Braime Group PLC Annual Report 2013

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FY2013 Annual Report · Braime Group PLC

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

report

accounts

2013

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CELEBRATING 125 YEARS
1888 – 2013

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

Contents

Company information

Notice of meeting

Chairman’s statement

Group strategic report

Director’s 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 accounts

Five year record

Explanatory notes of resolutions

Explanatory notes of principal changes
to the Company’s Articles of Association

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

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

Bankers

Stockbrokers

HSBC,
Leeds City Branch,
33 Park Row,
Leeds,
LS1 1LD.

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

Company registration
number

488001 (England and Wales)

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

Notice of meeting

Notice is hereby Notice is hereby given that the
SIXTY FOURTH Annual General Meeting of the
members of T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
(the ‘company’) will be held at the registered office
of the company at Hunslet Road, Leeds, LS10 1JZ on
16th May 2014 at 11.45am.

Ordinary Resolutions

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 2013, and the report of the auditors
thereon.

2. To confirm the preference dividends paid on 30th
June and 31st December 2013 together with the
interim dividends on the ordinary and ‘A’ ordinary
shares paid on 9th October 2013 and 4th April
2014.

3. a) To re-appoint as a director C. O. Braime, who
is retiring by rotation in accordance with the
Company’s Articles of Association and, being
eligible, offers himself for re-election.

b) To re-appoint as a director P. J. O. Alcock,

who is retiring by rotation in accordance with the
Company’s Articles of Association and, being
eligible, offers himself for re-election.

4. To re-appoint Kirk Newsholme as auditors, to hold
office from the conclusion of this meeting until the
conclusion of the next Annual general Meeting of
the company at which accounts are laid.

5. To authorise the directors to fix the remuneration

of the auditors.

Special Resolutions

6. THAT, with immediate effect:

6.1 The Articles of Association of the Company
be amended by deleting all the provisions of
the Company’s Memorandum of Association
which, by virtue of section 28 of the Companies
Act 2006, are to be treated as provisions of the
Company’s Articles of Association; and

6.2 the Articles of Association produced to the

meeting and initialled by the chairman of the
meeting for the purpose of identification (the
‘New Articles’) be adopted as the Articles of
Association of the Company in substitution for,
and to the exclusion of, the existing Articles
of Association of the Company (the “Current
Articles”).

7. THAT, subject to and conditional upon the
sanction of a majority of the holders of the
preference shares of the company in accordance
with Article 23.2 of the New Articles, the
borrowing powers of the directors of the company
be increased from one times the ‘Adjusted Capital
and Reserves’ (as defined in the New Articles) to
two times the ‘Adjusted Capital and Reserves’ by
amending the New Articles so that the word ‘one’
in Article 23.2 of the New Articles is deleted and
replaced with the word ‘two’.

An explanation of the resolutions to be proposed at
the meeting is included on page 59 of these accounts.

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

27th March 2014

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

Notice of meeting continued

ACCOMPANYING 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. A form of proxy which may be used to
make such appointment and give proxy instructions
accompanies this notice.

2. To be valid, the form of proxy must be received at
the company’s registered office at Hunslet Road,
Leeds LS10 1JZ by no later than 11:45 am on 14th
May 2014.

3. The return of a completed Form of Proxy will not

prevent a shareholder attending the Annual General
Meeting and voting in person if he/she wishes to
do so.

4. 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 and holders of the ‘A’ Ordinary shares are
entitled to attend, but not to vote at this meeting.

5. There will be available for inspection at the

registered office during the company’s usual
business hours (Saturdays, Sundays and public
holidays excluded) 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 2013 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.

The service contract of each executive director,

where applicable and the letter of appointment of
each non-executive director.

The proposed new Articles of Association of the
Company and a copy of the existing Articles of
Association.

6. CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the Annual
General Meeting 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.

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 14th May 2014. 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.

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.

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

Chairman’s statement

Performance of the group

Sales revenue increased in 2013 by 8.2% to £23.0
million, this improvement was seen evenly across
both the metal presswork and material handling
divisions. Profit from operations increased by 63.3%
to £1.1 million. The principal reasons to this overall
improvement were the controls over sales margins
and careful monitoring of overhead expenses. Profit
before tax increased by 49.0% to £1.0 million, this
improvement was against a comparative which
included a one off gain on the disposal of a property.
Finance costs remained in line year on year despite
the group increasing its net borrowings to finance
key asset acquisitions during the period. Further
commentary on the group’s performance is provided
in the group strategic report.

In view of this year’s encouraging performance, the
board has approved the payment, on 4th April 2014,
of a second interim dividend of 6.20p (increased from
5.40p in 2013), making a total dividend for the tax
year ending 5th April 2014 of 8.60p, compared to
7.80p in the previous year.

The board remains firmly committed to progressive
increases in the dividend when justified by
profitability and after taking into account the cash flow
requirements of the group.

Group highlights

A number of significant steps were taken in 2013
which greatly strengthened the long term future of
the group.

The transfer of our banking arrangements to HSBC
was completed in February and has both reduced
finance costs and strengthened our financial position.

As a result, the company was able to purchase our
new, much larger, office and distribution facility
in Morton, Illinois. This purchase was successfully
completed in time to benefit from the ‘roll over’ tax
relief from the sale of our previous US premises
in 2012.

A new ERP system was successfully implemented in
our US and Australian business. As the group platform
is rolled out around the group, we gain improved
visibility, a reduction in IT costs and enhanced internal
controls through the standardisation of processes.

4B USA also purchased the trade and assets of a US
based manufacturing business. This has enabled
the 4B division to strengthen its manufacturing
capabilities.

Braime Pressings acquired £441,000 of plant
and machinery which will significantly increase
manufacturing capacity, much of it to produce product
already coming on schedule. We also purchased two
spray painting lines to widen our portfolio of services
offered to customers.

125th anniversary

In 2013, we proudly celebrated the 125th anniversary
of the company which was started in Hunslet, Leeds,
in 1888 by T.F, (Tom Braime) who was later joined by
his brother, J.H (Harry Braime). This culminated in a
dinner dance for employees, customers and suppliers,
which was held in the historic canteen, and was a very
special event.

The past and the future of the business are based on
the success of the partnership of these three groups
and on the support of all our shareholders. The
directors thank all of them for their continuing loyalty.

Employees

I am also delighted that in 2013, we were able to
increase the number of our employees across the
group, but particularly in Leeds. In difficult economic
times we are pleased to be able to improve their
long term job security. We are also proud to employ
apprentices in our Leeds manufacturing business and
hope these individuals will have a long and successful
career in the group.

Chairman’s statement continued

Outlook

The result in 2013, while below our long term
objective, was positive when viewed against the
weakness of economies worldwide. Additionally, the
group successfully implemented some major projects
and important investments, which have greatly
strengthened the group.

Almost the entire sales of Braime Pressings are
indirect exports to European markets. Additionally a
very high proportion of the sales of the 4B division
are sold directly to either Europe or to other export
markets, so we are very dependent on the global
economy. While the USA and the UK are now out
of recession, other economies in Asia and, more
particularly in Europe, remain very weak. To this
situation, has been added political instability in the
Middle East and now in Eastern Europe, Russia and its
former satellite states. So these factors have to temper
any over optimism.

Nevertheless, we believe that the group can build on
the big strides it made in 2013 and make further
progress in 2014.

