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Braime Group PLC
Hunslet Road
Leeds LS10 1JZ
England, UK
www.braimegroup.com
Annual Report & Accounts 2023
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, the United Arab Emirates and
the United States.
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.
OVER 130 YEARS OF ENGINEERING EXCELLENCE
Front cover: In situ bucket elevator upgrade with 4B components: steel cord belting, mechanical splice, fabricated steel buckets and elevator bolts, USA.
Above: Belt slitting and punching at our headquarters on Hunslet Road, Leeds UK.
Designed and produced by corporateprm, Edinburgh and London
www.corporateprm.co.uk
Strategic Report
Governance
Financial Statements
1
“The Group has had another excellent year despite a
mixed economic backdrop globally.”
Nicholas Braime, Chairman
22nd April 2024
Financial Highlights 2023
Turnover (£m)
Profit from operations (£m)
before exceptional item
48.2
44.9
33.4
32.8
36.4
Contents
Strategic report
4.4
3.7
Group at a glance
Chairman’s statement
Business review
Group strategic report
Corporate social responsibility
2.2
2.5
1.4
The Board
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Governance
Profit before tax (£m)
Profit after tax (£m)
Corporate governance report
3.8
3.3
2.7
Directors’ report
Directors’ remuneration report
2.3
Independent auditors’ report
2
4
5
7
11
12
13
19
21
22
1.7
1.2
1.1
1.3
0.9
0.8
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Basic and diluted earnings
per share (pence)
Dividend per share
(pence)
188.96
162.22
11.6
11.8
12.45
13.75
14.75
93.68
59.31
52.08
2019
2020
2021
2022
2023
2019
2020
2021
2022
2023
Financial statements
Consolidated income statement
28
Consolidated statement of
comprehensive income
Consolidated balance sheet
29
30
Consolidated cash flow statement 31
Consolidated statement of
changes in equity
Notes to the accounts
Company balance sheet
Company statement of changes
in equity
Notes to the Company accounts
Five year record
Notice of meeting
Explanatory notes of resolutions
Directors and advisers
32
33
60
60
61
68
69
71
72
Braime Group PLC Annual Report & Accounts 2023
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 addition to the 4B division is 4B Middle East, based in
Sharjah, UAE. This was opened in July 2023, 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.
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 and ISO.
For more information please visit: www.braimepressings.com
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
3
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.
The 4B division consists of the following trading companies:
• 4B Braime Components Limited, based in Leeds, UK
• 4B Braime Components Limited, based in Sharjah, UAE
• 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
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.
Braime Group PLC Annual Report & Accounts 2023
4 Strategic Report
Chairman’s statement
vehicle industry; historically this has been the last sector to feel the
effects of a downturn in the economy and unfortunately has
usually been the last sector to recover. Although Braime Pressings
has secured orders for additional products from its customers in
this important sector of our business, as well as winning some
large additional work for pressed steel components from entirely
new industry sectors, in this instance from both the energy and
building sectors, nevertheless current levels of sales remain slightly
below last year’s figures and we expect this situation to continue
for much of 2024.
The principal sales of the Group globally, made through the 4B
division of the Group, are of components for new equipment used
in the “Bulk Material Handling Industry.” The highest volume of
these sales are used in new machinery required for even larger
new facilities to store or process granular products used primarily
in food production. Although the construction and final
completion of these investments were often delayed on site by the
Covid epidemic, the number of investment projects to expand
food production actually increased through the post Covid period
and continued to do so through 2022 and 2023. The quantity of
these investments were the primary reason behind the Group’s
sequence of positive results. However, we understand that the
level of such investments globally is currently much lower, so the
activities of the major original equipment manufacturers (OEMs)
of new machinery, which require large volumes of both the
mechanical and electronic components supplied by the Group, are
similarly being supplied in more lower volumes, especially in the
Western European market. This leads to more competition for the
same demand and pressure on margins because of the increased
competition for the supply to the ongoing remaining projects.
Eastern and Central Europe, including the Ukraine, and more
recently Russia itself, had become major areas of investment in
new facilities to store and process cereals, but these regions have
largely been closed; and this has also reduced the sales for our
newer OEM customers in the Asian markets. Fortunately, in 2024,
we continue to benefit from ongoing investment in new facilities
in the USA and South America.
The 4B division of the Group also makes substantial sales to
existing facilities we refer to as “End Users” and who provide a
significant spares market for our traditional mechanical products
and also for the Group’s new electronic products, which improve
safety and reduce maintenance. This is a business sector that we
have targeted and which remained buoyant both through Covid
and continues to be so even in the current downturn. This helps
provide the Group with stability at a time when we consider the
market for new machinery to be running at a low ebb and is a
benefit of 4B division’s increasing product range and also of the
Group’s global geographic spread of sales.
So overall, while we expect lower sales volume in 2024, this is
offset partially by sales of new product lines launched in late
2023. We remain hopeful, in spite of the current parlous state of
the global economy, of a reasonably positive result in 2024.
Nicholas Braime, Chairman
22nd April 2024
Nicholas Braime
Chairman
High level results
I am pleased to announce Group revenue for 2023 of £48.2m and
profit before tax of £3.3m. These results are discussed further in
the Chief Executives’ Business Review and the Group Strategic
Report, however I am delighted with the results given the general
economic climate.
Dividends
The Company paid an interim dividend of 5.25p in October 2023.
Based on the results above the directors propose paying a second
interim dividend of 9.50p on the 24th May 2024 to the holders of
the Ordinary and “A” Ordinary Shares on the share register on 10th
May 2024. The ex-dividend date is 9th May 2024. This brings the
total dividend paid in relation to the 2023 financial year to 14.75p,
compared to 13.75p in 2022.
Overall strategy
Our strategy remains largely unchanged, continuing to invest in
constantly improving our production processes and exploring new
global markets for our niche products and developing new
innovations for our customers’ engineering challenges.
Staff
I would like to thank all our staff and colleagues who have
continued to provide commitment, ideas and enthusiasm
throughout the year. The quality and commitment of our people
has been at the heart of our business success. This has been
demonstrated in many ways, including the deepening
relationships with our customers, and continual development of
our product lines and their flexibility in adapting to the ever-
changing business landscape.
Current trading and outlook
Much of the world economy is currently either in recession, or at
risk of being in recession, and although its degree varies across
different countries and regions, nevertheless this will inevitably
affect our own performance in 2024. This long predicted and
widely discussed global economic downturn began in early 2023
but thankfully affected our businesses less, and also much later in
the year, than I had thought when I wrote last year’s Chairman’s
statement, and the outlook at the half-year in 2023.
The principal market for a large proportion of the pressed steel
components manufactured by Braime Pressings is the commercial
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
5
Business review
Business overview
We are delighted that the Group has had another excellent
year despite a mixed economic backdrop globally. Our Group
revenue of £48.2m is a new record. We are pleased that
post-covid, we have continued to see year on year sales
growth since 2020. Profit from operations was £3.7m and
profit before tax was £3.3m.
