T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
REPORT & ACCOUNTS
2017
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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Contents
Notice of meeting
Chairman’s statement
Group strategic report
Corporate governance report
Directors’ report
Directors’ remuneration report
Independent auditors’ report
Consolidated income statement
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in equity
Notes to the accounts
Company balance sheet
Company statement of changes in equity
Notes to the company accounts
Five year record
Explanatory notes of resolutions
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1
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
2
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Directors
Nicholas Braime, MA (Oxon), MBIM (Chairman)
Peter Alcock, B. Eng. (Non-executive director)
Andrew Walker, MA (Cantab) (Non-executive director)
Alan Braime, BA (Hons), ACA
Carl Braime, BSc (Hons), MSc, MBA
Cielo Cartwright, BSc (Hons), ACA
Secretary
Alan Braime, BA (Hons), 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
3rd Floor, Royal House
28 Sovereign Street
Leeds
LS1 4BJ
Company registration
number
488001 (England and Wales)
3
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notice of meeting
Notice is hereby given that the SIXTY EIGHTH
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 14th June 2018 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 2017, and the report of the auditors
thereon.
2. To confirm the dividends paid on 20th October
2017 and 18th May 2018 on the Ordinary and ‘A’
Ordinary shares.
3. a) To re-appoint as a director Andrew Walker,
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 Nicholas Braime,
who is retiring by rotation in accordance with
the Company’s Articles of Association and, being
eligible, offers himself for re-election.
c) To re-appoint as a director Cielo Cartwright,
who was appointed since the last Annual General
Meeting, and being eligible, offers herself for
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 set the remuneration of
the auditors.
By order of the board,
Alan Braime Secretary
Hunslet Road, Leeds, LS10 1JZ
1st May 2018
4
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 12th
June 2018.
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 ‘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 2017 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.
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 12th June 2018. 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.
5
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Chairman’s statement
Review of the year
I am pleased to report that the Group’s sales revenue
in 2017 rose by 10.7% to £31.4m from £28.4m in 2016
and the profit from operations was £2.3m, compared
to £1.4m in the prior year.
After adjustments for finance income and expenses,
the profit before tax is £2.2m (2016 - £1.3m). After
deducting taxes of £0.6m, the profit for 2017 is £1.6m,
and is significantly above the 2016 result of £0.9m.
This improvement is the direct result of the process of
continuous investment in both new products and in
the development and extension of overseas markets.
Growth in sales increased the amounts owing by
customers by £0.7m and was only partly offset by an
increase of £0.4m in the sums owed to our suppliers.
After allowing for the necessary increases in working
capital, the Group generated £1.5m in cash.
translated back to UK Pounds at a relatively low
prevailing rate of exchange and consolidated in our
Group accounts.
The overseas 4B subsidiaries have continued to
increase the penetration in their own home markets
but also to expand each year sales to export markets in
their respective regions.
Dividends
In October 2017, the 1st interim dividend was
increased to 3.10p from 2.90p in October 2016. The
directors have decided to increase the 2nd interim
dividend to 7.10p from 6.40p in May 2017 and this
will be paid on 18th May 2018 to the holders of
Ordinary and ‘A’ Ordinary shares on the register on
11th May 2018. The overall dividend paid on the
2017 results will therefore increase to 10.20p from the
9.30p paid on the 2016 result.
Brexit
In 2017, the Group purchased a further £0.7m in new
manufacturing equipment, continuing the strategy of
investing in long term improvements in productivity.
The Group have further capital investments planned
for 2018 in manufacturing equipment to produce
presswork, sold to external customers of Braime
Pressings, and for components, sold internally to the
4B material handling division for distribution by the 4B
subsidiaries. The business already has the necessary
bank funding in place for these investments.
The UK’s trading position relative to the EU should
finally become clearer as negotiations continue
towards Brexit in March next year. In the Group we
have an existing subsidiary and operation on mainland
Europe and this gives us some flexibility to respond to
different scenarios in what will remain a very important
trade area for the business. Additionally, exports to
regions outside the EU – the principal growth area
for the group - already significantly outweigh sales to
mainland Europe.
Braime Pressings Limited
Staff
The manufacturing business operates in a very
competitive and demanding environment and,
while revenue increased, profit for the period was
unchanged. The focus has to be on continuing
improvements in productivity.
4B material handling division
The subsidiaries in the material handling division all
enjoyed increases in revenue, and earnings before
depreciation, interest and tax (EBITDA) also increased,
particularly in the second half of the year. Net margins
continued to be boosted by the low value of the UK
Pound Sterling which remained at relatively low levels
against other major currencies throughout 2017. A
weak Pound reduces the cost to our subsidiaries of
UK manufactured goods and additionally the profits
earned in overseas markets are increased when
The successful delivery of all plans and capital
investments depend ultimately on the decisions and
work of individual staff across the Group and this
year’s very positive result is due to their ongoing
efforts. We are fortunate to have so many pro-
active employees and also that our staff turnover
remains exceptionally small. I would like to take this
opportunity to thank all our staff for their hard work
and contribution during the year.
Our Group Finance Director, Paul Tiffany left us at the
end of the year and we thank him for his contribution.
I would also like to welcome our new Group Finance
Director, Cielo Cartwright who joined us in January
and was appointed to the board on 30th April
2018. Cielo has previously worked in multinational
businesses and we believe this experience will benefit
us as the business expands further afield.
6
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Chairman’s statement continued
Outlook
2018 has begun positively and the Group is trading
above both budget and last year. Aside from the
ever-present risk of an economic downturn, the
major exposure of the Group is to fluctuations in the
exchange rate. It is entirely possible that, as Brexit
approaches, the value of the UK Pound Sterling
appreciates and this is likely to have a negative effect
on the Group result – hopefully only short-term as the
business adapts to a new situation.
The main area of the business is the supply of goods
and services to handle and process industrial, and
above all, agricultural commodities. This sector is
currently a growth industry with a global market. The
strategy is to invest in increasing our market reach
while continuing to develop new products; both tasks
make up a big challenge but also represent an ongoing
opportunity.
Nicholas Braime, Chairman
1st May 2018
7
Group strategic report
Bank facilities
The Group’s operating banking facilities are renewed
annually. The arrangements with HSBC provide
sufficient headroom to the Group and have allowed us
to make the necessary investments in the year.
Taxation
Tax charge for the year was £0.6m, with an effective
rate of tax of 28% (2016 – 33%). The effective rate
is above the standard UK tax rate of 19.25% (2016 –
20%) due to the blending effect of the different rates
of tax applied by each of the countries in which the
Group operates. In any financial year the effective rate
will depend on the mix of countries in which profits
are made.
Capital expenditure
In 2017, the Group invested £0.7m in plant and
equipment continuing the recent substantial
investment in new manufacturing machinery.
During 2018, the Group plans to make further
tactical investments in key equipment to maximise
productivity.
Balance sheet
Net assets of the Group have increased to £11.0m
(2016 - £10.0m), this is due to the strong profit
performance in the year. A foreign exchange loss
of £0.5m (2016 – gain of £0.6m) was recorded on
the re-translation of the net assets of the overseas
operations.
The directors present their strategic report of the
Company and the Group for the year ended 31st
December 2017.
Principal activities
The principal activities of the Group during the year
under review was the manufacture of deep drawn
metal presswork and the distribution of material
handling components and monitoring equipment.
Manufacturing activity is delivered through the
Group’s subsidiary Braime Pressings Limited and the
distribution activity through the Group’s 4B division.
Braime Pressings specialises in metal presswork,
including deep drawing, multi-stage progression and
transfer presswork. Founded in 1888, the business
has over 130 years of manufacturing experience. The
metal presswork segment operates across several
industries including the automotive sector and
supplies external as well as group customers.
The material handling components subsidiaries are
industry leaders in developing high quality, innovative
and dependable material handling components for
the agricultural and industrial sectors. They provide a
range of complementary products including elevator
buckets, forged conveyor belting, designed bolts,
chain, level monitors and safety control systems which
facilitate handling and minimise the risk of explosion
in hazardous areas. The subsidiaries in the 4B division
have operations in the Americas, Europe, Asia,
Australia and Africa and export to over fifty countries.
Performance highlights
For the year ended 31st December 2017, the Group
generated revenue of £31.4m, up 10.7% from
prior year. Profit from operations was £2.3m, up
£0.9m from prior year. EBITDA was £3.1m. At 31st
December 2017, the Group had net assets of £11.0m.
Cash flow
Inventories increased by £0.3m and trade receivables
by £0.7m reflecting the increased sales activity. These
calls on working capital were partly offset by an
increase in our trade payables of £0.4m. In total the
business generated funds from operations of £1.5m
net of the movement in working capital. After the
payment of other financial costs and the dividend, the
cash balance (net of overdraft) was £1.0m.
8
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Group strategic report continued
Principal exchange rates
The Group reports its results in sterling, its presentational currency. The Group operates in five other currencies
and the principal exchange rates in use during the year and as at 31st December 2017 are shown in the table
below. During the year the Group’s profit reduced by £0.5m from losses in foreign currency translations.
Currency
Australian Dollar
Euro
South African Rand
Thai Baht
United States Dollar
Our business model
Symbol
AUD
EUR
ZAR
THB
USD
Average rate
Full year 2017
1.692
1.143
17.134
44.031
1.303
Closing rate
31st Dec 2017
1.728
1.127
16.631
44.016
1.351
Closing rate
31st Dec 2016
1.703
1.165
16.880
44.039
1.23
The two segments of the Group are very different operations and serve different markets, however together
they provide diversification, strength and balance to the Group.
The focus of the manufacturing business is to produce quality, technically demanding components. The use of
automated equipment allows us to produce in high volumes whilst maintaining flexibility to respond to customer
demands.
The material handling components business operates from a number of locations around the globe allowing
us to be close to our core markets. The focus of the business is to provide innovative solutions drawing on our
expertise in material handling and access to a broad product range.
Performance of Braime Pressings Limited, manufacturer of deep drawn metal presswork
Revenue grew during 2017 in our manufacturing division, however, profit for period was £0.1m (2016 - £0.1m).
The manufacturing arm continues to face pricing pressures in a highly competitive environment.
Performance of the 4B division, world wide distributor of components and monitoring systems for
the material handling industry
The combined revenues of our subsidiaries grew strongly in 2017 up £3.0m on prior year, which has fed through
to EBITDA. The growth reflects the Group’s investment in this division’s activities over the past three years.
The outlook for 2018 remains positive and we look to further growth across all subsidiaries.
9
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Group strategic report continued
Key performance indicators
The Group uses the following key performance
indicators to assess the performance of the Group as a
whole and of the individual businesses:
Key performance
indicator
Turnover growth
Gross margin
Operating profit
Stock days
Debtor days
Note
2017
2016
1
2
3
4
5
10.7%
7.3%
46.4%
45.3%
£2.34m
£1.39m
136 days 144 days
58 days
55 days
Turnover growth
Notes to KPI’s
1.
The Group aims to increase shareholder value by
measuring the year on year growth in Group revenue.
We are pleased with the level of growth achieved
during 2017.
Debtor days
5.
The average value of debtors divided by revenue
expressed as a number of days. This is an important
indicator of working capital requirements. Debtor days
still average within the standard payment terms of 60
days, however senior management are focused on
reducing this to improve cash.
Other metrics monitored weekly or monthly include
Quality measures (such as customer complaints),
raw materials buying prices, capital expenditure, line
utilisation, reportable accidents and near-misses.
Principal risks and uncertainties
The market remains challenging for our manufacturing
division, due to pricing pressures throughout the
supply chain. The maintenance of the TS16949 quality
standard is important to the Group and allows it to
access growing markets within the automotive and
other sectors. A process of continual improvement
in systems and processes reduces this risk as well as
providing increased flexibility to allow the business to
respond to customer requirements.