Update of the company’s constitution

The current articles of the company were adopted
more than 60 years ago with relatively minor
alterations in the intervening years. Many of the
provisions are now either obsolete or out of kilter
with market practice.

It is proposed as part of this year’s Annual General
Meeting, details of which are to be found in the
Notice of meeting and the explanatory notes, to
update the current articles and certain provisions
therein. The main driver behind this is to take into
account changes in English company law brought
about by the Companies Act 2006 and several other
developments in English law and market practice since
the last time the current articles were reviewed.

The board is very proud of the company’s long
standing heritage and the values that this heritage
has instilled. The modernisation of the articles allows
the company to move forward with these values yet
allows us to operate more effectively in the modern
business environment.

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

The directors consider that all of the resolutions to
be proposed at the AGM are in the best interests of
the company and its shareholders as a whole and
unanimously recommend that shareholders vote in
favour of all of the resolutions, as the directors intend
to do in respect of their own beneficial holdings.

O. N. A. Braime

27th March 2014

Group strategic report

Principal activities and risks and uncertainties

The group comprises of two core segments;
manufacture of deep drawn metal presswork, and
the distribution of material handling components and
monitoring equipment.

The centralised treasury function also controls the
group banking facilities, including all lines of funding.
Liquidity risk is managed through the matching of
short and long term funding to the needs of the
business. Medium and long term cash flow projections
are prepared and regularly monitored.

The metal presswork segment operates across several
industries including the automotive sector. The
market remains challenging due to pricing pressures
throughout the supply chain. The achievement and
retention of the TS16949 quality standard is important
to the group as it allows us to access growing markets.
If lost, this would adversely impact both existing
and new business activity. A process of continual
improvement in systems, process and review reduce
this risk. Long term supply agreements are made with
major customers. The company is exposed to medium
to long term fluctuations in steel prices. In order to
mitigate this volatility, the company fixes its prices with
suppliers where possible.

The material handling components subsidiaries trade
from six countries and export to over 50 countries.
The division maintains its competitive edge in a price
sensitive market through the provision of engineering
expertise and by working closely with our suppliers to
supply innovative components of the highest standard.
In addition, ranges of complementary products are
sold into different industries. These monitoring
systems are developed and improved on a regular
basis.

Exposure to customer credit risk is managed through
a variety of methods; credit insurance, credit checking
and the setting and monitoring of appropriate credit
limits.

The group has a centralised treasury function which,
through the use of forward contracts, hedges against
foreign exchange differences arising on cash flows
in currencies that differ to the operational entity’s
reporting currency.

Further information on the group’s financial liabilities
and exposures are set out in note 16.

Our business model

The focus of the manufacturing business is to produce
quality, technically demanding components. Using
automated equipment this allows us to produce in
high volumes, yet it also provides flexibility.

The material handling components business is located
around the globe allowing us to be close to our core
markets. The focus is to provide innovative solutions
drawing on our expertise and broad product range.

The two segments are very different serving different
markets, however together they add strength and
balance to the group.

Performance of Braime Pressings Limited,
manufacturer of deep drawn metal presswork

Sales of existing components increased and new work,
that had been previously delayed, began to come
on stream, and the result has improved significantly.
In the middle of the year, the company made a
substantial investment in plant. The installation of part
of this investment has been completed and delivery
of parts produced down these automated cells has
already commenced.

Further new work has been won in 2014 and is
scheduled to start in the next two months. The
profitability of this company is forecast to improve
further in the second half of this year.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Group strategic report continued

Capital expenditure

Total capital expenditure on land and buildings and
plant, machinery and equipment amounted to £2.2
million. The largest element of this was the purchase
of the US facility for £1.3 million. Expenditure in
the manufacturing business amounted to £441,000
and related to the expansion of the production
capacity and range. Expenditure in the 4B division
was £489,000 and primarily related to investments
in manufacturing capacity and improvements to IT
hardware and infrastructure.

Cash flow

Cash generated from operations was £938,000 (2012 -
£1.9 million). Working capital requirements increased
to support the higher activity levels with a marginal net
increase in debtors compared to creditors but, more
specifically, by an increase in inventory levels. The
investment in new fixed assets in 2013, including our
new US office and distribution facility, plant machinery
and vehicles, together totalled £2.2 million (2012 -
£825,000). The company financed these investments
by way of long term loans amounting to £1.1 million
and by cash generated from operating activities. The
group also repaid £142,000 of short term borrowings
and repaid hire purchase borrowings of £241,000. At
the year end the group held net cash of £76,000 (2012
- £934,000).

The company has employed a new specialist
maintenance manager, with considerable experience
in the automotive sector. As well as being tasked
to both install new plant and improve our level of
preventative maintenance, he has begun major
improvements aimed at improving our working
environment and reducing our energy bills.

Performance of the 4B division, world wide
distributor of components and monitoring systems
for the material handling industry

The division continued to benefit from the year on
year increase in sales and the profitability of our US
subsidiary, 4B Components Limited. The relocation of
4B Components into a new and much larger facility will
enable the continuing growth of this business, while
the purchase of the trade and assets of a component
manufacturer has helped to simplify our supply chain
and enhance our manufacturing expertise.

Our UK based subsidiary, Braime Elevator
Components Limited, had a successful year,
particularly in export markets. The two newer
subsidiaries in Australia and South Africa had
reasonable years, although their results, once
translated, were affected by the steep fall in the value
of their local currencies.

In contrast our French subsidiary, 4B Setem, had a
disappointing year due to the ongoing recession in
Europe.

Taxation

The effective rate of tax is 25.6% (2012 - 37.1%).
The reduction in the year is in part due to credits in
relation to previous years. The effective rate is above
the standard UK tax rate of 23.0% (2012 - 24.0%) due
to the higher rates of tax incurred by the overseas
subsidiaries.

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

Group strategic report continued

Bank facilities

Employees

The quality and commitment of our people has 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.

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.

O. N. A. Braime, Director

27th March 2014

The group’s operating banking facilities are renewed
annually. The new arrangements with HSBC provide
significant headroom to the group and have allowed
us to make key strategic investments in the year.

Balance sheet

Net assets of the group have increased to £6.7 million
(2012 - £6.2 million). This increase is due to the strong
profit performance in the year. A foreign exchange
loss of £200,000 (2012 - £58,000) was recorded on
the re-translation of the net assets of the overseas
operations. The movement in the year was primarily
due to the strengthening of pound sterling against the
South African rand and the Australian dollar.

Key performance indicators

The group uses certain key performance indicators to
assess the performance of the group as a whole and of
the individual business. These financial KPIs comprise
turnover growth, product margins and operating
net profit as demonstrated in note 3 in the financial
statements. Key balance sheet indicators such as
inventory levels, inventory aging, stock turnover and
debtor days are monitored monthly for both the group
and individual entities.

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 has not incurred
any fines or penalties or been investigated for any
breach of environmental regulations.

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 2013.

RESULTS AND DIVIDENDS

The profit for the year after taxation and transferred to reserves was £752,066 (2012 – £426,875).
No dividend is to be proposed at the Annual General Meeting.

DIRECTORS

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

O. N. A. Braime
Preference shares
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

31st December 2013

1st January 2013

100
143,400

1,000
5,000

100
300

35,175

400

100
143,400

1,000
5,000

100
300

35,175

400

In accordance with the company’s Articles of Association C. O. Braime and P. J. O. Alcock retire by rotation and,
being eligible offer themselves for re-election.