Much of the sales growth this year has been generated from
the strong performance in the USA and South American
markets which have continued to see investments in the grain
and feed sector. The Americas increased sales by 22% in 2023
to £23m. By contrast, the European market has remained
fairly static in part due to the ongoing war in the Ukraine and
the economic slowdown and rising inflation across much of
the continent which has dampened demand for investment in
new bulk handling facilities. We have seen some growth in
revenue in Africa while sales in the Asia Pacific region have
remained in line with prior year despite a considerable
slowdown of the Chinese economy and difficult market
conditions in Australia and parts of SE Asia.
In the UK, our steel components manufacturing business has
been impacted by a more cautious approach to stock-build by
external and internal customers and revenues fell to £10.5m
from £11.8m in 2022.
New business product development
As a Group we continue to benefit from our long-term strategy
of investment in continually developing new products and
markets. The Group benefits from its global presence with
subsidiaries located across the world and a great distribution
network through its long-term partners. Our strategy going
into 2024 is to continue to invest in manufacturing
improvements, new innovative products and developing new
markets to extend our distribution.
The Group has strengthened its global presence and expanded
its multinational trading business with the opening of a new 4B
subsidiary branch in the UAE in the summer of 2023. 4B
Middle East is 4B’s 8th international trading entity, further
extending the company’s global reach. 4B has been serving
customers in the Middle East for many years, across many
industries ranging from grain handling to fertilizer and cement.
With its local office in the UAE, 4B is now available to provide
on-site engineering and after sales support, which are at the
heart of 4B’s customer service philosophy. The opening of the
4B Middle East office brings us closer to our customers in the
region and enables us to directly support them with
technological material handling solutions. The Middle East is an
area of strategic importance with great resources and is a
region of significant economic growth.
The Group remains focused on innovation, a strategy that
continues to maintain 4B at the leading edge of technology for
our market sector. Recent product releases such as the IE node
and 4B Encoder have proven to be great additions to our
electronics product portfolio and have been well received by
our customers. In 2023, the Group has again launched a
number of new innovative electronics products designed for
dust hazardous environments and condition monitoring. The
110 metres of 2500 N/mm steel cord elevator belting
being installed in cement terminal in Oregon, USA.
recently released IE-GuardFlex strengthens the range and scope
of hazard monitoring systems provided by 4B. This centralised
controller and distributed node-based solution fits perfectly to
large end user systems providing advanced hazard monitoring
features suitable for all machine types and offers a cost-
effective alternative to traditional PLC based implementations.
Our universal speed relay has a simple and intuitive graphical
display which allows easy and precise machine set up to
monitor over- and under-speed, while our range of Mili-VIB
4-20mA sensors offer a condition monitoring solution for
continuous monitoring of vibration levels and temperature in
industrial environments and hazardous areas providing reliable
and accurate data that can be used to optimise performance
and increase equipment longevity.
Our UK manufacturing business has been working closely with
customers to convert costly manufacturing processes into lower
cost volume presswork. The knowledge and skill set of our
manufacturing team has proved fundamental in facilitating this
new business and we now see opportunities in the application
of these processes to the construction and buildings industries.
Braime Group PLC Annual Report & Accounts 2023
6 Strategic Report
Business review (continued)
Aerial view of crushing plant and elevator equipment in Quindao, China.
New capital investments
The Group continues to spend capital to maintain its
productivity and to safeguard its asset base through
appropriate redevelopment and refurbishment of plant and
property as well as the purchase of new machinery. In 2023,
the Group invested £1.6m in capital investments. £0.4m of this
relates to enhancements to the chain cell area. As discussed in
last year’s report, we took advantage of the necessity forced
upon us to rebuild the chain cell area to improve the efficiency
of production areas and to increase our existing capacity to
ensure the ongoing growth of this product line.
Similarly, investments made in our robotic lines for
manufacturing steel elevator buckets will help maintain our
position as the market leader and enable us to increase
volumes while the refurbishment of our large hydraulic 400t
press will also enable us to target new business in areas outside
of the automotive and materials handling industries.
2023 has built on the process improvements and innovation
activities of 2022 and we look forward to an exciting year in
2024 continuing our strategy of investment in improving
manufacturing efficiencies, new product development and new
market opportunities.
We also invested £0.4m on the redevelopment of our
manufacturing dispatch yard and the construction of an
additional employee car park to the rear of our Hunslet
property which includes an attenuation tank to minimise the
risk of oil spillages contamination and is also a flood defence.
As reported last year, in February 2023 we completed the
second phase of our solar panel installation, an important
feature of our sustainability.
In the USA, we strengthened our portfolio of plastic injection
moulding machines in our US facility with the purchase of a
528-tonne moulding machine and invested in new tooling for
our range of 5 inch projection CC-S buckets. These investments
help to strengthen our position as one of the top three
manufacturers of plastic elevator buckets in the USA and
facilitate our ability to provide a ‘one stop shop’ package
solution of buckets, belts, bolts and belt fasteners to our end
user and OEM customers.
Braime Group PLC Annual Report & Accounts 2023
Carl Braime,
Alan Braime,
Joint Chief Executive Officer
Joint Chief Executive Officer
Strategic Report
Governance
Financial Statements
7
Group strategic report
The directors present their strategic report of the Company and
the Group for the year ended 31st December 2023.
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, the Middle East, Asia,
Australia and Africa and in 2023 traded in ninety-eight
countries. The US subsidiary also has an injection-moulding
plant. All injection-moulded products are made wholly for 4B
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 better results than was
anticipated at the start of the year. For the year ended 31st
December 2023, the Group generated revenues of £48.2m, up
£3.3m from prior year. Profit from operations was £3.7m, down
£351,000 from prior year and EBITDA was £5.4m, down
£208,000 from prior year.
Profit before tax was £3.3m, down £487,000 from prior year.
At 31st December 2023, the Group had net assets of £20.8m.
Cash flow
Inventories decreased by £702,000 as the Group utilised stock
built up during 2022 when sales were rising rapidly. Trade and
other receivables similarly decreased, down £998,000 reflecting
lower customer activity during the period close to the year end.
There was a corresponding decrease in our trade and other
payables of £2.1m reflecting the decrease in purchases of stock.
In total the business generated funds from operations of £3.2m
(2022 – £3.4m). During the year, the Group spent £1.6m on
property, plant and equipment; £775,000 of this was on
improvements to our Hunslet property in the UK, and £860,000
on purchases of plant and machinery, mainly for our
manufacturing division. After the payment of other financial
costs and the dividend, the cash balance (net of overdraft) was
£2.2m, an increase of £1.4m from the prior year.
Bank facilities
The Group’s operating banking facilities are renewed annually.
At the year end, the available headroom on its operating
facilities was £3.4m. As previously announced, the Group had
additionally obtained a development loan facility of £1.5m from
its bankers HSBC for the Hunslet Road chain cell project, of
which only £978,000 was ever drawn down. Post-year end in
February 2024, in line with expectations at the time of taking
out the development facility, this was converted to a term loan,
repayable over five years at an interest of 2.5% above base rate.
The business continues to enjoy good relations with its bankers.