Gross margin
2.
Gross profit (revenue less change in inventories
and raw materials used) as a percentage of turnover
is monitored to maximise profits available for
reinvestment and distribution to shareholders. The
year on year improvement in margin has resulted from
operational efficiency and gains from movement in
foreign exchange rates.
Our 4B division maintains its competitive edge in
a price sensitive market through the provision of
engineering expertise and by working closely with our
suppliers to design and supply innovative components
of the highest standard. In addition, ranges of
complementary products are sold into different
industries. The monitoring systems are developed and
improved on a regular basis.
Operating profit
3.
Sustainable growth in operating profit is a strategic
priority to enable ongoing investment and increase
shareholder value. Year on year improvement in
operating profits resulting from the improvement
in gross margin and also efficient cost control over
operating expenses.
Stock days
4.
The average value of stock divided by the cost
of goods sold expressed as a number of days is
monitored to ensure the right level of stocks are held
in order to meet customer demands whilst not carrying
excessive amounts which impacts upon working
capital requirements. Increased sales demand close to
the year end has lowered stock days.
The directors receive monthly reports on key customer
and operational metrics from subsidiary management
and review these. The potential impact of business
risks and actions necessary to mitigate the risks, are
also discussed and considered at the monthly board
meetings. The more significant risks and uncertainties
faced by the Group are set out below:-
Raw material price fluctuation:- The Group
•
is exposed to fluctuations in steel and other raw
material prices and to mitigate this volatility, the group
fixes its prices with suppliers where possible.
10
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Group strategic report continued
Reputational risk:- As the Group operates
•
in relatively small markets any damage to, or loss
of reputation could be a major concern. Rigorous
management attention and quality control procedures
are in place to maximise right first time and on time
delivery. Responsibility is taken for ensuring swift
remedial action on any issues and complaints.
Foreign currency risk
The Group has a centralised treasury function which
manages the Group’s banking facilities and all lines of
funding. Forward contracts are used to hedge against
foreign exchange differences arising on cash flows
in currencies that differ from the operational entity’s
reporting currency.
•
Damage to warehouse or factory:- Any
significant damage to a factory or warehouse will
cause short-term disruption. To mitigate these risks,
the Group has arrangements with key suppliers to step
up supply in the event of a disruption.
Credit risk
The Group’s principal financial assets are bank
balances, cash and trade receivables, which represent
the Group’s maximum exposure to credit risk in
relation to financial assets.
Brexit impact:- The Group, along with other
•
businesses, faces economic and political uncertainty in
the future resulting from the UK vote to leave the EU.
However, the directors consider that its operations in
Europe provide the group with further trading options
and the fact that 56% of the Group’s revenues are
derived from markets outside the EU provides the
Group with some resilience to any impact.
•
Economic fluctuations:- The Group derives
a significant proportion of its profits from outside the
UK and is therefore sensitive to fluctuations in the
economic conditions of overseas operations including
foreign currency fluctuations.
Financial instruments
The operations expose it to a variety of financial risks
including the effect of changes in interest rates on debt,
foreign exchange rates, credit risk and liquidity risk.
The Group does not have material exposure in any of
the areas identified above.
The Group’s principal financial instruments comprise
sterling and foreign cash and bank deposits, bank
loans and overdrafts, other loans and obligations
under finance leases together with trade debtors and
trade creditors that arise directly from operations.
The main risks arising from the Group’s financial
instruments can be analysed as follows:
Price risk
The Group has no significant exposure to securities
price risk, as it holds no listed equity instruments.
The Group’s credit risk is primarily attributable to its
trade receivables. Credit risk is mitigated by a stringent
management of customer credit limits by monitoring
the aggregate amount and duration of exposure to any
one customer depending upon their credit rating. The
Group also has credit insurance in place. The amounts
presented in the balance sheet are net of allowance for
doubtful debts, estimated by the Group’s management
based on prior experience and their assessment of the
current economic environment.
The credit risk on liquid funds is limited because the
counterparties are banks with high credit-ratings
assigned by international credit-rating agencies.
The Group has no significant concentration of credit
risk, with exposure spread over a large number of
counterparties and customers.
Liquidity risk
The Group’s policy has been to ensure continuity of
funding through acquiring an element of the Group’s
fixed assets under finance leases and arranging
funding for operations via medium-term loans and
overdrafts to aid short term flexibility.
Cash flow interest rate risk
Interest rate bearing assets comprise cash and bank
deposits, all of which earn interest at a fixed rate. The
interest rate on the bank overdraft is at market rate
and the Group’s policy is to keep the overdraft within
defined limits such that the risk that could arise from
a significant change in interest rates would not have a
material impact on cash flows. The Group’s policy is
to maintain other borrowings at fixed rates to fix the
amount of future interest cash flows.
11
Group strategic report continued
Social and community matters
We recognise our responsibility to work in partnership
with the communities in which we operate and
we encourage active employee support for their
community in particular, in aid of technical awareness
and training. During the year, we participated in a
number of education events encouraging interest in
engineering in young people. It is our policy not to
provide political donations.
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. As a global
business, the Group fully recognises and seeks to
harness the benefits of diversity within its work force.
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.
On behalf of the board
Nicholas Braime, Director
1st May 2018
The directors monitor the level of borrowings and
interest costs to limit any adverse affects on financial
performance of the Group.
Health and safety
We maintain healthy and safe working conditions on
our sites and measure our ability to keep employees
and visitors safe. We continuously aim to improve
our working environments to ensure we are able
to provide a safe occupational health and safety
standards to our employees and visitors. The directors
receive monthly H&S reports and we carry out
regular risk management audits to identify areas for
improvement and to minimise safety risks.
Business ethics and human rights
We are committed to conducting our business
ethically and responsibly, and treating employees,
customers, suppliers and shareholders in a fair,
open and honest manner. As a business, we receive
audits by both our independent auditors and by our
customers and we look to source from suppliers who
share our values. We encourage our employees to
provide feedback on any issues they are concerned
about and have a whistle-blowing policy that gives our
employees the chance to report anything they believe
is not meeting our required standards.
The Group is similarly committed to conducting our
business in a way that is consistent with universal
values on human rights and complying with the
Human Rights Act 1998. The Group gives appropriate
consideration to human rights issues in our approach
to supply chain management, overseas employment
policies and practices. Where appropriate, we support
community partnering.
Environment
The Group’s policy with regard to the environment
is to understand and effectively manage the actual
and potential environmental impact of our activities.
Operations are conducted such that we comply with
all legal requirements relating to the environment
in all areas where we carry out our business. The
Group continuously looks for ways to harness energy
reduction (electricity and gas) and water. During the
period of this report the Group has not incurred any
fines or penalties or been investigated for any breach
of environmental regulations.
12
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Corporate governance report
The Company is listed on AIM and whilst it is not
required to comply with the Corporate Governance
Code 2014, nevertheless the Group applies those
principles of good governance it believes appropriate
to a group of this size.
Board of directors
The board is responsible for the overall operations of
the Group, including strategic planning, approval of
the annual budget, changes to the Group’s financing
arrangements, acquisition and disposals, material
contract and significant capital expenditure. It
meets monthly to discuss reports from the overseas
operations and to assess and action areas of significant
change, risks and opportunities for the Group.
The composition of the board during the year are the
directors listed in the Directors’ report.
Nicholas Braime was appointed Chairman in 1987.
He joined the Group in 1972 and was instrumental in
the set-up of the 4B division’s USA business in 1984,
where he spent a number of years before returning
as Sales Director for Braime Pressings Limited.
Nicholas is also the Group Managing Director and is
responsible for overseeing the overseas subsidiaries,
with the managing directors of these businesses
reporting to Nicholas.
Alan Braime is the Group Commercial Director. Alan
qualified as a chartered accountant with KPMG where
he worked for four years before joining the Group.
Alan joined the board in 2010. Alan oversees the
commercial operations of Braime Pressings Limited
and is also responsible for the Group’s IT operations
and strategy.
Carl Braime is the Group Sales Director. Carl joined
the Group in 2003 and spent a number of years
in South America with the Group prior to being
appointed to the board in 2010. He is responsible for
overseeing strategic customer relationships, as well
as the management of key supply chains in the 4B
division.
Paul Tiffany, Group Finance Director, a chartered
accountant with KPMG, worked in variety of owner
managed businesses and listed conglomerates. He
resigned from the board in December 2017.
Cielo Cartwright, our new Group Finance Director,
joined the Group in January 2018 and was appointed
to the board on 30th April 2018. Cielo qualified as a
chartered accountant with EY in 1992 and has been
divisional finance director in various public listed
companies including KCOM plc and NEXT plc and has
considerable international experience. Before joining
the Group, she was at Froneri, a JV of Nestle SA.
Andrew Walker, non-executive, is a corporate lawyer.
He was the Managing Partner of Simpson Curtis,
Senior Partner of Pinsent Curtis, Leeds and former
President of the Leeds Chamber of Commerce.
Andrew has held a number of non-executive and
trustee roles and is also a non-executive director of
Clugston Group Limited.
Peter Alcock, non-executive, is a mechanical engineer
and brings a deep understanding of engineering
processes having been, for 32 years, director of
Hunslet Holdings PLC, a key manufacturer of
locomotives, mining equipment and machine tools
originally founded in 1864 and whose operations now
form part of the Wabtec Corporation in the US.
Board committees
Remuneration committee
The executive directors’ pay is subject to the decision
of the whole board and not of a separate committee.
Any significant awards to senior management are also
discussed by the whole board. The Company’s policy
on directors’ remuneration is discussed further in the
directors’ remuneration report. The directors believe
this is adequate for a group of this size.
Audit and risk committee
The whole board formally receives presentation of
audit and risk matters from the Group’s independent
auditors at least once a year. The consideration
of business risks is a standing item on the board’s
agenda. 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.
13
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. 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 2017.
RESULTS AND DIVIDENDS
The profit for the year after taxation and transferred to reserves was £1,580,000 (2016 – £855,000). 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:
Nicholas Braime
Ordinary shares
Peter Alcock
Ordinary shares
‘A’ Ordinary shares
Andrew Walker
Ordinary shares
‘A’ Ordinary shares
Alan Braime
Ordinary shares
Carl Braime
Ordinary shares
31st December 2017
1st January 2017
143,400
143,400
1,000
5,000
100
300
35,175
35,175
1,000
5,000
100
300
35,175
35,175
In accordance with the Company’s Articles of Association Andrew Walker retires by rotation and, being eligible,
offers himself for re-election.
In accordance with the Company’s Articles of Association Nicholas Braime retires by rotation and, being eligible,
offers himself for re-election.
Paul Tiffany, Group Finance Director resigned his position from the board on 18th December 2017. Cielo
Cartwright, our new Group Finance Director, was appointed on 30th April 2018 and, being eligible, offers herself
for 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.
The indemnity was in force throughout the tenure of each director during the year and is currently in force. The
Company also maintains Directors’ and Officers’ liability insurance in respect of itself and its directors.
SUBSTANTIAL SHAREHOLDINGS
The Company has been notified that as at 8th April 2018, apart from the directors, only the following persons are
beneficially interested in more than 3% of the Ordinary shares of the Company:
Hargreave Hale Nominees Limited A/C LON
Hargreaves Lansdown (Nominees) Limited A/C HLNOM
Mrs P. V. Smith
Ferlim Nominees Limited Des. POOLED
W B Nominees Limited A/C ISAMAX
Mr. M. C. J. Barnes
Ordinary
shares held
71,000
29,362
27,500
26,083
18,466
16,555
Percentage
14.79%
6.12%
5.73%
5.43%
3.85%
3.45%
14
T.F. J.H. BRAIME (HOLDINGS) P.L.C.