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.

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

Directors’ report continued

SUBSTANTIAL SHAREHOLDINGS

The company has been notified that as at 27th March 2014, 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
71,000
46,883
27,500
24,000
16,555

Percentage
14.79
9.77
5.73
5.00
3.45

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.

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 group
strategic report on pages 8 to 10. The financial
position of the group, its cash flows, liquidity position
and borrowing facilities are described in the group
strategic report on pages 8 to 10. In addition, note
16 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.

group’s products and services. The exchange rate
between sterling, the US dollar and the euro and the
price of raw materials provides further uncertainty.

Primarily as a consequence of increased sales activity,
the investment in fixed assets and the repayment of
long term borrowings, the net cash figure has reduced
during 2013 from £933,791 to £76,282. The purchase
of the US property amounted to £1,274,526 and was
financed by a $1.35m term loan with the balance of
$550,000 paid from the group’s own cash resources.
By taking up the option to purchase the property,
previously leased by our US entity, the group has
reduced property costs and provided a sound basis on
which the US business can continue to grow. At 31st
December 2013, the available headroom within the
group’s borrowing facilities amounted to £1,103,079.
The directors are of the continued view that, after
consolidating the group’s banking arrangements,
access to financial resources has improved.

The group has contracts with a 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.

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.

Signs of economic recovery in many of the geographic
areas in which the group operates are being seen.
However the fragile nature of the recovery creates
uncertainty over the level of future demand for the

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

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

Directors’ report continued

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

• 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.

SUBSCRIPTIONS AND DONATIONS

Charitable donations amounting to £3,125 (2012 -
£2,403) were paid during the year. There were no
donations to political organisations.

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

27th March 2014

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.

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.

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 2015.

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

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.

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
2013
£

Total
2012
£

3,243
-
1,053
531
1,359

167,806
-
71,837
71,330
85,531

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

Pension
contributions
2012
£

2013
£

2,236
-
6,347
6,348
6,738

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

Fees
£

150
-
150
150
50

Salary
£

164,413
-
70,634
70,649
84,122

17,281
17,281
35,062

-
-
389,818

-
-
6,186

17,281
17,281
431,066

15,125
15,125
359,485

-
-

-
-
21,669 14,869

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

34,562

30,450

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

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

O. N. A. Braime

Approval

Normal
Retirement

Accrued
Pension
£
71,750

Pension Input

Amount
£
24,514

The directors’ remuneration report was approved by the board on 27th March 2014.

M. L. Mills, Director

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 2013 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 13 and 14, 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 Group Strategic
Report and the Report of the Directors to identify
material inconsistencies with the audited financial
statements and to identify any information that is
apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in
the course of performing the audit. If we become
aware of any apparent material misstatements or
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 2013 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.

•

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Independent auditors’ report continued

Opinion on other matters prescribed by the
Companies Act 2006
In our opinion:
•

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

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.

27th March 2014

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Consolidated income statement
for the year ended 31st December 2013

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

2013
£

2012
£

22,953,805

21,211,887

311,144
(12,942,829)
(5,021,454)
(520,945)
(3,704,402)

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

1,075,319

658,601

32,551
(100,967)
3,330

100,435
(101,541)
20,726

1,010,233

678,221

(258,167)

(251,346)

752,066

426,875

4
4

Basic and diluted earnings per share

52.23p

29.64p

Consolidated statement of comprehensive income
for the year ended 31st December 2013

Note

2013
£

2012
£

Profit for the year

752,066

426,875

Items that will not be reclassified subsequently to profit or loss
Remeasurement gain/(loss) on post employment benefits
Adjustment in respect of minimum funding requirement per IFRIC14
Items that may be reclassified subsequently to profit or loss
Foreign exchange losses on re-translation of overseas operations
Other comprehensive income for the year
Total comprehensive income for the year

18
18

6,000
25,000

(199,729)
(168,729)
583,337

(7,000)
10,000

(57,608)
(54,608)
372,267

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

In line with the requirements of IAS19, ‘Employee benefits’ the pension scheme asset is no longer recognised.

The notes on pages 23 to 51 form part of these financial statements

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

Consolidated balance sheet
at 31st December 2013

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
Deferred income tax liability
Total non-current liabilities
Total liabilities
Total net assets

Note

2013
£

2012
£

3,119,378
12,270

1,504,575
12,270

3,131,648

1,516,845

9
10

4,819,200
3,948,734
567,226

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

9,335,160
12,466,808

9,183,301
10,700,146

11
12

490,944
3,146,004
828,414
43,494

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

4,508,856

3,984,697

13
14

1,170,923
116,000

515,437
-

1,286,923
5,795,779
6,671,029

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
77,422
6,156,288
6,671,029

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

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

The financial statements on pages 19 to 51 were approved and authorised for issue by the board of directors
on 27th March 2014 and were signed on its behalf by:

O. N. A. Braime, Director

M. L. Mills, Director

Company Registration Number 488001

The notes on pages 23 to 51 form part of these financial statements

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

Consolidated cash flow statement
for the year ended 31st December 2013

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

(718,157)
(431,897)
590,038

Operating activities
Net profit
Adjustments for:
Depreciation
Grants amortised
Non-cash operating charges
Foreign exchange losses
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

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

(Decrease)/increase in cash
and cash equivalents
Cash and cash equivalents,
beginning of period
Cash and cash equivalents,
end of period

Note

2013
£

752,066

2012
£

426,875

4
4

520,945
(1,656)
56,000
(186,189)
(3,330)
100,967

(32,551)

34,000
258,167

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

(100,435)

21,000
251,346

363,898
14,430
444,808

(483,734)

378,440
2,726

662,427

1,089,302

823,136
1,912,438

(441,784)

746,353

1,498,419

(560,016)
938,403

(109,535)

(2,172,406)

(102,568)

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

(2,205,287)

32,551
330

1,081,989
(141,574)
(241,099)
(100,967)
(112,320)

486,029

(857,509)

933,791

76,282

The notes on pages 23 to 51 form part of these financial statements

(695,002)

673,084

260,707

933,791

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

Consolidated statement of changes in equity
for the year ended 31st December 2013

Note

Share
Capital
£

Capital
Reserve
£

Foreign
Exchange
Reserve
£

Retained
Earnings
£

Total
£

Balance at 1st January 2012

360,000

77,319

334,759

5,167,987 5,940,065

Comprehensive income
Profit

Other comprehensive income
Remeasurement losses
recognised directly in equity
Foreign exchange losses on
re-translation of overseas operations
Adjustment in respect of minimum
funding requirement per IFRIC14
Total other comprehensive income

Total comprehensive income

Transactions with owners
Dividends
Total transactions with owners

-
-

426,875

(7,000)

(57,608)

-
(57,608)

(57,608)

10,000
3,000

10,000
(54,608)

(57,608)

429,875

372,267

-
-

(112,320) (112,320)
(112,320) (112,320)

Balance at 1st January 2013

360,000

77,319

277,151

5,485,542 6,200,012

Comprehensive income
Profit

Other comprehensive income
Remeasurement gain
recognised directly in equity
Foreign exchange losses on
re-translation of overseas operations
Adjustment in respect of minimum
funding requirement per IFRIC14
Total other comprehensive income

Total comprehensive income

Transactions with owners
Dividends
Total transactions with owners

-
-

752,066 752,066

6,000

(199,729)

- (199,729)

-
(199,729)

25,000
25,000
31,000 (168,729)

(199,729)

783,066 583,337

-
-

(112,320) (112,320)
(112,320) (112,320)

Balance at 31st December 2013

360,000

77,319

77,422

6,156,288 6,671,029

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.