Taxation
The tax charge for the year was £999,000, with an effective rate
of tax of 30.0% (2022 – 28.8%). The effective rate is higher
than the averaged UK standard tax rate of 23.5% (2022 –
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 2023, the Group invested £1.6m (2022 – £2.8m) in property,
plant and equipment and intangible assets. In addition to
£775,000 spent on the UK chain cell enhancements, solar
panels and improved rear car park facilities, the Group has also
spent £860,000 enhancing its engineering capabilities,
purchasing robotic controls and sensors, a new access control
system, a 600t press in the UK, and a new injection moulding
machine and plastic bucket moulds in the USA.
Balance sheet
Net assets of the Group have increased to £20.8m (2022 –
£19.2m). Sterling strengthened against the United States dollar
in 2023 from a low base in 2022. Consequently, a foreign
exchange loss of £505,000 (2022 – £815,000 gain) was
recorded on the re-translation of the net assets of the overseas
operations, which has decreased retained earnings in the year.
A coordinate-measuring machine (CMM) probing depth to
the order of microns, Leeds, UK.
Braime Group PLC Annual Report & Accounts 2023
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 a number of other currencies and the
principal exchange rates in use during 2023 and the comparative figures for 2022 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 2023
1.880
8.821
1.152
23.088
43.423
1.248
Average rate
Full year 2022
1.777
8.354
1.170
20.155
43.159
1.232
Closing rate
31st Dec 2023
1.868
9.041
1.154
23.307
43.805
1.275
Closing rate
31st Dec 2022
1.771
8.394
1.128
20.385
41.589
1.204
Performance of the 4B division, world-wide
supplier of components and monitoring systems
for the material handling industry
Revenues increased from £46.3m to £50.3m, with external sales
up £4.3m to £42.4m. Profit for the period fell by £550,000 to
£2.3m. The North American market continued its strong growth
in 2023, with external revenues up 22% to £23m, and Africa
also performed strongly with sales up 17%. However, the
ongoing war in Ukraine has continued to dampen European
sales which are down from 2022 and the Pacific region sales
have remained static.
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 presswork manufacturing business is to
produce quality, technically demanding steel 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 £10.5m were down £1.4m on
prior year. External sales and intercompany sales were £5.7m
and £4.8m as compared to £6.7m and £5.1m respectively in
2022. Profit for the period was £613,000 (2022 – £1.0m). The
board believes the business continues to add strategic value
through its supply to the 4B division and complementary
engineering expertise.
Braime Group PLC Annual Report & Accounts 2023
Our subsidiary branch 4B Middle East display at the Saudi
Agriculture Export Exhibition, Riyadh, Saudi Arabia.
Strategic Report
Governance
Financial Statements
9
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:
Principal risks and uncertainties
The continued conflict in Ukraine and now Gaza as well as other
geo-political pressures create uncertainties in the world markets
in which the Group operates.
Key performance indicator Note
1
Turnover growth
2
Gross margin
Operating profit
Stock days
Debtor days
Notes to KPIs
1. Turnover growth
3
4
5
2023
7.3%
46.8%
3.75m
2022
23.3%
47.6%
4.45m
179 days
52 days
206 days
64 days
The Group aims to increase shareholder value by measuring
the year on year growth in Group revenue. Whilst growth is
lower than 2022, which was an exceptional year, the board
remain pleased with the revenue growth achieved
particularly in the North American sector.
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 decrease in gross margin is the result of
continuing higher material prices, across all product
categories.
3. Operating profit before exceptional item
Sustainable growth in operating profit is a strategic priority
to enable ongoing investment and increase shareholder
value. Reduction in operating profit, follows an exceptionally
strong year in 2022 and management remains pleased with
the results in the current economic climate.
4. Stock days
The value of period end 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. Stock days have decreased due to the
unwinding of the inventory build-up in December 2022,
which was put in place to mitigate the impact of increases in
raw materials costs in 2022.
5. Debtor days
The value of period end trade receivables divided by revenue
expressed as a number of days. This is an important indicator
of working capital requirements. Debtor days have
decreased as a result of lower sales growth compared to
2022, particularly towards the end of the financial year.
Other metrics monitored weekly or monthly include quality
measures (such as customer complaints), raw material buying
prices, capital expenditure, line utilisation, reportable accidents
and near-misses.
The Group’s short reporting lines of management means it can
remain nimble footed to sudden and/or large changes in the
business landscape.
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 overseas operations. 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.
• Energy price fluctuation:- The manufacturing division is
energy intensive. It uses forward contracts to mitigate
volatility and is continually evaluating its processes to reduce
energy consumption and generate energy.
• 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.
Braime Group PLC Annual Report & Accounts 2023
10 Strategic Report
Group strategic report (continued)
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.
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.
On behalf of the board
Cielo Cartwright, Chief Financial Officer
22nd April 2024
Principal risks and uncertainties (continued)
• 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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
11
Corporate social responsibility
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.
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.
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.
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 and is currently looking at the new reporting
requirements that may fall due in the future. The Group
continuously looks for ways to harness energy reduction
(electricity and gas) and water. The Company has already
installed two solar PV systems on its UK premises generating
Trimming and polishing deep drawn stainless cans,
Braime Pressings, UK.
310 KWh of energy. 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.
Cielo Cartwright, Chief Financial Officer
22nd April 2024
Braime Group PLC Annual Report & Accounts 2023
12 Strategic Report
The Board
Nicholas Braime, Executive Chairman
Nicholas 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 was
appointed Chairman in 1987 and became Group
Managing Director in 2006. He stepped down
Alan Braime, Joint Chief Executive Officer
Alan qualified as a chartered accountant with
KPMG where he worked for four years before
joining the Group. Alan joined the board in
2010 as Group Commercial Director and was
jointly appointed Group CEO in February 2023.
He oversees the commercial operations of our
manufacturing division Braime Pressings Limited
Carl Braime, Joint Chief Executive Officer
Carl joined the Group in 2004 as Group Sales
Director and was jointly appointed Group CEO
in February 2023. Carl spent a number of years
in South America with the Group prior to being
appointed to the board in 2010. He is responsible
for the 4B division, overseeing its strategic
customer relationships, as well as the management
Cielo Cartwright, Chief Financial Officer
Cielo 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,
Mark Cooper, Non-Executive Director
Mark was until 2022 the Managing Director of
Steel & Alloy, which is part of the multinational
conglomerate Gonvarri Industries. Mark has
40 years of experience with Steel & Alloy and
has served in a variety of senior executive roles
including sales and procurement and was
instrumental in setting up Steel & Alloy’s plant
Dr Tony Steels, Non-Executive Director
Tony was until recently Chief Executive of Mpac
Group PLC and has a significant track record
of profitable, sustainable growth in the global
technology and capital equipment industry.
Tony has previously held a number of senior
executive UK and international management
positions at Cytec Industries Inc., Umeco Plc and
Philip Stockdale, Non-Executive Director
Philip has a degree in mathematics and electronics
from the OU, and is a certified electrical engineer.
