Braime Group PLC Annual Report 2021

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FY2021 Annual Report · Braime Group PLC

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2021

Braime Group – a rich heritage dating back to 1888

The Group has a rich heritage, tracing back its origins to the

19th century, when oilcans made in a small workshop by

Thomas Braime quickly gained a reputation for quality.

Thomas, the eldest son of a veterinary surgeon, was apprenticed

to McLaren, an engineering company manufacturing steam

traction engines. After losing his thumb in an accident, he was

inspired to look for effective ways to apply oil to machinery.

In 1888, he set up production in Hunslet, Leeds, using the new

pressings technology. His younger brother Harry, also a skilled

engineer joined him as partner. The rise of the motor industry

increased demand for metal pressings and larger premises

were soon needed for the expanding business. The current

Braime buildings, with its attractive red brick and terracotta

frontage, was constructed between 1911 and 1914. During

the First World War, the Company played an important role

in armament provision, training women as skilled munition

workers. The Group’s headquarters remains its listed buildings

on Hunslet Road, the beautiful interiors are often used in film

sets. However, today, the Group is truly international with

subsidiaries in North America, Europe, China, South East Asia,

Africa and Australia.

Braime Group PLC

Hunslet Road

Leeds LS10 1JZ

England, UK

www.braimegroup.com

Annual Report & Accounts 2021

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Braime Group PLC
The Group is involved in the
manufacture of metal presswork
and the distribution of bulk
material handling components.
Our electronics division specialises
in level controls, intelligent sensors
and safety control systems for
bucket elevators and conveyors.

The Group is headquartered in
Leeds, United Kingdom, but also
trades from locations in France,
South Africa, Australia, Thailand,
China and the United States.

OVER 130 YEARS OF ENGINEERING EXCELLENCE

Front cover: Cement kiln elevator steel cord belt installation, Martinsburg, West Virginia, USA.

Above: Inside the IE-Node: remote sensor monitoring interface for PLCs and automation systems.

Designed and produced by corporateprm, Edinburgh and London

www.corporateprm.co.uk

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Strategic Report

Governance

Financial Statements

Explanatory notes of resolutions

(continued)

resolution.

The following notes give an explanation of the proposed resolutions. Resolutions 1 to 6 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

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 2021 to the meeting.

To confirm the interim dividend on the Ordinary and ‘A’ Ordinary shares of 4.25p per share paid on 14th October 2021 and 8.20p

The Articles of Association of the Company require the nearest number to one third of the directors to retire at each Annual General

Meeting. The following directors are retiring by rotation in accordance with the Company’s Articles of Association and, being eligible,

The Company is required to appoint auditors at each Annual General Meeting to hold office until the next such meeting at which

The resolution proposes the reappointment of the Company’s existing auditors, Kirk Newsholme, and authorises the directors to

2. Confirmation of dividends

per share paid on 8th June 2022.

Re-appointment of directors

offer themselves for re-election.

3. C. O. Braime

4. A. Q. Braime

5. Re-appointment of auditors

accounts are presented.

6. Remuneration of auditors

agree their remuneration.

Directors and advisers

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), FCA

Carl Braime, BSc (Hons), MSc, MBA

Cielo Cartwright, BSc (Hons), FCA

Secretary

Cielo Cartwright, BSc (Hons), FCA

Registered office

Hunslet Road, Leeds LS10 1JZ

Independent

auditors

Bankers

Kirk Newsholme

Chartered Accountants and Statutory Auditors

4315 Park Approach, Thorpe Park, Leeds LS15 8GB

HSBC

Leeds City Branch

33 Park Row, Leeds LS1 1LD

Stockbrokers

W H Ireland

3rd Floor, Royal House, 28 Sovereign Street, Leeds LS1 4BJ

Company registration

488001 (England and Wales)

Number

Strategic Report

Governance

Financial Statements

“We expected 2021 to be challenging. Instead, all our subsidiaries across the
Group exceeded both their budget and their prior year sales.”

Nicholas Braime, Chairman

27th April 2022

Financial Highlights 2021

Turnover (£m)

Proﬁt from operations (£m)
before exceptional item

35.7

33.4

32.8

31.4

36.4

3.2

2.3

2.2

2.5

Contents

Strategic report

Chairman’s statement

Group strategic report

1.4

The Board

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

Governance

Corporate governance report

Proﬁt before tax (£m)

Proﬁt after tax (£m)

Directors’ report

3.0

2.2

Directors’ remuneration report

Independent auditors’ report

2.2

1.6

1.7

1.3

Financial statements

Consolidated income statement

1.2

1.1

0.9

0.8

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

Basic and diluted earnings
per share (pence)

Dividend per share
(pence)

Consolidated statement of
comprehensive income

Consolidated balance sheet

Consolidated cash ﬂow statement

Consolidated statement of
changes in equity

Notes to the accounts

12.45

Company balance sheet

154.79

109.73

93.68

59.31

52.08

11.5

11.6

11.8

10.2

2017

2018

2019

2020

2021

2017

2018

2019

2020

2021

Company statement of changes
in equity

Notes to the Company accounts

Five year record

Notice of meeting

Explanatory notes of resolutions

Directors and advisers

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Braime Group PLC Annual Report & Accounts 2021

2 Strategic Report

Group at a glance

Principal activities

The Group manufactures deep drawn metal presswork and distributes material handling
components and monitoring equipment. Manufacturing activity is delivered through
Braime Pressings Limited and the distribution activity is through the 4B division.

Our strategy
The main area of the business is the supply of goods and services for handling and processing industrial, and in particular,
agricultural commodities. This sector is currently a growth industry with a global market. Our strategy is to invest in increasing
our market reach while continuing to develop new products. Our latest subsidiary, 4B China, in Changzhou, Jiangsu province
of China, was launched in 2018, having closely consulted on local opportunities with our key customers in the region.

We continue to enhance features of our secure, cloud based industrial monitoring solution, Hazardmon which is revolutionary
for introducing greater levels of transparency and record keeping.

We will continue to investigate new geographical markets.

Braime Pressings

Braime Pressings specialises in metal presswork, including
deep drawing, multi-stage progression and transfer presswork.
The business manufactures precision stamped components
for the automotive and industrial sectors, with automation
capabilities such as pick and place, roll threading, washing
and robotic welding.

4B Group “Better by design”

The 4B division is an industry leader in developing high quality,
innovative and dependable material handling components for the
agricultural and industrial sector, from elevator buckets to forged
conveyor chain and level monitors to hazard monitors. 4B works
in close partnership with its customers on new designs and on
the upgrade of existing elevators and conveyor machines.

Braime Pressings has over 130 years of manufacturing
experience and a proven record of world class supply to the
automotive industry and a range of other markets. It offers
innovative solutions to customer requirements which exceed
expectations on cost, quality and delivery.

• Deep Drawn Presswork

• Multi Stage Progression

• Transfer Presswork

• Robot Technology

•

Sub Assembly

Braime Pressings prides itself on the maintenance and continual
improvement of a full quality management system and is
accredited to IATF-ISO.

For more information please visit: www.braimepressings.com

The 4B division consists of the following companies:

• 4B Braime Components Limited, based in Leeds, UK

• 4B Elevator Components Limited, based in Morton,

Illinois, USA

• 4B-France sarl, based in Villers-Bretonneux, France

• 4B Africa Elevator Components (Pty) Limited, based

in Johannesburg, South Africa

• 4B Australia Pty Limited, based in Queensland, Australia

• 4B Asia Paciﬁc Company Limited, based in

Samutprakam, Thailand

• 4B Braime (Changzhou) Industrial Control Equipment

Co Limited, based in Changzhou, China

For more information please visit: www.go4b.com

Braime Group PLC Annual Report & Accounts 2021

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The Group manufactures deep drawn metal presswork and distributes material handling

components and monitoring equipment. Manufacturing activity is delivered through

Braime Pressings Limited and the distribution activity is through the 4B division.

Our strategy

The main area of the business is the supply of goods and services for handling and processing industrial, and in particular,

agricultural commodities. This sector is currently a growth industry with a global market. Our strategy is to invest in increasing

our market reach while continuing to develop new products. Our latest subsidiary, 4B China, in Changzhou, Jiangsu province

of China, was launched in 2018, having closely consulted on local opportunities with our key customers in the region.

We continue to enhance features of our secure, cloud based industrial monitoring solution, Hazardmon which is revolutionary

for introducing greater levels of transparency and record keeping.

We will continue to investigate new geographical markets.

Braime Pressings

4B Group “Better by design”

Strategic Report

Governance

Financial Statements

Seamless Steel Buckets
Braime Pressings have manufactured
pressed seamless steel buckets and
supplied them worldwide to the bulk
material handling sector for over
120 years. The buckets, including the
Company’s “StarcoTM” and “Super
StarcoTM” models, have been designed
after extensive research and development
and offer a range of alternative styles
to suit the different individual materials
being conveyed and achieve the
optimum ﬁll, effective discharge and
throughput over a wide speed range.

Pressings
Braime Pressings is equipped with
5 transfer presses, each with up
to 8 stations, as well as numerous
single station and progression presses,
fed by coil, and including robotic
transfer of product where appropriate.
The range of equipment includes both
mechanical and hydraulic presses
with capacities up to 500T, as
well as ancillary forming and
welding machinery.

Deep Seamless Enclosures
and Large Panels
Production includes deep drawn
pressings up to 500mm deep, as well
as large panels up to 2.4 meters long.
The Company manufactures to the
highest quality standards required by the
automotive and other industry sectors
and holds annual accreditation to:
IATF 16949:2016
ISO 9001:2015

Elevator Bolts
Braime Pressings manufactures bolts
and fasteners, used in bulk material
handling to attach elevator buckets to
vertical conveyors which are used in the
storage and processing of agricultural
products, such as cereals, animal feed,
and sugar, and equally for moving
industrial commodities, such as
aggregates, cement, coal and glass
cullet. The bolts are cold forged making
them exceptionally strong.

Elevator Buckets
4B has the world’s largest range
of elevator buckets used for conveying
bulk materials. With over 400 different
sizes and styles, 4B supplies steel and
plastic elevator buckets for both
agricultural applications such as grain,
feed, seeds, and sugar and industrial
applications such as cement,
glass, aggregates and coal.

Electronic Monitoring
4B offers an extensive range of
monitoring equipment and sensors
for bucket elevators, belt and chain
conveyors, screw conveyors and silos.
4B’s sensors and monitors have
worldwide approvals for use in dust
hazardous environments. Our sensors
and hazard monitoring systems are
designed to reduce the risk of ﬁres and
explosions, and prevent breakdowns
that result in costly down time.

Elevator Belting
4B has a wide range of elevator belting
to suit all applications. Belt types
include anti-static, abrasion-resistant,
high temperature, oil resistant and
ﬂame retardant and steel web belting
for the toughest environments. Belts are
supplied slit, cut to length and punched
to customer requirement.

Dropped Forged Conveyor Chain
4B is a manufacturer of drop forged chain
for agricultural and industrial applications.
4B’s superior heat treatment technique
provides the optimum chain link with
a more resilient ductile core for shock
resistance, and an extremely hard exterior
surface for superior wear resistance, ideal
for handling ash, cement, gypsum, coal
and wood chips. 4B offers a range of
conveyor sprockets and trailers and
nylon or welded ﬂights.

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4 Strategic Report

Chairman’s statement

date is the 19th May 2022). This brings the total dividend paid in
relation to 2021 to 12.45p, compared to 11.8p in 2020.

Strategy
The business has continued to pursue its longstanding strategy of
aiming to achieve growth in sales and proﬁt by consistently
investing in 3 key areas:-

– new machinery and equipment to achieve ongoing

improvements in productivity and efﬁciency;

– product development to add further innovative products for

existing and new customers;

– developing new markets which offer opportunities to expand

the customer base.

This strategy is pursued through a policy of maintaining low
central overheads, and by limiting central control to the areas of
ﬁnance, capital expenditure, product development and marketing
support. Control over other areas of the business is delegated to
the subsidiaries, who are best placed to develop policies to suit
their own local markets.

Capital Investment
In 2021 the Group made capital investments totalling £2.1m,
repeating the level of investment made in 2020. Of this, £0.7m
was invested in production equipment, £0.5m in the completion
of the new operating and distribution facility for 4B France, and
£0.7m spent towards the cost of the new warehouse being
constructed for our UK manufacturing facility.

The new premises at 4B France, completed in May 2021,
provide larger and more modern ofﬁce and storage facilities,
signiﬁcantly improve the ability to serve existing customers,
support future growth, and enable it to provide support, where
necessary post Brexit, to other European customers still supplied
primarily from the UK.

The new climate controlled warehouse in Leeds will provide
Braime Pressings with additional centralised climate-controlled
storage for both raw materials and ﬁnished parts. The new
warehouse, dispatch area, and extra employee parking were
scheduled for completion in October 2021 but have been
seriously delayed by the issue in the Chain Cell and the
unexpected discovery of a 30m deep water well at a point
where the new building joins the existing facility, as announced
in February 2022.

The well, not marked on any current or historical maps, and
missed by the ground survey and exploratory bore holes, was
probably part of Union Foundry, built around 1850, occupying
part of the current manufacturing site prior to its acquisition by
T.F. & J.H. Braime in 1910. The cost of plugging and securing the
well beneath the foundations, and the resulting delay to the
building program, have added around £300,000 to the cost of
this project. Completion is ﬁnally expected in the summer of this
year.

Nicholas Braime
Chairman

Overview
We expected 2021 to be challenging. Instead, all our
subsidiaries across the Group exceeded both their budget and
their prior year’s sales. In particular, the revenues of Braime
Pressings increased substantially due to exceptionally high
demand from its external customers for commercial vehicle
components, as well as increased demand from its internal
customers in the Group for the supply of material handling
components to the 4B division, due to a surprising increase in
infrastructure projects globally. The combined effect was to lift
the annual revenue of Braime Pressings by 38%. In
consequence, the manufacturing business made a very
signiﬁcant contribution to the Group operating proﬁt for the
ﬁrst time in recent years.

Across the Group in 2021, sales increased from £32.8m in 2020
to £36.4m in 2021, and the overall gross margin rose from
46.7% to 48.4%. Meanwhile the effect of exchange rate
movements on overseas margins and earnings was marginally
positive in 2021. So the Group operating proﬁt increased from
£1.4m to £2.5m before exceptional costs, an excellent result in
the context of the pandemic.