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 27th March 2014

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 52 to 57.

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 18). 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.

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 2013.

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.

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

after 1st January 2013.

• IFRS 7, ‘Offsetting financial assets and financial

liabilities’ (amendments); effective on or after 1st
January 2013.

• IFRS 11, ‘Joint arrangement’, superseding IAS 31
and SIC-13; 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.

The impact of these new and amended IFRS’s has not
had a material impact on these financial statements.

(b) New standards, amendments and interpretations
issued but not effective for the financial year
beginning 1st January 2013 and not early adopted.

• IFRS 9, ‘Financial instruments’.

• IFRS 10, ‘Consolidated financial statements’;

effective on or after 1st January 2014.

• IFRS 12, ‘Disclosure of interests in other entities’;

effective on or after 1st January 2014.

• IAS 27, ‘Separate financial statements’; effective on

or after 1st January 2014.

• IAS 28, ‘Investments in associates and joint

ventures’; effective on or after 1st January 2014.

• IAS 32, ‘Offsetting financial assets and financial

liabilities’ (amendments); effective on or after 1st
January 2014.

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.

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.

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. No adjustment is made for the fair value of
forward currency contracts where such adjustment
is clearly not material to the results presented in the
financial statements (note 16)

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

1.9 Financial liabilities

All borrowing costs are expensed as incurred.

The group’s financial liabilities include bank loans and
overdrafts, other loans, 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

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.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued

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.

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.

Remeasurement 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.

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 its 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.

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.

1.16 Income taxes

1.17 Dividends

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.

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.

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 certain 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 can
be summarised as follows:

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.

• Land and buildings – 50 years
• 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.

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.

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

Notes to the accounts continued

2. 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
Profit on disposal of fixed assets
Operating lease payments

Note

6
7

2013
£

2012
£

5,021,454
520,945
(45,322)
191,200
152,362

5,000
26,000
3,000
(32,551)
39,280

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

5,000
25,000
3,000
(100,435)
25,732

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 2013.

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.

Central Manufacturing Distribution
2013
£

2013
£

Total
2013
£

Revenue
External
Inter company
Total

Profit
EBITDA
Gain on sale of tangible fixed assets
Finance costs
Finance income
Depreciation
Tax expense
(Loss)/profit for the period

Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities

-
74,866
74,866

(40,251)
-
(24,848)
201
(3,675)
(15,690)
(84,263)

3,010,216
2,976,179
5,986,395

19,943,589
3,422,562
23,366,151

22,953,805
6,473,607
29,427,412

387,263
20,239
(40,703)
3,000
(343,184)
250,339
276,954

1,249,252
12,312
(35,416)
129
(174,086)
(492,816)
559,375

1,596,264
32,551
(100,967)
3,330
(520,945)
(258,167)
752,066

1,283,313
1,274,526

2,329,357
441,571

8,854,138
489,190

12,466,808
2,205,287

395,378

1,541,182

3,859,219

5,795,779

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

Notes to the accounts continued

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
2012
£

-
51,390
51,390

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

Manufacturing
2012
£

Distribution
2012
£

Total
2012
£

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

1,670,920

2,370,341

4,500,134

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

UK
Europe
Americas
Africa
Asia
Australasia

Revenue
2013
£,000

5,284
6,219
9,101
1,364
320
666
22,954

Non-current
assets
2013
£,000

Revenue
2012
£,000

Non-current
assets
2012
£,000

1,277
60
1,716
42
-
24
3,119

4,889
6,112
7,981
1,196
390
644
21,212

1,183
70
160
50
-
42
1,505

There is one group customer which accounts for more than 10% of the group’s revenues.

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

18.6

2013
£

64,963
27,004
9,000

330
3,000

2013
£

100,967

3,330
(97,637)

2012
£

68,104
24,437
9,000

2,726
18,000

2012
£

101,541

20,726
(80,815)

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
Prior year adjustment

Current tax charge

Deferred tax – origination and
reversal of timing differences
Total tax charge

2013
£

2012
£

43,494
3,485

137,289
(42,101)

-
-

46,979

251,346
-

95,188

142,167

116,000
258,167

251,346

-
251,346

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:

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 23.25% (2012 – 24.50%)
Expenses not deductible for tax purposes
Income not taxable
Tax credits on research and development
Capital allowances for the period in excess of depreciation
Profit on property disposed not taxable
Deferred tax asset not recognised
Foreign tax
Utilisation of tax losses
Other differences
Movement in short term timing differences
Prior year adjustment
Rate differences

2013
£
1,010,233

2012
£
678,221

234,845
36,933
(385)
(25,198)
(39,422)
-
-
(11,813)
(25,030)
9,065
2,213
(38,616)
(425)
142,167

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

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 £34,000, £9,000 and £(2,000) respectively (2012 - £64,000, £61,000 and £(8,000))
calculated at a rate of 20% (2012 – 23%). The deferred tax balance has not been discounted.

6. EMPLOYEES
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

18.6

2013

No.
69
56
125

£
4,402,922
84,021
112,000
6,230
16,520
486,477
5,108,170
(86,716)
5,021,454

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

431,066
21,669
452,735

359,485
14,869
374,354

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

Notes to the accounts continued

6. EMPLOYEES continued
The number of directors for whom retirement benefits are accruing under money purchase pension
schemes amounts to 4 (2012 – 4) and under defined benefit pension schemes amounted to 1 (2012 – 1).
Further details of directors remuneration are included in the remuneration report.

7. PROPERTY, PLANT AND EQUIPMENT

At 31st December 2013
Cost
Accumulated depreciation
Net book value

At 31st December 2012
Cost
Accumulated depreciation
Net book value

Year ended 31st December 2013
Opening net book value
Additions
Transfer to operating charges
Depreciation
Exchange differences
Closing net book value

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

Plant,
machinery
and motor
vehicles
£

Land and
buildings
£

Total
£

1,509,049
78,209
1,430,840

6,517,110
4,828,572
1,688,538

8,026,159
4,906,781
3,119,378

289,512
74,215
215,297

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

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

215,297
1,274,526
(56,000)
(3,675)
692
1,430,840

1,289,278
930,761
-
(517,270)
(14,231)
1,688,538

1,504,575
2,205,287
(56,000)
(520,945)
(13,539)
3,119,378

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

The net book value of tangible fixed assets includes an amount of £331,853 (2012 - £585,737) in respect of
assets held under finance leases and hire purchase contracts. The related depreciation charge on these assets
for the year was £233,661 (2012 - £236,741).

The total cost of non-depreciable assets included in freehold land and buildings was £174,412 (2012 - £nil).

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

Notes to the accounts continued

8. SUBSIDIARIES

Subsidiary

Principal activity

Proportion of shares held
2013 and 2012

Ordinary Preference
Shares

Registered in and operating
from England:
Braime Pressings Limited

Manufacture of metal presswork

100%

Braime Elevator Components Limited

Distribution of bulk material
handling components

ii Registered in England and operating

from the USA:
4B Elevator Components Limited

iii

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

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

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

2013
£
520,793
31,541
4,265,465
1,401
4,819,200

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

During the twelve months ended 31st December 2013 the group recognised a charge of finished goods
inventories of £152,362 (2012 – £31,093) to reflect the ageing of certain stock items.

