,851
12,519
406,370

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 34

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

EMPLOYEES continued

6.
The number of directors for whom retirement benefits are accruing under money purchase pension
schemes amounts to 4 (2011 – 4) and under defined benefit pension schemes amounted to 1 (2011 – 2).
Further details of directors remuneration are included in the remuneration report.

PROPERTY, PLANT AND EQUIPMENT

At 31st December 2012
Cost
Accumulated depreciation
Net book value

At 31st December 2011
Cost
Accumulated depreciation
Net book value

Year ended 31st December 2012
Opening net book value
Additions
Disposals
Depreciation
Exchange differences
Closing net book value

Year ended 31st December 2011
Opening net book value
Additions
Disposals
Depreciation
Exchange differences
Closing net book value

Plant,
machinery
and motor
vehicles
£

Land and
buildings
£

Total
£

289,512
74,215
215,297

5,698,074
4,408,796
1,289,278

5,987,586
4,483,011
1,504,575

668,089
173,616
494,473

4,909,190
3,976,668
932,522

5,577,279
4,150,284
1,426,995

494,473
-
(278,005)
-
(1,171)
215,297

932,522
824,550
-
(464,539)
(3,255)
1,289,278

1,426,995
824,550
(278,005)
(464,539)
(4,426)
1,504,575

486,807
8,486
-
-
(820)
494,473

737,173
592,925
(3)
(395,200)
(2,373)
932,522

1,223,980
601,411
(3)
(395,200)
(3,193)
1,426,995

The net book value of tangible fixed assets includes an amount of £585,737 (2011 - £466,521) in respect of
assets held under finance leases and hire purchase contracts. The related depreciation charge on these assets
for the year was £236,741 (2011 - £164,728).

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:52 Page 35

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

SUBSIDIARIES

Subsidiary

Principal activity

Proportion of shares held
2012 and 2011

Ordinary
Shares

Preference
Shares

iii

Registered in and operating
from England:
Braime Pressings Limited

Braime Elevator Components Limited

Registered in England and operating
from the USA:
4B Elevator Components Limited

Incorporated in and operating
from France:
Sarl S.E.T.E.M.

iv Incorporated in and operating

from Thailand:
4B Asia Pacific Company Limited

Incorporated in and operating
from South Africa:
4B Africa Elevator
Components (Pty) Limited

Incorporated in and operating
from Australia:
4B Australia Pty Limited

Manufacture of metal presswork

100%

Distribution of bulk material
handling components

100%

48%

100%

While only 48% of the ordinary shares are held in 4B Asia Pacific Company Limited the company controls
89% of the voting rights.

INVENTORIES

Raw materials
Work in progress
Finished goods
Goods in transit

2012
£
388,743
50,299
3,935,562
12,699
4,387,303

2011
£
351,311
58,385
3,950,960
41,077
4,401,733

During the twelve months ended 31st December 2012 the group recognised a charge of finished goods
inventories of £31,093 (2011 – £16,557) to reflect the ageing of certain stock items.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:53 Page 36

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

10. TRADE AND OTHER RECEIVABLES

Trade debtors
Other debtors
Prepayments

2012
£
2,982,859
135,277
101,579
3,219,715

2011
£
2,931,027
48,436
528,031
3,507,494

Where possible credit insurance is obtained and sales to customers kept within agreed credit limits. Experience
over the last five years has shown that bad debts in any one year have not exceeded £10,000.

The risk in relation to credit risk is considered low and is supported by the low level of bad debts experienced,
both pre and post credit insurance claims, by the group in any one year. There are no material bad debt
provisions and no material past due balances.

11. TRADE AND OTHER PAYABLES – CURRENT

Trade creditors
Other taxes and social security costs
Other creditors
Accruals

2012
£
1,777,479
139,190
100,538
461,076
2,478,283

2011
£
1,529,540
67,021
136,777
524,372
2,257,710

12. OTHER FINANCIAL LIABILITIES – CURRENT

Bank loans - secured
Hire purchase
Other creditors

Note

2012
£
5,075
235,839
623,008
863,922

2011
£
175,536
175,323
398,773
749,632

An analysis of the interest rate payable on financial liabilities and information about fair values is given in note 15.