However, the results include £1.2m of exceptional costs, £1.0m
of which the directors have set aside as a provision to cover the
costs of re-building part of the UK facility, which had to be
demolished in December. This issue is discussed further later in
the statement. After deducting both the ﬁnance expense of
£0.2m and the exceptional cost of £1.2m the proﬁt before tax,
is £1.1m, similar to the ﬁgure in 2020.

Dividends
The Company paid an interim dividend of 4.25p in October 2021.
Based on the positive result for 2021, and strong current trading,
the directors propose paying a second dividend of 8.20p on the
8th June to the holders of the Ordinary and “A” Ordinary Shares
on the Share Register on the 20th May 2022. (The ex-dividend

Braime Group PLC Annual Report & Accounts 2021

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Strategic Report

Governance

Financial Statements

New Product Development
In 2021, we brought to market a number of new innovative
products and continued our investment in product development.
The long process from original concept, through the assessment
of the technical and commercial feasibility of the idea, detailed
design, gaining the relevant approvals standard and certiﬁcation,
carrying out ﬁeld trials, to ﬁnal product launch, takes a
minimum of 3 years and sometimes much more. Devoting
current time to continuously progressing a stream of new
product development is crucial to the future of the business.

Repairs to the UK Facility
In July 2021, following a major storm, bricks under a beam
supporting the roof of the North-East corner of the Leeds
facility, fell to ground in the Chain Cell. Very fortunately nobody
was hurt, but the drop of a structural beam by 300mm, caused
another supporting beam to rotate off its location in the
opposite chimney wall and pushed out the top of an external
wall running adjacent to Sayner Lane, forcing the wall to bow
outwards and the public highway had to be closed.

Our structural engineers advised that the building would
inevitably deteriorate further, cause the roof to collapse and,
when it did so, would pull down further areas of rooﬁng over the
main workshops and that the only option was full demolition.
We reserved £250,000 for this at the interim results stage.

The Leeds facility is a Grade II Listed Building. Under the 1990
Listed Buildings Act, it is a criminal offence to demolish or
materially alter a Listed Building without the prior consent of the
local authority, in our case Leeds City Council (LCC). Prior to
granting their consent for demolition, LCC required that our
structural engineers justiﬁed the demolition and that our
architects submitted a planning application for the demolition
and the restoration of the building, which included important
features of the historic structure deemed of particular value.
These features included rebuilding the original facade of the
building adjacent to Sayner Lane re-using the original bricks and
restoring the original ﬁreplace and chimney, which dominated
the rear of the property and formed an important part of the
Union Foundry, built in the mid-19th Century, during the early
industrial revolution in Leeds.

Following an application for demolition and re-building, the
Planning Application was granted in mid-January 2022. The
current best estimate from specialist advisors is that the total
cost will be in the region of £850,000 which will have to be
ﬁnanced from internal resources. However, we are still in
discussion with LCC planners, architects, and potential
contractors to minimise the cost of the re-construction,
including the costly features required by the council but creating
a new low maintenance building designed to increase efﬁciency,
reduce operational costs and provide additional usable space for
storage and production. We hope to receive ﬁrm pricing in early
May and complete the works in 2022. Further updates will be
provided.

4B France’s new facility, located near Amiens

This unexpected event forced Braime Pressings to temporarily
relocate and condense some of its manufacturing operation in
another part of the UK facility, causing additional stress at a
time when resources were already fully stretched. The only
mitigating factors are that it involved the oldest part of the
facility, dating from 1850, was in poor condition, badly
designed, and built on clay without foundations. Despite these
setbacks, the overall results to date have remained positive.

Risk
Business risks are set out in the strategic report but the two
principal risks to the Group are its exposure to currency
ﬂuctuations, and its exposure to claims for compensation linked
to product failure. These primary risks are due respectively, to
the very high proportion of the Group products which are sold
overseas, and to the speciﬁc nature of the markets in which it is
engaged.

The Group also buys part of its raw materials in overseas
currencies, and this partly offsets the fact that around 80% of
Group revenues are made in overseas markets and currencies.
The business holds substantial funds in key foreign currencies
and, to the limited extent to which this is possible, it minimises
the risk by reacting to currency ﬂuctuations. This involves both
judgement and luck and the risk, inherent in the Groups proﬁle,
remains unavoidable in the long-term.

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6 Strategic Report

Chairman’s statement (continued)

The invasion of Ukraine by Russia has tragic and unimaginable
humanitarian consequences. It has also largely closed, for the
moment, two very signiﬁcant markets for agro-industrial
components supplied both directly, and especially indirectly, by
Group subsidiaries.

The Group is being badly affected by huge increases in the cost
of our main raw materials, steel, plastic resin and rubber. In
2022, these increases have already averaged 50% and are
unprecedented in peacetime. Meanwhile, the over 600%
increase in the cost of sea freight, and the doubling of delivery
times during 2021 has shown no sign of abating. On occasions,
the shipping cost now exceeds the ex-works cost of the
products. The size of the increases, and the long and unreliable
delivery times, are very disruptive for a Group dependent on
trading globally.

These problems seriously affect purchasing, production and sales
and create a huge increase in the stress and the daily work of
our employees. Above all, the knock-on effect of this instability
puts every order and every customer perpetually “at risk”. We
therefore look to the year ahead with concern, and anticipate
difﬁcult times ahead, although historically, the diversity of our
product range and the global nature of our sales have together
helped us weather such challenges.

Nicholas Braime, Chairman

27th April 2022

A large proportion of the Group’s products are sold into the
material handling market, primarily to storage and processing
facilities. In the case of the mechanical components, the parts
are used in physically transporting the granular product; in the
case of the electronic components, they are designed to help
reduce the risk that the combination of the dust and oxygen
present in moving high volumes of combustible product, triggers
a ﬁre or dust explosion. As a result, the business is exposed
periodically to claims for ﬁnancial compensation although no
such claims have been made in the ﬁnancial year.

Great care is taken in the design and manufacture of our
products in order to meet and maintain a multitude of complex
international Standards and Approvals. This process involves
signiﬁcant ongoing cost. Nevertheless, the risk cannot be
entirely eliminated so the Group carries insurance to enable it to
defend itself against any claims that may arise.

New Business Opportunity
In April 2022, the Group purchased the exclusive sales rights,
and customer list, for an additional range of electrical
components used in the bulk material handling industry. This
product range will be re-labelled and integrated with our own
“4B” brand and the purchase increases our current small UK
market, expands our customer base and creates potential for
further growth.

Staff
In my 2020 Report, we praised our staff for their courage in
working through the pandemic and their willingness to change
their patterns of work to meet the much higher demand from
our customers and compensate for those employees who
became ill or who needed to be furloughed. The large degree of
ﬂexibility shown by our staff in coping with the additional
problems outlined above has continued through 2021.

Just as everyone thought the pandemic was ﬁnally over and
normality was slowly returning, the workload of many of our
staff has been massively increased by further new challenges. As
always, the continued success of the business depends almost
entirely on the efforts and enthusiasm of our staff at all levels of
the business.

Current Trading and Outlook
The ﬁrst quarter of 2022 has begun very positively. Sales across
the Group are currently running well ahead of the same period
in 2021, as customers continue to enjoy a post pandemic
bounce.

Group sales are diversiﬁed by product and industry and are sold
in a wide spread of overseas markets, some of which will be less
affected by any recession. In some cases, these markets will
actually beneﬁt from the steep rise in grain and other
commodity prices. Currently though, the immediate future is
uncertain and a major recession in the UK, and Europe is widely
anticipated.

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Strategic Report

Governance

Financial Statements

Group strategic report

The directors present their strategic report of the Company and
the Group for the year ended 31st December 2021.

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 subsidiaries within the 4B division 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, elevator and conveyor belting, elevator bolts
and belt fasteners, forged chain, level monitors and sensors and
controllers for monitoring and providing preventative
maintenance systems which facilitate handling and minimise the
risk of explosion in hazardous areas. The 4B division has
operations in the Americas, Europe, Asia, Australia and Africa
and in 2021 traded in ninety countries. The US subsidiary also
has an injection-molding plant. All injection-molded products
are made wholly for internal consumption and this is classed as
4B division activity rather than included in the manufacturing
segment.

Performance highlights
The board is pleased to report a signiﬁcant improvement in the
underlying results of the Group. For the year ended 31st
December 2021, the Group generated revenues of £36.4m, up
£3.6m from prior year. Proﬁt from operations before exceptional
costs was £2.5m, up £1.1m from prior year and EBITDA before
exceptional costs was £3.8m up £1.2m from prior year. As
mentioned in the Chairman’s Statement, exceptional costs of
£1.2m relate to extensive repairs to the chain cell area of our
Hunslet Road property, following the discovery of a series of
structural faults along three walls. As at the year end, we had
spent £0.2m demolishing the walls, dismantling a large area of
rooﬁng and securing the surrounding area.

However, because the property is Grade II listed, the external
walls will require careful restoration of original features using
materials agreed with the local authority conservation ofﬁcers.
At the time of writing, we have provided for additional costs of
£0.85m being our best estimate of the required cost of
restoration. The chain cell repair has also contributed to £0.2m
of delays to the completion of our warehouse which is not now
expected to be completed until the summer and this is also
included in our provision. Proﬁt before tax is £1.1m including
exceptional costs is in line with prior year (2020 – £1.2m).

At 31st December 2021, the Group had net assets of £15.7m.

Cash ﬂow
Inventories increased by £1.3m as the Group planned for
increased demand partly as a result of the easing of Covid-19
restrictions on world economies, and partly to reduce the impact
of anticipated inﬂation on raw materials. Trade and other
receivables increased by £0.3m reﬂecting increased customer
activity close to the year end for the same reason. These were
largely offset by an increase in our trade and other payables of
£0.2m and an increase in provisions of £1.1m. In total the
business generated funds from operations of £1.9m (2020
– £2.7m). The Group continued its investment programme
during the year, spending £2.1m on capital items; £0.7m of this
was on the construction of the new warehouse in the UK
announced in the summer of 2021 and a further £0.5m to
complete the new warehouse in France which was ofﬁcially
opened in May 2021. After the payment of other ﬁnancial costs
and the dividend, the cash balance (net of overdraft) was
£1.0m, a decrease of £0.2m from the prior year.

Bank facilities
The Group’s operating banking facilities are renewed annually.
As announced last year, the new UK warehouse construction is
being funded largely through the procurement of a
development loan of £0.9m from HSBC. The development loan
will be converted to a ﬁve year term loan when construction of
the warehouse is completed. Our facility with HSBC provides
ample headroom for the Group to make the necessary
investments in the year and to carry out the repairs mentioned
above to the chain cell operations. The business continues to
enjoy good relations with its bankers.

Taxation
The tax charge for the year was £0.3m, with an effective rate of
tax of 29.9% (2020 – 28.5%). The effective rate is higher than
the standard UK tax rate of 19% (2020 – 19%); this results
from the blending effect of the different rates of tax applied by
each of the countries in which the Group operates, in particular,
our US operations’ tax charge affects the blended rate. In any
ﬁnancial year the effective rate will depend on the mix of
countries in which proﬁts are made, however the Group
continues to review its tax proﬁle to minimise the impact.

Capital expenditure
In 2021, the Group invested £2.1m (2020 – £2.1m) in property,
plant and equipment. In addition to £1.2m spent on both the
UK and French warehouse construction, the Group has made
improvements to its employee facilities and enhanced its
engineering capabilities, purchasing equipment in welding, bolt
threading and pointing, and has continued to expand its bucket
tooling portfolio.

Balance sheet
Net assets of the Group have increased to £15.7m (2020 –
£15.0m). A foreign exchange gain of £0.1m (2020 – £0.1m
loss) was recorded on the re-translation of the net assets of the
overseas operations, which has increased retained earnings in
the year.

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Braime Group PLC Annual Report & Accounts 2021

8 Strategic Report

Group strategic report (continued)

STRATEGY DRIVERS

ENGINEERING
LED

IDENTIFY
OPPORTUNITIES

STRONG
RELATIONSHIPS

LONG
TERM

VALUED
EMPLOYEES

Engineering led
business focused
on the needs of
the end user

Identify opportunities
to suit local
conditions and
local markets

Strong relationships
with long term
partners

Long term outlook –
continuing to invest
in designs and
new machinery

Place value on
employee engagement –
loyalty and creativity
and entrepreneurship

Principal exchange rates
The Group reports its results in sterling, its presentational currency. The Group operates in six other currencies and the principal
exchange rates in use during the year and the comparative ﬁgures for the year ending 31st December 2020 are shown in the table
below.

Currency
Australian Dollar
Chinese Renminbi (Yuan)
Euro
South African Rand
Thai Baht
United States Dollar

Symbol
AUD
CNY
EUR
ZAR
THB
USD

Average rate
Full year 2021
1.838
8.875
1.165
20.490
44.073
1.374

Average rate
Full year 2020
1.867
8.880
1.126
21.309
40.404
1.290

Closing rate
31st Dec 2021
1.859
8.606
1.191
21.494
44.690
1.348

Closing rate
31st Dec 2020
1.763
8.890
1.112
20.030
40.838
1.365

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

Revenues increased from £34.2m to £37.9m, with external sales
up £2.2m. The 4B Group saw revenue growth as the world
economies started to recover from the Covid pandemic.
Revenue in the European market increased by £0.1m compared
to 2020 with the Americas increasing by £0.6m and China by
£0.5m. Proﬁt for the period fell by £0.2m to £1.3m with the
prior year beneﬁtting from the forgiveness of £0.4m of a
government loan received by our US subsidiary.

Our business model
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 and their
activities.

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
Braime Pressings Limited sales of £9.5m were up £2.7m on prior
year. Intercompany sales and external sales were £4.3m and
£5.2m as compared to £3.0m and £3.8m respectively in 2020.
Proﬁt for the period was £0.8m (2020 – loss £0.2m). The
manufacturing arm beneﬁtted from strong demand from the
automotive sector and from stronger intercompany sales as
world economies started to recover from the pandemic. The
board believes the business continues to add strategic value
through its supply to the 4B division and complementary
engineering expertise.