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

Notes to the accounts continued

10. TRADE AND OTHER RECEIVABLES

Trade debtors
Other debtors
Prepayments

2013
£
3,456,289
252,039
240,406
3,948,734

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

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

2013
£
2,195,408
217,019
185,457
548,120
3,146,004

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

12. OTHER FINANCIAL LIABILITIES – CURRENT

Bank loans - secured
Hire purchase
Other creditors

Note

2013
£
126,216
156,873
545,325
828,414

2012
£
5,075
235,839
623,008
863,922

An analysis of the interest rate payable on financial liabilities and information about fair values is given in note 16.

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.

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

2013
£
180,000
865,871
115,172
9,880
1,170,923

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

2013
£
156,873
115,172
272,045

2013
£
126,216
124,994
368,633
372,244
992,087

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

2012
£
235,839
277,305
513,144

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

Terms and conditions of outstanding loans were as follows:

US dollar bank loan
US dollar unsecured bank loan
US dollar term loan

Interest
Rate
%
4.25% fixed
3.00% fixed
2.25% over
LIBOR

Year of
maturity

2018
2022

2013
£
185,092
46,263

2012
£
-
51,761

2023

760,732

The 4.25% fixed US dollar bank loan is secured on specific plant and equipment held by 4B Elevator
Components Limited. The US dollar term loan forms part of the group funding arrangements. The loan is
secured by a fixed and floating charge over certain assets of certain group companies.

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

Notes to the accounts continued

14. DEFERRED INCOME TAX LIABILITY

Accelerated capital allowances in excess of depreciation

Balance at 1st January 2013
Charged to income statement during the year
Balance at 31st December 2013

Note

2013
£
116,000

2012
£
-

Deferred tax
£
-
116,000
116,000

Deferred tax has been recognised at a rate of 40% on accelerated capital allowances utilised in the year in
4B Elevator Components Limited.

15. 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

2013

£
120,000
300,000
420,000

2012

£
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.

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

Notes to the accounts continued

16. 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.

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

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

Level 3 - inputs for the asset or liability that are
not based on observable market data
(unobservable inputs).

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 £2,452
(2012 - £787,038) 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;

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 fixed interest term
loans and foreign currency forward contracts.

Forward contracts
Forward currency contracts of £485,980 were
outstanding at 31st December 2013 covering periods
from 10th January 2014 to 31st March 2014 (31st
December 2012 - £211,933). The fair value of the
forward currency contracts is £2,594 (2012 - £3,546).

Fixed interest term loans
As at 31st December 2013 fixed interest rate term
loans amounted to £185,092 and £46,263 (see note
13). The directors are of the opinion that the fair
value of these fixed interest rate loans is not materially
different to their stated carrying values.

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 £18,619
(2012 - £28,362), the interest due on finance lease
and hire purchase agreements after one year but not
more than five years totals £14,463 (2012 - £33,084).
Likewise the interest due on bank loans repayable
within one year totals £30,752 (2012 - £1,493), the
interest due on bank loans repayable after one year
but not more than five years totals £80,652 (2012 -
£4,384), and the interest due on bank loans
repayable after more than five years totals £25,404
(2012 - £1,604).

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 2013

Sterling
Euro
US dollar
Other

As at 31st December 2012

Sterling
Euro
US dollar
Other

Floating rate
financial
assets
£

Fixed rate
financial
assets
£

Total
£

33,683
184,357
226,369
118,945
563,354

-
-
-
-
-

33,683
184,357
226,369
118,945
563,354

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

In the prior year the fixed rate financial assets comprised of a sterling cash deposit on the money market at 1
month rates. The weighted average period for which they were fixed was 1 month and the weighted average
fixed rate was 0.25%.

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
£

684,052
244,908
99,663
-
1,028,623

435,232
-
992,087
16,812
1,444,131

1,119,284
244,908
1,091,750
16,812
2,472,754

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

Currency

As at 31st December 2013

Sterling
Euro
US dollar
Other

As at 31st December 2012

Sterling
Euro
US dollar
Other

Floating rate financial liabilities comprise bank borrowings.

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 2013

Sterling
Euro
US dollar

At 31st December 2012

Sterling
Euro
US dollar

-
(1,080,232)
(304,651)
(1,384,883)

48,346
-
(20,035)
28,311

150,169
-
-
150,169

1,203,951
-
-
1,203,951

1,402,466
(1,080,232)
(324,686)
(2,452)

-
(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)

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 £20,000 (2012 - £10,000).

A weakening in the value of sterling by 10% will benefit the operating profit by a figure not exceeding £50,000
(2012 - £100,000). A strengthening of sterling by 10% will reduce the operating profit by a figure not greater
than £40,000 (2012 - £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

2013
£
1,103,079

2012
£
426,992

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.

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.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Notes to the accounts continued

17. 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 (2012 – 1,440,000). There are no potentially dilutive shares in issue.

Dividends paid

Equity shares
Ordinary shares

Interim of 5.40p (2012 – 5.40p) per share paid on 4th April 2013
Interim of 2.40p (2012 – 2.40p) per share paid on 9th October 2013

‘A’ Ordinary shares

Interim of 5.40p (2012 – 5.40p) per share paid on 4th April 2013
Interim of 2.40p (2012 – 2.40p) per share paid on 9th October 2013

Total dividends paid

2013
£

2012
£

25,920
11,520
37,440

51,840
23,040
74,880

112,320

An interim dividend of 6.20p per Ordinary and ‘A’ Ordinary share will be paid on 4th April 2014.

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

Notes to the accounts continued

18. PENSION COSTS

18.1 The company operates a funded defined benefit
pension scheme, Braime Pressings Limited Retirement
Benefits Scheme, which provides benefits based on
final salary and length of service on retirement, leaving
service or death 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.

IAS19, ‘Employee benefits’ (amendments) (see note
1.4) is effective for the current accounting period.
The directors have taken the decision, on grounds
of materiality, not to re-state the comparatives in the
consolidated income statement, the consolidated
statement of comprehensive income and the
associated notes below.

18.2 The scheme is subject to the Statutory Funding
Objective under the Pensions Act 2004. A valuation
of the scheme is carried out at least once every three
years to determine whether the Statutory Funding
Objective is met. 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.

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

18.3 The scheme exposes the company to a number
of risks:

• Investment risk. The scheme holds investments

in asset classes, which have volatile market values
and while these assets are expected to provide
the real returns over the long-term the short-
term volatility can cause additional funding to be
required if deficit emerges.

• Interest rate risk. The scheme’s liabilities are
assessed using market yields on high quality
corporate bonds to discount the liabilities. As
the scheme holds assets such as gilts or annuity
policies the value of the assets and liabilities may
not move in the same way.

• Inflation risk. A significant proportion of the

benefits under the scheme are linked to inflation.
Although the sheme’s assets are expected to
provide a good hedge against inflation over the
long-term, movements over the short-term could
lead to deficits emerging.

• Mortality risk. In the event that members live

longer than assumed a deficit will emerge in the
scheme.

There were no plan amendments, curtailments or
settlements during the period.

18.4 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.