Directors’ report continued
At 31st December 2017, the available headroom
within the Group’s borrowing facilities amounted to
£1.6m. The directors are of the continued view that
through its Group banking partner it has sufficient
access to financial resources.
The Group has contracts with a number of customers
and suppliers across different geographic areas and
industries which act to mitigate the volatility in any
one area. The Group’s forecasts and projections,
taking account reasonably possible changes in trading
performance, show that there is no substantial risk that
the Group will not 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.
Company law requires the directors to prepare
financial statements for each financial year. Under that
law the directors have prepared the Group financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the
European Union and the rules of the London Stock
Exchange for companies trading on the AIM. The
directors have chosen to prepare financial statements
for the Company in accordance with UK Generally
Accepted Accounting Practice. Under Company
law the directors must not approve the financial
statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group
and the Company and of the profit or loss of the
Group for that period.
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 12. The financial
position of the Group, its cash flows, liquidity position
and borrowing facilities are also described in the
Group strategic report. In addition, note 17 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.
Growth is being seen in many of the geographic areas
in which the Group operates. The exchange rate
between sterling, the US dollar and the euro and the
price of raw materials creates uncertainty over the
future gross margin of the Group.
The Group’s net cash figure increased from an
opening figure of £0.7m to £1.0m as at 31st December
2017.
During the period the Group funding of working
capital increased by £0.7m principally arising from an
increase in inventory and trade and other receivables
which were only partly offset by increases in trade and
other payables. Overall cash derived from operating
activities generated £1.5m (2016 - £1.9m) net of the
increased working capital funding.
15
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Directors’ report continued
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 £10,000 (2016 -
£1,000) 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
Nicholas Braime, Director
1st May 2018
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
continued
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 to
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/she has taken all the steps that he/she ought to
have taken as a director in order to make himself or
herself aware of any relevant audit information and
to establish that the Company’s auditors are aware
of that information.
16
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 Paul Tiffany, when he held office, and
Cielo Cartwright, 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.
Peter 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 2019.
The renewal of Andrew Walker’s service contract is
subject to approval of the whole board and has been
previously approved until 30th March 2019.
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 directors’ remuneration that are
pensionable are salaries.
There are no performance conditions relating to the
non-executive directors’ fees.
17
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
£’000
Fees
£’000
Salary
£’000
Total
2017
£’000
Total
2016
£’000
Pension
contributions
2016
£’000
2017
£’000
194
104
104
106
-
-
-
508
-
-
-
-
-
27
27
54
54
4
1
1
1
-
-
-
7
198
105
105
107
-
27
27
569
187
99
99
14
24
26
26
475
54
51
-
14
14
7
-
-
-
35
-
11
11
1
6
-
-
29
Executive directors
Nicholas Braime
Alan Braime
Carl Braime
Paul Tiffany
Marcus Mills
Peter Alcock
Andrew Walker
Paid by the Company
The estimated taxable value of benefits in kind includes private medical cover. Pension contributions represent
amounts paid to defined contribution pension schemes.
Approval
The directors’ remuneration report was approved by the board on 1st May 2018.
Nicholas Braime, Director
18
Independent auditors’ report
TO THE MEMBERS OF T.F. & J.H. BRAIME
(HOLDINGS) P.L.C.
Opinion on financial statements 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. (the ‘parent company’)
and its subsidiaries (the ‘group’) for the year ended
31 December 2017 which comprise the Consolidated
income statement, the Consolidated statement
of comprehensive income, the Consolidated and
Company balance sheets, the Consolidated cash flow
statement, the Consolidated and Company statements
of changes in equity and notes to the accounts,
including a summary of significant accounting policies.
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, including
FRS102 “The Financial Reporting Standard applicable
in the UK and Republic of Ireland” (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.
In our opinion:
•
the financial statements give a true and fair view
of the state of the group’s and of the parent
company’s affairs as at 31 December 2017 and of
the group’s profit for the year then ended;
the group financial statements have been properly
prepared in accordance with IFRSs as adopted by
the European Union;
•
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
•
•
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.
Basis for opinion
We conducted our audit in accordance with
International Standards on Auditing (UK) (ISAs (UK))
and applicable law. Our responsibilities under those
standards are further described in the Auditor’s
responsibilities for the audit of the financial statements
section of our report. We are independent of the
group and parent company in accordance with the
ethical requirements that are relevant to our audit of
the financial statements in the UK, including the FRC’s
Ethical Standard as applied to SME listed entities
and we have fulfilled our ethical responsibilities in
accordance with these requirements. We believe that
the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report to you in respect of the
following matters in relation to which the ISAs (UK)
require us to report to you where:
•
the directors’ use of the going concern basis of
accounting in the preparation of the financial
statements is not appropriate; or
the directors have not disclosed in the financial
statements any identified material uncertainties
that may cast significant doubt about the group’s
or parent company’s ability to continue to adopt
the going concern basis of accounting for a period
of at least twelve months from the date when the
financial statements are authorised for issue.
•
19
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Independent auditors’ report continued
Key audit matters
Key audit matter are those matters that, in our
professional judgement, were of most significance
in our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of
resources in the audit; and directing the efforts of the
engagement team. These matters were addressed in
the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Carrying value of Inventories
Risk description: This risk concerns the carrying value
of inventories of £6,431,000 (2016 - £6,119,000) as
shown in note 10.
Management judgement is applied to determining
the cost of inventories in order to accurately reflect
the manufacturing costs incurred in bringing them to
their current location and physical condition in the
manufacturing segment of the business. This primarily
relates to the assessment of direct labour costs and
manufacturing overheads to be absorbed and other
relevant production costs. The total value of work-
in-progress and finished goods inventory held by
the manufacturing segment of the group into which
such costs would have been absorbed amounted to
£239,000 (2016 - £231,000).
As described in note 1.19; inventories are carried at
the lower of cost and net realisable value. Establishing
impairment provisions for slow-moving, obsolete and
damaged inventories to reduce inventories to their net
realisable value involves judgements and estimates to
be made by management. The group has consistently
adopted a policy of making impairment provisions
based upon the ageing of inventories. The income
statement for the year ended 31 December 2017
includes an inventory impairment charge of £26,000
(2016 - £158,000) as disclosed in note 10.
Given the level of judgement and estimation involved
in determining cost and net realisable value this risk
was identified by us as one of the most significant risks
of material misstatement.
20
Our response: We performed the following audit
procedures:
• on a sample basis agreed the cost of raw
•
materials (manufacturing segment) and bought in
components (distribution segment) to third party
invoices and where these were denominated in
foreign currencies reviewed the reasonableness
of the exchange rates used to translate these
invoices.
for work in progress and finished goods held
in the manufacturing segment we have for a
sample of items obtained the product costings
and tested the underlying costs within each item
selected. We also challenged the key assumptions
concerning overhead absorption by assessing
the appropriateness of costs included in the
calculation.
reviewed the overheads absorbed by the
manufacturing segment to determine whether
they were allowable under IAS 2 and appropriately
recognised. We agreed the estimated overheads
to actual overheads incurred in the year to assess
whether they were materially different.
• assessed the net realisable value (NRV) of a
sample of inventory items by agreeing their
subsequent sales price to customer invoices to
ensure that the items were being held at the lower
of cost and net realisable value.
•
• observed the condition of inventories when we
and the firm we instructed to assist us attended
stock counts (see existence of inventory risk
section below).
• gained an understanding of the movements in the
inventory impairment provision year on year and
assessed the scale of the provision in comparison
to gross inventory value to determine whether
there were any unusual movements.
• performed procedures to ensure that inventory
impairment provisions were calculated in line
with the group’s inventory provisioning policy.
Procedures included reviewing the provisions and
verifying ageing data.
Key observations: From the work performed we
consider that that the inventory shown in the group
financial statements is appropriately valued and that
the impairment provision in respect of inventories has
been consistently applied and is appropriate.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Independent auditors’ report continued
Existence of inventories
Risk description: This risk concerns the existence
of inventories of £6,431,000 (2016 - £6,119.000) as
shown in note 10. £1,412,000 (2016 - £1,804,000)
representing 22% (2016 - 29%) of the group’s
inventories are held in the USA (4B Elevator
Components Limited) where no year-end physical
count is undertaken for all items of inventory. Instead
a rolling perpetual count system is employed; however
there does not appear to be a formal system in place
to ensure the regular counting of significant balances
and to ensure that all lines of inventory are counted at
least once a year. Given the significance of this level of
inventory to the group and the factors above we have
assessed the existence of inventories in the USA as
being one of significance to our audit.
Our response: We instructed a firm of Certified Public
Accountants (CPAs) based in the USA to attend
the premises in the USA to carry out agreed upon
procedures in accordance with attestation standards
established by the American Institute of Certified
Public Accountants. This included physically test
counting a sample of items selected in advance by
ourselves from 4B Elevator Components Limited’s
inventory system together with the selection of
additional items chosen by them to physically count
and compare to that company’s inventory records.
We followed through the test counts carried out by
ourselves and the firm of CPAs to that company’s final
inventory valuations.
Key observations: From the work performed we
consider that that the inventory shown in the
group financial statements relating to 4B Elevator
Components Limited mentioned above exists.
Our application of materiality
The scope of our audit was influenced by our
application of materiality. We set certain quantitative
thresholds for materiality. These, together with
qualitative considerations, helped us to determine the
scope of our audit and the nature, timing and extent
of our audit procedures on the individual financial
statement line items and disclosures and in evaluating
the effect of misstatements, both individually and on
the financial statements as a whole.
We define materiality as the magnitude of
misstatement in the financial statements that makes it
probable that the economic decisions of a reasonably
knowledgeable person would be changed or
influenced. We use materiality both in determining
the nature, timing and extent of our audit work and in
evaluating the results of that work.
Based on our professional judgement, we determined
materiality for the financial statements as a whole as
follows:
Group materiality £274,000 (2016 - £230,000).
Basis for determining materiality: Arithmetic average
of 1% of group turnover and 1% of gross assets.
Rationale for benchmark applied: As a trading group
this reflects the level of activity (turnover) and the
fixed and working capital intensive nature of the
business (gross assets). We believe that these
measures and the percentages applied are widely
used for groups of this size and nature.
Component materiality: For each component in our
audit scope, we allocated a materiality that is less than
our overall group materiality. The range of materiality
across components ranged from £80,000 to £149,000.
Certain components were audited to a local statutory
audit materiality that was also less than our overall
Group materiality.
Performance materiality to drive the extent of our
testing for each component in our audit scope was set
at 80% of component materiality.
We agreed with the Audit Committee that we would
report to them misstatements identified during our
audit above £11,650 (2016 - £11,500) as well as
‘clearly trivial’ misstatements below that amount
that, in our view, warranted reporting for qualitative
reasons.
21
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Independent auditors’ report continued
An overview of the scope of our audit
Other information
T.F. & J.H. Braime (Holdings) P.L.C., Braime
Pressings Limited, 4B Elevator Components Limited
and 4B Braime Components Limited are companies
incorporated in England and Wales on which we are
engaged to perform an audit under ISAs (UK). These
components comprised 74% of group turnover, 94% of
group profit before tax and 76% of group gross assets.
4B Africa Elevator Components (Proprietary) Limited
and 4B Asia Pacific Company Limited have had audits
performed by component auditors in accordance
with local legislation. These components were not
individually significant enough to require an audit for
group reporting purposes but a review was performed
by us appropriate to the size and risk profile of these
components. This included obtaining and reviewing an
audit procedures questionnaire for 4B Africa Elevator
Components (Proprietary) Limited and analytical
review procedures in relation to 4B Asia Pacific
Company Limited. These components comprised 7%
of group turnover, minus 9% of group profit before tax
(because of losses) and 9% of group gross assets.