He has extensive experience of the nuclear, oil
and gas, engineering and manufacturing
industries. Philip has previously held senior
executive roles in a number of multinationals
including AGT International, Thales, and
as Managing Director in February 2023. Nicholas
remains Executive Chairman and takes a prime
interest in the Group’s infrastructure and product
development. 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.
as well as our operations in Thailand. Alan is
also responsible for the Group’s IT operations
and strategy. Alan has spent considerable time
on the development of the Group’s ERP systems,
giving him a unique perspective into the impact of
technology on the Group’s business drivers.
of key supply chains and its marketing strategy.
Carl has built up a strong expertise and know-how
of the Group’s product offerings and technologies,
and their interdependencies.
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.
in Turkey where he also served as Managing
Director. Mark brings with him significant
knowledge of the steel and automotive industry.
Georg Fischer AG, based in the UK and China. He
has degrees in engineering, management and a
PhD in business process modelling from UMIST.
Tony is the Senior Independent Director.
Engica Technology Systems International.
Philip’s key expertise is strategy and business
development.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
13
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 2018 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
BBrraaiimmee GGrroouupp PPllcc
have been applied throughout the year
ended 31st December 2023. The board
considers that it has complied with the
recommendations of the QCA Code
throughout the year with the exception of
January and February, when the role of
Chairman and Chief Executive was 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:
QCA Code Principle
How it should be applied
How the Company applied it
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
responsibilities and their
implications for long term success
The board must express a shared view
of the Company’s purpose, business
model and strategy and set out how
the Company intends to deliver
shareholder value in the medium to
long term. It should demonstrate that
the delivery is underpinned by a clear
set of values aimed at protecting the
Company from unnecessary risk and
securing its long-term future.
Directors must develop a good
understanding of the needs and
expectations of all elements of the
Company’s shareholder base. The
board must manage shareholder’s
expectations and should seek to
understand the motivations behind
shareholder voting decisions.
Long-term success relies upon good
relations with a range of different
stakeholder groups both internal
and external. Communities within
which the Company operates have
the potential to affect the Company’s
ability to deliver shareholder value.
Systems need to be in place to solicit,
consider, and act on feedback from all
stakeholder groups.
The main area of our business is focused on handling
agricultural commodities and our strategy is to increase our
geographical reach in this global market and to develop new
products to enhance our offering. The principal risks and
uncertainties surrounding execution of our strategy are set out
in the Group strategic report
The Company engages with shareholders through its
website and at the annual general meeting. At the AGM, a
presentation of the business activity and outlook is presented
by the Chairman. The feedback from shareholders attending
the most recent AGM has been very positive. Responsibility
for shareholder liaison rests with the Chairman, and in his
absence, with the Company Secretary.
The Company recognises the importance of maintaining
good relations with key stakeholder groups, in addition to its
members, these are its employees, customers, key suppliers
and regulatory bodies. The Company dedicates significant time
to understanding and acting on the needs and requirements
of each of these groups via meetings dedicated to obtaining
feedback. The Group is fortunate to have so many proactive
and longstanding employees and staff turnover remains very
low. The Group has dedicated quality teams and works very
closely with its key suppliers in key product categories such
as monitors, chain, belts and steel, to ensure that products
continue to meet the appropriate quality standards, and
features are regularly enhanced to obtain and maintain
competitive edge.
Braime Group PLC Annual Report & Accounts 2023
14 Strategic Report
Corporate governance report (continued)
Principles and approach (continued)
QCA Code Principle
How it should be applied
How the Company applied it
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
The board needs to ensure that
the Company’s risk management
framework identifies and
addresses all relevant risks in order
to execute and deliver strategy
and to consider the supply chain,
from key suppliers to end-
customer. Setting strategy should
include extend of exposure to the
identified risks that the Company
is able and willing to bear.
The board members are
collectively and legally responsible
for promoting the interests
of the company and for
defining corporate governance
arrangements. Ultimately
the quality and approach to
governance lies with the chair.
The board should be provided
with timely, quality information
to facilitate assessment of matters
requiring decision or insight.
The board should have an
appropriate balance between
executive and non-executive and
have at least two non-executive
directors.
The board must have an
appropriate balance of sector,
financial, and public markets
skills and experience, as well
as an appropriate balance
of personal qualities and
capabilities.
7. Evaluate board performance
based on clear and relevant
objectives, seeking continuous
improvement
The board should review the
effectiveness of its performance
as well as that of its committees
and directors.
Braime Group PLC Annual Report & Accounts 2023
The executives have undergone a business continuity planning
exercise to understand its exposure to the loss of key staff,
suppliers, customers and other natural catastrophic events,
enabling the generation of a risk register. Principal risks
facing the Group are set out in the Group 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 board consists of four Executive Directors, Nicholas
Braime, Carl Braime, Alan Braime and Cielo Cartwright, and
three Non-Executive Directors, Mark Cooper, Tony Steels
and Philip Stockdale who joined the Board from 1st May
2023 replacing Peter Alcock and Andrew Walker who both
stepped down from office on 22nd June 2023. Tony Steels is
Senior Independent Director and chairs the board meetings in
Nicholas’ absence. Board meetings are held monthly. Certain
matters are standing agenda items at each board meeting
– these include disclosure of directors’ interests, health and
safety, reports from the CEOs and heads of the subsidiary
businesses, the CFO's report, specific customer issues, IT,
major capital expenditure, business development and AIM
disclosures. A formal agenda, board papers including minutes
of the last meeting are circulated in advance. The attendance
of the directors at board meetings can be found below.
The board members' experience and areas of expertise can
be found in The Board section. The board is committed to
the promotion of gender balance and diversity within its
workforce. At the time of writing there are six male board
members and one female board member.
The Company organises briefings from its NOMAD for the
directors covering regulations that are relevant to their role
as directors of an AIM-quoted company. These are held at
a minimum on an annual basis. The Company has not to
date, 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.
Performance targets are set as part of the budgeting process.
Evaluation of the performance of the Company's board has
historically been implemented in an informal manner and
no formal board performance evaluation took place during
the year. 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 have either 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 annual report. The role of the
various governance committees are set out further down this
section.
Strategic Report
Governance
Financial Statements
15
QCA Code Principle
How it should be applied
How the Company applied it
8. Promote a culture that is
based on ethical values and
behaviours
The board should embody and
promote a corporate culture
that is based on sound ethical
values and use it as an asset and
source of competitive advantage.
The policy and culture should
be visible. The corporate culture
should be recognisable.
9. Maintain governance
structures and processes that
are fit for purpose and support
good decision making
The Company should maintain
governance structures in line
with its corporate culture and
appropriate to its size and
complexity and its capacity,
appetite and tolerance for risk.
10. Communication how the
Company is governed and is
performing by maintaining a
dialogue with shareholders and
other relevant stakeholders
A healthy dialogue should exist
between the board and all
its stakeholders. In particular,
appropriate communication and
reporting should exist between
the board and all constituent parts
of its shareholder base.
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 a
standing topic at every board meeting and the board discusses
examples of behaviours that either aligns with or at odds
with the Group's stated values. The directors believe that the
Company's culture encourages collaborative, ethical behaviour
which benefits employees, clients and stakeholders. It is
committed to conducting business ethically and responsibly,
and 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
all employees and contractors have worked in line with the
Group's values during this financial year.