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Strategic Report

Governance

Financial Statements

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 Note
1
Turnover growth
2
Gross margin

Operating proﬁt before
exceptional item

Stock days
Debtor days

Notes to KPIs
1. Turnover growth

4
5

2021
11.0%
48.4%

2020
(1.9%)
46.7%

2.49m

1.38m

184 days
54 days

182 days
56 days

The Group aims to increase shareholder value by measuring
the year on year growth in Group revenue. The board is
pleased with the signiﬁcant turnaround of Group revenues
following the global pandemic.

2. Gross margin

Gross proﬁt (revenue plus change in inventories less raw
materials used) as a percentage of revenue is monitored to
maximise proﬁts available for reinvestment and distribution
to shareholders. The increase in gross margin is the result of
recovery from the pandemic.

3. Operating proﬁt

Sustainable growth in operating proﬁt is a strategic priority
to enable ongoing investment and increase shareholder
value. The increase in operating proﬁt before exceptional
items reﬂects recovery from the pandemic.

4. Stock days

The average value of inventories divided by raw materials
and consumables used and changes in inventories of
ﬁnished goods and work in progress 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. Stockholding has increased due to inventory
build-up in December 2021 to mitigate the impact of
anticipated increases in raw materials costs in 2022.

5. Debtor days

The average value of trade receivables divided by revenue
expressed as a number of days. This is an important indicator
of working capital requirements. Debtor days have
continued to improve and management are focusing on
reducing this to improve cashﬂows given the signiﬁcant
outlays for the chain cell rebuild.

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
In the current economic, political and physical climate, the only
certainty is uncertainty. As the global economy emerges from
the impact of the Covid pandemic, increased demand and
shortage of raw materials has placed upward inﬂationary
pressure on supply chains.

The recent invasion of Ukraine and consequent sanctions placed
by the West on Russia has increased political tensions
worldwide. This is creating volatility in the energy and
commodities markets. Prior to this, the COP26 summit saw the
UK government commit to ambitious targets to cut greenhouse
emissions, and this commitment is being passed onto
businesses. The UK’s transition arrangements with the EU ended
at the end of 2021. A trade agreement with the EU has been
struck but the ﬁner details of the agreement remain to be
negotiated. The directors consider that these events all pose
business threats but may well create other opportunities. The
Company’s short reporting lines of management means it can
remain nimble footed to sudden and/or large changes in the
business landscape.

The two principal risks associated with our particular business
model are discussed in the Chairman’s statement.

General risks
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.

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.

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 directors have
put in place formal business continuity and disaster recovery
plans with respect to its UK and US operations.

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10 Strategic Report

Group strategic report (continued)

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.

• 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.

• 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.

• 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.
As the Covid-19 pandemic has demonstrated, economies are
greatly intertwined and reverberations feed through the
supply chain.

• Cyber security: All businesses now rely almost totally on
computers, networks and systems with ‘data’ information
held on them, and require privacy and integrity of this data.
The likelihood of cyber security attacks and security threats
are key risks for every organisation. The Group reviews its
security measures regularly with its IT providers.

Financial instruments
The operations expose the Group 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’s exposure in the areas identiﬁed above are discussed
in note 19 of the ﬁnancial statements.

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 direct exposure to securities price risk, as it
holds no listed equity instruments. The Group maintains a
deﬁned beneﬁt scheme, the asset valuations are subject to
market changes (note 21).

Foreign currency risk
The Group operates a centralised treasury function which
manages the Group’s banking facilities and all lines of funding.
Forward contracts are on occasions used to hedge against
foreign exchange differences arising on cash ﬂows in currencies
that differ from the operational entity’s reporting currency.

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.

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
medium term loans and ﬁnance leases and arranging funding
for operations via bank 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.

The directors monitor the level of borrowings and interest costs
to limit any adverse effects on the 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 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. As a global business, the Group is able to
tap into the experience of its various international locations to
share best practice and learning points. The experience of the
past two years has improved our plans and procedures in the
event of future pandemics.

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Strategic Report

Governance

Financial Statements

Research and development
The Group continues to invest in research and development and
from time to time liaises with university engineering groups with
a view to improving features of its products. This has resulted in
innovations in the products which will beneﬁt the Group in the
medium to long term.

Duties to promote the success of the Company
Section 172 of the Companies Act 2006 requires the directors to
act in a way that they consider, in good faith, would be most
likely to promote the success of the Company for the beneﬁt of
its members as a whole, and in doing so have regard (amongst
other matters) to:

–

the most likely consequences of any decision in the long term;

the interest of the Company’s employees;

the need to foster the Company’s business relationships with
suppliers, customers and others;

the impact of the Company’s operations on the community
and the environment;

the desirability of the Company maintaining a reputation for
high standards of business conduct; and

the need to act fairly between the members of the Company.

The board conﬁrms that, during the year, it has had regard to
the matters set out above. Further details as to how the
directors have fulﬁlled their duties are set out below and in the
Governance Report which in particular, expands on directors’
duties and stakeholder liaison.

Business ethics and human rights
The board is respectful of the Company’s long history, and
considers the long-lasting impact of its decisions. 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.

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. The
Group is grateful to its employees for continuing to come to
work in what has been a worrying time for themselves and their
families.

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. The Company
already has a 190KW solar system on its UK premises and is
currently seeking permission from the national grid to extend
our installation of solar panels. During the year, the Group
conducted an energy audit of its principal plant and property
with the help of energy consultants and has been implementing
the ﬁndings to reduce our energy consumption. During the
period of this report the Group has not incurred any ﬁnes or
penalties or been investigated for any breach of environmental
regulations. The board is cognizant that climate change will
change the business landscape for the future and is working to
understand its wide-ranging impact on the Group’s activities and
operations.

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. We regularly participate in a
number of education events encouraging interest in engineering
in young people. It is our policy not to provide political donations.

On behalf of the board

Cielo Cartwright, Group Finance Director

27th April 2022

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Braime Group PLC Annual Report & Accounts 2021

12 Strategic Report

The Board

Nicholas Braime
Chairman

Alan Braime
Group Commercial Director

Carl Braime
Group Sales Director

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.
Nicholas has built close relationships with the
company’s key suppliers over several decades
and has a clear vision of expansion for the
business in strategic locations.

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 strategy and
operations. Alan has spent considerable time
on the implementation and development of
the Group’s ERP systems, giving him a unique
perspective into the impact of technology on
the Group’s business drivers.

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. Carl has
built up a strong expertise and know-how of
the Group’s product offerings and
technologies, and their interdependencies.

Cielo Cartwright
Group Finance Director

Andrew Walker
Non-executive

Peter Alcock
Non-executive

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. Andrew is particularly interested in
governance matters and his legal training
makes his contribution to the discussion of
risks particularly valuable.

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. Peter is the Senior Independent Director.

Cielo Cartwright, Group Finance Director,
joined the Group in 2018. Cielo qualiﬁed as a
chartered accountant with EY and has been
divisional ﬁnance director in various public
listed companies including KCOM plc and
NEXT plc. She was Group FD of Chaucer
Foods, a private-equity owned multinational
manufacturer and before joining the Group,
she was at Froneri, a JV of Nestle SA. Cielo’s
extensive experience in international
businesses makes her fully attuned to the
cultural issues of global operations and their
impact on ﬁnancial management. Cielo is on
the board of governors of Leeds Becketts
University and is a member of the regional
advisory board of Make UK for Yorkshire and
the Humber.

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Strategic Report

Governance

Financial Statements

Corporate governance report

Chairman’s statement on corporate governance
At Braime we recognise that high standards of corporate
governance underpin our continuing success.

We continually review the framework within which we operate
and the processes implemented to ensure that they reﬂect the
complexities of our business and, whilst acknowledging our size,
are also capable of adding value as the business grows to ensure
that the stakeholders interests are always aligned with the
Company. The Company seeks guidance from the Quoted
Companies Alliance, as set out in their publication, “The QCA
Corporate Governance Code”.

The board sets out the overall strategic direction for the Group,
regularly reviews management performance and ensures that
the Group has the right level of resources available to support
our strategic goals. The board is satisﬁed that the necessary
controls and resources are in place such that these
responsibilities can be properly addressed.

Within the Group we promote a culture of good governance in
dealing with all key stakeholders: our employees, our customers
and our shareholders. The following report describes our
corporate governance structures and processes and how they
have been applied throughout the year ended 31st December
2021. The board considers that it has complied with the
recommendations of the QCA Code throughout the year with
the exception of the role of Chairman and chief executive being
fulﬁlled by a single individual, this is commented on further
below.

Principles and approach
As an AIM company, Braime Group PLC is not required to
comply with the UK Corporate Governance Code (the ‘Code’)
which applies only to fully listed UK companies and adherence
to which requires the commitment of signiﬁcant resources and
cost. However high standards of corporate governance are a key
priority of the board. Details of how the Company addresses key
governance issues by reference to the 10 Principles of Corporate
Governance as developed by the Quoted Companies Alliance
(QCA) are discussed further in this report and set out in the
Corporate Governance section of the Group website www.
braimegroup.com/corporate-governance. These principles
are as follows:

1. Establish a strategy and business model which promote

long-term value for shareholders

2. Seek to understand and meet shareholder needs and

expectations

3. Take into account wider stakeholder and social

8. Promote a culture that is based on ethical values and

behaviours

9. Maintain governance structures and processes that are ﬁt for

purpose and support good decision making

10. Communicate how the company is governed and is

performing by maintaining a dialogue with shareholders and
other relevant stakeholders

Strategy and risks
The Strategic Report on pages 7 to 11 sets out our strategy,
which focuses on increasing our geographical reach in global
markets, and developing new products to enhance our offering,
particularly in the agricultural commodities sector. Our strategy
setting includes review of the principal risks pertaining to the
business and the extent to which the Group is able and willing
to bear these risks. The board has put into place formal business
continuity plans in its larger operations to understand its
exposure to loss of key staff, suppliers, customers and other
natural catastrophic events, enabling the generation of a risk
register. The existence of this plan was particularly helpful at the
onset of the Covid-19 pandemic. The principal risks facing the
business are set out in pages 9 to 10 of the Strategic Report.
Insurance of key risks is an integral part of the Group’s risk
management framework, and the board actively reviews its
cover requirements on an ongoing, and at least annual, basis.

The duties of the 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, acquisitions
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 board’s time can be grouped into six key areas as outlined
below. A portion of their time is also spent on administrative
matters.

Strategy

• Setting strategic targets.

• Reviewing new business developments,

including potential acquisitions.

• Research and technology.

Risk

• Group’s risk and internal control framework.

Governance

• Legal updates and new disclosure requirements.

• Internal board review.

• Succession planning.

responsibilities and their implications for long term success

Finance

• Budget approval.

4. Embed effective risk management considering both

opportunities and threats

5. Maintain the board as a well functioning balanced team led

by the chair

6. Ensure that between them the directors have the necessary

up to date experience, skills and capabilities

7. Evaluate board performance based on clear and relevant

objectives, seeking continuous improvement

• Oversight of the preparation and management

of the ﬁnancial statements.

• Dividend policy.

• Pensions strategy.

Stakeholder
engagement

• AGM and other shareholder feedback.

• Investor calls and meetings.

Safety

• Health and safety monthly updates and

management.

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14 Governance

Corporate governance report (continued)

The powers of the directors are set out in the Company’s Articles
of Association. In addition, the directors have responsibilities and
duties under legislation, in particular the Companies Act 2006.

future changes. The nomination committee also discusses the
appointment and replacement of senior management within the
Group.

Composition of the board
During the year ended 31st December 2021 the board
comprised 4 executive directors and 2 non-executive directors.
The Group Financial Director also serves as Company Secretary
to the board.

The board members’ experience and areas of expertise can be
found in the board biography section on page 12. The board is
committed to the promotion of gender balance and diversity
within its workforce. There are currently three male executive
members and one female executive board member and two
male non-executive independent board members.

The Company has periodically held brieﬁngs for directors
covering regulations that are relevant to their role as directors of
an AIM quoted company. Historically, these brieﬁngs have
coincided with signiﬁcant changes in regulations and accounting
standards, however going forward, the Company proposes that
such brieﬁngs should be held at a minimum on an annual basis.
The Company has not sought external advice on keeping
directors’ skills up to date but the directors believe that their
blend of formal qualiﬁcations, past and ongoing experience
provides them with the relevant up-to-date skills needed to act
as board members for a company of its size.

Board committees
The board operates a number of committees as set out below,
these are also available on the Group website.

Remuneration committee
The executive directors’ pay is subject to the decision of the
whole board and not of a separate committee. However, a
separate meeting takes place annually whereby the non-
executives receive and consider recommendations from the
Chairman of proposed pay for the executive directors as shown
in the meeting attendance table. Any signiﬁcant changes to
awards to senior management are 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 statutory auditors at least
once a year. The consideration of business risks is a regular 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 assess the requirement for an internal audit function under
review.

Nomination committee
The Company uses the whole board to consider matters of
nomination and succession. The nomination committee ensures
there is a robust process for the appointment of new board
directors, and works to identify the skills, experience, personal
qualities and capabilities required for the next stage in the
Company’s development, linking the Company’s strategy to

Responsibilities of the board
The board members are collectively and legally responsible for
promoting the interests of the Company and for deﬁning
corporate governance arrangements. Ultimately, the quality of
and approach to governance lies with the chair. The QCA Code
recommends that there should be a clear division of
responsibility between the running of the board and executive
responsibilities for running the Company.

The Chairman is responsible for:

•

setting the board agenda;

the leadership of the board and ensuring its effectiveness on
all aspects of its role;

• providing strategic insight from his long business experience

in the industry and with the Company; and

• providing a sounding board for the executives on key
business decisions and challenging proposals where
appropriate.

The executive directors are responsible for:

•

the day-to-day management of the Group’s business;

leading the business and the rest of the management team
in accordance with the strategy agreed by the board;

leading the development of the Group’s strategy with input
from the rest of the board;

leading the management team in the implementation of the
Group’s strategy; and

• bringing matters of particular signiﬁcance to the board for
discussion and consideration by the board if appropriate.