Neither 4B France Sarl nor 4B Australia PTY
Limited are required by local legislation to have
audits performed. We carried out our own detailed
audit procedures on these components sufficient
to conclude that there were no significant risks
of material misstatement in the group financial
statements. These components comprised 19% of
group turnover, 15% of group profit before tax and
15% of group gross assets.
We engaged a firm of CPAs in USA to attend the stock
count of 4B Braime Components Limited and a firm of
Chartered Accountants in Australia to attend the stock
count of 4B Australia PTY Limited.
At the parent entity level we tested the consolidation
process and carried out analytical procedures to
confirm our conclusion that there were no significant
risks of material misstatement of the aggregated
financial information of components that were not
subject to audit by us.
The directors are responsible for the other
information. The other information comprises the
information included in the report and accounts set
out on pages 4 to 7, 13, 17 and 64 to 65, other than
the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does
not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do
not express any form of assurance thereon.
In connection with the audit of the financial
statements, our responsibility is to read the other
information and, in doing so, consider whether the
other information is materially inconsistent with the
financial statements or our knowledge obtained
in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required
to determine whether there is a material misstatement
in the financial statements or a material misstatement
of the other information. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information; we are
required to report that fact. We have nothing to report
in this regard.
Opinions on matters prescribed by the
Companies Act 2006
In our opinion, based on the work undertaken in the
course of the audit:
•
•
the information given in the strategic report and
the directors’ report for the financial year for
which the financial statements are prepared is
consistent with the financial statements; and
the strategic report and the directors’ report have
been prepared in accordance with applicable legal
requirements.
22
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Independent auditors’ report continued
fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these financial statements.
A further description of our responsibilities for the
audit of the financial statements is located on the
Financial Reporting Council’s website at www.frc.org.
uk/auditorsresponsibilities. This description forms part
of our auditor’s report.
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.
Neill Rayland BA FCA
(Senior Statutory Auditor)
For and on behalf of Kirk Newsholme
Chartered Accountants and Statutory Auditors
4315 Park Approach
Thorpe Park
Leeds
LS15 8GB
1st May 2018
Matters on which we are required to report by
exception
In the light of the knowledge and understanding of the
group and the parent company and its environment
obtained in the course of the audit, we have not
identified material misstatements in the strategic
report or the directors’ report.
We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, if in our opinion:
• adequate accounting records have not been kept
by the parent company, or returns adequate for
our audit have not been received from branches
not visited by us; or
the parent company financial statements are not
in agreement with the accounting records and
returns; or
•
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Responsibilities of directors
As explained more fully in the statement of directors’
responsibilities set out on pages 15 and 16, the
directors are responsible for the preparation of the
financial statements and for being satisfied that they
give a true and fair view, and for such internal control
as the directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the group’s and the
parent company’s ability to continue as a going
concern, disclosing, as applicable, matters relating
to going concern and using the going concern basis
of accounting unless the directors either intend to
liquidate the company or to cease operations, or have
no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due to
23
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Consolidated income statement
for the year ended 31st December 2017
Revenue
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Employee benefits costs
Depreciation and amortisation expense
Other expenses
Profit from operations
Finance expense
Finance income
Profit before tax
Tax expense
Profit for the year
Profit attributable to:
Owners of the parent
Non-controlling interests
Note
2017
£’000
2016
£’000
3
6
2
4
4
5
31,449
28,415
114
(16,955)
(7,449)
(803)
(4,015)
337
(15,891)
(6,726)
(801)
(3,940)
2,341
1,394
(143)
3
(150)
30
2,201
1,274
(621)
1,580
1,719
(139)
1,580
(419)
855
932
(77)
855
Basic and diluted earnings per share
18
109.73p
59.34p
Consolidated statement of comprehensive income
for the year ended 31st December 2017
Note
2017
£’000
2016
£’000
Profit for the year
Items that will not be reclassified subsequently to profit or loss
Net pension remeasurement gain on post employment benefits
19.10
Items that may be reclassified subsequently to profit or loss
Foreign exchange (losses)/gains on re-translation of overseas operations
Other comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
1,580
855
45
10
(472)
(427)
598
608
1,153
1,463
1,299
(146)
1,153
1,540
(77)
1,463
The foreign currency movements arise on the re-translation of overseas subsidiaries’ opening balance sheets at
closing rates.
The notes on pages 28 to 55 form part of these financial statements
24
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Consolidated balance sheet
at 31st December 2017
Note
2017
£’000
2017
£’000
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Current assets
Inventories
Trade and other receivables
Financial assets
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
7
8
10
11
9
12
13
14
15
5,238
58
6,431
5,911
-
1,145
164
4,391
1,983
195
988
87
2016
£’000
2016
£’000
5,358
12
5,296
5,370
13,487
18,783
12,126
17,496
6,119
5,213
52
742
-
4,181
1,730
147
6,733
6,058
1,361
118
1,075
7,808
10,975
1,479
7,537
9,959
360
257
539
9,006
10,162
(203)
9,959
Capital and reserves attributable to equity holders of the parent Company
16
Share capital
Capital reserve
Foreign exchange reserve
Retained earnings
Total equity attributable to the shareholders of the parent
Non-controlling interests
Total equity
360
257
74
10,633
11,324
(349)
10,975
The financial statements on pages 24 to 55 were approved and authorised for issue by the board of directors on
1st May 2018 and were signed on its behalf by:
Nicholas Braime Director
Alan Braime, Director
Company Registration Number 488001
The notes on pages 28 to 55 form part of these financial statements
25
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Consolidated cash flow statement
for the year ended 31st December 2017
Note
2017
£’000
2017
£’000
1,580
Operating activities
Net profit
Adjustments for:
Depreciation and amortisation
Grants amortised
Foreign exchange (losses)/gains
Finance income
Finance expense
Loss/(gain) on sale of land and buildings,
plant, machinery and motor vehicles
Adjustment in respect of
defined benefits scheme
Income tax expense
Income taxes paid
7 & 8
4
4
5
Operating profit before changes
in working capital and provisions
Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Cash generated from operations
Investing activities
Purchases of property, plant, machinery
and motor vehicles and intangible assets
Sale of land and buildings, plant,
machinery and motor vehicles
Interest received
Financing activities
Proceeds from long term borrowings
Loan financing repayments
Repayment of borrowings
Repayment of hire purchase creditors
Interest paid
Dividends paid
Increase in cash and cash equivalents
Cash and cash equivalents,
beginning of period
Cash and cash equivalents,
end of period
21
803
-
(443)
(3)
143
4
45
621
(617)
(698)
(312)
356
(618)
14
3
165
52
(329)
(247)
(143)
(137)
553
2,133
(654)
1,479
(601)
(639)
239
742
981
2016
£’000
801
(6)
525
(30)
150
(13)
12
420
(492)
(208)
(400)
272
(999)
13
28
-
57
(102)
(176)
(150)
(131)
2016
£’000
855
1,367
2,222
(336)
1,886
(958)
(502)
426
316
742
26
The notes on pages 28 to 55 form part of these financial statements
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Consolidated statement of changes in equity
for the year ended 31st December 2017
Note
Share Capital Exchange Retained
Earnings
Capital Reserve
£’000
£’000
Reserve
£’000
Total
£’000 £’000
Total
Interests Equity
£’000 £’000
Foreign
Non-
Controlling
Balance at 1st January 2016
360
257
(59)
8,195
8,753
(126)
8,627
Comprehensive income
Profit
Other comprehensive income
Net pension remeasurement
gain recognised directly in equity
Foreign exchange losses on
re-translation of overseas subsidiaries
consolidated operations
Total other comprehensive income
Total comprehensive income
19
Transactions with owners
Dividends
Total transactions with owners
18
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
932
932
(77)
855
10
10
-
10
598
598
598
-
10
942
598
608
1,540
-
-
(77)
598
608
1,463
-
-
(131)
(131)
(131)
(131)
-
-
(131)
(131)
Balance at 1st January 2017
360
257
539
9,006 10,162
(203) 9,959
Comprehensive income
Profit
Other comprehensive income
Net pension remeasurement
gain recognised directly in equity
Foreign exchange gains on
re-translation of overseas subsidiaries
consolidated operations
Total other comprehensive income
Total comprehensive income
Transactions with owners
Dividends
Total transactions with owners
19
18
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,719 1,719
(139) 1,580
-
45
45
-
45
(465)
(465)
(465)
-
45
(465)
(420)
1,764 1,299
(7)
(7)
(472)
(427)
(146) 1,153
-
-
(137)
(137)
(137)
(137)
-
-
(137)
(137)
Balance at 31st December 2017
360
257
74
10,633 11,324
(349) 10,975
The capital reserve arose on the listing of the Company’s shares on the London Stock Exchange and the cancellation of the 180,000
5% Cumulative Preference shares at a redemption price of £1.125 per share. 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 accumulated profit and losses of the Group.
There was no movement in the share capital of the Company.
27
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 1st May 2018.
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 56 to 63.
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:
Inventory
Inventories are stated at the lower of cost and net
realisable value. The group establishes an impairment
provision for inventory estimated to realise a lower
value than cost. When calculating the impairment
provision, management considers the nature and
condition of the inventory as well as applying
assumptions around the saleability of stock and its
estimated selling value less cost expected to be
incurred and sell the item. The directors also consider
the purchase history of the inventory items to assess
whether the items remain in use.
Cost of work in progress and finished goods
The Group values the work in progress and finished
goods inventory of its manufacturing segment at the
cost of direct materials and labour plus attributable
overheads and certain administrative costs based
on normal levels of activity. When calculating
overhead absorption rates, management considers
the percentage of costs that are directly attributable
to bringing inventory to its present location and
condition, and estimated wastage based on historical
experience and through knowledge of the business.
Useful economic lives of property, plant and equipment
The annual depreciation charge for property,
plant and equipment is sensitive to changes in the
estimated useful economic lives and residual values
of the assets. The useful economic lives and residual
values are re-assessed annually. They are amended
when necessary to reflect current estimates, based
on technological advancement, future investments,
economic utilisation and the physical condition of the
assets.
28
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the accounts continued
Retirement benefit obligations
The Group operates a defined benefit pension
scheme (note 19). Asset valuations are based on the
fair value of the assets. The valuation 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.
1.4 Changes to accounting policy and
disclosure
(a) New and amended standards adopted by the
Group.
The Group has adopted the following new and
amended IFRS’s as of 1st January 2017:
• Amendment to IAS 12, ‘Recognition of deferred
tax assets for unrealised losses’; effective on or
after 1st January 2017.
• Amendment to IAS 7, ‘Disclosure initiative’;
effective on or after 1st January 2017.
• Annual improvements to IFRS’s 2014-16 cycle
IFRS12; effective on or after 1st January 2017.
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 2017 and not early adopted.
• Annual improvements to IFRS’s 2014-16 cycle
IFRS1 and IAS 28; effective on or after 1st January
2018.
IFRS 15, ‘Revenue from contracts with customers’;
effective on or after 1st January 2018.
•
• Clarifications to IFRS 15, ‘Revenue from contracts
with customers’; effective on or after 1st January
2018.
• Amendments to IFRS 2, ‘Classification and
measurements of share-based payment
transactions’; effective on or after 1st January
2018.
•
• Amendments to IAS 40, ‘Transfer of investment
property’; effective on or after 1st January 2018
IFRIC Interpretation 22, ‘Foreign currency
transactions and advance consideration’; effective
on or after 1st January 2018.
IFRS 9, ‘Financial instruments’; effective on or after
1st January 2018.
•
• Amendments to IFRS 4, ‘Applying IFRS 9 financial
instruments with IFRS 4 insurance contracts’;
effective on or after 1st January 2018.
•
• Amendments to IFRS 9, ‘Prepayment features with
negative compensation’; effective on or after 1st
January 2018.