Other creditors comprise of an invoice discounting facility which has been secured by a fixed and floating charge
over certain assets of certain group companies. In the prior year the balance on the invoice discounting facility
was disclosed in the balance sheet and notes within current trade and other payables.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:53 Page 37

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

13. FINANCIAL LIABILITIES – NON-CURRENT

Irredeemable Preference shares
Bank loans – secured
Hire purchase
Government grants

Note

2012
£
180,000
46,596
277,305
11,536
515,437

Obligations under finance lease and hire purchase contracts comprise amounts payable as follows:

In one year or less, or on demand
In more than one year but not more than five years

Obligations under bank loan agreements comprise amounts payable as follows:

Within one year
One to two years
Two to five years
Over five years

Terms and conditions of outstanding loans were as follows:

Euro bank loan

US dollar bank loan
US dollar other loan

Interest
Rate
%
2.25% over
LIBOR
5% fixed
3% fixed

Year of
maturity

2 months
2022
2022

2012
£
235,839
277,305
513,144

2012
£
5,075
5,230
16,676
24,690
51,671

2012
£

-
-
51,761

2011
£
180,000
123,200
231,081
13,192
547,473

2011
£
175,323
231,081
406,404

2011
£
175,536
11,471
37,353
74,376
298,736

2011
£

165,540
73,998
59,198

The euro bank loan and the 5% fixed US dollar bank loan were repaid in the year. The US dollar bank loan is
secured on the plant, equipment and inventory held by 4B Elevator Components Limited.

BRAIMESR&A_25_43_2012_Layout 1 15/04/2013 12:53 Page 38

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

14. SHARE CAPITAL

Authorised:
480,000 Ordinary shares of 25p each
1,200,000 ‘A’ Ordinary shares of 25p each

Allotted, called up and fully paid:
480,000 Ordinary shares of 25p each
960,000 ‘A’ Ordinary shares of 25p each

2012
£
120,000
300,000
420,000

120,000
240,000
360,000

2011
£
120,000
300,000
420,000

120,000
240,000
360,000

There are 180,000 Cumulative Preference shares of
£1 each which have been classified as liabilities under
IAS 32 (note 13). The rate of dividend of the 5%
Cumulative Preference shares is 5% plus the associated
tax credit. On a return of capital on a winding-up, the
holders shall be entitled to £1.125 per share together
with any arrears of preference dividend due to the
date of return. Holders of these shares are only
entitled to vote at meetings if the preference dividend
remains unpaid for six months after any date fixed for
payment or where resolutions are proposed which
affect their rights or which increase the company’s
borrowing powers. In these events the 5% Cumulative
Preference shareholders would be entitled to one vote
per share.

The ‘A’ Ordinary shares rank pari passu in all respects
with Ordinary shares except that the holders of ‘A’
Ordinary shares are not entitled to vote at general
meetings. Holders of Ordinary shares are entitled to
one vote for every four shares held.

On a return of capital on a winding-up, the holders of
Ordinary and ‘A’ Ordinary shares shall be entitled to
the residue of profits after distribution of the amount
due to the 5% Cumulative Preference shareholders.
The residue shall be distributed in proportion to the
amounts paid up on the shares.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

15. FINANCIAL INSTRUMENTS
The group’s activities expose it to a variety of financial
risks: market risk (including currency risk and cash
flow interest rate risk), credit risk and liquidity risk.

The group holds financial instruments in order to
finance its operations and to manage the interest rate
and currency risks arising from those operations.

In addition various financial instruments such as trade
debtors and trade creditors arise directly from the
group’s operations.

The group holds both financial assets and financial
liabilities. Financial assets comprise cash balances,
loans and receivables and are disclosed on the balance
sheet as trade and other receivables. Financial
liabilities comprise financial liabilities measured at
amortised cost including bank loans and overdrafts,
trade and other payables, finance leasing liabilities and
irredeemable preference shares. Financial liabilities
also include forward currency contracts at a fair value.