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

Notes to the accounts continued

18.5 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

18.8
18.7

2013
£
6,513,000
(6,505,000)
8,000
(8,000)
-

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

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

Current service cost
Total included in employee benefits expense

Interest on liabilities
Interest on assets

Note

2013
£
112,000
112,000

2012
£
95,000
95,000

256,000
(259,000)
(3,000)

261,000
(279,000)
(18,000)

Total amounts recognised in the consolidated income statement

109,000

77,000

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

Opening defined benefit obligation
Current service cost
Contributions by plan participants
Interest cost
Benefits paid
Actuarial gains
Experience gains on liabilities
Remeasurement gain from changes to demographic assumptions
Remeasurement loss from change to financial assumptions
Closing defined benefit obligation

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

Opening fair value of plan assets
Interest on assets
Return on scheme assets in excess of interest
Benefits paid
Employer contribution
Contributions by plan participants
Closing fair value of plan assets

2013
£
6,295,000
112,000
17,000
256,000
(118,000)
-
(45,000)
106,000
(118,000)
6,505,000

2013
£
6,328,000
259,000
(51,000)
(118,000)
78,000
17,000
6,513,000

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

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

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

Notes to the accounts continued

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

Annuities
Bonds
Cash
Insurance policies
Total

2013
£
2,472,000
1,003,000
87,000
2,951,000
6,513,000

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

There have been no material movements in the scheme’s asset values from the period of 31st December 2012
to 31st December 2013.

The assets do not include any investment in shares of the company.

18.10 The actual return on plan assets is as follows:

Actual return on plan assets

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

Actuarial gains/(losses)
Loss on scheme assets in excess of interest
Experience gains on liabilities
Remeasurement loss from changes to demographic assumptions
Remeasurement gain from changes to financial assumptions
Adjustment in respect of minimum funding requirement
Total amount recognised in statement of comprehensive income

2013
£
208,000

2012
£
845,000

2013
£
-
(51,000)
45,000
(106,000)
118,000
25,000
31,000

2012
£
(7,000)
-
-
-
-
10,000
3,000

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

Remeasurement gains

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

2013
£
263,000

2012
£
271,000

Present value of funded obligations
Fair value of plan assets
Surplus
Experience gains/(losses) on plan liabilities
Losses from changes to
demographic assumptions
Changes in assumptions used to
value scheme liabilities
(Losses)/gains on scheme assets
in excess of interest

2013
£ ,000
(6,505)
6,513
8
45

(106)

118

(51)

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

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

Notes to the accounts continued

18.14 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

2013
4.40%
4.70%
3.70%
5.00%
120%
PNA00
YoU mc
min
1.0%

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%

18.15 In the event that the actuarial valuation reveals a larger deficit than expected the company may be
required to increase contributions above those set out in the existing schedule of contributions.
Conversely, if the position is better than expected contributions may be reduced.

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 £81,000.

The weighted average duration of the defined benefit obligation is approximately 16.5 years.

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

Net asset at start of period
Pension cost
Employer contributions
Remeasurement gain/(loss) recognised
in the Statement of Comprehensive Income
Adjustment in respect of minimum funding requirement
Net asset at end of period

Note

18.6

2013
£
-
(109,000)
78,000

2012
£
-
(77,000)
74,000

6,000
25,000
-

(7,000)
10,000
-

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

Notes to the accounts continued

18.17 Sensitivity of the value placed on the surplus (before minimum funding requirement adjustment)

Adjustments to assumptions

Discount rate
Plus 0.50%
Minus 0.50%

Inflation
Plus 0.50%
Minus 0.50%

Salary increase
Plus 0.50%
Minus 0.50%

Life expectancy
Plus 1.0 years
Minus 1.0 years

Approximate
effect on surplus
£

97,000
(111,000)

(184,000)
180,000

(61,000)
58,000

(8,000)
11,000

% With-profit deferred annuities converted on retirement using guaranteed annuity rates
Plus 10.00%
Minus 10.00%

199,000
(199,000)

Note that the above sensitivities are approximate and only show the likely effect of an assumption being adjusted
whilst all other assumptions remain the same.

The sensitivity analysis shown above was determined using the same method as per the calculation of liabilities
for the balance sheet disclosures, but using assumptions adjusted as detailed above.

19. OPERATING LEASES
The group has entered into commercial leases on certain properties, motor vehicles and items of plant and
equipment. At 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

2013
£

2012
£

5,276
51,156
56,432

447
153,906
154,353

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

Notes to the accounts continued

20. NOTES SUPPORTING CONSOLIDATED CASH FLOW STATEMENT

Cash and cash equivalents

Cash at bank and in hand
Bank overdrafts

2013
£
567,226
490,944
76,282

2012
£
1,576,283
642,492
933,791

Major non-cash transaction
During the year the group did not acquire any tangible assets subject to finance (2012 - £340,816) under hire
purchase agreements.

21. CAPITAL COMMITMENTS

There were no capital commitments (2012 - £nil) which are contracted but not provided for in these financial
statements.

22. 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.

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

Company balance sheet
at 31st December 2013

Note

2013
£

2012
£

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

1,270,851
344,695
1,615,546

-
344,695
344,695

5,672
3,043,624
6,790
3,056,086

214,685

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

278,932

2,841,401

4,456,947

1,254,347
3,202,600

360,000
2,842,600
3,202,600

4,017,689

4,362,384

1,463,201
2,899,183

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

This financial statement was approved and authorised for issue by the board of directors on 27th March 2014
and signed on its behalf by:

A. Q. Braime, Director

M. L. Mills, Director

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 16 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 £415,737 (2012 – £144,901).

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 – 50 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.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Notes to the accounts continued

TANGIBLE FIXED ASSETS

Cost
At 1st January 2013
Additions
Disposals
At 31st December 2013

Depreciation
At 1st January 2013
Provided for in the year
Disposals
At 31st December 2013

Net book value
At 31st December 2013

At 31st December 2012

Land and
buildings

-
1,274,526
-
1,274,526

-
3,675
-
3,675

1,270,851

The total cost of non-depreciable assets included in land and buildings was £174,412 (2012 - £nil).

INVESTMENTS

Subsidiary undertakings

Shares at cost at 1st January 2013
Currency adjustment

Subsidiary

Principal activity

2013
£
344,695
-
344,695

2012
£
350,703
(6,008)
344,695

Proportion of shares held
2013 and 2012

Ordinary Preference
Shares

Registered in and operating
from England:
Braime Pressings Limited

Braime Elevator Components Limited

ii Registered in England and operating

from the USA:
4B Elevator Components Limited

iii

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

Manufacture of metal presswork

100%

Distribution of bulk material
handling components

100%

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

Notes to the accounts continued

Subsidiary

Principal activity

Proportion of shares held
2013 and 2012

Ordinary Preference
Shares

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%

Distribution of bulk material
handling components

100%

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

6. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR

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

2013
£
4,197
1,475
5,672

2012
£
3,029
4,250
7,279

2013
£
3,043,624

2012
£
3,671,052

2013
£
189,619
-
-
25,066
214,685

2012
£
265,481
-
-
13,451
278,932

Cross guarantees exist in respect of all group company bank borrowings. At 31st December 2013 the
borrowings guaranteed by the company amounted to £1,003,342 (2012 - £nil).

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

Notes to the accounts continued

7. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR

Irredeemable Preference shares
Amount owed to subsidiary companies

2013
£
180,000
1,074,347
1,254,347

2012
£
180,000
1,283,201
1,463,201

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

8. 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

2013
£
120,000
300,000
420,000

2012
£
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.