IFRS 16, ‘Leases’; effective on or after 1st January
2019.
IFRIC Interpretation 23, ‘Uncertainty over income
tax treatments’; effective on or after 1st January
2019.
•
• Amendments to IAS 28, ‘Long-term interest in
associates and joint ventures’; effective on or after
1st January 2019.
IFRS 17, ‘Insurance contracts’; effective on or after
1st January 2019.
•
Other than in respect of the application of IFRS 16,
the application and interpretations surrounding the
other standards 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.
As referred to in note 20, the Group has outstanding
commitments under non-cancellable operating leases,
which as at 31st December 2017 totalled £646,000.
Upon the application of IFRS 16 the Group will be
obliged to recognise an asset reflecting the right to use
the leased assets for the lease term, and a lease liability
initially calculated as the present value of the lease
payments, discounted at the rate implicit in the lease.
The right of use assets will initially be recognised at
cost and then amortised over the life of the lease, with
cost expected to approximate to the amount of the
initial measurement of the lease liabilities.
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.
29
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
Non-controlling interests in the net assets of the
consolidated subsidiaries are identified separately
from the Group’s equity therein. Non-controlling
interests consist of the amount of those interests at
the date of the original business combination and the
minority’s share of changes in equity since the date of
the combination. Where losses are accumulated, all
earnings and losses of the subsidiaries are attributed
to the parent and the non-controlling interest in
proportion to their ownership.
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 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 average rates of
exchange. Any differences arising from this procedure
have been charged/(credited) to the currency
translation reserve in equity.
1.6 Basis of consolidation
Subsidiaries are all 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. 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.
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 income statement.
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.
30
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 receivables) but also incorporate
other types of contractual monetary assets. 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.
Financial assets are recognised when the Group enters
into a contractual agreement with a third party through
an instrument. All interest received is recognised as
finance income in the income statement.
1.9 Financial liabilities
The Group’s financial liabilities include bank loans
and overdrafts, other loans, trade and other payables,
finance leasing liabilities and forward currency
contracts. They are included in balance sheet line
items ‘bank overdraft’, ‘trade and other payables’,
‘long-term financial liabilities’ and ‘other financial
liabilities’.
Financial liabilities are recognised when the Group
becomes a party to the contractual agreements of the
instrument. All interest related charges are recognised
as an expense in ‘finance cost’ in the income
statement.
Bank loans are raised for support of long term funding
of the Group’s operations. They are recognised at
fair value, net of direct issue costs. Finance charges,
including premiums payable on settlement or
redemption and direct issue costs, are charged to
the income statement 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 17).
Trade payables are recognised initially at their fair
value and subsequently measured at amortised cost
less settlement payments.
1.10 Cash and cash equivalents
Cash and cash equivalents include cash at bank and
in hand as well as short term highly liquid investments
such as money market instruments and bank deposits.
For the purposes of the cash flow statement cash and
cash equivalents include bank overdrafts.
1.11 Borrowing costs
All borrowing costs are expensed as incurred.
1.12 Pension obligations and short term
employee benefits
Pensions to employees are provided through a defined
benefit plan as well as a defined contribution plan.
A defined benefit plan is a pension plan that defines
an amount of pension benefit that an employee will
receive on retirement, usually dependent on one or
more factors such as age, years of service and salary.
The legal obligation for any benefits from this kind of
pension plan remains with the Group, even if the plan
assets for funding the defined benefit plan have been
acquired. Plan assets may include assets specifically
designated to a long term benefit fund as well as
qualifying insurance policies.
A defined contribution plan is a pension plan under
which the Group pays fixed contributions into an
independent entity. The Group has no legal or
constructive obligations to pay further contributions
after payment of the fixed contribution.
31
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the accounts continued
The asset or liability recognised in the balance sheet
for defined benefit pension plans is the present value
of the defined benefit obligation (DBO) at the balance
sheet date less the fair value of plan assets, together
with adjustments for past service costs. The DBO is
calculated annually by independent actuaries using
the projected unit credit method. The present value of
the DBO is determined by discounting the estimated
future cash outflows using interest rates of high quality
corporate bonds that are denominated in the currency
in which the benefits will be paid and that have terms
to maturity approximating to the terms of the related
pension liability.
Remeasurement gains and losses are recognised
immediately and in full in other 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.
If the Group will not benefit from a scheme surplus in
the form of refunds from the plan or reduced future
contributions, an adjustment is made in respect of the
minimum funding requirement and no asset resulting
from the above policy is recognised.
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.
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’ or
‘hire purchase contract’), 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.
An asset is impaired where there is objective evidence
that, as a result of one or more events that occurred
after initial recognition, the estimated recoverable
value of the asset has been reduced.
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.
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.
32
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the accounts continued
1.16 Income taxes
1.18 Property, plant and equipment
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.
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:
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 where material are always
provided for in full. Deferred tax assets are recognised
to the extent that it is probable that they will be able
to be offset against future taxable income. Deferred
tax assets and liabilities are calculated, without
discounting, at tax rates that are expected to apply to
their respective period of realisation, provided they
are enacted or substantively enacted at the balance
sheet date.
Most changes in deferred tax assets or liabilities are
recognised as components of tax expense in the
income statement. Only changes in deferred tax assets
or liabilities that relate to a change in value of assets or
liabilities that are charged or credited directly to equity
are charged or credited directly to equity.
1.17 Dividends
Equity dividends are recognised when they become
legally payable. In the case of dividends to equity
shareholders, they are recognised when paid.
In the case of final dividends, this is when approved by
the shareholders at the Annual General Meeting.
• Land and buildings – 25 - 50 years
• Plant, machinery
– 3 - 5 years on a straight
line basis
and motor vehicles
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.
33
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
1.21 Other provisions, contingent liabilities and contingent assets
Other provisions are recognised when present obligations will probably lead to an outflow of economic
resources from the Group and they can be estimated reliably. Restructuring provisions are recognised only if
a detailed formal plan for the restructuring has been developed and implemented, or management has at least
announced the plan’s main features to those affected by it. Provisions are not recognised for future operating
losses.
Provisions are measured at the estimated expenditure required to settle the present obligation, based on the
most reliable evidence available at the balance sheet date, including the risks and uncertainties associated
with the present obligation. Any reimbursement expected to be received in the course of settlement of the
present obligation is recognised, if virtually certain as a separate asset, not exceeding the amount of the related
provision. Where there are a number of similar obligations, the likelihood that an outflow will be required in
settlement is determined by considering the class of obligations as a whole. In addition, long term provisions are
discounted to their present values, where time value of money is material.
All provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
In those cases where the possible outflow of economic resource as a result of present obligations is considered
improbable or remote, or the amount to be provided for cannot be measured reliably, no liability is recognised
in the consolidated balance sheet. These contingent liabilities are recognised in the course of the allocation
of purchase price to the assets and liabilities acquired in the business combination. They are subsequently
measured at the higher amount of a comparable provision as described above and the amount initially
recognised, less any amortisation.
Probable inflows of economic benefits to the Group that do not yet meet the recognition criteria of an asset are
considered contingent assets.
Note
7 & 8
2.
PROFIT FROM OPERATIONS
This has been arrived at after charging/(crediting):
Depreciation and amortisation
Foreign exchange differences
Research and development costs
Write-down of inventory to net realisable value
Inventory recognised as an expense
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
Fees payable to overseas auditors
Loss/(profit) on disposal of fixed assets
Operating lease payments
2017
£’000 £
803
(280)
62
26
16,841
7
53
10
5
4
185
2016
’000
801
(234)
41
158
15,554
6
31
3
4
(13)
118
34
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
3.
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 2017.
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
2017
£’000
2017
£’000
2017
£’000
Total
2017
£’000
31,449
9,089
40,538
3,144
(143)
3
(803)
(621)
1,580
4,150
3,211
7,361
27,299
5,172
32,471
146
(23)
1
-
(8)
116
2,605
(28)
1
(338)
(593)
1,647
Revenue
External
Inter Company
Total
Profit
EBITDA
Finance costs
Finance income
Depreciation and amortisation
Tax expense
Profit/(loss) for the period
Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities
-
706
706
393
(92)
1
(465)
(20)
(183)
4,593
490
1,742
2,397
-
11,793
222
18,783
712
3,664
2,402
7,808
35
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
Central
2016
£’000
Manufacturing
2016
£’000
Distribution
2016
£’000
Revenue
External
Inter Company
Total
Profit
EBITDA
Finance costs
Finance income
Depreciation
Tax expense
(Loss)/profit for the period
Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities
-
473
473
(144)
(74)
-
(279)
(41)
(538)
4,497
1,023
1,023
3,565
2,659
6,224
181
(26)
3
(141)
98
115
1,008
-
2,140
Total
2016
£’000
28,415
7,575
35,990
2,195
(150)
30
(801)
(419)
855
24,850
4,443
29,293
2,158
(50)
27
(381)
(476)
1,278
11,991
347
17,496
1,370
4,374
7,537
Geographical analysis
The Group is domiciled in the UK. Analysis of revenues from external customers by continent is provided below:
UK
Rest of Europe
Americas
Africa
Australia and Asia
Revenue
2017
£’000
6,454
7,319
13,325
1,316
3,035
31,449
Non-current
assets
2017
£’000
Revenue
2016
£’000
Non-current
assets
2016
£’000
3,451
70
1,482
150
143
5,296
5,808
7,083
12,223
1,291
2,010
28,415
3,460
81
1,468
199
162
5,370
There is one Group customer which accounts for more than 10% of the Group’s revenues.
36
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
4.
FINANCE INCOME AND EXPENSE
Note
2017
£’000
2016
£’000
Finance expense
Bank borrowings
Hire purchase interest
Finance income
Bank interest received
Other finance income
5.
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
19.6
Note
Deferred tax – origination and reversal of timing differences
15
Total tax charge
111
32
143
2
1
3
127
23
150
28
2
30
2017
£’000
2016
£’000
139
(1)
138
513
-
513
651
(30)
(30)
621
97
-
97
449
(11)
438
535
(116)
(116)
419
37
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
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:
Profit before tax
Expected tax charge based on the standard rate
of corporation tax in the UK of 19.25% (2016 – 20%)
Expenses not deductible for tax purposes
Income not taxable
Tax credits on research and development
Profit on property disposal non taxable
Foreign tax
Movement in rolled over and fair value deferred tax
Deferred tax not provided
Prior year adjustment
Rate differences
2017
£’000
2,201
424
4
-
(25)
-
211
(25)
33
(1)
-
621
2016
£’000
1,274
255
50
(2)
(24)
(179)
161
-
122
(11)
47
419
No deferred tax asset arising on tax losses, accelerated depreciation in excess of capital allowances or deferred
tax liability in respect of the pension provision has been recognised as their future realisation is relatively
uncertain. The amounts not recognised are estimated at £nil, £92,000 and £16,000 respectively (2016 - £10,000,
£45,000 and £(4,000)) calculated at a rate of 17% (2016 – 17%).
EMPLOYEES
6.
The average number of employees of the Group during the year was made up as follows:
Note
19.6
Office and management
Sales and distribution
Manufacturing
Staff costs (including directors) comprise:
Wages and salaries
Defined contribution pension cost
Defined benefit pension cost
Other long-term employee benefits
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
2017
No.
37
47
85
169
£’000
6,451
233
70
51
710
7,515
(66)
7,449
£’000
569
35
604
2016
No.
34
54
70
158
£’000
5,864
192
51
26
639
6,772
(46)
6,726
£’000
475
29
504
The number of directors for whom retirement benefits accrued under money purchase pension schemes
amounted to 3 (2016 – 3) and under defined benefit pension schemes amounted to nil (2016 – nil). Further
details of directors remuneration are included in the remuneration report.
38
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
7.