There is no formal policy for matching foreign
currency cash flows, or matching exposure to foreign
currency net assets or liabilities although a careful
watch is kept on the positions. As shown below the
group’s currency exposure at the year end is £787,038
(2011 - £2,520,968) and is primarily euros and US
dollars to sterling.

The group’s policy is to ensure a balance of financial
instruments to meet its operating requirements. This
has been achieved during the period. Unutilised
committed borrowing facilities have been maintained
in order to provide flexibility in the management of
liquidity.

Fair values
There is no material difference between the carrying
value and the fair value of the group’s financial assets
and liabilities. Financial instruments carried at fair
value are required to be measured by reference to
the following levels:

Level 1 - quoted prices (unadjusted) in active markets

for identical assets or liabilities;

Level 2 -

inputs other than quoted prices included
within level 1 that are observable for the
asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and

Level 3 -

inputs for the asset or liability that are not
based on observable market data
(unobservable inputs).

The level within which the financial asset or liability is
classified is determined based on the lowest level of
significant input to one fair value measurement. The
only derivatives entered into by the group are
included in level 2 and consist of foreign currency
forward contracts.

Forward contracts
Forward currency contracts of £211,933 were
outstanding at 31st December 2012 covering periods
from 14th January 2013 to 28th February 2013 (31st
December 2011 - £1,269,546). The fair value of the
forward currency contracts is £3,546 (2011 - £8,591).

Maturity analysis
Other than is disclosed in note 13 regarding bank
loans and obligations under finance lease and hire
purchase agreements and the irredeemable
preference shares all financial instruments fall
due within one year.

The interest on irredeemable preference shares is
£9,000 per annum. In addition to the maturity analysis
disclosed in note 13 the interest due on hire purchase
agreements repayable within one year totals £28,362
(2011 - £16,764), the interest due on finance lease and
hire purchase agreements after one year but not more
than five years totals £33,084 (2011 - £27,495).
Likewise the interest due on bank loans repayable
within one year totals £1,493 (2011 - £4,998), the
interest due on bank loans repayable after one year
but not more than five years totals £4,384 (2011 -
£16,563), and the interest due on bank loans
repayable after more than five years totals £1,604
(2011 - £8,283).

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Interest rate and currency of financial assets and liabilities
The currency and interest rate profile of the group’s interest bearing financial assets is shown below:

Currency

As at 31st December 2012

Sterling
Euro
US dollar
Other

As at 31st December 2011

Sterling
Euro
US dollar
Other

Floating rate
financial
assets
£

Fixed rate
financial
assets
£

Total
£

299,259
221,358
620,290
190,007
1,330,914

300,064
-
-
-
300,064

599,323
221,358
620,290
190,007
1,630,978

63,937
240,851
312,735
181,299
798,822

1,065,063
-
-
-
1,065,063

1,129,000
240,851
312,735
181,299
1,863,885

Fixed rate financial assets comprise a sterling cash deposit on the money market at 1 month rates. The weighted
average period for which they are fixed is 1 month (2011 – 1 month) and the weighted average fixed rate is
0.25% (2011 – 0.43%).

Floating rate financial assets comprise bank current accounts.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Interest rate and currency of financial assets and liabilities
The currency and interest rate profile of the group’s interest bearing financial liabilities is shown below:

Floating rate
financial
liabilities
£

Fixed rate
financial
liabilities
£

Total
£

827,707
303,327
189,165
-
1,320,199

657,723
-
51,671
35,421
744,815

1,485,430
303,327
240,836
35,421
2,065,014

1,374,591
159,696
467,166
501
2,001,954

586,404
165,539
133,196
-
885,139

1,960,995
325,235
600,362
501
2,887,093

Currency

As at 31st December 2012

Sterling
Euro
US dollar
Other

As at 31st December 2011

Sterling
Euro
US dollar

Floating rate financial liabilities comprise bank borrowings.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Currency exposure
The monetary assets and liabilities of the group that are not denominated in the functional currency of the
operating unit concerned are shown below.