The roles of Chairman and chief executive are fulﬁlled by
Nicholas Braime. This is a departure from the recommendation
of the QCA code however the board considers this practical
arrangement enables the Group to utilise Nicholas’ deep
knowledge of the business and his extensive relationships with
key stakeholders, whilst at the same time beneﬁting from his
strategic vision. Given the size of the business, the board
believes Nicholas is currently best placed to lead the
development and execution of the Group strategy. In his role as
Chairman, he is ably supported by the two non-executive
directors who actively participate in the development of
governance structures. The board will continue to assess these
structures as the Group grows.

The role of Company Secretary is fulﬁlled by Cielo Cartwright,
the Group Finance Director. The Company Secretary liaises with
the Chairman and the independent directors in the preparation
of board meetings, including the timely provision of information.
The Company Secretary also acts as a link between the
Company and shareholders on matters of governance and
investor relations. The Company is aware that at certain times, it
may become necessary to separate the role of executive and
secretary and should such events occur, takes the appropriate
steps to do so.

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Strategic Report

Governance

Financial Statements

Board attendance and agenda
The board met formally 12 times throughout the year. During
the year, as a result of continuing Covid-19 restrictions, some
board meetings were held on-line and brieﬁng papers were
circulated electronically. In addition to the regular scheduled
meetings throughout the year, unscheduled supplementary
meetings also take place as and when necessary. Directors who
are unable to attend a particular meeting receive relevant
brieﬁng papers and are given the opportunity to discuss any
issues with the Chairman or the Group Finance Director.

To enable the directors of the board to carry out their
responsibilities all directors are provided access to all relevant
information. The board has a schedule of matters for its
discussion, which is reviewed against best practice. A summary
of matters reserved for the schedule is available on the Group’s
website.

In advance of all board meetings the directors are supplied with
papers covering the Group’s strategy and operations. Members
of the executive management team can attend and make
presentations as appropriate at meetings of the board.

Details of the number of meetings of the board during the
period are set out in the table below. There were no new
appointments to the board during the period.

Meeting attendance during 2021

Director

Board
(12)

Audit & Risk
Committee (1)

Remuneration
Committee (1)

O. N. A. Braime

A. Q. Braime

C. O. Braime

C. B. Cartwright

A. W. Walker

P. J. O. Alcock

–

Board evaluation
The board continues to evaluate improvements to its conduct of
business. Improvements have continued to be implemented
throughout the year. During 2021, presentations from MD’s of
all subsidiaries have taken place to provide the non-executive
directors with a greater opportunity to hear the diverse nature
of the Group’s operations ﬁrst hand and there is a rolling
programme of such presentations set out for 2022.

Performance targets are set as part of the budgeting process.
Evaluation of the performance of the board has historically been
implemented in an informal manner whereby the Chairman
appraised the individual performance of the executives. The
board supports and encourages all directors to undertake the
necessary training and take up opportunities for professional
and personal development.

On an ongoing basis, board members maintain a watching brief
to identify relevant internal and external candidates who may be
suitable additions to or backup for current board members.
However, the directors consider that the company is too small to
either have an internal succession plan and it would not be cost
effective to maintain an external candidate list prior to the need
arising. Key performance indicators are set out in the Strategic
Report.

Support
Directors can obtain independent professional advice at the
Company’s expense in performance of their duties as directors.
None of the directors obtained independent professional advice
in the period under review. All directors have access to the
advice and the services of the Company Secretary. In addition to
these formal roles, the non-executive directors have access to
senior management of the business either by telephone or via
involvement at informal meetings. At least annually, our
nominated advisor (NOMAD) is invited to a board meeting to
provide training updates on directors’ duties and any legislative
changes.

Directors’ conﬂict of interests
The Companies Act 2006 and the Company’s Articles of
Association require the board to consider any potential conﬂicts
of interest. The board has procedures for managing and, where
appropriate, authorising actual or potential conﬂicts of interest.
Under those procedures, directors are required to declare at
board meetings all directorships or other appointments to
organisations that are not part of the Group and which could
result in actual or potential conﬂicts of interest, as well as other
situations which could result in a potential conﬂict of interest.

The board is required to review directors’ actual or potential
conﬂicts of interest at least annually. Directors are required to
disclose proposed new appointments to the Chairman before
taking them on, to ensure that any potential conﬂicts of interest
can be identiﬁed and addressed appropriately. Any potential
conﬂicts of interest in relation to proposed directors are
considered by the board prior to their appointment. In this
ﬁnancial year there have been no declared conﬂicts of interest.

Elections
The Company’s Articles of Association provide that one third of
the directors retire by rotation each year at the AGM.

Relations with stakeholders
As required under by Section 172 of the Companies Act 2006,
directors preside over the Group for the beneﬁt of all
stakeholders. Decisions taken by the board are always cognizant
of the impact of each stakeholder group. Fundamentally, the
goal is the long-term sustainable growth of the business, which
will see returns to shareholders increasing, enable employees to
realise their ambitions, and support customers in achieving their
goals.

The directors consider the key stakeholders of the Group to fall
into the following categories: its employees, its shareholders,
customers, suppliers and other business-related parties.

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Braime Group PLC Annual Report & Accounts 2021

16 Governance

Corporate governance report (continued)

Employees as stakeholders
Employees are key internal stakeholders with signiﬁcant time
and ﬁnancial investment in the business. The Group provides
both formal and informal communications through letters and
notices, as well as regular visits by the directors to sites to meet
with employees. During the year overseas trips were curtailed as
a result of the pandemic, however, the directors continued to
communicate regularly using on-line video conferencing. The
directors are committed to providing a working environment
that promote employees’ wellbeing whilst facilitating their
performance. Further details of employee engagement can be
found in the Group Strategic Report.

Shareholders as stakeholders
The board recognises and values the importance of good
communications with all shareholders. The Company engages
with shareholders through the Group’s website and at the AGM.
At the AGM, a presentation of the business activity and outlook
is presented by the Chairman. The feedback from shareholders
attending our AGM has been positive. Responsibility for
shareholder liaison rests with the Chairman, and in his absence,
with the Company Secretary. All reports and updates are made
available on the Group’s website.

The AGM provides all shareholders with the opportunity to
develop further their understanding of the Company. It is the
principal forum for all the directors to engage in dialogue with
private investors. All shareholders are given the opportunity to
raise questions on any matter at the meeting. The Group aims
to send notices of Annual General Meetings to shareholders at
least 21 clear days before the meeting. Notices of the AGM are
available on the Group’s website. Following the AGM the
voting results for each resolution are published and are available
on the Group’s website. The Group’s website www.
braimegroup.com/investor-information provides all historical
RNS announcements, interim reports and annual reports.

Customers and other stakeholders
The directors ensure that stakeholder management plans are in
place for key customers and key suppliers. Directors ensure that
appropriate levels of management time is afforded to meet with
customers to understand their needs and with key suppliers to
forge a strong, mutually beneﬁcial partnership built on the
principles of respect and long-term outlook.

Maintaining a reputation for high standards of
business conduct
The board believes that the promotion of a corporate culture
based on sound ethical values and behaviours is essential to
maximise shareholder value. The companies in the Group
maintain handbooks which include clear guidance on what is
expected of every employee and ofﬁcer of the Company and
further development of this guidance is being undertaken to
continually strive for high standards. Staff matters are discussed
at every board meeting and the board considers examples of
behaviours that either aligns with or are at odds with the
Group’s stated values. The directors believe that the Company’s
culture encourages collaborative, ethical behaviour which

Braime Group PLC Annual Report & Accounts 2021

Grain terminal, Port of Tilbury, London.

beneﬁts employees, clients and stakeholders. It is committed to
conducting business ethically and responsibly, treating
employees, customers, suppliers and shareholders in a fair, open
and honest manner. We aim to maintain healthy and safe
working conditions on all our sites and measure our ability to
keep employees and visitors safe. We encourage our employees
to provide feedback on any issues they are concerned about and
the directors maintain a culture of accessibility and fair play and
travel extensively to keep in touch with all areas of the business.
The directors believe that all employees and contractors have
worked in line with the Group’s values during this ﬁnancial year.

Fair, balanced and understandable
The directors have also reviewed the ﬁnancial statements and
taken as a whole consider them to be fair, balanced and
understandable, and provide the information necessary for
shareholders to assess the Company’s performance, business
model and strategy and have considered the need to act fairly as
between the members of the Company.

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Grain terminal, Port of Tilbury, London.

Strategic Report

Governance

Financial Statements

Directors’ report

The directors present their annual report and ﬁnancial
statements for the year ended 31st December 2021.

Results and dividends
The proﬁt for the year after taxation and transferred to reserves
was £750,000 (2020 – £854,000). No dividend is to be
proposed at the Annual General Meeting, but the interim
dividends will be conﬁrmed.

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

31st December 2021

1st January 2021

Peter Alcock

Ordinary shares

‘A’ Ordinary shares

Alan Braime

Ordinary shares

Carl Braime

Ordinary shares

Nicholas Braime

Ordinary shares

Cielo Cartwright

Ordinary shares

Andrew Walker

Ordinary shares

‘A’ Ordinary shares

1,000

5,000

1,000

5,000

35,175

143,400

–

100

300

–

100

300

In accordance with the Company’s Articles of Association C. O.
Braime retires by rotation and, being eligible, offers himself for
re-election.

In accordance with the Company’s Articles of Association A. Q.
Braime retires by rotation and, being eligible, offers himself for
re-election.

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

The Company has made qualifying third party indemnity
provisions for the beneﬁt of its directors and ofﬁcers. 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 13th April 2022,
apart from the directors, only the following persons are
beneﬁcially interested in more than 3% of the Ordinary shares
of the Company:

CGWL Nominees Limited
A/C GC1

Hargreaves Lansdown
(Nominees) Limited
A/C HLNOM

Mrs P. V. Smith

Ferlim Nominees Limited
Des. POOLED

W B Nominees Limited
A/C ISAMAX

Lion Nominees Limited
A/C RB

Ordinary shares held Percentage

72,500

15.10%

31,633

6.59%

27,500

5.73%

26,063

5.43%

21,600

4.50%

20,000

4.17%

Mrs A. Barnes

16,655

3.47%

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.

Section 172 statement
The board states its compliance with s172(1) of the Companies
Act 2006. Details as to how the directors have fulﬁlled their
duties can be found in the Group Strategic Report and the
Governance Report.

Going concern
As noted in its strategic report, the Group operates in a number
of currencies other than sterling, its principal currency. The
exchange rate between sterling, the US dollar and the euro and
the price of raw materials creates inherent uncertainty over the
future gross margin of the Group.

The Group’s net cash ﬁgure decreased from an opening ﬁgure
of £1,198,000 to £974,000 as at 31st December 2021.

During the period the Group funding of working capital
decreased by £314,000 principally arising from an increase in
trade and other payables (including provisions) which were
partially offset by increases in trade and other receivables.
Inventories increased by £1,259,000. Overall cash derived from
operating activities generated £1,876,000 (2020 – £2,686,000)
net of the increased working capital funding.

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18 Governance

Directors’ report (continued)

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.

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 £15,000 (2020 – £10,000)
were paid during the year. There were no donations to political
organisations.

Streamlined Energy and Carbon Reporting
(“SECR”)
The directors are of the opinion that the disclosure required by
the Companies (Directors’ Report) and Limited Liability
Partnerships (Energy and Carbon Report) Regulations 2018 are
not required because whilst the Group met two of the threshold
criteria for the year ended 31st December 2021, it did not meet
the threshold criteria for the year ended 31st December 2020.

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

Cielo Cartwright, Secretary

27th April 2022

At 31st December 2021, the available headroom within the
Group’s borrowing facilities amounted to £3,348,000. 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 UK and the rules of the London Stock Exchange
for companies trading on the AIM. The directors have chosen to
prepare ﬁnancial statements for the Company in accordance
with UK Generally Accepted Accounting Practice. Under
Company law the directors must not approve the ﬁnancial
statements unless they are satisﬁed that they give a true and fair
view of the state of affairs of the Group and the Company and
of the proﬁt or loss of the Group for that period.

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

•

select suitable accounting policies and then apply them
consistently;

• make judgements and accounting estimates that are

reasonable and prudent;

•

state whether applicable United Kingdom Accounting
Standards have been followed by the parent Company and
applicable IFRSs as adopted by the UK 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

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Strategic Report

Governance

Financial Statements

Directors’ remuneration report

INFORMATION NOT SUBJECT TO AUDIT
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.

Remuneration committee
As noted in the Corporate Governance report, Executive
directors’ pay is subject to the decision of the whole board and
not of a formal remuneration committee. The directors believe
that this is adequate for a Group of this size.

Statement of Company’s policy on directors’
remuneration
The board’s policy is that the remuneration of the directors
should reﬂect market rates applicable to a business of its size
and complexity. This information is assessed by the board based
on their commercial contacts within the industry and the local

business community. It is intended that this policy will remain in
place for the following ﬁnancial year and subsequent periods.

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

The only elements of directors’ remuneration that are
pensionable are salaries.

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

Service contracts
Other than 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.

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

Fees
£’000

Salary
£’000

Estimated
taxable value of
beneﬁts in kind
£’000

Total
2021
£’000

Total
2020
£’000

Pension
contributions
2021
£’000

Pension
contributions
2020
£’000

Executive directors

Nicholas Braime

Alan Braime

Carl Braime

Cielo Cartwright

Non-executive
directors

Peter Alcock

Andrew Walker

Paid by the Company

–

223

126

116

–

591

465

–

232

128

117

665

537

229

126

118

659

533

–

The estimated taxable value of beneﬁts-in-kind includes private medical cover. Pension contributions represent amounts paid to
deﬁned contribution pension schemes. Cielo Cartwright is provided with an electric company car which carries a beneﬁt-in-kind in
the current tax year of zero.

Approval
The directors’ remuneration report was approved by the board on 27th April 2022.

Nicholas Braime, Director

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20 Governance

Independent auditors’ report

to the members of Braime Group PLC

Opinion on ﬁnancial statements of Braime Group PLC
We have audited the ﬁnancial statements of Braime Group PLC (the ‘parent company’) and its subsidiaries (the ‘Group’) for the year
ended 31 December 2021 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 UK. 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).

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 2021 and of the Group’s proﬁt for the year then ended;

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

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

the ﬁnancial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the 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 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
In auditing the ﬁnancial statements, we have concluded that the director’s use of the going concern basis of accounting in the
preparation of the ﬁnancial statements is appropriate.