The board has a number of informal subcommittees which the
directors consider appropriate for the size of the business and
are described further below.
For the first two months of the year, the roles of Chairman
and Chief Executive were fulfilled by Nicholas Braime which
was a departure from the recommendations of the QCA code.
However, this matter has been addressed by making some
changes to the board as explained in the ‘Responsibilities of
the board’ section below.
Certain matters are reserved for the board for its
consideration. These are set out below in this section.
The Company's website provides all historical RNS
announcements, interim reports and annual reports. The
annual reports and AGM circulars are posted directly to all
registered shareholders or nominees. Communication with
shareholder base is primarily conducted at general meetings
which include presentations by the Chairman. Historical
annual reports including notices of all general meetings are
shown in the investor section. The Company also maintains
email and phone contacts which shareholders can use to make
enquiries or requests. At the last AGM, all resolutions were
passed unanimously by the shareholders voting. At this stage
the Company does not publish an Audit Committee report or
a Remuneration Committee report but it may look to do so in
the future.
Braime Group PLC Annual Report & Accounts 2023
16 Governance
Corporate governance report (continued)
Strategy and risks
The Group strategic report on pages 7 to 10 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 across all its 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 recent Covid-19 pandemic. The principal risks facing
the business are set out in pages 9 to 10 of the Group 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.
Finance
• Budget approval.
• 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.
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.
Composition of the board
The board comprises of four Executive Directors and three
Non-Executive Directors. For the first four months of the year
ended 31st December 2023 the board comprised of four
Executive Directors and two Non-Executive Directors. Three new
Braime Group PLC Annual Report & Accounts 2023
Non-Executive Directors were appointed to the board on 1st May
2023 and the two long standing non-executives retired at the
AGM on 22nd June 2023. The Chief Financial Officer 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 three
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 informal sub-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 typically uses the whole board to consider matters
of nomination and succession. However with respect to the
appointment of the Joint Chief Executives in February 2023, the
nomination committee comprised of the Chairman and the two
previous Non-Executives, with the Chief Financial Officer acting as
Secretary. 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 future changes. The nomination
committee also discusses the appointment and replacement of
senior management within the Group.
Strategic Report
Governance
Financial Statements
17
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;
•
•
•
•
papers were circulated electronically but available in paper format
on request. During the year some board meetings were held as
hybrid meetings, with some board members participating online.
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 executives.
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. M. T. Cooper, T. Steels and P. P.
Stockdale joined the board on 1st May 2023. P. J. O. Alcock and
A. W. Walker retired from the board on 22nd June 2023.
Meeting attendance during 2023
leading the management team in the implementation of the
Group’s strategy; and
Director
Board
(11)
Audit & Risk
Committee (1)
Remuneration
Committee (1)
• bringing matters of particular significance to the board for
discussion and consideration by the board if appropriate.
For the first two months of the year, the roles of Chairman and
Chief Executive were fulfilled by Nicholas Braime. Whilst this was a
departure from the recommendation of the QCA code, the board
considered this practical arrangement enabled 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. As part of the Group’s
succession planning, Nicholas stepped down as Chief Executive in
February 2023, and Alan Braime and Carl Braime were appointed
Joint Chief Executives, thereby splitting Nicholas’ role as both
Chairman and Chief Executive. Together Alan and Carl lead the
execution of the overall Group strategy. In particular, Carl Braime
oversees the 4B division whilst Alan focuses on the manufacturing
division. Nicholas remains Executive Chairman.
The role of Company Secretary is fulfilled by Cielo Cartwright, the
Chief Financial Officer. 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.
Board attendance and agenda
Executive directors are employed on a full time basis and non-
executive directors are expected to commit to a minimum of 20
days per year.
The board met formally 11 times throughout the year. Briefing
O. N. A. Braime
A. Q. Braime
C. O. Braime
C. B. Cartwright
P. J. O. Alcock
A. W. Walker
M. T. Cooper
T. Steels
P. P. Stockdale
10
11
11
11
5
5
7
7
6
1
1
1
1
1
1
–
–
–
1
–
–
–
–
–
1
1
1
Board evaluation
The board continues to evaluate improvements to its conduct of
business. Improvements have continued to be implemented
throughout the year. During 2023, presentations from the
Managing Directors 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 a rolling programme of such presentations are again
planned for 2024, and will include heads of product.
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.
Braime Group PLC Annual Report & Accounts 2023
18 Governance
Corporate governance report (continued)
Board evaluation (continued)
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 Group
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.
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. Overseas trips which had been curtailed during the
pandemic have been reinstated. However, the use on-line video
conferencing, which became the norm during the pandemic has
also become established as a regular feature of communications.
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. This is discussed further in point 8 of
the QCA Code Principles.
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
19
Directors’ report
The directors present their annual report and financial
statements for the year ended 31st December 2023.
Results and dividends
The profit for the year after taxation and transferred to reserves
was £2,336,000 (2022 – £2,721,000). 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:
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 11th April 2024, apart
from the directors, only the following persons are interested in
more than 3% of the Ordinary shares of the Company:
Ordinary shares held Percentage
31st December
2023
1st January
2023
CGWL Nominees Limited
A/C GC1
Peter Alcock
(retired 22nd June 2023)
Ordinary shares
‘A’ Ordinary shares
Alan Braime
Ordinary shares
Carl Braime
Ordinary shares
Nicholas Braime
Ordinary shares
Cielo Cartwright
Ordinary shares
Mark Cooper
(appointed 1st May 2023)
Ordinary shares
Tony Steels
(appointed 1st May 2023)
Ordinary shares
Philip Stockdale
(appointed 1st May 2023)
Ordinary shares
Andrew Walker
(retired 22nd June 2023)
Ordinary shares
‘A’ Ordinary shares
1,000
5,000
1,000
5,000
35,175
35,175
35,175
35,175
143,400
143,400
–
–
–
–
–
–
–
–
100
300
100
300
In accordance with the Company’s Articles of Association
A. Q. Braime retires by rotation and, being eligible, offers himself
for re-election.
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
C. M. B. Cartwright retires by rotation and, being eligible, offers
herself 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.
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
72,500
15.10%
31,608
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 Group 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 increased from an opening figure of
£786,000 to £2,172,000 as at 31st December 2023.
Braime Group PLC Annual Report & Accounts 2023
20 Governance
Directors’ report (continued)
Going concern (continued)
During the period the Group funding of working capital During
the period the Group funding of working capital decreased by
£353,000 arising from a decrease in trade and other payables,
which were partially offset by decreases in trade and other
receivables and inventories of £998,000 and £702,000
respectively. Overall cash derived from operating activities
generated £3,237,000 (2022 – £3,423,000) net of the increased
working capital funding.