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

Notes to the accounts continued

9. RESERVES

Profit and loss reserve
Balance at 1st January 2013
Retained profit for the year
Dividends paid
Balance at 31st December 2013

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

2,539,183
415,737
(112,320)
2,842,600

2013
£
415,737
(112,320)
303,417
2,899,183
3,202,600

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

2013
Number
6 6

2012
Number

34,562

30,450

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

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

Five year record

2013
£,000

2012
£,000

2011
£,000

2010
£,000

2009
£,000

Turnover

22,954

21,212

20,068

18,058

15,685

Profit from operations

Profit before tax

Profit after tax

1,075

1,010

752

659

678

427

1,294

1,413

1,244

1,361

814

945

699

625

387

Basic and diluted earnings per share

52.23p

29.64p

56.53p

65.63p

26.88p

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

Explanatory notes of resolutions

The following notes give an explanation of the
proposed resolutions. Resolutions 1 to 5 inclusive
are proposed as Ordinary resolutions. This means
that for each of those resolutions to be passed, more
than half of the votes cast must be in favour of the
resolution. Resolutions 6 and 7 are proposed as
Special resolutions. This means that for each of those
resolutions to be passed, at least three-quarters of the
votes cast must be in favour of the resolution.

The directors consider that all of the resolutions
to be proposed at the AGM are in the best
interests of the company and its shareholders
as a whole and unanimously recommend
that shareholders vote in favour of all of the
resolutions, as the directors intend to do in
respect of their own beneficial holdings.

BUSINESS TO BE TRANSACTED AT THE AGM

Details of the resolutions which are to be proposed at
the AGM are set out below.

Ordinary resolutions

1. To receive and adopt the report and accounts
The directors are required to present the accounts
for the year ended 31st December 2013 to the
meeting.

2. Confirmation of dividends
To confirm the preference dividends of 2.50p per
share paid on 30th June and 31st December 2013
together with the interim dividend on the ordinary
and ‘A’ ordinary shares of 2.40p per share paid on
9th October 2013 and 6.20p per share paid on 4th
April 2014.

3. Re-appointment of directors
The Articles of Association of the company require
the nearest number to one third of the directors to
retire at each Annual General Meeting. Accordingly,
C. O. Braime and P. J. O. Alcock are retiring by
rotation in accordance with the Company’s Articles
of Association and, being eligible, offer themselves
for re-election.

4-5. Re-appointment of auditors
The company is required to appoint auditors at each
Annual General Meeting to hold office until the

next such meeting at which accounts are presented.
The resolution proposes the reappointment of the
company’s existing auditors, Kirk Newsholme, and
authorises the directors to agree their remuneration.

Special resolutions

6. Adoption of new Articles of Association
The directors are also asking shareholders to

approve the adoption of new Articles of Association
(the ‘New Articles’), primarily to take account of
changes in English company law brought about
by the Companies Act 2006. An explanation of
the main differences between the company’s
current Articles of Association and the proposed
New Articles is set out in the Explanatory notes
of principal changes to the company’s Articles
of Association. Other differences, which are of a
minor, technical or clarifying nature, have not been
noted.

A copy of the New Articles is available for

inspection, as noted on page 5 of this document,
and is available on the company’s website at
www.braimegroup.com. Resolution 6 in the Notice
of Annual General Meeting, which will be proposed
as a special resolution, seeks the approval of
shareholders to the adoption of the New Articles.

7. Increase of borrowing powers
This resolution seeks, subject to the sanction of a
majority of the holders of the preference shares of
the company in accordance with Article 23.2 of the
New Articles, to increase the borrowing powers of
the directors of the company from one times the
‘Adjusted Capital and Reserves’ (as defined in the
New Articles) to two times the ‘Adjusted Capital
and Reserves’.

The directors believe that the existing borrowing
headroom, associated with the borrowing powers
as currently stated, are sufficient within which to
operate for the foreseeable future. The directors
currently have no plans to increase borrowings.
However, the existing borrowing powers are not in
line with the market and in the event of a strategic
opportunity arising , the company may be unduly
restricted.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.Explanatory notes of principal changes
to the Company’s Articles of Association

It is proposed in resolution 6 to adopt the New
Articles in order to update and replace the Current
Articles primarily to take account of changes in English
company law brought about by the Companies Act
2006.

The principal changes introduced in the New Articles
are summarised in this explanatory note. Other
changes, which are of a minor, technical or clarifying
nature and also some more minor changes which
merely reflect changes made by the Companies Act
2006 have not been noted in this Explanatory note.

It is worth noting, for the avoidance of doubt,
that the New Articles preserve the existing
rights of the ordinary shares, the ‘A’ ordinary
shares and the preference shares of the
company; the provisions in the New Articles
relating to the rights attached to the different
classes of shares mirror exactly the relevant
provisions in the Current Articles.

The proposed New Articles are available for
inspection, as noted on page 5 of this document,
and are available on the company’s website at
www.braimegroup.com.

1. THE COMPANY’S OBJECTS

The provisions regulating the operations of the
company are currently set out in the company’s
Memorandum and Articles of Association. The
company’s Memorandum contains, among other
things, the objects clause which sets out the scope
of the activities the company is authorised to
undertake. This is drafted to give a wide scope.

The Companies Act 2006 significantly reduces
the constitutional significance of a company’s
memorandum. The Companies Act 2006 provides
that a memorandum will record only the names
of the original subscribers and the number of
shares each subscriber has agreed to take in the
company. Under the Companies Act 2006 the
objects clause and all other provisions which are
currently contained in a company’s memorandum
are now deemed to be contained in a company’s
articles of association unless the company passes a
special resolution to the contrary.

Further, the Companies Act 2006 states that,
unless a company’s articles provide otherwise, a

company’s objects are unrestricted. This abolishes
the need for companies to have objects clauses.
The company is proposing to remove its objects
clause together with all other provisions of its
Memorandum which, by virtue of the Companies
Act 2006, are now treated as forming part of the
Company’s Articles of Association to allow it to
have the widest possible scope for its activities.
Resolution 6 confirms the removal of these
provisions for the company. As the effect of
this resolution will be to remove the statement
currently in the Company’s Memorandum of
Association regarding limited liability, the New
Articles also contain an express statement
regarding the limited liability of shareholders.

2. AUTHORISED SHARE CAPITAL AND

UNISSUED SHARES

The Companies Act 2006 abolishes the
requirement for a company to have an authorised
share capital. A consequence of resolution 6.1
would be the removal of this limitation from the
company’s constitution and the New Articles
reflect this. The directors will still be limited as to
the number of shares they can at any time allot
because an allotment authority continues to be
required under the Companies Act 2006, save in
respect of employee share schemes.

3. REDEEMABLE SHARES

Previously, if a company wished to issue
redeemable shares, it needed to include in its
articles the terms and manner of redemption.
The Companies Act 2006 enables directors to
determine such matters instead provided they are
so authorised by the articles. The New Articles
contain such an authorisation. The company has
no plans to issue redeemable shares but if it did so
the directors would need shareholders’ authority
to issue new shares in the usual way.

4. AUTHORITY TO CONSOLIDATE AND
SUB-DIVIDE SHARES AND REDUCE
SHARE CAPITAL

Under Companies Act 1948, a company required
specific enabling provisions in its articles to
consolidate or sub-divide its shares and to reduce
its share capital or other undistributable reserves
as well as shareholder authority to undertake
the relevant action. The Current Articles include

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

Explanatory notes of principal changes
to the Company’s Articles of Association continued

these enabling provisions. Under the Companies
Act 2006, however, a company only requires
shareholder authority to do any of these things
and it is no longer necessary for articles to contain
enabling provisions. Accordingly, the relevant
enabling provisions have not been included in the
New Articles.