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

Our evaluation of the directors’ assessment of the entity’s ability to adopt the going concern basis of accounting included:

• Obtaining the directors’ integrated proﬁt and loss account, balance sheet and cash ﬂow forecasts which are prepared

for individual subsidiary undertakings and consolidated at group level for the period to 31 December 2023;

• Understanding and evaluating the key assumptions to the forecast being forecasts of sales, gross proﬁt margin, administrative

costs, level of capital expenditure, inventory, trade debtors and trade creditor days, anticipated new borrowings and repayment
proﬁles of new and existing borrowings. The evaluation made reference to historic ﬁgures and the relative accuracy of past
performance against past forecasts and based on our knowledge of the business the reasonableness of sales forecasts;

• Checking the mathematical accuracy of the forecasts and calculations used in the forecast model such as inventory, debtor and

creditor days and gross proﬁt margins;

• Agreeing ﬁnancial facilities to facility letters or other appropriate evidence;

• Assessing the level of headroom in available facilities throughout the whole forecast period; and

• Assessing the sensitivity of forecasts to matters such as reductions in sales, and gross proﬁt margins and whether there would still

be sufﬁcient headroom in facilities.

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

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Strategic Report

Governance

Financial Statements

Key audit matters
Key audit matters 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 £10,124,000 (2020 – £8,864,000) as shown in
note 11.

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 £481,000 (2020 – £371,000).

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 2021 includes an inventory
impairment provision credit of £(72,000) (2020 – £283,000 charge) as disclosed in note 11.

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.

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 manufactured work in progress and ﬁnished goods 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 in the process of manufacturing 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 ﬁrms we instructed to assist us attended

stock counts.

• 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.

•

challenged the assumptions adopted by management in arriving at the group’s inventory provisioning
policy by reviewing the sales activity of impaired and previously impaired lines of inventory.

Key observations

From the work performed we consider 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.

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22 Governance

Independent auditors’ report

to the members of Braime Group PLC (continued)

Key audit matters (continued)

Provision for building repair costs

Risk description

This risk concerns the determination and quantiﬁcation of the provision for liabilities of £1,054,000 as
referred to in notes 3 and 17.

Management judgement is applied in determining whether a provision is necessary in order to settle
obligations created as a result of past events and the quantiﬁcation of the payments required to settle
those obligations. At the point of approving the ﬁnancial statements those future payments cannot be
fully quantiﬁed and therefore the provision and liabilities of £1,054,000 represents management’s best
estimate based on all available information.

As described in note 1.3 and note 17 management have carefully considered whether as a consequence
of events within the period a present obligation has been created at the balance sheet date. Having
established that certain legal and constructive obligations exist that give the company no realistic
alternative but to settle those obligations then based on all available information management have
made their best estimate of the total expected costs. The income statement for the year ended
31 December 2021 includes costs of £1,217,000 relating to the building restoration of which
£1,054,000 is included in provisions for liabilities, as disclosed in notes 3 and 17.

Given the level of judgement and estimation involved in determining whether a provision exists and the
sums involved, this risk was identiﬁed by us as one of the most signiﬁcant risks of material misstatement.

Our response

We performed the following audit procedures:

•

reviewed the relevant events and conditions in order to establish whether appropriate considerations
have been undertaken by management in determining whether a provision is necessary in order to
settle obligations created as a result of past events, and whether the company has no realistic
alternative but to settle them.

• we have agreed the costs incurred to date, and the accounting treatment of those costs, and

reviewed the contractual terms of the ongoing building development project, which having been
delayed as a consequence of the events referred to in note 3, could see penalties levied against the
company.

•

critically reviewed the information used by management in quantifying the value of the provision
required in order to settle the company’s obligations.

checked that appropriate disclosures have been included within the ﬁnancial statements as required
by IAS 37.

Key observations

From the work performed we consider that management have taken all necessary steps to consider that
the company has no realistic alternative but to settle the obligations created as a result of past events
and that the sums included within provisions for liabilities shown in the Group ﬁnancial statements
represent management’s best estimate based on all available information and all required disclosures
have been correctly included in the notes to the ﬁnancial statements.

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 £364,000 (2020 – £328,000).

Basis for determining
materiality:

1% of Group turnover.

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Financial Statements

Group materiality £364,000 (2020 – £328,000).

Rationale for
benchmark applied:

As a trading Group this reﬂects the level of activity. We believe that this measure and the percentage
applied appropriately reﬂect both the size of the Group and the key driver behind its ﬁnancial
performance.

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 £95,000 to £176,000. 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 75% of component
materiality.

We agreed with the Audit Committee that we would report to them misstatements identiﬁed during our audit above
£13,650 (2020 – £12,300) as well as ‘clearly trivial’ misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.

An overview of the scope of our audit

Braime Group PLC, 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
70.9% of Group turnover, 58.8% of Group proﬁt before tax and 68.4% of Group gross assets.

4B Africa Elevator Components (Proprietary) Limited, 4B Braime (Changzhou) Industrial Control Equipment Co. Ltd. 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 Braime
(Changzhou) Industrial Control Equipment Co. Ltd and 4B Asia Paciﬁc Company Limited. These components comprised 10.6% of
group turnover, 7.3% of group proﬁt before tax and 13.3% of group gross assets.

4B Australia PTY Limited is not required by local legislation to have an audit performed. 4B France Sarl does have a statutory audit
performed but this was not completed by the time the Group audit is signed off. 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 18.5% of group turnover, 33.9% of group proﬁt before tax and 18.3% of group gross
assets.

We engaged a ﬁrm of CPAs in USA to attend a year-end inventory count of 4B Elevator Components Limited, a ﬁrm of Chartered
Accountants in Australia to attend a year-end inventory count of 4B Australia PTY Limited and a Chartered Accountant in France to
attend the year-end inventory count of 4B France Sarl.

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.

Other information

The other information comprises the information included in the report and accounts set out on pages 1 to 6, 12 to 16, and 19
(except where indicated) and 66 to 69, other than the ﬁnancial statements and our auditor’s report thereon. The directors are
responsible for the other information contained within the annual report. Our opinion on the ﬁnancial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the ﬁnancial statements or our knowledge obtained in the course of the audit or otherwise appears to
be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the ﬁnancial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

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

•

the information given in the 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.

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24 Governance

Independent auditors’ report

to the members of Braime Group PLC (continued)

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, in our opinion:

•

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

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

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

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

Responsibilities of directors

As explained more fully in the statement of directors’ responsibilities set out on page 18, 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 fraud or error, and to issue Report of the Auditors that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to inﬂuence the economic decisions of users taken on the basis of these ﬁnancial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The risk of not detecting
a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate
concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and
detection of fraud rests with both those charged with governance of the entity and management.

The extent to which the audit was considered capable of detecting irregularities including fraud

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-
compliance with laws and regulations, was as follows:

•

The engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills
to identify or recognise non-compliance with applicable laws and regulations;

• We identiﬁed the laws and regulations applicable to the Group through discussions with directors and other management, and

from our commercial knowledge and sector experience;

• We focused on speciﬁc laws and regulations which we considered may have a direct material effect on the ﬁnancial statements
or the operations of the group, including the Companies Act 2006 and taxation legislation. The Group is subject to many other
laws and regulations where the consequences of non-compliance could have a material effect on the ﬁnancial statements, for
instance through the imposition of ﬁnes, penalties or litigation such as health and safety law, in particular manual handling and
power press regulations 1998 (PUWER), REACH regulations, waste disposal regulations, GDPR and employment law;

• We assessed the extent of compliance with the laws and regulations identiﬁed above through making enquiries of management

and inspecting legal correspondence; and

•

Identiﬁed laws and regulations were communicated within the audit team regularly and the team remained alert to instances of
non-compliance throughout the audit.

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Auditors’ responsibilities for the audit of the ﬁnancial statements (continued)

We assessed the susceptibility of the Group and company’s ﬁnancial statements to material misstatement, including obtaining an
understanding of how fraud might occur, by:

• Making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual,

suspected and alleged fraud; and

To address the risk of fraud through management bias and override of controls, we:

•

Performed analytical procedures to identify any unusual or unexpected relationships;

Tested journal entries to identify unusual transactions;

• Assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias;

and

•

Investigated the rationale behind any signiﬁcant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but
were not limited to:

• Agreeing ﬁnancial statement disclosures to underlying supporting documentation;

• Reading the minutes of meetings of those charged with governance;

•

Enquiring of management as to actual and potential litigation and claims;

• Reviewing any correspondence with HMRC, US tax authorities and relevant regulators websites for notices of any breaches; and

• Review of relevant legal or professional costs within the accounting records for any evidence of previously un-detected or

un-reported instances of non-compliance

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from
ﬁnancial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit
procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.

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

A further description of our responsibilities for the audit of the ﬁnancial statements is located on the Financial Reporting Council’s
website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our 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.

Use of our report

This report is made solely to the company’s members as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in a Report of the Auditors and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report,
or for the opinions we have formed.

Andrew Thomas 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
27th April 2022

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Braime Group PLC Annual Report & Accounts 2021

26 Financial Statements

Consolidated income statement

For the year ended 31st December 2021

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
Other operating income

Proﬁt from operations before exceptional item

Exceptional item

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

2021
£’000

2020
£’000

5
5

36,406

32,803

869
(19,656)
(8,930)
(1,334)
(4,954)
88

(63)
(17,428)
(8,408)
(1,280)
(4,277)
30

2,489

1,377

(1,217)

1,272

(205)
3

1,070

(320)

750

665
85

750

–

1,377

(191)
9

1,195

(341)

854

823
31

854

Basic and diluted earnings per share

52.08p

59.31p

The notes on pages 31 to 58 form part of these ﬁnancial statements.

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Financial Statements

Consolidated statement of comprehensive income

For the year ended 31st December 2021

Proﬁt for the year

Items that will not be reclassiﬁed subsequently to proﬁt or loss
Net pension remeasurement gain on post employment beneﬁts

Items that may be reclassiﬁed subsequently to proﬁt or loss
Foreign exchange gain/(loss) on re-translation of overseas operations

Other comprehensive income/(loss) for the year

Total comprehensive income for the year

Total comprehensive income attributable to:
Owners of the parent
Non–controlling interests

Note

21.3

2021
£’000

750

177

927

817
110

927

2020
£’000

854

(133)

(67)

787

744
43

787

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Braime Group PLC Annual Report & Accounts 2021

28 Financial Statements

Consolidated balance sheet

As at 31st December 2021

Assets
Non-current assets
Property, plant and equipment
Intangible assets
Right of use assets

Total non-current assets

Current assets
Inventories
Trade and other receivables
Cash and cash equivalents

Total current assets

Total assets

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

Total current liabilities

Non-current liabilities
Financial liabilities
Deferred income tax liability
Provision for liabilities

Total non-current liabilities

Total liabilities

Total net assets

Share capital
Capital reserve
Foreign exchange reserve
Retained earnings

Total equity attributable to the shareholders of the parent
Non-controlling interests

Total equity

Note

2021
£’000

2020
£’000

8
9
10

11
12

13
14

15
16
17

8,713
25
632

9,370

10,124
6,211
1,463

17,798

27,168

489
4,895
2,902
41

8,327

2,046
24
1,054

3,124

7,830
37
487

8,354

8,864
5,855
1,533

16,252

24,606

335
4,744
2,133
78

7,290

2,075
278
–

2,353

11,451

9,643

15,717

14,963

360
257
(89)
15,382

15,910
(193)

360
257
(151)
14,800

15,266
(303)

15,717

14,963

The ﬁnancial statements on pages 26 to 58 were approved and authorised for issue by the board of directors on 27th April 2022
and were signed on its behalf by:

Nicholas Braime, Chairman

Cielo Cartwright, Group Finance Director

Company Registration Number 488001

The notes on pages 31 to 58 form part of these ﬁnancial statements.

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Financial Statements

Consolidated cash flow statement

For the year ended 31st December 2021

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

Operating proﬁt before changes in working capital and provisions

Note

8, 9 & 10

5
5

Increase in trade and other receivables
Increase in inventories
Increase in trade and other payables
Increase in provisions

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
Repayment of borrowings
Repayment of hire purchase creditors
Repayment of lease liabilities
Bank interest paid
Lease interest paid
Hire purchase interest paid
Dividends paid

(Decrease)/increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

The notes on pages 31 to 58 form part of these ﬁnancial statements.

2021
£’000

750

1,334
210
(3)
205
(38)
91
320
(679)

1,440

2,190

(288)
(1,259)
179
1,054

(314)

1,876

(2,074)
73
2

(1,999)

1,145
(452)
(182)
(234)
(124)
(65)
(16)
(173)

(101)

(224)

1,198

974

2020
£’000

854

1,280
(170)
(9)
191
1
71
341
(168)

1,537

2,391

(356)
(291)
942
–

295

2,686

(2,057)
13
4

(2,040)

1,117
(419)
(217)
(228)
(124)
(38)
(29)
(173)

(111)

535

663

1,198

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30 Financial Statements

Consolidated statement of changes in equity

For the year ended 31st December 2021

Share
Capital
£’000

Capital
Reserve
£’000

Note

Foreign
Exchange
Reserve
£’000

Retained
Earnings
£’000

Non-
Controlling
Interests
£’000

Total
£’000

Total
Equity
£’000

Balance at 1st January 2020

360

257

(6)

14,084

14,695

(346)

14,349

Comprehensive income
Proﬁt

Other comprehensive income
Net pension remeasurement gain
recognised directly in equity

21.3

Foreign exchange losses on
re-translation of overseas
subsidiaries consolidated
operations

Total other comprehensive income

Total comprehensive income

Transactions with owners
Dividends

Total transactions with owners

–

823

854

–

(145)

–

(145)

(79)

889

744

–

(173)

–

(133)

(67)

787

(173)

Balance at 1st January 2021

360

257

(151)

14,800

15,266

(303)

14,963

Comprehensive income
Proﬁt

Other comprehensive income
Net pension remeasurement gain
recognised directly in equity

21.3

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

–

665

750

–

152

177

755

817

110

927

(173)

–

(173)

Balance at 31st December 2021

360

257

(89)

15,382

15,910

(193)

15,717

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.

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Financial Statements

Notes to the accounts

For the year ended 31st December 2021

1. ACCOUNTING POLICIES

1.1 General Company information
Braime Group PLC (‘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, China, England, France, South Africa,
Thailand and the United States.