At 31st December 2023, the available headroom within the
Group’s borrowing facilities amounted to £3,390,000. 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;
• prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group’s and
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the Group and Company
and to enable them to ensure that the financial statements and
the Directors’ remuneration report comply with the Companies
Act 2006 and, as regards the Group financial statements, Article
4 of the IAS Regulation. They are also responsible for
safeguarding the assets of the Group and the Company and
hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The directors are responsible for the maintenance and integrity
of the Company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Each of the directors at the date of this report confirms that:
(a) so far as the director is aware, there is no relevant audit
information of which the Company’s auditors are unaware;
and
(b) he/she has taken all the steps that he/she ought to have
taken as a director in order to make himself or herself aware
of any relevant audit information and to establish that the
Company’s auditors are aware of that information.
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 £13,000 (2022 – £16,000)
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 the reporting requirements fall on the
Company as an individual entity, and neither the Company, nor
any of its individual subsidiaries, met the threshold criteria for
the year ended 31st December 2023.
Auditors
A resolution proposing Kirk Newsholme be re-appointed as
auditors of the Company will be put to the Annual General
Meeting.
• make judgements and accounting estimates that are
reasonable and prudent;
By order of the board
•
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
Cielo Cartwright, Secretary
22nd April 2024
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
21
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
The non-executive directors have service contracts with the
Company. 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:
Estimated taxable
value of benefits
in kind
£’000
Total
2023
£’000
Total
2022
£’000
Pension
contributions
2023
£’000
Pension
contributions
2022
£’000
Fees
£’000
Salary
£’000
Executive directors
Nicholas Braime
Alan Braime
Carl Braime
Cielo Cartwright
Non-executive directors
Peter Alcock (retired 22nd June 2023)
Andrew Walker (retired 22nd June 2023)
Mark Cooper (appointed 1st May 2023)
Tony Steels (appointed 1st May 2023)
Philip Stockdale (appointed 1st May 2023)
Paid by the Company
–
–
–
–
16
16
22
22
22
98
98
194
175
175
140
–
–
–
–
–
684
509
8
2
2
1
–
–
–
–
–
13
11
202
177
177
141
16
16
22
22
22
795
618
239
135
135
124
31
31
–
–
–
695
560
–
25
25
12
–
–
–
–
–
62
37
–
18
18
12
–
–
–
–
–
48
30
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.
Approval
The directors’ remuneration report was approved by the board on 22nd April 2024.
Nicholas Braime, Director
Braime Group PLC Annual Report & Accounts 2023
22 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 2023 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 significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and UK adopted international accounting standards. 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 2023 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;
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.
Our approach to the 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
74.11% of Group turnover, 79.48% of Group profit before tax and 70.95% of Group gross assets.
4B France Sarl, 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 France Sarl and 4B Africa Elevator Components (Proprietary) Limited, a review of specific working papers
regarding certain key audit areas for 4B France Sarl, and analytical review procedures in relation to 4B Braime (Changzhou) Industrial
Control Equipment Co. Ltd and 4B Asia Pacific Company Limited. These components comprised 21.67% of Group turnover, 9.93%
of Group profit before tax and 23.02% of Group gross assets.
4B Australia PTY Limited is not required by local legislation to have an audit performed. We carried out our own detailed audit
procedures on this component sufficient to conclude that there were no significant risks of material misstatement in the Group
financial statements. This component comprised 4.22% of Group turnover, 10.59% of Group profit before tax and 6.03% of Group
gross assets.
We engaged a firm of CPAs in USA to attend a year-end inventory count of 4B Elevator Components Limited complimented by own
virtual attendance at one of the Company’s monthly perpetual stock checks, and a firm of Chartered Accountants in Australia to
attend a year-end inventory count of 4B Australia PTY Limited.
At the parent entity level we tested the consolidation process and carried out analytical procedures to confirm our conclusion that
there were no significant risks of material misstatement of the aggregated financial information of components that were not
subject to audit by us.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
23
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 £12,587,000 (2022 – £13,289,000) 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
presswork 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 presswork manufacturing segment of the
Group into which such costs would have been absorbed amounted to £626,000 (2022 – £785,000).
As described in note 1.20 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 2023 includes an inventory impairment provision
charge of £195,000 (2022 – £76,000 credit) 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 (presswork manufacturing segment) and bought
in components (4B 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
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.
Braime Group PLC Annual Report & Accounts 2023
24 Governance
Independent auditors’ report (continued)
to the members of Braime Group PLC
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 £482,000 (2022 – £449,000).
Basis for determining
materiality:
1% of Group turnover.
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 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 £117,000 to £232,000. 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 £18,100
(2022 – £16,800) as well as ‘clearly trivial’ misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt 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 2025;
• Understanding and evaluating the key assumptions to the forecast being forecasts of sales, gross profit margin, administrative
costs, level of capital expenditure, inventory, trade debtor 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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
25
Other information
The other information comprises the information included in the annual report 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 the part of the directors’ remuneration report to be audited has been properly prepared in accordance with 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.
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 their 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 the part of the directors’ remuneration report to be audited 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 20, 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 Group or parent company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a
high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
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.
Braime Group PLC Annual Report & Accounts 2023
26 Governance
Independent auditors’ report (continued)
to the members of Braime Group PLC
Auditors’ responsibilities for the audit of the financial statements (continued)
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.
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.
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
27
Other matters
The Company voluntarily prepares a directors’ remuneration report in accordance with the provisions of 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
22nd April 2024
Braime Group PLC Annual Report & Accounts 2023
28 Financial Statements
Consolidated income statement
For the year ended 31st December 2023
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
2023
£’000
2022
£’000
4
7
2
2
3
5
5
6
48,155
44,879
(426)
(25,188)
(11,009)
(1,678)
(6,270)
164
2,925
(26,456)
(10,260)
(1,535)
(5,391)
287
3,748
4,449
–
3,748
(485)
72
3,335
(999)
2,336
2,274
62
2,336
(350)
4,099
(282)
5
3,822
(1,101)
2,721
2,768
(47)
2,721
Basic and diluted earnings per share
20
162.22p
188.96p
The notes on pages 33 to 59 form part of these financial statements.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
29
Consolidated statement of comprehensive income
For the year ended 31st December 2023
Profit for the year
Note
2023
£’000
2,336
2022
£’000
2,721
Items that will not be reclassified subsequently to profit or loss
Net pension remeasurement gain on post employment benefits
21.3
19
128
Items that may be reclassified subsequently to profit or loss
Foreign exchange (loss)/gain on re-translation of overseas operations
Other comprehensive (loss)/income for the year
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interests
(505)
(486)
815
943
1,850
3,664
1,775
75
1,850
3,727
(63)
3,664
Braime Group PLC Annual Report & Accounts 2023
30 Financial Statements
Consolidated balance sheet
As at 31st December 2023
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
2023
£’000
2022
£’000
8
9
10
11
12
13
14
15
16
17
18
10,082
489
717
11,288
12,587
7,973
2,310
22,870
34,158
138
6,991
3,769
52
9,782
636
425
10,843
13,289
8,760
1,458
23,507
34,350
672
8,635
3,219
195
10,950
12,721
2,325
44
–
2,369
2,343
92
–
2,435
13,319
15,156
20,839
19,194
360
257
221
20,182
21,020
(181)
360
257
742
18,091
19,450
(256)
20,839
19,194
The financial statements on pages 28 to 59 were approved and authorised for issue by the board of directors on 22nd April 2024
and were signed on its behalf by:
Nicholas Braime, Chairman Cielo Cartwright, Chief Financial Officer
Company Registration Number 488001
The notes on pages 33 to 59 form part of these financial statements.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
31
Consolidated cash flow statement
For the year ended 31st December 2023
Note
8, 9 & 10
5
5
6
Operating activities
Net profit
Adjustments for:
Depreciation and amortisation
Foreign exchange (losses)/gains
Finance income
Finance expense
Gain on sale of land and buildings, plant, machinery and motor vehicles
Adjustment in respect of defined benefit scheme
Income tax expense
Income taxes paid
Operating profit before changes in working capital and provisions
Decrease/(increase) in trade and other receivables
Decrease/(increase) in inventories
(Decrease)/increase in trade and other payables
Decrease in provisions
Cash generated from operations
Investing activities
Purchases of property, plant, machinery and motor vehicles
Purchase of 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
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
The notes on pages 33 to 59 form part of these financial statements.