5. GENERAL MEETINGS

The provisions in the Current Articles dealing with
the convening of general meetings and the length
of notice required to convene general meetings
are being amended to conform to new provisions
in the Companies Act 2006. In particular, all
meetings other than the company’s Annual
General Meeting will be classed simply as general
meetings. Also, a general meeting to consider a
special resolution can now be convened on 14
clear days’ notice, whereas previously 21 clear
days was required.

The Current Articles specify that the quorum for
a general meeting is either three or five members
personally present depending on the business to
be transacted at the meeting. The New Articles
provide that the quorum is two members present
in person or by proxy or by representative
(irrespective of the business being transacted at
the meeting); this is in line with the Companies
Act 2006.

The New Articles provide, in addition, for general
meetings to be held by teleconference, by video
conference or by any other electronic means.

6. VOTES OF MEMBERS

The Companies Act 2006 entitles proxies to speak
at an Annual General Meeting. Multiple proxies
may be appointed provided that each proxy is
appointed to exercise the rights attached to a
different share held by the shareholder. Multiple
corporate representatives may be appointed. The
New Articles reflect these new provisions.

7. ELECTRONIC AND WEB COMMUNICATIONS

Provisions of the Companies Act 2006 which
came into force in January 2007 enable companies
to communicate with shareholders by electronic
and/or website communications. The New
Articles allow communications to shareholders in
electronic form and, in addition, they permit the

company to take advantage of the new provisions
relating to website communications. Before the
company can communicate with a shareholder by
means of website communication, the relevant
shareholder must be asked individually by the
company to agree that the company may send or
supply documents or information to him by means
of a website, and the company must either have
received a positive response or have received no
response within the period of 28 days beginning
with the date on which the request was sent.
The company will notify the shareholder (either
in writing, or by other permitted means) when a
relevant document or information is placed on the
website and a shareholder can always request a
hard copy version of the document or information.

8. REQUIREMENT FOR DIRECTORS TO

HOLD SHARES

The Current Articles provide that in order to
qualify as a director of the company, a person
must hold shares of a specified value in the
company. Although such requirements were
historically common, it is now relatively unusual
for a publicly quoted company to have a share
qualification requirement for directors. The
existence of such a requirement could in future
affect the company’s ability to attract non-
executive directors and the New Articles do not
include a share qualification requirement.

9. DIRECTORS’ REMUNERATION

The Current Articles provide that the
remuneration, by way of fees, of directors of
the company not employed by the company
is £250 per annum for each director and the
remuneration, by way of fees, of directors of the
company employed by the company is £50 per
annum for each director. The New Articles allow
the remuneration, by way of fees, of the directors
to be determined by the board, but specify that
the aggregate remuneration, by way of fees, of all
the directors will not exceed £200,000 per annum
unless otherwise approved by ordinary resolution
of the company in general meeting. The financial
limit is included in the New Articles in recognition
of institutional shareholder corporate governance
guidelines. It is intended to allow flexibility for
the future, but the directors do not expect the
introduction of the New Articles to result in any
changes to the current levels of the directors’
remuneration, individually or in aggregate.

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

Explanatory notes of principal changes
to the Company’s Articles of Association continued

10. VACATION OF OFFICE BY DIRECTORS

The current Articles specify the circumstances
in which a director must vacate office. The New
Articles update these provisions to reflect the
approach taken on mental and physical incapacity
in the model articles for public companies
produced by the Department for Business,
Enterprise and Regulatory Reform.

The New Articles also delete the provisions
relating to Thomas Fletcher Braime, who has,
since the Current Articles were adopted,
passed away.

11. BORROWING POWERS

It is worth noting, for the avoidance of doubt
only, that the New Articles preserve the existing
borrowing powers of the directors of the company
at one times the ‘Adjusted Capital and Reserves’
(as defined in the Current Articles and the New
Articles).

12. DIRECTORS’ CONFLICTS OF INTEREST

The Companies Act 2006 sets out directors’
general duties which largely codify the existing
law but with some changes. Under the Companies
Act 2006, a director must avoid a situation where
he or she has, or can have, a direct or indirect
interest that conflicts, or possibly may conflict,
with the company’s interests. The requirement
is very broad and could apply, for example, if a
director becomes a director of another company
or a trustee of another organisation. The
Companies Act 2006 allows directors of public
companies to authorise conflicts and potential
conflicts, where appropriate, where the Articles
of Association contain a provision to this effect.
The Companies Act 2006 also allows the Articles
of Association to contain other provisions for
dealing with directors’ conflicts of interest to
avoid a breach of duty. The New Articles give the
directors authority to approve such situations.

There are safeguards which will apply when
directors decide whether to authorise a conflict or
potential conflict. First, only directors who have
no interest in the matter being considered will be
able to take the relevant decision and, secondly, in

taking the decision the directors must act in a way
they consider, in good faith, will be most likely to
promote the company’s success. The directors will
be able to impose limits or conditions when giving
authorisation if they think this is appropriate.
It is also proposed that the New Articles should
contain provisions relating to confidential
information, attendance at board meetings and
availability of board papers to protect a director
being in breach of duty if a conflict of interest
or potential conflict of interest arises. These
provisions will only apply where the position
giving rise to the potential conflict has previously
been authorised by the directors.

13. PROVISION FOR EMPLOYEES ON

CESSATION OF BUSINESS

The Companies Act 2006 provides that the
powers of the directors of a company to make
provision for a person employed or formerly
employed by the company or any of its
subsidiaries in connection with the cessation or
transfer to any person of the whole or part of the
undertaking of the company or that subsidiary,
may only be exercised by the directors if they are
so authorised by the company’s articles or by the
company in general meeting. The New Articles
provide that the directors may exercise this
power.

14. USE OF SEALS

A company no longer requires authority in its
articles to have an official seal for use abroad.
Accordingly, the relevant authorisation has not
been included in the New Articles.

For consistency with the Companies Act
2006 changes to the execution of documents
by companies, the New Articles provide an
alternative option for affixing a seal. Under
the New Articles, when the seal is affixed to a
document it may be signed by one authorised
person in the presence of a witness, whereas
previously the requirement was for signature by
either a director and the secretary or two directors
or such other person or persons as the directors
may approve.

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

Explanatory notes of principal changes
to the Company’s Articles of Association continued

15. SUSPENSION OF REGISTRATION

OF SHARE TRANSFERS

The Current Articles permit the directors to
suspend the registration of transfers. Under the
Companies Act 2006 share transfers must be
registered as soon as practicable. The power in
the Current Articles to suspend the registration
of transfers is inconsistent with this requirement.
Accordingly, this power has not been included in
the New Articles.

16. GENERAL

Generally, the opportunity has been taken to

update the existing provisions to bring them in
line with the position set out in the Companies
Act 2006. Provisions relating to, for example,
the ability of the company to issue shares in
uncertificated form and the ability of directors
of the company to delegate their powers to
committees of the board of directors of the
company have either been amended and
brought up to date or inserted in the New Articles.

T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
64

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

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

report

accounts

2013

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CELEBRATING 125 YEARS
1888 – 2013