Non interest bearing financial assets and liabilities

Sterling
£

Euro US dollar
£

Other
currencies
£

Total
£

Functional currency
At 31st December 2012

Sterling
Euro
US dollar

At 31st December 2011

Sterling
Euro
US dollar

-
(1,060,306)
(1,076,878)
(2,137,184)

301,984
-
-
301,984

112,331
-
-
112,331

935,831
-
-
935,831

1,350,146
(1,060,306)
(1,076,878)
(787,038)

-
(952,748)
(893,898)
(1,846,646)

(37,568)
-
-
(37,568)

(68,020)
-
-
(68,020)

(568,734)
-
-
(568,734)

(674,322)
(952,748)
(893,898)
(2,520,968)

Risk sensitivity
A change in interest rates of 1% in any of the three currencies invested or borrowed will not affect the income
statement by a figure greater or less than £10,000 (2011 - £10,000).

A weakening in the value of sterling by 10% will benefit the operating profit by a figure not exceeding £100,000
(2011 - £100,000). A strengthening of sterling by 10% will reduce the operating profit by a figure not greater
than £50,000 (2011 - £50,000).

These amounts are estimates. Actual results in the future may differ materially from these due to development
in the global financial markets which may cause fluctuations in interest and exchange rates to vary. The amounts
stated above should not be considered a projection of likely future events and losses.

Borrowing facilities
The group has the following undrawn committed borrowing facilities:

Expiring in one year or less

2012
£
426,992

2011
£
662,181

These facilities are for the purposes of working capital flexibility and are reviewed annually.

Group bank loans and overdrafts and invoice discounting facilities have been secured by a fixed and floating
charge over certain assets of certain group companies.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Foreign currency risk

Foreign exchange risk arises because the group has
operations located in various parts of the world whose
functional currency is not the same as the group’s
primary functional currency (sterling). Although its
global market penetration arguably reduces the
group’s risk in that it has diversified into several
markets, the net assets from such overseas operations
is exposed to currency risk giving rise to gains or
losses on re-translation into sterling. Only in
exceptional circumstances will the group consider
hedging its net investments in overseas operations as
generally it does not consider that the cash flow risk
created from such hedging techniques warrants the
reduction in volatility in consolidated net assets.

Foreign exchange risk also arises when individual
group operations enter into transactions denominated
in a currency other than their functional currency. It is
group policy that all such transactions should be
hedged locally by entering into forward contracts with
group treasury. Where is it considered the risk to the
group is significant, group treasury will enter into a
matching forward contract with a reputable bank.

It is group policy that transactions between group
entities are always denominated in the selling group
entity’s functional currency thereby giving rise to
foreign exchange risk in the income statement of both
the purchasing group entity and the group. Although
the purchasing group entity might hedge this
exposure with group treasury, no external hedge is
entered into at group level as there is no exposure to
consolidated net assets from intra-group transactions.

Liquidity risk

The liquidity risk of each group entity is managed
centrally by the group treasury function. Each
operation has a facility with group treasury, the
amount of the facility being based on budgets. The
budgets are set locally and agreed by the board

annually in advance, enabling the group’s cash
requirements to be anticipated. Where facilities of
group entities need to be increased, approval must be
sought from the group finance director. Where the
amount of the facility is above a certain level
agreement of the board is needed.

All surplus cash is held centrally to maximize the
returns on deposits through economics of scale.
The type of cash instrument used and its maturity
date will depend on the group’s forecast cash
requirements. The group maintains a draw down
facility with a major banking corporation to manage
any unexpected short-term cash shortfalls.

Interest rate risk

The group finances its operations through a mixture of
retained profit, bank borrowings and finance lease
arrangements. The group borrows at floating rates
and has hedging products in place to provide fixed
interest payments for a proportion of its debt over a
specified period. This enables the group to forecast
borrowing costs with a degree of certainty.

Credit risk

The group is mainly exposed to credit risk from credit
sales. It is group policy, implemented locally, to insure
sales when insurance cover is available.