The Company is incorporated and domiciled in the UK. The Company’s registered number is 488001. The address of its registered
ofﬁce is Hunslet Road, Leeds, LS10 1JZ. The Company is a public limited company and has its primary listing on the AIM division of
the London Stock Exchange.

The Group consolidated ﬁnancial statements were authorised for issue by the board on 27th April 2022.

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 UK (IFRSs as adopted by the UK), 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 59 to 65.

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.

Provisions
A provision is raised where management consider a liability exists as a result of past events but where its timing and amount are
uncertain. When considering whether a provision should be raised, the directors assess the probability that an outﬂow of cash or
other economic resource will be required to settle the provision and whether the liability can be measured reliably. Liabilities which
cannot be measured reliably or where settlement is not probable are not provided for. The directors make external enquiries and seek
evidence that a legal obligation to settle the liability exists, or that actions of entities within the group have created an expectation
that the Group will accept and discharge certain responsibilities and the Group has no alternative but to settle those obligations.
They also consider the source of the information to determine if the evidence can provide a reliable measure of the liability.

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32 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

1.3 Critical accounting estimates and assumptions (continued)
Retirement beneﬁt obligations
The Group operates a deﬁned beneﬁt pension scheme (note 21). 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 2021:

• Amendments to IFRS9, IAS39, IFRS7, IFRS4 and IFRS16 – Interest rate benchmarks – introduces practical expedient and
exemptions from hedge accounting requirements – effective accounting periods beginning on or after 1st January 2021

• Amendments to IFRS16 – Covid-19 related rent concessions beyond 30th June 2021 – Extend the time period over which the
practical expedient introduced by earlier amendments is available for use to 30th June 2022 – effective accounting period
beginning on or after 1st April 2021

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

2021 and not early adopted.

• Annual improvements to IFRS Standards 2018-2020 cycle – Minor amendments to IFRS1, IFRS9 and IAS41 – effective accounting

period beginning on or after 1st January 2022

• Amendments to IFRS3 – Reference to the Conceptual Framework – Updates certain references to the Conceptual Framework for
ﬁnancial reporting without changing the accounting requirements for business combinations – effective accounting periods
beginning on or after 1st January 2022

• Amendments to IAS16 – Property, plant and equipment: Proceeds before intended use – Requires amounts received from selling
items produced while the company is preparing the asset for its intended use to be recognised in proﬁt or loss, and not as an
adjustment to the cost of the asset – effective accounting periods beginning on or after 1st January 2022

• Amendment to IAS37 – Onerous contracts: Cost of fulﬁlling a contract – Speciﬁes which costs to include when assessing whether

a contract will be loss-making – effective accounting periods beginning on or after 1st January 2022

• Amendments to IAS1 – Classiﬁcation of liabilities as current or non-current – Clariﬁes that the classiﬁcation of liabilities as current
or non-current should be based on rights that exist at the end of the reporting period – effective accounting periods beginning
on or after 1st January 2023

• Amendments to IAS1 and IFRS Practice Statement 2 – Disclosure of accounting policies – Changes requirements from disclosing
‘signiﬁcant’ to ‘material’ accounting policies and provides explanations and guidance on how to identify material accounting
policies – effective accounting periods beginning on or after 1st January 2023

• Amendments to IAS8 – Deﬁnition of accounting estimates – Clariﬁes how to distinguish changes in accounting policies from

changes in accounting estimates – effective accounting periods beginning on or after 1st January 2023

• Amendments to IAS12 – Deferred tax related to assets and liabilities arising from a single transaction – Introduces an exception
to clarify that the ‘initial recognition exemption’ does not apply to transactions that give rise to equal taxable and deductible
timing differences – effective accounting periods beginning on or after 1st January 2023

•

IFRS17 Insurance contracts – Establishes new principles for the recognition, measurement, presentation and disclosure of
insurance contracts issued, reinsurance contracts held and qualifying investment contracts with discretionary participation
features issued – effective accounting periods beginning on or after 1st January 2023

The application and interpretations surrounding the new or amended 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.

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1.5 Revenue recognition
IFRS 15 ‘Revenue from Contracts with Customers’ establishes a comprehensive framework for determining whether, how much and
when revenue is recognised. It replaced IAS 18 Revenue and related interpretations with effect from 1st January 2018. Under IFRS
15, revenue recognition is based on the principle that revenue is recognised when control of a good or service transfers to a
customer. Where sale of goods occur, revenue is recognised at a point in time when goods are delivered to customers. For the
Group, the transfer of control under IFRS 15 and satisfaction of performance obligations therefore remains consistent with the
transfer of risks and rewards to the customer under IAS18. Revenue represents the fair value of consideration received or receivable
for the sale of goods in the ordinary course of the Group’s activities, and is stated exclusive of VAT, similar taxes and after eliminating
sales within the Group. Payment is typically due within 60 days. Interest receivable on bank deposits and other items such as rentals,
insurance proceeds, and receipts to fund capital assets are not classed as revenue but included within ﬁnance income and other
operating income respectively. The breakdown of revenue from ordinary activities used within the Group to assess the performance
is presented, by operating segment, in the segment analysis (see note 4).

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 Braime Group PLC 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 acquiree 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.

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
Braime Group PLC 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.

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34 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (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 and 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.

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.

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

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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 Right of use assets and lease liabilities
The Group as a lessee
The Group makes the use of leasing arrangements principally for the provision of warehouses and related facilities, ofﬁce space, IT
equipment, fork lift trucks, and motor vehicles. The rental contracts for warehouses and ofﬁces are typically negotiated for terms of
between 3 and 5 years and some of these have extension terms. Lease terms for ofﬁce and IT equipment, fork lift trucks and motor
vehicles typically have lease terms of between 1 and 6 years without any extension terms. The Group does not enter into sale and
leaseback arrangements. All the leases are negotiated on an individual basis and contain a wide variety of different terms and
conditions such as purchase options and escalation clauses.

The Group assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use
and obtain substantially all of the economic beneﬁts of an identiﬁed asset for a period of time in exchange for consideration.

Some lease contracts contain both lease and non-lease components. These non-lease components are usually associated with
facilities management services at ofﬁces and servicing and repair contracts in respect of motor vehicles. The Group has elected to not
separate its leases for ofﬁces into lease and non-lease components and instead accounts for these contracts as a single lease
component. For its other leases, the lease components are split into their lease and non-lease components based on their relative
stand-alone prices.

Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability in its consolidated balance sheet. The
right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability

The Group depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of
the useful life of the right-of-use asset or the end of the lease term.

At the commencement date, the Group measures the lease liability at the present value of the lease payments unpaid at that date,
discounted using the Group’s incremental borrowing rate because as the lease contracts are negotiated with third parties it is not
possible to determine the interest rate that is implicit in the lease. The incremental borrowing rate is the estimated rate that the
Group would have to pay to borrow the same amount over a similar term, and with similar security to obtain an asset of equivalent
value. This rate is adjusted should the lessee entity have a different risk proﬁle to that of the Group.

Lease payments included in the measurement of the lease liability are made up of ﬁxed payments (including in substance ﬁxed),
variable payments based on an index or rate, amounts expected to be payable under a residual value guarantee and payments
arising from options reasonably certain to be exercised.

Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of
principal and ﬁnance costs. The ﬁnance cost is the amount that produces a constant periodic rate of interest on the remaining
balance of the lease liability.

The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arising from a change in
the lease term or a change in the assessment of an option to purchase a leased asset. The revised lease payments are discounted
using the Group’s incremental borrowing rate at the date of reassessment when the rate implicit in the lease cannot be readily
determined. The amount of the remeasurement of the lease liability is reﬂected as an adjustment to the carrying amount of the
right-of-use asset. The exception being when the carrying amount of the right-of-use asset has been reduced to zero then any excess
is recognised in proﬁt or loss.

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36 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

1.13 Right of use assets and lease liabilities (continued)
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients. These leases
relate to items of ofﬁce equipment such as desks, chairs, and certain IT equipment. Instead of recognising a right-of-use asset and
lease liability, the payments in relation to these are recognised as an expense in proﬁt or loss on a straight-line basis over the lease
term.

Where substantially all of the risks and rewards incidental to ownership of a lease asset have been transferred to the Group as is the
case in a 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.

Assets held under hire purchase contracts are classiﬁed as property, plant and equipment.

1.14 Impairment of non-ﬁnancial assets
The Group’s non-current assets 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.

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

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

Deferred tax liabilities 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.

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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.

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

The useful lives of property, plant and equipment can be summarised as follows:

•

Land and buildings

25 – 50 years

Plant, machinery and motor vehicles

3 – 5 years on a straight line basis

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

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

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

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

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

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

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

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

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38 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

PROFIT FROM OPERATIONS

Proﬁt from operations before exceptional item has been arrived at after charging/
(crediting):
Depreciation and amortisation
Foreign exchange differences
Research and development costs
(Credit to)/write-down of inventory to net realisable value
Inventory recognised as an expense
Impairment of trade receivables
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
(Proﬁt)/loss on disposal of ﬁxed assets
Other operating income

Note

2021
£’000

2020
£’000

8, 9 & 10

1,334
468
64
(72)
18,859
(66)

19
61
–
20
(38)
(50)

1,280
(144)
92
283
17,208
(12)

19
46
11
21
1
(30)

EXCEPTIONAL COST

3.
In the latter part of 2021, a series of structural faults were discovered along three of the supporting walls of the Group’s UK chain cell
operations. As the property is Grade II listed, the walls and part of the rooﬁng have to be carefully dismantled, and the external wall
will require careful restoration of its original heritage features, in line with conditions set by the local authority conservation ofﬁcers.
The Group has already incurred £163,000 of expenditure of demolition and scaffolding costs in 2021. At the time of writing the
directors have estimated the cost of rebuilding the area to be £850,000, which has been provided for in the accounts. The demolition
of the wall has also impacted the completion of the adjacent warehouse construction resulting in extension of time costs of £204,000
which are included in the provision (see note 17). The total cost of the unforeseen and exceptional event is £1,217,000.

4. 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 2021.

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.

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SEGMENTAL INFORMATION (CONTINUED)

Central
2021
£’000

Manufacturing
2021
£’000

Distribution
2021
£’000

Revenue
External
Inter Company

Total

Proﬁt
EBITDA
Finance costs
Finance income
Depreciation and amortisation
Tax expense

(Loss)/proﬁt for the period

Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities

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

Total
2021
£’000

36,406
13,029

49,435

2,606
(205)
3
(1,334)
(320)

750

Total
2020
£’000

32,803
9,999

42,802

2,657
(191)
9
(1280)
(341)

854

14,927
1,298

27,168
2,528

6,817

11,451

Central
2020
£’000

Manufacturing
2020
£’000

Distribution
2020
£’000

31,240
6,704

37,944

2,539
(99)
2
(692)
(494)

1,256

29,041
5,159

34,200

2,511
(55)
2
(660)
(373)

1,425

–
2,038

2,038

(740)
(69)
–
(608)
144

(1,273)

5,839
1,219

2,109

5,166
4,287

9,453

807
(37)
1
(34)
30

767

6,402
11

2,525

–
1,772

1,772

309
(105)
–
(592)
32

(356)

5,178
415

801

3,762
3,068

6,830

(163)
(31)
7
(28)
–

(215)

4,200
54

2,025

15,228
2,020

24,606
2,489

6,817

9,643

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Braime Group PLC Annual Report & Accounts 2021

40 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

SEGMENTAL INFORMATION (CONTINUED)

4.
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
2021
£’000

Non-current
assets
2021
£’000

7,743
8,908
14,017
1,486
4,252

36,406

4,624
2,214
1,989
214
329

9,370

Revenue
2020
£’000

5,913
8,828
13,424
1,161
3,477

32,803

Non-current
assets
2020
£’000

3,958
1,702
2,170
60
464

8,354

There was one Group customer of the manufacturing segment which accounted for 13% of the Group’s revenues.

FINANCE INCOME AND EXPENSE

Finance expense
Bank borrowings
Lease interest
Hire purchase interest

Finance income
Other interest received

2021
£’000

2020
£’000

124
65
16

205

124
38
29

191

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Strategic Report

Governance

Financial Statements

6. TAX EXPENSE

Current tax expense
UK corporation tax
UK tax expense on proﬁts for the year
Prior year adjustment
Double tax relief
Double tax relief (prior year)

Foreign corporation tax
Foreign tax expense on proﬁts for the year
Prior year adjustment

Current tax charge
Deferred tax
Origination and reversal of timing differences
Adjustments in respect of prior periods
Adjustments in respect of rate differences

Total tax charge

2021
£’000

2020
£’000

209
8
(239)
(8)

(30)

573
(2)

571

541

(234)
(30)
43

320

303
(9)
(303)
–

(9)

508
(42)

466

457

(138)
10
12

341

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% (2020 – 19%)
Expenses not deductible for tax purposes
Non taxable income
Tax credits on research and development
Items charged to reserves
Foreign tax
Deferred tax not provided
Deferred tax – prior year
Deferred tax asset previously not recognised
Prior year items
Rate differences

2021
£’000

1,070

2020
£’000

1,195

203
1
–
(11)
17
222
(14)
(30)
(72)
(2)
6

320

227
14
(83)
(23)
12
184
39
10
–
(51)
12

341

Other than as shown in note 16, 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 £24,000, £nil and £nil respectively (2020 – £nil, £48,000 and £nil) calculated at a rate of
19% (2020 – 19%).

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42 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

EMPLOYEES

7.
The average number of employees of the Group during the year was made up as follows:

Ofﬁce and management
Sales and distribution
Manufacturing

Staff costs (including directors) comprise:

Wages and salaries
US paycheck protection program grant
CJRS government grant
Deﬁned contribution pension cost
Deﬁned beneﬁt pension cost
Other long-term employee beneﬁts
Employer’s national insurance contributions and similar taxes

The US PPP grant received in 2020 and the UK CJRS grant related to the Covid pandemic.

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

Note

21.3

2021
No.

51
53
79

183

2021
£’000

7,710
–
(15)
249
142
65
779

8,930

2020
No.

49
53
76

178

2020
£’000

7,578
(436)
(46)
318
116
81
797

8,408

2021
£’000

2020
£’000

665
45

710

659
45

704

The number of directors for whom retirement beneﬁts accrued under money purchase pension schemes amounted to 3 (2020 – 3)
and under deﬁned beneﬁt pension schemes amounted to nil (2020 – nil). Further details of directors remuneration are included in
the remuneration report.