PROPERTY, PLANT AND EQUIPMENT
At 31st December 2017
Cost
Accumulated depreciation
Net book value
At 31st December 2016
Cost
Accumulated depreciation
Net book value
Year ended 31st December 2017
Opening net book value
Additions
Disposals
Depreciation
Exchange differences
Closing net book value
Year ended 31st December 2016
Opening net book value
Additions
Depreciation
Exchange differences
Closing net book value
Plant,
machinery
and motor
vehicles
£’000
Land and
buildings
£’000
Total
£’000
3,053
144
2,909
9,584
7,255
2,329
12,637
7,399
5,238
3,033
142
2,891
9,106
6,639
2,467
12,139
6,781
5,358
2,891
18
-
(1)
1
2,909
2,632
273
(18)
4
2,891
2,467
694
(19)
(796)
(17)
2,329
2,045
1,097
(783)
108
2,467
5,358
712
(19)
(797)
(16)
5,238
4,677
1,370
(801)
112
5,358
The net book value of tangible fixed assets includes an amount of £757,000 (2016 - £833,000) in respect of
assets held under finance leases and hire purchase contracts. The related depreciation charge on these assets for
the year was £249,000 (2016 - £160,000).
Assets in the course of construction which have not been depreciated total £408,000.
The total cost of non-depreciable assets included in freehold land and buildings was £2,885,000
(2016 - £2,876,000).
39
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
8.
INTANGIBLE ASSETS
At 31st December 2017
Cost
Accumulated amortisation
Net book value
At 31st December 2016
Cost
Accumulated amortisation
Net book value
Year ended 31st December 2017
Opening net book value
Additions
Amortisation
Closing net book value
Year ended 31st December 2016
Opening net book value
Closing net book value
Total
£’000
64
(6)
58
12
-
12
12
52
(6)
58
12
12
Intangible assets relate to purchased goodwill and software. Additions in the year relate to software.
9.
FINANCIAL ASSETS
Secured loan to third party
Amount due on loan within one year
2017
£’000
-
-
2016
£’000
52
52
The secured loan accrued interest at 3.25% above the Bank of England base rate and was fully repaid in 2017.
10.
INVENTORIES
Raw materials
Work in progress
Finished goods
Goods in transit
2017
£’000
499
51
5,745
136
6,431
2016
£’000
299
56
5,625
139
6,119
During the twelve months ended 31st December 2017 the Group recognised a charge of finished goods
inventories of £26,000 (2016 – £158,000) to reflect the ageing of certain stock items.
40
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
11. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments
2017
£’000
5,293
375
243
5,911
2016
£’000
4,640
377
196
5,213
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.
12. TRADE AND OTHER PAYABLES – CURRENT
Trade payables
Other taxes and social security costs
Other payables
Accruals
13. OTHER FINANCIAL LIABILITIES – CURRENT
Bank loans - secured
Hire purchase
Other creditors
2017
£’000
3,161
191
180
859
4,391
2017
£’000
335
276
1,372
1,983
2016
£’000
2,741
191
304
945
4,181
2016
£’000
278
226
1,226
1,730
Note
14
14
An analysis of the interest rate payable on financial liabilities and information about fair values is given in note 17.
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.
41
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
14. FINANCIAL LIABILITIES – NON-CURRENT
Bank loans – secured
Hire purchase
Note
2017
£’000
650
338
988
Obligations under finance lease and hire purchase contracts comprise amounts payable as follows:
In one year or less, or on demand
In more than one year but not more than five years
Obligations under bank loan agreements comprise amounts payable as follows:
Within one year
One to two years
Two to five years
Over five years
Terms and conditions of outstanding loans were as follows:
Interest
Rate
%
4.25% fixed
4.00% fixed
2.50% fixed
3.00% fixed
2.25% over LIBOR
2.50% over Bank of England base rate
2.75% over Bank of England base rate
US dollar bank loan
US dollar bank loan
US dollar bank loan
US dollar unsecured bank loan
US dollar term loan
GBP term loan
GBP term loan
Year of
maturity
2018
2018
2022
2022
2023
2019
2020
2017
£’000
276
338
614
2017
£’000
335
226
390
34
985
2017
£’000
36
76
86
31
533
84
139
2016
£’000
871
490
1,361
2016
£’000
226
490
716
2016
£’000
278
258
467
146
1,149
2016
£’000
91
-
-
40
695
124
199
The 4.25%, 4.00% and 2.50% fixed US dollar bank loans are secured on specific plant and equipment held by 4B
Elevator Components Limited. The US dollar term loan and the GBP term loans form part of the Group funding
arrangements. These loans are secured by a fixed and floating charge over certain assets of certain Group
companies. Other loans are unsecured.
42
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
15. DEFERRED INCOME TAX LIABILITY
Accelerated capital allowances in excess of depreciation
Rolled over capital gains
Balance at 1st January 2017
Exchange differences
Credit to income statement during the year
Balance at 31st December 2017
Note
2017
£’000
29
58
87
2016
£’000
36
82
118
Deferred tax
£’000
118
(1)
(30)
87
Deferred tax has been recognised at a rate of 28.5% (2016 – 39%) on accelerated capital allowances in 4B
Elevator Components Limited and 17% (2016 – 17%) in respect of the Company and Braime Pressings Limited.
16. 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
2017
£’000
120
300
420
120
240
360
2016
£’000
120
300
420
120
240
360
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.
43
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
17. FINANCIAL INSTRUMENTS
Level 1 - quoted prices (unadjusted) in active markets
The Group’s activities expose it to a variety of financial
risks: market risk (including currency risk and cash
flow interest rate risk), credit risk and liquidity risk.
The Group holds financial instruments in order to
finance its operations and to manage the interest rate
and currency risks arising from those operations.
All financial assets and liabilities are initially measured
at transaction price (including transaction costs). If an
arrangement constitutes a financing transaction, the
financial asset or financial liability is measured at the
present value of the future payments discounted at a
market rate of interest for a similar debt instrument.
Trade and other receivables net of impairment losses,
cash and bank balances, trade and other payables
are subsequently measured at the amortised cost
equivalent to the undiscounted amount of cash or
other consideration expected to be paid or received.
Bank loans are initially measured at the present value
of future payment, discounted at a market rate of
interest and subsequently measured at amortised
costs using the effective interest method.
for identical assets or liabilities;
Level 2 - inputs other than quoted prices included
within level 1 that are observable for the
asset or liability, either directly (i.e. as prices)
or indirectly (i.e. derived from prices); and
Level 3 - inputs for the asset or liability that are not
based on observable market data
(unobservable inputs).
The level within which the financial asset or liability
is classified is determined based on the lowest level
of significant input to one fair value measurement.
The only instruments 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 £1,348,000 were
outstanding at 31st December 2017 (31st December
2016 - £nil). The fair value loss on the forward
currency contracts at 31st December 2017 is £15,000
and this has not been included in the balance sheet on
the grounds of materiality (2016 - £nil).
Fixed interest term loans
Whilst finance leasing liabilities within notes 13 and
14 are included within financial liabilities they do not
constitute a financial instrument.
As at 31st December 2017 fixed interest rate US dollar
term loans amounted to £229,000 (2016 - £131,000)
(see note 14).
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
£2,000,000 (2016 - £2,126,000) 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:
Maturity analysis
Other than is disclosed in note 14 regarding bank
loans and obligations under finance lease and hire
purchase agreements all financial instruments fall due
within one year.
In addition to the maturity analysis disclosed in note
14 the interest due on hire purchase agreements
repayable within one year totals £35,000 (2016 -
£25,000), the interest due on finance lease and hire
purchase agreements after one year but not more than
five years totals £33,000 (2016 - £46,000). Likewise
the interest due on bank loans repayable within one
year totals £22,000 (2016 - £28,000), the interest due
on bank loans repayable after one year but not more
than five years totals £29,000 (2016 - £69,000), and
the interest due on bank loans repayable after more
than five years totals £nil (2016 - £2,000).
44
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 2017
Sterling
Euro
US dollar
Other
Floating rate
financial
assets
£’000
Fixed rate
financial
assets
£’000
-
142
359
641
1,142
-
-
-
-
-
Total
£’000
-
142
359
641
1,142
Negative sterling floating rate financial assets relate to bank overdrafts available for offset against credit currency
balances where a legal right of set-off exists.
As at 31st December 2016
Sterling
Euro
US dollar
Other
(1,169)
288
1,321
352
792
-
-
-
-
-
(1,169)
288
1,321
352
792
45
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
£’000
Fixed rate
financial
liabilities
£’000
2,339
(194)
149
(3)
2,291
1,529
20
-
64
1,613
568
-
229
47
844
652
-
826
-
1,478
Total
£’000
2,907
(194)
378
44
3,135
2,181
20
826
64
3,091
Currency
As at 31st December 2017
Sterling
Euro
US dollar
Other
As at 31st December 2016
Sterling
Euro
US dollar
Other
Floating rate financial liabilities comprise bank borrowings.
46
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
£’000
Euro US dollar
£’000
£’000
Other
currencies
£’000
Total
£’000
-
(1,437)
757
(680)
-
(1,036)
558
(478)
737
-
(21)
716
631
-
(20)
611
(365)
-
-
(365)
2,329
-
-
2,329
2,701
(1,437)
736
2,000
(67)
-
-
(67)
2,060
-
-
2,060
2,624
(1,036)
538
2,126
Functional currency
At 31st December 2017
Sterling
Euro
US dollar
At 31st December 2016
Sterling
Euro
US dollar
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 (2016 - 25,000).
A weakening in the value of sterling by 10% will benefit the operating profit by a figure not exceeding £250,000
(2016 - £238,000). A strengthening of sterling by 10% will reduce the operating profit by a figure not greater
than £305,000 (2016 - £290,000).
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
2017
£’000
1,636
2016
£’000
1,756
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.
47
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 are 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 it is considered that 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 generally denominated in the buying
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 generally borrows
at floating rates but some borrowing arrangements
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.
Quantitative disclosures have been made in note 11.
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.
48
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the accounts continued
18. 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 (2016 – 1,440,000). There are no potentially dilutive shares in issue.
Dividends paid
Equity shares
Ordinary shares
Interim of 6.40p (2016 – 6.20p) per share paid on 12th May 2017
Interim of 3.10p (2016 – 2.90p) per share paid on 21st October 2017
‘A’ Ordinary shares
Interim of 6.40p (2016 – 6.20p) per share paid on 12th May 2017
Interim of 3.10p (2016 – 2.90p) per share paid on 21st October 2017
Total dividends paid
2017
£’000
2016
£’000
31
15
46
61
30
91
137
30
14
44
59
28
87
131
An interim dividend of 7.10p per Ordinary and ‘A’ Ordinary share will be paid on 18th May 2018.
49
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
19.2 The scheme exposes the Company to a number
of risks:
• Investment risk. The scheme holds investments in
asset classes such as equities, which have volatile
market values and while these assets are expected
to provide real returns over the long-term the short-
term volatility can cause additional funding to be
required if a 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 equities 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 scheme’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.
19.3 The expected return on assets is equivalent to
the discount rate used to value the scheme’s liabilities
and based on the yield available on high quality
corporate bonds of appropriate term and currency.
The discount rate assumption used here of 2.45% is
based on the yield on the IBOXX over 15 years AA
Corporate Bond Index.
19. PENSION COSTS
19.1 The Group operates a number of defined
contribution schemes, the cost of which are disclosed
in note 6. Additionally the Group operates a funded
defined benefit pension scheme, the 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 Group. The scheme is closed
to new members. There are 5 active members, 6
deferred members and 15 pensioners in the scheme.
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.
The scheme is managed by a board of trustees
appointed in part by the Group. The trustees have
responsibility for obtaining valuations of the fund,
administering benefit payments and investing the
scheme’s assets. The trustees delegate some of
these functions to their professional advisers where
appropriate.