Quantative disclosures have been made in note 10.

The group does not enter into complex derivatives to
manage credit risk.

Capital risk

The group’s objective when maintaining capital, being
the share capital and capital reserves, is to safeguard
the group’s ability to continue as a going concern so
that it is able to provide returns for shareholders and
benefits for other stakeholders.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

16. EARNINGS PER SHARE AND DIVIDENDS

Both the basic and diluted earnings per share have been calculated using the net results attributable to
shareholders of T.F. & J.H. Braime (Holdings) P.L.C. as the numerator.

The weighted average number of outstanding shares used for basic earnings per share amounted to 1,440,000
shares (2011 – 1,440,000). There are no potentially dilutive shares in issue.

Dividends paid

Equity shares
Ordinary shares
Interim of 5.40p (2011 – 4.80p) per share paid on 2nd April 2012
Interim of 2.40p (2011 – 2.40p) per share paid on 10th October 2012

‘A’ Ordinary shares
Interim of 5.40p (2011 – 4.80p) per share paid on 2nd April 2012
Interim of 2.40p (2011 – 2.40p) per share paid on 10th October 2012

Total dividends paid

2012
£

2011
£

25,920
11,520
37,440

51,840
23,040
74,880

23,040
11,520
34,560

46,080
23,040
69,120

112,320

103,680

An interim dividend of 5.40p per Ordinary and ‘A’ Ordinary share has been paid on 4th April 2013.

17. PENSION COSTS

17.1 The company operates a funded defined benefit pension scheme, Braime Pressings Limited Retirement
Benefits Scheme, which provides benefits based on final pensionable pay on behalf of certain companies in the
T.F. & J.H. Braime (Holdings) P.L.C. group. The assets of the scheme are held separately from those of the
group, being predominantly invested with an insurance company. The scheme is funded to cover future
pension liabilities.

17.2 A qualified actuary determines the contributions payable to the scheme. The most recent actuarial
valuation was conducted at 6th April 2010. The market value of scheme assets at 6th April 2010 was
£5,162,000. The funding level at 6th April 2010 was 99% on an ongoing basis.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are
recognised within the consolidated statement of comprehensive income.

17.3 The expected return on assets is a weighted average of the assumed long-term returns for the various
asset classes. Bond returns are selected by reference to the yields on government and corporate debt as
appropriate to the scheme’s holdings of these instruments. AA corporate bond yields are used in the
valuation of the scheme’s annuity policies held with Zurich Assurance Limited.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

17.4 The amounts recognised in the balance sheet are as follows:

Fair value of plan assets
Present value of funded obligations
Surplus
Adjustment in respect of minimum funding requirement
Net asset

Note

17.7
17.6

2012
£
6,328,000
(6,295,000)
33,000
(33,000)
-

2011
£
5,691,000
(5,648,000)
43,000
(43,000)
-

17.5 The amounts recognised in the consolidated income statement are as follows:

Current service cost
Past service cost
Total included in employee benefits expense

Interest cost
Expected return on plan assets
Total amounts recognised in the consolidated income statement

Note

4
4

2012
£
95,000
-
95,000

261,000
(279,000)
77,000

17.6 Changes in the present value of the defined benefit obligation are as follows:

Opening defined benefit obligation
Current service cost
Contributions by plan participants
Past service cost
Interest cost
Benefits paid
Actuarial gains
Closing defined benefit obligation

2012
£
5,648,000
95,000
18,000
-
261,000
(300,000)
573,000
6,295,000

17.7 Changes in the fair value of plan assets are as follows:

Opening fair value of plan assets
Expected return on plan assets
Actuarial gains
Benefits paid
Employer contribution
Contributions by plan participants
Closing fair value of plan assets