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Financial Statements

PROPERTY, PLANT AND EQUIPMENT

At 31st December 2021
Cost
Accumulated depreciation

Net book value

At 31st December 2020
Cost
Accumulated depreciation

Net book value

Year ended 31st December 2021
Opening net book value
Additions
Disposals
Depreciation
Exchange differences

Closing net book value

Year ended 31st December 2020
Opening net book value
Additions
Disposals
Depreciation
Reclassiﬁcation
Exchange differences

Closing net book value

Plant,
machinery
and motor
vehicles
£’000

Land and
buildings
£’000

Total
£’000

6,076
(281)

5,795

4,746
(243)

4,503

4,503
1,453
–
(47)
(114)

5,795

2,956
1,489
–
(2)
39
21

4,503

13,134
(10,216)

19,210
(10,497)

2,918

8,713

12,706
(9,379)

3,327

17,452
(9,622)

7,830

3,327
660
(36)
(1,025)
(8)

2,918

3,868
568
(14)
(1,040)
(39)
(16)

3,327

7,830
2,113
(36)
(1,072)
(122)

8,713

6,824
2,057
(14)
(1,042)
–
5

7,830

The net book value of tangible ﬁxed assets includes an amount of £414,000 (2020 – £568,000) in respect of assets held under hire
purchase contracts. The related depreciation charge on these assets for the year was £197,000 (2020 – £250,000). Additions include
£58,000 (2020 – £31,000) of assets held under hire purchase contracts..

Assets in the course of construction which have not been depreciated total £1,206,000 (2020 – £2,225,000) of which £761,000
relates to the Hunslet Road warehouse construction.

The total cost of non-depreciable assets included in freehold land and buildings was £3,165,000 (2020 – £3,024,000).

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44 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

INTANGIBLE ASSETS

At 31st December 2021
Cost
Accumulated amortisation

Net book value

At 31st December 2020
Cost
Accumulated amortisation

Net book value

Year ended 31st December 2021
Opening net book value
Additions
Amortisation
Exchange differences

Closing net book value

Year ended 31st December 2020
Opening net book value
Additions
Amortisation
Reclassiﬁcations

Closing net book value

Intangible assets relate to purchased goodwill and software.

Total
£’000

149
(124)

155
(118)

37
–
(12)
–

48
–
(12)
1

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Governance

Financial Statements

10. RIGHT OF USE ASSETS

At 31st December 2021
Cost
Accumulated depreciation

Net book value

At 31st December 2020
Cost
Accumulated depreciation

Net book value

Year ended 31st December 2021
Opening net book value
Additions
Depreciation
Exchange differences

Closing net book value

Year ended 31st December 2020
Opening net book value
Additions
Depreciation
Exchange differences

Closing net book value

Buildings
£’000

IT Equipment
£’000

Vehicles
£’000

414
(167)

247

275
(62)

213

213
162
(111)
(17)

247

154
186
(130)
3

213

163
(82)

142
(49)

93
33
(47)
2

20
101
(28)
–

436
(132)

304

300
(119)

181

181
220
(92)
(5)

304

104
145
(68)
–

181

Total
£’000

1,013
(381)

632

717
(230)

487

487
415
(250)
(20)

632

278
432
(226)
3

487

Buildings include warehouses and ofﬁce leases. IT equipment include sundry IT and broadband ﬁbre leases. Vehicles include fork lift
trucks and motor vehicles. With the exception of short-term leases and leases of low-value underlying assets, each lease is reﬂected
in the Group accounts as a right-of-use (RoU) asset per note 10 above and a lease liability (see note 15b).

11.

INVENTORIES

Raw materials
Work in progress
Finished goods
Goods in transit

2021
£’000

639
209
8,580
696

10,124

2020
£’000

382
126
7,794
562

8,864

During the twelve months ended 31st December 2021 the Group reduced charges against ﬁnished goods inventories of £72,000
(2020 – charge of £283,000) following reassessment of the saleability of certain stock items (note 2).

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46 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

12. TRADE AND OTHER RECEIVABLES

Trade receivables
Other receivables
Prepayments

2021
£’000

5,465
478
268

6,211

2020
£’000

5,303
354
198

5,855

Included in other receivables is £120,000 (2020 – £19,000) of corporation tax repayable, £215,000 (2020 – £191,000) in relation to
a VAT claim, and £nil (2020 – £32,000) in respect of a deferred tax asset.

Where possible credit insurance is obtained and sales to customers kept within agreed credit limits. In general, 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. Trade receivables include a credit of £66,000 for provision written back (2020 – £12,000).

13. TRADE AND OTHER PAYABLES – CURRENT

Trade payables
Other taxes and social security costs
Other payables
Accruals

14. OTHER FINANCIAL LIABILITIES – CURRENT

Bank loans – secured
Lease liabilities
Hire purchase creditors
Other creditors

2021
£’000

3,395
248
62
1,190

4,895

2021
£’000

1,064
250
158
1,430

2,902

2020
£’000

3,391
166
62
1,125

4,744

2020
£’000

354
186
186
1,407

2,133

Note

15a
15b
15c

An analysis of the interest rate payable on ﬁnancial liabilities and information about fair values is given in note 19.

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.

15. FINANCIAL LIABILITIES – NON-CURRENT

Note

15a
15b
15c

2021
£’000

1,372
415
222
37

2,046

2020
£’000

1,388
318
337
32

2,075

Bank loans – secured
Lease liabilities
Hire purchase creditors
Other creditors (non-current)

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Financial Statements

15a. 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
%

Development loan
US dollar bank loan
US dollar term loan
US dollar term loan
EUR term loan

2.50% over Bank of England base rate
4.00% ﬁxed
2.25% over LIBOR
3.74% ﬁxed
1.31% ﬁxed

Year of
maturity

2022
2023
2023
2024
2034

2021
£’000

1,064
181
322
869

2,436

2021
£’000

614
217
133
117
1,354

2020
£’000

354
389
357
642

1,742

2020
£’000

–
383
231
157
971

The 4.00% and 3.74% ﬁxed US dollar bank loans are secured on speciﬁc plant and equipment held by 4B Elevator Components
Limited. The US dollar term loans form part of the Group funding arrangements. The US LIBOR loan was repaid in February 2022 to
avoid the cost of converting to a SOFR loan. These loans are secured by a ﬁxed and ﬂoating charge over certain assets of certain
Group companies. The EUR term loan relates to the construction of the French warehouse and is secured against the property in
France. The development loan relates to the construction of the Hunslet Road warehouse and will be converted to a 5 year term loan
on completion of the warehouse.

15b. Lease liabilities:

Minimum lease payment commitments in respect of RoU assets at the year end were as follows:

Less than one year
One to two years
Two to ﬁve years
Over ﬁve years

Lease
Payments
£’000

Finance
Charges
£’000

Net Present
Value
£’000

310
217
223
40

790

(60)
(32)
(30)
(3)

(125)

250
185
193
37

665

At 31st December 2020 the minimum lease payment commitments in respect of RoU assets were as follows:

Less than one year
One to two years
Two to ﬁve years

£’000

231
204
145

580

(45)
(24)
(7)

(76)

186
180
138

504

The lease liabilities are calculated from the present values of the lease rentals based on the Group’s estimated borrowing rate of
10%. A change of +/- 5% to the implied discount rate does not result in a material change to the estimates.

Each lease generally imposes a restriction that, unless there is a contractual right for the Group to sublet the asset to another party,
the right-of-use asset can only be used by the Group. Leases are either non-cancellable or may only be cancelled by incurring a
substantive termination fee. Some leases contain an option to purchase the underlying leased asset outright at the end of the lease,
or to extend the lease for a further term. The Group is prohibited from selling or pledging the underlying leased assets as security.
For leases over ofﬁce buildings and factory premises the Group must keep those properties in a good state of repair and return the
properties in their original condition at the end of the lease. Further, the Group must insure right-of-use assets and incur
maintenance fees on such items in accordance with the lease contracts.

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48 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

15b. Lease liabilities (continued):

At 31st December 2021, the Group had 33 leased RoU assets by category as follows: Buildings: 4, IT equipment: 5, and Vehicles: 24.
The average remaining lease commitments were: Buildings: 2 years, IT equipment: 1.4 years, and Vehicles: 2.8 years respectively.

Lease payments not recognised as a liability
The Group has elected not to recognise a lease liability for short term leases (leases with an expected term of 12 months or less) or
for leases of low value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable
lease payments are not permitted to be recognised as lease liabilities and are expensed as incurred.

The total cash outﬂow for leases for the year ended 31st December 2021 was £299,000 (2020 – £266,000).

At 31st December 2021 the Group had not committed to any new leases that had yet to commence.

15c. Hire purchase creditors:

Hire purchase future payments, interest charges and liabilities as at 31st December 2021 were as follows:

Within one year
One to two years
Two to ﬁve years

Future
Payments
£’000

Interest
Charges
£’000

HP Creditor
£’000

169
141
93

403

(11)
(6)
(6)

(23)

158
135
87

380

Hire purchase payments, interest charges and liabilities as at 31st December 2020 were as follows:

Within one year
One to two years
Two to ﬁve years

16. DEFERRED INCOME TAX LIABILITY

Accelerated capital allowances in excess of depreciation
Losses
Rolled over capital gains

Future
Payments
£’000

Interest
Charges
£’000

HP Creditor
£’000

195
151
205

551

(9)
(8)
(11)

(28)

2021
£’000

183
(222)
63

186
143
194

523

2020
£’000

292
(77)
63

278

The decrease in deferred tax liability relates primarily to the recognition of taxable losses available where they can be offset against
accelerated capital allowances.

Balance at 1st January 2021
Deferred tax asset as at 1st January 2021
Release to income statement during the year

Balance at 31st December 2021

Deferred tax
£’000

278
(32)
(222)

Deferred tax has been recognised at a blended rate of 29% (2020 – 29%) on accelerated capital allowances in 4B Elevator Components
Limited and 25% (2020 – 19%) in respect of the Company, 4B Braime Components Limited and Braime Pressings Limited.

The Finance Act 2021 increased the UK tax rate to 25% from April 2023. This was substantially enacted at the balance sheet date
and has been used to calculate the deferred tax balances.

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Financial Statements

17. PROVISION FOR LIABILITIES

Provision for liabilities – chain cell repairs

2021
£’000

1,054

2020
£’000

–

During the year, serious structural faults were discovered on the supporting walls of the chain cell area of our Hunslet Road property.
This necessitated the emergency demolition of the external walls, dismantling of the roof over the chain cell operations and the
temporary relocation of our chain cell operations. The building is Grade II listed and may only be lawfully altered with prior planning
permission. Consent to demolish the walls was granted by the local authority on the condition that the Company restore the property
per their requirements using appropriate materials and retaining its original features. Consequently, an obligation exists at the year
end to carry out the repairs set out in the planning application. The directors have provided £850,000 for these repairs based on their
assessment of the costs necessary to made good the demolished areas.

Whilst some costs can be reasonably established, at the time of writing, there remains uncertainty over the type of materials that may
be used as their speciﬁcations are awaiting the decision of the local authority conservation ofﬁcers. The type of material used has a
direct bearing on the foundation depth of the walls being erected and hence the cost. The demolition of the wall has also impacted the
completion of the adjacent warehouse construction resulting in extension of time costs of £204,000 which are included in the provision.
The directors are working with the contractors of the warehouse extension to establish the most-cost effective way of achieving the
restoration and reducing delays to completing the warehouse. The total provision represents the directors’ best estimate of the required
cost of restoring the chain cell walls and the additional costs associated with the delays to the warehouse project and the directors have
referred to benchmarks to arrive at the estimated cost.

18. 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

2021
£’000

2020
£’000

120
300

420

120
240

360

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.

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

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

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 cost using the effective interest method.

Whilst lease liabilities within note 14 and 15 are included within ﬁnancial liabilities they do not constitute a ﬁnancial instrument.

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50 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

19. FINANCIAL INSTRUMENTS (CONTINUED)

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. The Group’s currency exposure at the year end was £2,714,000 (2020 –
£1,422,000), primarily euros and US dollars to sterling.

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

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

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as
prices) or indirectly (i.e. derived from prices); and

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

The level within which the ﬁnancial asset or liability is classiﬁed is determined based on the lowest level of signiﬁcant input to one
fair value measurement. The only 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
There were no forward currency contracts outstanding at 31st December 2021 (31st December 2020 – £nil).

Fixed interest term loans
Fixed interest term loans as at 31st December 2021 were US dollar term bank loans of £334,000 (2020 – £540,000) and euro bank
term loans of £1,354,000 (2020 – £971,000) (see note 15a).

Maturity analysis
Other than is disclosed in note 15 regarding bank loans and lease liabilities all ﬁnancial instruments fall due within one year.

In addition to the maturity analysis disclosed in note 15, the interest due on bank loans repayable within one year totals £36,000
(2020 – £34,000), the interest due on bank loans repayable after one year but not more than ﬁve years totals £58,000 (2020 –
£40,000), and the interest due on bank loans repayable after more than ﬁve years totals £48,000 (2020 – £22,000).

Interest due (ﬁnance charges) on RoU lease liabilities are shown in note 15b and interest due on hire purchase creditors are shown in
note 15c.

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 2021
Sterling
Euro
US dollar
Other

Floating rate
ﬁnancial assets
£’000

Fixed rate
ﬁnancial assets
£’000

Financial assets
Total
£’000

(1,202)
466
1,380
819

1,463

–
–
–
–

–

(1,202)
466
1,380
819

1,463

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Financial Statements

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.