22
2023
£’000
2,336
1,678
(424)
(72)
485
(80)
69
999
(1,401)
1,254
3,590
998
702
(2,053)
–
(353)
3,237
(1,421)
–
88
22
(1,311)
977
(372)
(172)
(283)
(404)
(64)
(17)
(205)
(540)
1,386
786
2,172
2022
£’000
2,721
1,535
622
(5)
282
(188)
132
1,101
(759)
2,720
5,441
(2,669)
(3,165)
4,870
(1,054)
(2,018)
3,423
(2,053)
(725)
216
1
(2,561)
236
(392)
(158)
(268)
(210)
(60)
(11)
(187)
(1,050)
(188)
974
786
Braime Group PLC Annual Report & Accounts 2023
32 Financial Statements
Consolidated statement of changes in equity
For the year ended 31st December 2023
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 2022
360
257
(89)
15,382
15,910
(193)
15,717
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
20
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
831
831
831
–
–
2,768
2,768
(47)
2,721
128
128
–
128
–
128
831
959
(16)
(16)
815
943
2,896
3,727
(63)
3,664
(187)
(187)
(187)
(187)
–
–
(187)
(187)
Balance at 1st January 2023
360
257
742
18,091
19,450
(256)
19,194
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
20
Total transactions with owners
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,274
2,274
62
2,336
19
19
–
19
(521)
(521)
3
22
(518)
(499)
13
13
(505)
(486)
(521)
2,296
1,775
75
1,850
–
–
(205)
(205)
(205)
(205)
–
–
(205)
(205)
Balance at 31st December 2023
360
257
221
20,182
21,020
(181)
20,839
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
33
Notes to the accounts
For the year ended 31st December 2023
1. ACCOUNTING POLICIES
1.1 General Company information
Braime Group PLC (‘the Company’) and its subsidiaries (together ‘the Group’) manufacture metal presswork and through its 4B
brand, handle the supply of bulk material handling components through trading from locations in Australia, China, England, France,
South Africa, Thailand, the United Arab Emirates 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 22nd April 2024.
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 60 to 67.
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.
Areas of judgement
Judgements are made by management in the application its accounting policies which can have a significant effect on the amounts
recognised in the financial statements. During the year, management made judgements in the following area:
Capitalisation of property expenditure
The Group is headquartered in a listed building which requires a significant level of ongoing maintenance by the Company. Where
expenditure is judged to result in an enhancement of the value of the property, the expenditure is capitalised in line with the Group’s
depreciation policies. Otherwise expenditure on the property is taken as repair costs which are charged in the year.
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:
Assumptions about the future and critical accounting estimates
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 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.
Braime Group PLC Annual Report & Accounts 2023
34 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
1. ACCOUNTING POLICIES (CONTINUED)
1.3 Critical accounting estimates and assumptions (continued)
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.
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 2023:
•
IFRS 17 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 on or after 1st January 2023. The application of IFRS17 was considered and
dismissed as having no material effect on these financial statements.
• Amendments to IFRS 17 – Initial Application of IFRS 17 & IFRS 9 – Comparative Information – Helps entities to avoid temporary
accounting mismatches by allowing an option relating to comparative information about financial assets presented on initial
application of IFRS 17 – effective accounting period beginning on or after 1st January 2023.
• Amendments to IAS 1 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 period beginning on or after 1st January 2023.
• Amendments to IAS 8 – 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 July 2023.
• Amendments to IAS 12 – 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.
• Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules – Introduces a temporary exception in relation to the
OECD Pillar Two income taxes. Specifically, an entity does not recognize deferred tax assets and liabilities related to the OECD
Pillar Two income taxes and is exempt from providing ‘normal’ IAS 12 disclosures in relation to them – effective immediately
(subject to any local endorsement requirements).
(b) New standards, amendments and interpretations issued but not effective for the financial year beginning 1st January
2023 and not early adopted.
• Amendments to IAS 1 – 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 2024.
• Amendments to IAS 1 – Non-current Liabilities with Covenants – Clarifies that only those covenants with which an entity must
comply on or before the end of the reporting period affect the classification of a liability as current or non-current – effective
accounting periods beginning on or after 1st January 2024.
• Amendments to IFRS 16 – Lease Liability in a Sales and Leaseback – Specifies requirements relating to measuring the lease liability
in a sale and leaseback transaction after the date of the transaction – effective accounting periods beginning on or after 1st
January 2024.
• Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements – Requires an entity to provide additional disclosures about its
supplier finance arrangements – effective accounting periods beginning on or after 1st January 2024.
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35
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. 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. Revenue streams for both of the Group’s income segments are recognised when the Group’s performance
obligations are fulfilled, that is when control over goods has transferred to the customer. Customers obtain control of the goods
when they are delivered to and have been accepted at their premises or made available for ex-works collections, depending on
individual customer arrangements. 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. 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.
Braime Group PLC Annual Report & Accounts 2023
36 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
1. ACCOUNTING POLICIES (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 any 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.
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
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.
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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.
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.
Braime Group PLC Annual Report & Accounts 2023
38 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
1. ACCOUNTING POLICIES (CONTINUED)
1.13 Right of use assets and lease liabilities (continued)
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.
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.
Braime Group PLC Annual Report & Accounts 2023
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Governance
Financial Statements
39
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 Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets are recognised if, and only if:
a)
It is probable that the expected future economic benefits that are attributable to the asset will flow to the Group; and
b) the cost of the asset can be measured reliably.
The cost of an acquired intangible asset comprises its purchase price and any directly attributable cost of preparing the asset for its
intended use. After initial recognition, intangible assets are measured at cost less accumulated amortisation and impairment losses, if
any.
Intangible assets are amortised on a straight-line basis over their estimated useful lives, which do not exceed the contractual period,
if any. The estimated useful lives, residual values, and amortisation methods are reviewed at each year end, and any changes in
estimates are accounted for prospectively.
• Patents and trademarks
• Software and intellectual property
• Development expenditures
2 – 20 years
3 – 5 years
2 – 5 years
• Customer relationships and distribution rights
5 – 29 years
1.20 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.
1.21 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.
1.22 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.