2012
£
5,691,000
279,000
566,000
(300,000)
74,000
18,000
6,328,000

2011
£
104,000
(68,000)
36,000

263,000
(270,000)
29,000

2011
£
4,902,000
104,000
9,000
(68,000)
263,000
(113,000)
551,000
5,648,000

2011
£
4,914,000
270,000
501,000
(113,000)
110,000
9,000
5,691,000

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

17.8 Analysis of fair value of plan assets between asset categories is as follows:

Annuities
Bonds
Cash
Insurance policies
Total

17.9 The actual return on plan assets is as follows:

Actual return on plan assets

17.10 Amount recognised in the statement of comprehensive income is as follows:

Actuarial losses
Adjustment in respect of minimum funding requirement
Total amount recognised in statement of comprehensive income

17.11 Cumulative amount of actuarial gains and losses recognised in the
statement of comprehensive income is as follows:

Actuarial gains

2012
£
2,563,000
965,000
30,000
2,770,000
6,328,000

2011
£
1,598,000
1,110,000
6,000
2,977,000
5,691,000

2012
£
845,000

2011
£
771,000

2012
£
(7,000)
10,000
3,000

2011
£
(50,000)
(31,000)
(81,000)

2012
£
271,000

2011
£
268,000

17.12 Amounts for the current period and previous periods are as follows:

Present value of funded obligations
Fair value of plan assets
Surplus
Experience (losses)/gains on plan liabilities
Changes in assumptions used to
value scheme liabilities
Experience gains/(losses) on plan assets

2012
£ ,000
(6,295)
6,328
33
-

(573)
566

2011
£,000
(5,648)
5,691
43
(29)

(522)
501

2010
£,000
(4,902)
4,914
12
(184)

(237)
253

2009
£,000
(4,218)
4,367
149
(69)

(446)
591

2008
£,000
(3,440)
3,580
140
(16)

329
(253)

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

17.13 Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

Discount rate
Salary increase
Inflation
Expected return on plan assets
Post retirement mortality
table

2012
4.10%
4.10%
3.10%
4.10%
120%
PNXA00
YoU mc
min
1.0%

2011
4.70%
4.20%
3.20%
5.00%
120%
PNXA00
YoU mc
min
1.0%

2010
5.40%
4.70%
3.70%
5.50%
120%
PNXA00
YoU mc
min
1.0%

2009
5.70%
4.70%
3.70%
5.60%
120%
PNXA00
YoU mc
min
1.0%

2008
6.20%
4.20%
3.20%
5.60%
120%
PNXA00
YoU mc
min
1.0%

17.14 The employer’s best estimate of contributions expected to be paid to the plan during the annual period
beginning after the balance sheet date is £19,000.

17.15 The amounts recognised in the balance sheet are as follows:

Net asset at start of period
Pension cost
Employer contribution
Actuarial gains recognised in SoCI
Adjustment in respect of minimum funding requirement
Net asset at end of period

2012
£
-
(77,000)
74,000
(7,000)
10,000
-

2011
£
-
(29,000)
110,000
(50,000)
(31,000)
-

18. OPERATING LEASES
The group has entered into commercial leases on certain properties, motor vehicles and items of plant and
equipment. As the balance sheet date, the group had outstanding commitments for minimum lease payments
under non-cancellable operating leases, which fall due as follows:

Expiring:
Not later than one year
Later than one year and not later than five years

2012
£
447
153,906
154,353

2011
£
2,520
133,288
135,808

Operating lease commitments on land and buildings include a significant commitment of £114,116 by the group
in respect of property in Morton, Illinois. This lease was entered into by the group in 2011 for an initial term of
five years, with an option for two further renewal periods, each with a term of five years.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

19. NOTES SUPPORTING CONSOLIDATED CASH FLOW STATEMENT

Cash and cash equivalents

Cash at bank and in hand
Bank overdrafts

2012
£
1,576,283
642,492
933,791

2011
£
1,746,464
1,485,757
260,707

Cash and cash equivalents held by the group that are not available for use total £300,064 (2011 - £1,065,064).

Major non-cash transaction
During the year the group acquired tangible assets subject to finance of £340,816 (2011 - £281,170) under hire
purchase agreements.

20. CAPITAL COMMITMENTS
There were capital commitments of £nil (2011 - £150,000) which are contracted but not provided for in these
financial statements.