Currency
As at 31st December 2020
Sterling
Euro
US dollar
Other

Floating rate
ﬁnancial assets
£’000

Fixed rate
ﬁnancial assets
£’000

Financial assets
Total
£’000

(1,540)
678
1,891
504

1,533

–
–
–
–

–

(1,540)
678
1,891
504

1,533

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

Currency
As at 31st December 2021
Sterling
Euro
US dollar
Other

Currency
As at 31st December 2020
Sterling
Euro
US dollar
Other

Floating rate
ﬁnancial liabilities
£’000

Fixed rate
ﬁnancial liabilities
£’000

Financial liabilities
Total
£’000

(2,484)
(49)
(134)
–

(2,667)

(507)
(1,506)
(362)
(358)

(2,733)

(2,991)
(1,555)
(496)
(358)

(5,400)

Floating rate
ﬁnancial liabilities
£’000

Fixed rate
ﬁnancial liabilities
£’000

Financial liabilities
Total
£’000

(1,545)
(197)
(231)
–

(1,973)

(644)
(1,006)
(543)
(346)

(2,539)

(2,189)
(1,203)
(774)
(346)

(4,512)

Floating rate ﬁnancial liabilities comprise bank borrowings and lease assets.

Currency exposure
The Group operates in a number of currencies and 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/(liabilities)

Functional currency
As at 31st December 2021
Sterling
Euro
US dollar
Other

Sterling
£’000

Euro
£’000

US dollar
£’000

Other
currencies
£’000

–
–
(419)
(1,034)

(1,453)

797
–
(2)
(26)

769

249
–
–
(122)

127

2,866
–
–
–

2,866

Total
£’000

3,912
–
(421)
(1,182)

2,309

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52 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

19. FINANCIAL INSTRUMENTS (CONTINUED)

Non interest bearing ﬁnancial assets/(liabilities) (continued)

Functional currency
As at 31st December 2020
Sterling
Euro
US dollar
Other

Risk sensitivity

Sterling
£’000

Euro
£’000

US dollar
£’000

–
–
(517)
(643)

(1,160)

1,090
–
(25)
–

1,065

(1,778)
–
–
6

(1,772)

Other
currencies
£’000

2,520
–
–
–

2,520

Total
£’000

1,832
–
(542)
(637)

653

Interest rate sensitivity
Based on the year end balance of ﬂoating rate assets and liabilities, a change in interest rates of 1% in the monetary assets and
liabilities mentioned above invested or borrowed will not affect the income statement by a ﬁgure greater or less than £12,000
(2020 – £5,000).

Currency rate sensitivity
A weakening in the value of sterling by 10% will beneﬁt the operating proﬁt by a ﬁgure not exceeding £301,000 (2020 – £158,000).
A strengthening of sterling by 10% will reduce the operating proﬁt by a ﬁgure not greater than £247,000 (2020 – £129,000).

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

2021
£’000

3,348

2020
£’000

3,186

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.

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 assess the costs of entering
into a matching forward contract with a reputable bank.

It is Group policy that transactions between Group entities are generally denominated in the selling entity’s functional currency
thereby giving rise to foreign exchange risk in the income statement of both the purchasing entity and the Group. The exception to
this are charges made by the UK, since it is deemed to control treasury risks. Although the selling 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.

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Governance

Financial Statements

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 maximise 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 12.

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.

20. EARNINGS PER SHARE AND DIVIDENDS
Both the basic and diluted earnings per share have been calculated using the net results attributable to shareholders of Braime
Group PLC as the numerator.

The weighted average number of outstanding shares used for basic earnings per share amounted to 1,440,000 shares (2020 –
1,440,000). There are no potentially dilutive shares in issue.

Dividends paid

Equity shares
Ordinary shares
Interim of 7.80p (2020 – 8.00p) per share paid on 25th May 2021
Interim of 4.25p (2020 – 4.00p) per share paid on 14th October 2021

‘A’ Ordinary shares
Interim of 7.80p (2020 – 8.00p) per share paid on 25th May 2021
Interim of 4.25p (2020 – 4.00p) per share paid on 14th October 2021

Total dividends paid

An interim dividend of 8.20p per Ordinary and ‘A’ Ordinary share will be paid on 8th June 2022.

2021
£’000

2020
£’000

37
20

75
41

116

173

38
19

77
39

116

173

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Braime Group PLC Annual Report & Accounts 2021

54 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

21. PENSION COSTS

21.1 Scheme summary
The Group operates a number of deﬁned contribution schemes, the cost of which are disclosed in note 7. Additionally the Group
operates a funded deﬁned beneﬁt pension scheme, the Braime Pressings Limited Retirement Beneﬁts Scheme (the Scheme). The
Scheme 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. 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
following disclosures refer only to the Scheme.

The Scheme is managed by a board of trustees appointed in part by the Group and part from elections by members of the Scheme.
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 2019. The market value of Scheme assets at 6th April 2019 was
£9,463,000. The funding level at 6th April 2019 was 104% on an ongoing basis. The Statutory Funding Objective does not currently
impact on the recognition of the Scheme in these accounts.

The next valuation of the scheme is due as at 6th April 2022. 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 expects to pay contributions of around £50,000 during the year to 31st December 2022. The weighted average duration
of the deﬁned beneﬁt obligation is approximately 16 years.

21.2 Risks
The cost of the Scheme to the Group depend upon a number of assumptions about future events. Future contributions may be
higher (or lower) than those currently agreed if the assumptions are not borne out in practice or if different assumptions are agreed
in the future.

•

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 and 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 some hedging 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.

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Governance

Financial Statements

21.3 Reconciliation of deﬁned beneﬁt obligation and fair value of scheme assets

Deﬁned beneﬁt
obligation

Fair value of
scheme assets

Net deﬁned
scheme liability

2021
£’000

2020
£’000

2021
£’000

2020
£’000

2021
£’000

2020
£’000

Balance at 1st January

10,328

9,300

(10,328)

(9,300)

Service cost – current
Service cost – past
Administration costs
Interest cost/(income)
Interest effect of asset ceiling

Included in proﬁt or loss

Effect of asset ceiling

Remeasurement loss/(gain)
a) Actuarial loss/(gain) from:
– Financial assumptions
– Demographic assumption
– Adjustments (experience)

b) Return on plan asset
(excluding interest)

Included in other
comprehensive income

Employers contributions
Employees contributions
Beneﬁts paid

Other movements

83
–
–
122
–

205

–

(601)
–
–

–

(601)

–
10
(324)

(314)

76
1
–
183
–

260

–

1,081
–
–

–
–
59
(123)
–

(64)

181

–
–
–

–
–
39
(188)
–

(149)

(127)

–
–
–

–

330

(1,020)

1,081

–
10
(323)

(313)

330

(51)
(10)
324

263

(45)
(10)
323

268

Balance at 31st December

9,618

10,328

(9,618)

(10,328)

Net remeasurement gain taken
to other comprehensive income

601

(1,081)

(511)

1,147

(1,020)

(271)

–

83
–
59
(1)
–

141

181

(601)
–
–

330

(51)
–
–

(51)

–

76
1
39
(5)
–

111

(127)

1,081
–
–

(1,020)

(45)
–
–

(45)

–

The asset ceiling arises as based on the assumptions adopted there is a net pension scheme asset of £282,000 at 31st December
2021 but as Braime Pressings Limited does not have an unconditional right to any surplus of the scheme, the surplus of £282,000
has not been recognised in the Group balance sheet and therefore assets have been reduced by £282,000 to £9,618,000 so as to
equal scheme liabilities at that date.

The effect of GMP equalisation has been allowed as a past service cost in 2021. Other than this, there were no plan amendments,
curtailments or settlements during the period. Remeasurement gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognised within the consolidated statement of comprehensive income. Included in remeasurement losses
are the effect of asset ceiling of £181,000 (2020 – £127,000 gain) but the interest effect of asset ceiling are recognised in the proﬁt
for the year.

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Braime Group PLC Annual Report & Accounts 2021

56 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

21.4 Analysis of fair value of plan assets between asset categories

Annuity policies in payment
Equities – quoted – overseas
Equities – quoted – UK
Cash
With proﬁt deferred annuities
Asset ceiling

Total

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

21.5 Reconciliation of effect of asset ceiling

Effect of asset ceiling at start
Interest on effect of asset ceiling
Actuarial losses/(gains)

Effect of asset ceiling at end

21.6 Key assumptions and sensitivities
The key actuarial assumptions at balance sheet date are shown below:

2021
% of total
assets

2020
% of total
assets

55.5%
16.4%
2.5%
1.1%
24.5%
–

56.0%
12.4%
2.0%
1.8%
27.8%
–

100.0%

2021
£’000

5,495
1,624
248
109
2,424
(282)

9,618

2021
£’000

101
1
180

282

2021

1.80%
3.65%
3.65%
3.50%

2020
£’000

5,840
1,293
209
188
2,899
(101)

10,328

2020
£’000

228
5
(132)

101

2020

1.20%
3.20%
3.20%
3.10%

Discount rate
Inﬂation (RPI)
Salary increases
Pension increase (LP15)

Post retirement mortality

Commutation

Zurich with-proﬁts deferred annuity policy

115% of the S3NA tables with CMI
2018 projections using a long-term
improvement rate of 1.00% pa

No allowance has been made for
members to take tax free cash

70% future income value,
30% market value

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Governance

Financial Statements

The impact on the deﬁned beneﬁt obligation to changes in the signiﬁcant principal assumptions are shown below.

The 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 has been determined using the same method as per the calculation of liabilities for the
balance sheet disclosures, but using assumptions adjusted as detailed below.

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

% With-proﬁt deferred annuities converted on retirement using guaranteed annuity rates
Plus 10.00% (i.e. 80%)
Minus 10.00% (i.e. 60%)

22. NOTES SUPPORTING CONSOLIDATED CASH FLOW STATEMENT

Cash and cash equivalents

Cash at bank and in hand
Bank overdraft

Approximate
effect on liability
£’000

192
(217)

(327)
326

(76)
74

(52)
62

249
(249)

2021
£’000

2020
£’000

1,463
(489)

974

1,533
(335)

1,198

Major non-cash transaction
During the year the Group acquired tangible assets of £58,000 (2020 – £31,000) subject to ﬁnance under hire purchase agreements
of £39,000.

23. CAPITAL COMMITMENTS
There were capital commitments of £634,000 (2020 – £568,000) which are contracted but not provided for in these ﬁnancial statements.

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Braime Group PLC Annual Report & Accounts 2021

58 Financial Statements

Notes to the accounts

For the year ended 31st December 2021 (continued)

24. SUBSIDIARIES

Subsidiary

Principal activity

Registered in and operating from
Hunslet Road, Leeds, West Yorkshire,
LS10 1JZ, England, UK:

Proportion of shares held
2021 and 2020

Ordinary
Shares

Preference
Shares

Braime Pressings Limited

Manufacture of metal presswork

4B Braime Components Limited

Distribution of bulk material handling components

T.F. & J.H. Braime (Holdings) P.L.C.

Dormant

100%

ii Registered as above and operating from
625 Erie Avenue, Morton, Illinois 61550,
USA:

4B Elevator Components Limited

Distribution of bulk material handling components

100%

Incorporated in and operating from

iii
35 Bis Rue du 8 Mai 1945,
80800 Villers-Bretonneux, France:

4B–France sarl

Distribution of bulk material handling components

100%

iv Incorporated in and operating from
899/1 Moo 20, Soi Chongsiri,
Amphur Bangplee, Samutprakarn,
10540, Thailand:

4B Asia Paciﬁc Company Limited

Distribution of bulk material handling components

48%

v Incorporated in and operating from
14 Newport Business Park, Mica
Drive, Kya Sand, Johannesburg 2163,
South Africa:

4B Africa Elevator Components (Pty)
Limited

Incorporated in and operating from
B1/41 Bellrick Street, Acacia Ridge,
Queensland, 4110, Australia:

Distribution of bulk material handling components

100%

4B Australia Pty Limited

Distribution of bulk material handling components

100%

vii Incorporated in and operating from
18 Xinya Road, Wujin State High &
New Technology Development Zone,
Changzhou, Jiangsu, China:

4B Braime (Changzhou) Industrial
Control Equipment Company 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.

25. RELATED PARTY TRANSACTIONS
The total remuneration for key management personnel for the year including directors totalled £1,382,000 (2020 – £1,339,000).

There were no other related party transactions during the year.

26. POST BALANCE SHEET EVENTS
In April 2022, the Group entered into an exclusivity arrangement with one of its trading partners to expand Group sales distribution.
The cost of the transaction to the Group is £725,000, payable in part in 2022 and in part in 2023.

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Financial Statements

Company balance sheet

For the year ended 31st December 2021

Fixed assets
Intangible assets
Tangible ﬁxed assets
Investments

Current assets
Debtors: due within one year

Creditors: amounts falling due within one year
Amounts owed to Group undertakings
Other creditors falling due within one year

Net current liabilities

Total assets less current liabilities

Creditors: amounts falling due after more than one year
Provisions for liabilities

Capital and reserves
Called up share capital
Revaluation reserve
Capital redemption reserve
Retained earnings

Shareholders’ funds

Company’s proﬁt for the ﬁnancial year

Note

3
4
5

10
11

2021
£’000

5
7,126
1,978

9,109

1,753

4,165
1,824

5,989

(4,236)

4,873

187
1,172

3,514

360
85
180
2,889

3,514

505

2020
£’000

15
6,498
1,978

8,491

1,484

5,371
921

6,292

(4,808)

3,683

311
190

3,182

360
85
180
2,557

3,182

202

These ﬁnancial statements were approved and authorised for issue by the board of directors on 27th April 2022 and signed on its
behalf by:

Nicholas Braime, Chairman

Cielo Cartwright, Group Finance Director

The notes on pages 60 to 65 form part of these ﬁnancial statements

Company statement of changes in equity

For the year ended 31st December 2021

Called up
Share Capital
£’000

Revaluation
Reserve
£’000

Capital
Redemption
Reserve
£’000

Retained
Earnings
£’000

Balance at 1st January 2020
Comprehensive income for the ﬁnancial year – proﬁt
Dividends paid

Balance at 31st December 2020
Comprehensive income for the ﬁnancial year – proﬁt
Dividends paid

Balance at 31st December 2021

360
–
–

360

85
–
–

180
–
–

180

2,528
202
(173)

2,557
505
(173)

2,889

Total
£’000

3,153
202
(173)

3,182
505
(173)

3,514

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 represent cumulative proﬁt or losses net of dividends and other adjustments. Included within retained earnings
is a non-distributable amount of £71,000.
Included in proﬁt for the year is a dividend received from the Company’s subsidiary 4B Elevator Components Limited.

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60 Financial Statements

Notes to the Company accounts

For the year ended 31st December 2021