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. As part of the process
the Group must agree with the trustees of the
scheme the contributions to be paid to address any
shortfall against the Statutory Funding Objective and
contributions to pay for future accrual of benefits. A
qualified actuary determines the contributions payable
to the scheme. The most recent actuarial valuation
was conducted at 6th April 2016. The market value
of scheme assets at 6th April 2016 was £8,671,000.
The funding level at 6th April 2016 was 104% 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.
There were no plan amendments, curtailments or
settlements during the period.
50
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
19.4 The amounts recognised in the balance sheet are as follows:
Fair value of scheme assets
Present value of funded obligations
Surplus
Adjustment in respect of minimum funding requirement
Net asset
Note
19.7
19.6
19.5 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
6
4
Administration costs
Total amounts recognised in the consolidated income statement
19.6 Changes in the present value of the defined benefit obligation are as follows:
Opening defined benefit obligation
Current service cost
Contributions by scheme participants
Interest cost
Benefits paid
Remeasurement gains based on experience
Remeasurement gains due to changes in demographic assumptions
Remeasurement loss/(gain) from changes to financial assumptions
Closing defined benefit obligation
19.7 Changes in the fair value of plan assets are as follows:
Opening fair value of scheme assets
Interest on assets
Return on scheme assets in excess of interest
Benefits paid
Administration costs
Employer contributions
Contributions by scheme participants
Closing fair value of scheme assets
2017
£’000
9,128
(9,038)
90
(90)
-
2017
£’000
70
70
225
(226)
(1)
19
88
2017
£’000
8,758
70
9
225
(217)
(1)
-
194
9,038
2017
£’000
8,781
226
304
(217)
(19)
44
9
9,128
2016
£’000
8,781
(8,758)
23
(23)
-
2016
£’000
51
51
264
(266)
(2)
-
49
2016
£’000
7,221
51
9
264
(196)
(1)
(214)
1,624
8,758
2016
£’000
7,271
266
1,392
(196)
-
39
9
8,781
51
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
19.8 Analysis of fair value of plan assets between asset categories is as follows:
Annuity policies in payment
Equities – unquoted - overseas
Equities – unquoted - UK
Cash
Money market funds – unquoted
With profit deferred annuities
Total
% of Total
Assets
58.4%
10.6%
2.4%
2.3%
-
26.3%
100.0%
The assets do not include any investment in shares of the Company.
19.9 The actual return on scheme assets is as follows:
Actual return on scheme assets
19.10 Amount recognised in the statement of comprehensive income is as follows:
Gain on scheme assets in excess of interest
Remeasurement loss from changes to financial assumptions
Changes in effect of asset ceiling
Experience gains
Gains from changes to demographic assumptions
Total amount recognised in statement of comprehensive income
2017
£’000
5,331
968
219
210
-
2,400
9,128
2017
£’000
530
2017
£’000
304
(194)
(66)
1
-
45
2016
£’000
5,298
857
195
191
2
2,238
8,781
2016
£’000
1,658
2016
£’000
1,392
(1,624)
27
1
214
10
19.11 Cumulative amount of remeasurement gains and losses recognised in the statement of comprehensive
income is as follows:
Remeasurement gains
19.12 Amounts for the current period and previous periods are as follows:
Present value of funded obligations
Fair value of scheme assets
Surplus
Experience gains on plan liabilities
Gains/(losses) from changes to demographic assumptions
Losses from changes to financial assumptions
Gains on scheme assets in excess of interest
2017
£’000
372
2016
£’000
327
2017
£’000
(9,038)
9,128
90
1
-
(194)
304
2016
£’000
(8,758)
8,781
23
1
214
(1,624)
1,392
52
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
19.13 Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
2017
2016
Discount rate
Inflation (RPI)
Salary increases
Pension increase (LP15)
Post retirement mortality
2.45%
3.60%
4.60%
3.45%
2.60%
3.65%
4.65%
3.50%
110% of S2NA tables with CMI 2015 110% of S2NA tables with CMI 2015
projections with a long-term rate of projections with a long-term rate of
improvement of 1% pa
No allowance has been made for
members to take tax free cash
70% future income value,
30% market value
Commutation
improvement of 1% pa
No allowance has been made for
members to take tax free cash
Zurich with-profits deferred annuity policy 70% future income value,
30% market value
19.14 The next valuation of the scheme is due as at 6th April 2019. 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 Group’s best estimate of contributions expected to be paid to the plan during the annual period beginning
after the balance sheet date is £44,000. The weighted average duration of the defined benefit obligation is
approximately 17.9 years.
19.15 The amounts recognised in the balance sheet are as follows:
Net asset at start of period
Pension cost
Employer contributions
Remeasurement gain recognised in the statement of comprehensive income
Net asset at end of period
Note
19.5
19.10
2017
£’000
-
(88)
43
45
-
2016
£’000
-
(49)
39
10
-
53
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
19.16 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
£’000
168
(192)
(310)
304
(91)
87
(23)
28
210
(210)
% With-profit deferred annuities converted on retirement using guaranteed annuity rates
Plus 10.00%
Minus 10.00%
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.
20. 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:
Not later than one year
Later than one year and not later than five years
Over five years
21. NOTES SUPPORTING CONSOLIDATED CASH FLOW STATEMENT
Cash and cash equivalents
Cash at bank and in hand
Bank overdraft
Cash at bank and in hand
2017
£’000
2016
£’000
260
386
-
646
132
149
23
304
2017
£’000
1,145
(164)
981
2016
£’000
742
-
742
54
Major non-cash transaction
During the year the Group acquired tangible assets of £146,000 subject to finance (2016 - £371,000) under hire
purchase agreements.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the accounts continued
22. CAPITAL COMMITMENTS
There were capital commitments of £160,000 (2016 - £nil) which are contracted but not provided for in these
financial statements.
23. SUBSIDIARIES
Proportion of shares held
2017 and 2016
100%
-
-
-
-
-
Subsidiary
Principal activity
i
Shares
Registered in and operating from Hunslet Road, Leeds, West Yorkshire, LS10 1JZ, England:
100%
Braime Pressings Limited
Manufacture of metal presswork
Ordinary Preference
Shares
4B Braime Components Limited
Distribution of bulk material
handling components
100%
ii Registered at Hunslet Road, Leeds, West Yorkshire, LS10 1JZ, England and operating from the USA:
4B Elevator Components Limited
Distribution of bulk material
handling components
100%
Incorporated in and operating from 9 Route de Corbie, 80800 Lamotte Warfusee, France:
4B-France sarl
Distribution of bulk material
handling components
100%
Incorporated in and operating from 899/1 Moo 20, Soi Chongsiri, Bangplee-Tam Ru Road,
Samutprakam, 10540, Thailand:
4B Asia Pacific Company Limited
Distribution of bulk material
handling components
48%
Incorporated in and operating from 14 Newport Business Park, Mica Drice, Kya Sand,
2163 Johannesburg, South Africa:
4B Africa Elevator
Components (Pty) Limited
Distribution of bulk material
handling components
100%
iii
iv
v
vi
Incorporated in and operating from Unit 1, 18 Overlord Place, Acacia Ridge, Queensland, 4110, Australia:
4B Australia Pty Limited
Distribution of bulk material
handling components
100%
-
While only 48% of the ordinary shares are held in 4B Asia Pacific Company Limited the Company controls 89%
of the voting rights. As a consequence no single investor directly controls the investee however, given the
operational management that the company demonstrates, it has the ability to direct the relevant activities and the
decision making process such that it has power over the investee.
24. RELATED PARTY TRANSACTIONS
The total remuneration for key management personnel for the year including directors totalled £1,055,000
(2016 - £956,000).
There were no other related party transactions during the year.
55
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Company balance sheet
at 31st December 2017
Note
2017
£’000
981
-
981
1,932
1,274
3,206
Fixed assets
Intangible assets
Tangible fixed assets
Investments
Current assets
Debtors: due within one year
Cash at bank and in hand
Creditors: amounts falling due
within one year
Amounts owed to subsidiary companies
Other creditors falling due within one year
Net current (liabilities)/assets
Total assets less current liabilities
Creditors: amounts falling due
after more than one year 1
Provisions for liabilities
Capital and reserves
Called up share capital
Revaluation reserve
Capital redemption reserve
Retained earnings
Shareholders’ funds
Company’s (loss)/ profit for the financial year
3
4
5
8
10
0
11
12
2017
£’000
46
6,166
598
6,810
(2,225)
4,585
409
159
4,017
360
85
180
3,392
4,017
(408)
Restated
2016
£’000
Restated
2016
£’000
1,316
3
1,319
2,604
335
2,939
-
6,387
598
6,985
(1,620)
5,365
615
188
4,562
360
85
180
3,937
4,562
1,166
These financial statements were approved and authorised for issue by the board of directors on 1st May 2018
and signed on its behalf by:
Nicholas Braime, Director
Alan Braime, Director
56
The notes on pages 58 to 63 form part of these financial statements
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Company statement of changes in equity
for the year ended 31st December 2017
Capital
Called up Revaluation Redemption
Reserve
Reserve
£’000
£’000
Share Capital
£’000
Retained
Earnings
£’000
Total
£’000
Balance at 1st January 2016
Comprehensive income for the
financial year – profit
Dividends paid
Balance at 31st December 2016
Comprehensive income for the
financial year – loss
Dividends paid
Balance at 31st December 2017
360
-
-
360
-
-
360
85
-
-
85
-
-
85
180
-
-
180
-
-
180
2,902
3,527
1,166
(131)
3,937
(408)
(137)
3,392
1,166
(131)
4,562
(408)
(137)
4,017
The revaluation reserve represents the fair value uplift in the Company’s freehold property.
The capital redemption reserve represents the nominal value of preference share capital repurchased by the
Company.
The retained earnings represents cumulative profit or losses net of dividends and other adjustments. Included
within retained earnings is a non-distributable amount of £71,000.
57
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the Company accounts continued
1.
COMPANY INFORMATION
T.F. & J.H. Braime (Holdings) P.L.C. is a Company
limited by shares, incorporated in England & Wales.
Its registered office is Hunslet Road, Leeds, LS10 1JZ.
The Company is a holding company. Details of the
Group’s activities are provided on page 8.
2. ACCOUNTING POLICIES
2.1 Accounting convention
These financial statements have been prepared in
accordance with Financial Reporting Standard 102
‘The Financial Reporting Standard applicable in the UK
and Republic of Ireland’ and the Companies Act 2006.
The financial statements have been prepared under
the historical cost convention, as described below.
The Company has chosen to early adopt the
amendments to FRS 102 ‘The Financial Reporting
Standard applicable in the UK and Republic of Ireland
Triennial review 2017 – Incremental improvements
and clarifications’.
As a consequence the Company has elected to
measure freehold land and buildings leased to other
group companies, previously measured at fair value,
under the historical cost convention. The fair value at
the date of transition has been used as its deemed cost
at this date.
Investment properties fair valued at 31st December
2016 of £4,533,000 have been redesignated as
freehold property and the difference between
the deemed cost and its historic cost treated as
a revaluation reserve. As at 1st January 2016 this
resulted in the creation of a revaluation reserve of
£85,000, with a corresponding decrease in retained
earnings.
The prior year fair value gain of £276,000 and part
of the movement in deferred tax in the comparative
period to 31st December 2016 of £152,000 has as
a consequence been removed from the company’s
profit for the financial period. This has had the
effect of reducing the profit for the year ended 31st
December 2016 from £1,290,000 to £1,166,000.
The functional currency of the Company is considered
to be pounds sterling.