21. RELATED PARTY TRANSACTIONS
The key management of the company are considered to be only the directors of the company.

Key management compensation is disclosed in the directors’ remuneration report.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Company balance sheet
at 31st December 2012

Note

2012
£

2011
£

Fixed assets
Tangible assets
Investments

Current assets
Debtors: due within one year
Debtors: due after more than one year
Cash at bank and in hand

Creditors: amounts falling due
within one year

Net current assets

Total assets less current liabilities

Creditors: amounts falling due
after more than one year

Capital and reserves
Called up share capital
Profit and loss account
Shareholders’ funds

2
3

4
5

8
9
10

-
344,695
344,695

177,397
350,703
528,100

7,279
3,671,052
618,290
4,296,621

278,932

-
3,498,455
532,546
4,031,001

346,570

4,017,689

4,362,384

1,463,201
2,899,183

360,000
2,539,183
2,899,183

3,684,431

4,212,531

1,345,929
2,866,602

360,000
2,506,602
2,866,602

This financial statement was approved and authorised for issue by the board of directors on 11th April 2013
and signed on its behalf by:

O. N. A. Braime, Director

M. L. Mills, Director

BRAIMESR&A_44_56_2012_Layout 1 15/04/2013 12:57 Page 50

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts

1.6 Financial instruments
Disclosures required under FRS 29 have not been
separately provided in addition to those already given
in note 15 to the group financial statements as they
are also relevant to the position of the company as
permitted under FRS 29.

1.7 Profit for the financial period
The company has taken advantage of the exemption
allowed under section 408 of the Companies Act 2006
and has not presented its own profit and loss account
in these financial statements. The company’s profit for
the year was £144,901 (2011 – £438,102).

1.8 Value of investments
Investments held as fixed assets are stated at cost less
any provision for impairment.

1. ACCOUNTING POLICIES
1.1 Accounting convention
The financial statements have been prepared under
the historical cost convention and are in accordance
with applicable accounting standards.

1.2 Depreciation
Tangible fixed assets
Depreciation is provided on tangible fixed assets,
other than freehold land which is not depreciated,
at rates calculated to write off the cost over their
estimated useful lives using the following
percentages:

Land and buildings – 25 years

1.3 Deferred tax
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 the company anticipates to make sufficient
taxable profits in the future to absorb the reversal of
the underlying timing differences. Deferred tax
balances are not discounted.

1.4 Dividends
Equity dividends are recognised when they become
legally payable. In the case of interim dividends to
equity shareholders, they are recognised when paid.
In the case of final dividends, this is when approved
by the shareholders at the Annual General Meeting.

1.5 Foreign currencies
Transactions in foreign currencies are recorded at the
rate ruling at the date of the transaction.

Monetary assets and liabilities denominated in foreign
currencies are re-translated at the rate of exchange
ruling at the balance sheet date. All differences are
taken to the profit and loss account.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

TANGIBLE FIXED ASSETS

Property cost
At 1st January 2012
Disposals
At 31st December 2012

Depreciation
At 1st January 2012
Charged in the year
Disposals
At 31st December 2012

Net book value
At 31st December 2012

At 31st December 2011

INVESTMENTS

Subsidiary undertakings

Shares at cost at 1st January 2012
Currency adjustment

Subsidiary

Principal activity

Freehold
property

377,406
(377,406)
-

200,009
10,480
(210,489)
-

177,397

2012
£
350,703
(6,008)
344,695

2011
£
355,181
(4,478)
350,703

Proportion of shares held
2012 and 2011

Ordinary Preference
Shares

iii

Registered in and operating
from England:
Braime Pressings Limited

Braime Elevator Components Limited

Registered in England and operating
from the USA:
4B Elevator Components Limited

Incorporated in and operating from France:
Sarl S.E.T.E.M.

Manufacture of metal presswork

100%

Distribution of bulk material
handling components

100%

BRAIMESR&A_44_56_2012_Layout 1 15/04/2013 12:57 Page 52

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

Subsidiary

Principal activity

Proportion of shares held
2012 and 2011

Ordinary Preference
Shares

iv Incorporated in and operating

from Thailand:
4B Asia Pacific Company Limited

Incorporated in and operating
from South Africa:
4B Africa Elevator
Components (Pty) Limited

Incorporated in and operating
from Australia:
4B Australia Pty Limited

Distribution of bulk material
handling components

48%

100%

The value of this investment included in the accounts is the cost translated at the sterling/currency rate at
31st December 2012.

4. DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR

Other taxes
Prepayments

5. DEBTORS: AMOUNTS RECEIVABLE AFTER MORE THAN ONE YEAR

Amount owed by a subsidiary company

CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

Bank loans and overdrafts
Other taxes and social security costs
Other creditors
Accruals

2012
£
3,029
4,250
7,279

2011
£
-
-
-

2012
£
3,671,052

2011
£
3,498,455

2012
£
265,481
-
-
13,451
278,932

2011
£
325,236
60
163
21,111
346,570

Cross guarantees exist in respect of all group company bank borrowings. At 31st December 2012 the
borrowings guaranteed by the company amounted to £nil (2011 - £737,044).

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Irredeemable Preference shares
Amount owed to subsidiary companies

2012
£
180,000
1,283,201
1,463,201

2011
£
180,000
1,165,929
1,345,929

The amounts owed to subsidiary companies are repayable between one and two years.

SHARE CAPITAL

Authorised:
480,000 Ordinary shares of 25p each
1,200,000 ‘A’ Ordinary shares of 25p each

Allotted, called up and fully paid:
480,000 Ordinary shares of 25p each
960,000 ‘A’ Ordinary shares of 25p each

2012
£
120,000
300,000
420,000

120,000
240,000
360,000

2011
£
120,000
300,000
420,000

120,000
240,000
360,000

The rate of dividend of the 5% Cumulative Preference shares is 5% plus the associated tax credit. On a return of
capital on a winding-up, the holders shall be entitled to £1.125 per share together with any arrears of preference
dividend due to the date of return. Holders of these shares are only entitled to vote at meetings if the preference
dividend remains unpaid for six months after any date fixed for payment or where resolutions are proposed
which affect their rights or which increase the company’s borrowing powers. In these events the 5% Cumulative
Preference shareholders would be entitled to one vote per share.

The ‘A’ Ordinary shares rank pari passu in all respects with Ordinary shares except that the holders of ‘A’
Ordinary shares are not entitled to vote at general meetings. Holders of Ordinary shares are entitled to one
vote for every four shares held.

On a return of capital on a winding-up, the holders of Ordinary and ‘A’ Ordinary shares shall be entitled to
the residue of profits after distribution of the amount due to the 5% Cumulative Preference shareholders.
The residue shall be distributed in proportion to the amounts paid up on the shares.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Notes to the accounts continued

RESERVES

Profit and loss reserve
Balance at 1st January 2012
Retained profit for the year
Dividends paid
Balance at 31st December 2012

10. RECONCILIATION IN MOVEMENT IN SHAREHOLDERS’ FUNDS

Profit for the year
Dividend paid
Net movement in shareholders’ funds
Opening shareholders’ funds
Closing shareholders’ funds

11. EMPLOYEES

Office and management

Directors’ remuneration
Emoluments for qualifying service

2,506,602
144,901
(112,320)
2,539,183

2011
£
438,102
(103,680)
334,422
2,532,180
2,866,602

2012
£
144,901
(112,320)
32,581
2,866,602
2,899,183

2012
No.
6

2011
No.
6

30,450

27,700

Further details of directors’ remuneration are included in the remuneration report.

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

Five year record

2012
£,000

2011
£,000

2010
£,000

2009
£,000

2008
£,000

Turnover

21,212

20,068

18,058

15,685

15,174

Profit from operations

Profit before tax

Profit after tax

Basic and diluted
earnings per share

659

678

427

1,294

1,244

814

1,413

1,361

945

699

625

387

576

527

252

29.64p

56.53p

65.63p

26.88p

17.47p

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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.

report

accounts

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