2.2 Financial Reporting Standard 102 –
reduced disclosure exemptions
The Company has taken advantage of the following
disclosure exemptions in preparing these financial
statements as permitted by FRS102 “The Financial
Reporting Standard applicable in the UK and Republic
of Ireland”.
• The requirements of Section 7 Statement of Cash
Flows;
• the requirement of Section 3 Financial Statement
Presentation paragraph 3.17 (d);
• the requirements of Section 11 Financial Instruments
paragraphs 11.39 to 11.48A;
• the requirements of Section 12 Other Financial
Instruments paragraphs 12.26 to 12.29;
• the requirement of Section 33 Related Party
Disclosures paragraph 33.7.
2.3
Intangible assets
Acquired bespoke software is included at cost and
amortised in equal annual instalments over a period
of 5 years which is its estimated useful economic life.
Provision is made for any impairment.
2.4 Property, plant and equipment
Property, plant and equipment is stated at purchase
cost together with any incidental expenses of
acquisition, net of depreciation and any provision for
impairment.
Depreciation is provided on all tangible assets, at rates
calculated to write off the cost less estimated residual
value of each asset over its expected useful life
• Plant and machinery – 4-5 years on a straight line
basis
• Fixtures and fittings – 4-5 years on a straight line
basis
– 4-5 years on a straight line
basis
• Motor vehicles
Depreciation has not been charged on freehold land
and buildings in the year as the directors consider their
residual value to be higher than their net book value.
Residual value represents the estimated amount which
would currently be obtained from the disposal of an
asset after deducting estimated costs of disposal, if
the asset were already at an age and in the condition
expected at the end of its estimated useful life.
58
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the Company accounts continued
The need for any fixed asset impairment write down
is assessed by comparison of the carrying value of the
assets against the higher of realisable value and value
in use.
The gain or loss arising on the disposal of an asset
is determined on the difference between the sale
proceeds and the carrying value of the asset, and is
recognised in the profit and loss account.
2.5 Financial instruments
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instrument.
Financial liabilities and equity instruments are
classified according to the substance of the contractual
arrangements entered into. An equity instrument
is any contract that evidences a residual interest in
the assets of the Company after deducting all of its
liabilities.
All financial assets and liabilities are initially measured
at transaction price (including transaction costs). If an
arrangement constitutes a financing transaction, the
financial asset or financial liability is measured at the
present value of the future payments discounted at a
market rate of interest for a similar debt instrument.
The following assets and liabilities are classified as
basic financial instruments – cash and bank balances,
trade creditors, accruals, bank loans and inter-
company balances.
Cash and bank balances, trade creditors, accruals and
inter-company balances (being repayable on demand)
are measured at the amortised cost equivalent to the
undiscounted amount of cash or other consideration
expected to be paid or received.
Bank loans are initially measured at the present value
of future payments, discounted at a market rate of
interest and subsequently measured at amortised cost
using the effective interest method.
2.6
Impairment of assets
Assets are assessed for indicators of impairment at
each balance sheet date. If there is objective evidence
of impairment, an impairment loss is recognised in
profit and loss as described below.
Non financial assets
An asset is impaired where there is objective evidence
that, as a result of one or more events that occurred
after initial recognition, the estimated recoverable
value of the asset has been reduced. The recoverable
amount of an asset is the higher of its fair value less
costs to sell and its value in use.
Financial assets
For financial assets carried at cost less impairment, the
impairment loss is the difference between the asset’s
carrying amount and the best estimate of the amount
that would be received for the asset if it were sold at
the reporting date.
Where indicators exist for a decrease in impairment
loss, and the decrease can be related objectively
to an event occurring after the impairment was
recognised, the prior impairment loss is tested to
determine reversal. An impairment loss is reversed
on an individual impaired financial asset to the extent
that the revised recoverable value does not lead to a
revised carrying amount higher than the carrying value
had the impairment loss not been recognised.
2.7 Cash and cash equivalents
Cash and cash equivalents include cash in hand and
bank overdrafts. Bank overdrafts are shown within
borrowings in current liabilities, except where a legal
right of set off exists.
2.8
Investments
Investments in subsidiaries are measured at cost less
impairment.
2.9 Taxation
Current tax, including UK corporation tax is provided
at amounts expected to be paid (or recovered) using
the tax rates and laws that have been enacted or
substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing
differences that have originated but not reversed
at the balance sheet date and that give rise to an
obligation to pay more tax or a right to pay less tax in
the future. Timing differences are differences between
the Company’s taxable profits and its results as stated
in the financial statements that arise from the inclusion
of gains and losses in tax assessments in different
periods from those in which they are recognised in the
financial statements.
59
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the Company accounts continued
Unrelieved tax losses and other deferred tax assets are
recognised only to the extent that, on the basis of all
available evidence, it can be regarded as more likely
than not that there will be suitable taxable profits from
which the future reversal of the underlying timing
differences can be deducted.
Deferred tax is measured using the tax rates and laws
that have been enacted or substantively enacted by
the balance sheet date and are expected to apply to
the reversal of the timing difference. Deferred tax
relating to the Company’s properties are measured
using the tax rates and allowances that apply to sale of
the asset.
Where items recognised in other comprehensive
income or equity are chargeable to or deductible
for tax purposes, the resulting current or deferred
tax expense or income is presented in the same
component of comprehensive income or equity as
the transaction or other event that resulted in the tax
expense or income.
2.10 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 reported at the rate of exchange ruling
at the balance sheet date. Exchange differences are
recognised in the income statement in the period in
which they arise.
2.11 Hire purchase and leasing commitments
Assets held under finance leases, hire purchase
contracts and other similar arrangements, which
confer rights and obligations similar to those attached
to owned assets, are capitalised as tangible fixed
assets at the fair value of the leased asset (or, if lower
the present value of the minimum lease payments
as determined at the inception of the lease) and are
depreciated over the shorter of the lease terms and
their useful lives. The capital elements of future lease
obligations are recorded as liabilities, while the interest
elements are charged to the profit and loss account
over the period of the leases to produce a constant
periodic rate of interest on the remaining balance of
the liability.
2.12 Critical accounting judgements and sources
of estimation uncertainty
In the application of the Company’s accounting
policies, management is required to make judgements,
estimates and assumptions about carrying values
of assets and liabilities that are not readily available
from other sources. The estimates and associated
assumptions are based on historical experience and
other factors that are considered to be relevant. Actual
results may differ from these estimates.
The estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the
estimate is revised if the revision affects only that
period, or in the period of the revision and future
periods if the revision affects both current and future
periods.
The critical judgements that the directors have made
in applying the Company’s accounting policies and the
key sources of estimation uncertainty that have had
the most significant effect on the financial statements
are described below:
Carrying value of freehold land and buildings
As described in notes 2.1 and 2.4 to the financial
statements the Company’s freehold land and buildings
are now carried at deemed cost with reference to a
previous independent valuation as at 31st December
2015. Having given consideration to current
property values the directors have considered that
the properties residual values exceed their net book
values, hence no depreciation need be charged.
Useful economic lives of plant and machinery
The annual depreciation charge for plant and
machinery is sensitive to changes in the estimated
useful economic lives and residual values of the
assets. The useful economic lives and residual values
are re-assessed annually. They are amended when
necessary to reflect current estimates, based on
technological advancement, future investments,
economic utilisation and the physical condition of the
assets.
60
T.F. & J.H. BRAIME (HOLDINGS) P.L.C. Notes to the Company accounts continued
3.
INTANGIBLE ASSETS
Cost
At 1st January 2017
Additions
At 31st December 2017
Amortisation
At 1st January 2017
Provided for the year
At 31st December 2017
Net book value
At 31st December 2017
4.
TANGIBLE FIXED ASSETS
Freehold
Land and Plant and Fixtures and
fittings
buildings machinery
£’000
£’000
£’000
Motor
vehicles
£’000
Cost
At 1st January 2017
Additions
Disposals
At 31st December 2017
Depreciation
At 1st January 2017
Provided for the year
Disposals
At 31st December 2017
Net book value
At 31st December 2017
4,267
18
-
4,285
10
-
-
10
2,468
427
(36)
2,859
406
682
(29)
1,059
4,275
1,800
At 31st December 2016
4,257
2,062
82
45
(1)
126
14
22
(1)
35
91
68
2
-
-
2
2
-
-
2
-
-
Software
£’000
-
52
52
-
6
6
46
Total
£’000
6,819
490
(37)
7,272
432
704
(30)
1,106
6,166
6,387
The net book value of tangible fixed assets includes an amount of £536,000 in respect of assets under finance
leases and hire purchase contracts. The related depreciation on these assets for the year was £186,000. Assets in
the course of construction which have not been depreciated total £408,000 (2016 - £196,000).
The historical cost of the freehold land and buildings is £2,855,000.
61
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the Company accounts continued
5.
INVESTMENTS
Subsidiary undertakings
At 1st January 2017 and 31st December 2017
The list of subsidiaries is disclosed in note 23 of the consolidated financial statements.
6.
EMPLOYEES
Office and management
Directors’ remuneration
Emoluments for qualifying service
£’000
598
2017
No.
6 6
2016
No.
£’000
£’000
53
51
Further details of directors’ remuneration are included in the remuneration report.
7.
PROFIT FOR THE FINANCIAL YEAR
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and
has not presented its own Income Statement in these financial statements.
8. DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR
Other taxes
Prepayments
Amounts owed by a subsidiary company
9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank overdraft
Bank loan - secured
Corporation tax
Trade creditors
Accruals
Hire purchase - secured
2017
£’000
50
17
914
981
2017
£’000
775
99
5
112
69
214
1,274
2016
£’000
6
44
1,266
1,316
2016
£’000
-
108
1
8
33
185
335
Cross guarantees exist in respect of all Group company bank borrowings. At 31st December 2017 the
borrowings guaranteed by the Company amounted to £nil (2016 - £971,000).
62
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Notes to the Company accounts continued
10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Bank loan - secured
Hire purchase creditor - secured
2017
£’000
124
285
409
2016
£’000
215
400
615
The bank loan and hire purchase creditors are secured by fixed charges over certain assets of the Company.
11. PROVISIONS FOR LIABILITIES
Deferred tax liability
Rolled over capital gains
Property fair value adjustment
Balance at 1st January 2016
Credit to income statement during the year
Balance at 31st December 2017
2016
£’000
72
116
188
2017
£’000
58
101
159
Deferred
tax
£’000
188
(29)
159
Deferred tax has been recognised at a rate of 17% (2016 – 17%) based on tax rates and laws that have been
enacted or substantively enacted at the balance sheet date.
12. 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
2017
£’000
120
300
420
120
240
360
2016
£’000
120
300
420
120
240
360
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.
63
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
Five year record
2017
£’000
2016
£’000
2015
£’000
2014
£’000
2013
£’000
Turnover
31,449
28,415
26,470
24,292
22,954
Profit from operations
2,341
1,394
897
1,236
Profit before tax
2,201
1,274
1,950
1,125
Profit after tax
1,580
855
1,542
782
1,075
1,010
752
Basic and diluted earnings per share 109.73p
59.34p
107.05p
54.31p
52.23p
64
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 4 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.
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 2017 to the
meeting.
2. Confirmation of dividends
To confirm the interim dividend on the ordinary
and ‘A’ ordinary shares of 3.10p per share paid on
21st October 2017 and 7.10p per share paid on
18th May 2018.
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, Nicholas Braime and Andrew Walker
are retiring by rotation in accordance with the
Company’s Articles of Association and, being
eligible, offer themselves for re-election. Cielo
Cartwright, Group Finance Director, was appointed
since the last AGM and being eligible, offers
herself for election.
4. 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.
65
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
T.F. & J.H. BRAIME (HOLDINGS) P.L.C.
REPORT & ACCOUNTS
2017
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T.F. & J.H. BRAIME (HOLDINGS) P.L.C.