Braime Group PLC Annual Report & Accounts 2023
40 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
1. ACCOUNTING POLICIES (CONTINUED)
1.22 Other provisions, contingent liabilities and contingent assets (continued)
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.
2. PROFIT FROM OPERATIONS
Profit from operations before exceptional item has been arrived at after
charging/(crediting):
Depreciation and amortisation
Foreign exchange differences – losses/(gains)
Research and development costs
Write-down of/(credit to) inventory to net realisable value
Inventory recognised as an expense
(Write back of)/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
Fees payable to overseas auditors
Profit on disposal of fixed assets
Other operating income
3. EXCEPTIONAL ITEM
Exceptional cost – Chain cell repairs
Note
2023
£’000
2022
£’000
8, 9 & 10
11
12
1,678
318
171
195
25,417
(25)
27
71
21
(80)
(84)
1,535
(192)
90
(76)
23,607
92
19
61
20
(188)
(99)
Note
2023
£’000
–
2022
£’000
350
Exceptional cost in 2022 related to repair of the chain cell wall of the Group’s property in Leeds. This is discussed further in Note 17
Provision for Liabilities.
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 2023.
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 4B division, supplier of bulk material
handling components.
Braime Group PLC Annual Report & Accounts 2023
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 and amortisation
Tax expense
(Loss)/profit for the period
Assets
Total assets
Additions to non current assets
Liabilities
Total liabilities
Strategic Report
Governance
Financial Statements
41
–
2,567
2,567
490
(255)
–
(720)
(46)
(531)
7,739
1,319
2,337
Central
2023
£’000
Presswork
Manufacturing
2023
£’000
4B
2023
£’000
42,445
7,819
50,264
4,244
(136)
22
(923)
(953)
2,254
Total
2023
£’000
48,155
15,133
63,288
5,426
(485)
72
(1,678)
(999)
2,336
5,710
4,747
10,457
692
(94)
50
(35)
–
613
10,664
40
15,755
879
34,158
2,238
3,000
7,982
13,319
Central
2022
£’000
Presswork
Manufacturing
2022
£’000
–
1,880
1,880
(183)
(114)
–
(612)
(198)
(1,107)
7,225
1,886
1,918
6,688
5,149
11,837
1,118
(63)
4
(35)
–
1,024
9,206
8
3,771
4B
2022
£’000
38,191
8,087
46,278
4,699
(105)
1
(888)
(903)
2,804
Total
2022
£’000
44,879
15,116
59,995
5,634
(282)
5
(1,535)
(1,101)
2,721
17,919
922
34,350
2,816
9,467
15,156
Braime Group PLC Annual Report & Accounts 2023
42 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
4. SEGMENTAL INFORMATION (CONTINUED)
Geographical analysis
The Group is domiciled in the UK. Analysis of revenues from external customers by continent is provided below:
UK
Rest of Europe and the Middle East
Americas
Africa
Australia and Asia
Revenue
2023
£’000
Non-current
assets
2023
£’000
9,338
8,704
23,075
1,897
5,141
48,155
6,910
2,174
1,643
112
449
11,288
Revenue
2022
£’000
9,877
9,314
18,924
1,623
5,141
44,879
Non-current
assets
2022
£’000
6,455
2,295
1,725
186
182
10,843
There was one Group customer of the presswork manufacturing segment which accounted for 10.5% of the Group’s revenues.
5. FINANCE INCOME AND EXPENSE
Finance expense
Bank borrowings
Lease interest
Hire purchase interest
Finance income
Other interest received
2023
£’000
2022
£’000
404
64
17
485
72
72
211
60
11
282
5
5
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
43
6. TAX EXPENSE
Current tax expense
UK corporation tax
UK tax expense on profits for the year
Double tax relief
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
2023
£’000
2022
£’000
658
(658)
–
1,069
(22)
1,047
429
(429)
–
1,055
(22)
1,033
1,047
1,033
(60)
25
(13)
999
26
10
32
1,101
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 23.52% (2022 – 19%)
Expenses not deductible for tax purposes
Superdeduction
Tax credits on research and development
Items charged to reserves regarding post employment benefits
Rate difference on foreign tax
Deferred tax not provided
Deferred tax – prior year
Amortisation of intangible asset
Prior year items
Rate differences relating to deferred tax
2023
£’000
3,335
784
10
–
–
4
259
(48)
25
–
(22)
(13)
999
2022
£’000
3,822
726
7
(37)
(14)
24
435
(81)
10
21
(22)
32
1,101
Other than as shown in note 16, no deferred tax asset arising on tax losses or other short term timing differences has been
recognised as their future realisation is relatively uncertain. The amounts not recognised are estimated at £25,000 and £19,000
respectively (2022 – £45,000 and £21,000 respectively) calculated at a rate of 25% (2022 – 25%).
Braime Group PLC Annual Report & Accounts 2023
44 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
7. EMPLOYEES
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
Employee retention grant
Defined contribution pension cost
Defined benefit pension cost
Other long-term employee benefits
Employer’s national insurance contributions and similar taxes
Note
21.3
The Employee retention grant relates to US government assistance with regards to the Covid pandemic.
Directors’ remuneration:
Emoluments of qualifying services
Company pension contributions to money purchase schemes
2023
No.
59
59
83
201
2023
£’000
9,867
(337)
285
121
71
1,002
2022
No.
50
62
74
186
2022
£’000
8,733
–
358
177
96
896
11,009
10,260
2023
£’000
2022
£’000
795
62
857
695
48
743
The number of directors for whom retirement benefits accrued under money purchase pension schemes amounted to 3 (2022 – 3)
and under defined benefit pension schemes amounted to nil (2022 – nil). Further details of directors’ remuneration are included in
the remuneration report.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
45
8. PROPERTY, PLANT AND EQUIPMENT
At 31st December 2023
Cost
Accumulated depreciation
Net book value
At 31st December 2022
Cost
Accumulated depreciation
Net book value
Year ended 31st December 2023
Opening net book value
Additions
Disposals
Depreciation
Exchange differences
Closing net book value
Year ended 31st December 2022
Opening net book value
Additions
Disposals
Depreciation
Exchange differences
Closing net book value
Plant,
machinery
and motor
vehicles
£’000
Land and
buildings
£’000
Total
£’000
8,172
(438)
7,734
7,444
(274)
7,170
7,170
775
–
(167)
(44)
7,734
5,795
1,401
(28)
(101)
103
7,170
14,511
(12,163)
22,683
(12,601)
2,348
10,082
14,107
(11,495)
21,551
(11,769)
2,612
9,782
2,612
860
(7)
(1,078)
(39)
2,348
2,918
652
–
(1,048)
90
2,612
9,782
1,635
(7)
(1,245)
(83)
10,082
8,713
2,053
(28)
(1,149)
193
9,782
The net book value of tangible fixed assets includes an amount of £278,000 (2022 – £253,000) in respect of assets held under hire
purchase contracts. The related depreciation charge on these assets for the year was £195,000 (2022 – £151,000). There were
£235,000 of additions during the year (2022 – £nil) of assets held under hire purchase contracts.
Assets in the course of construction which have not been depreciated total £421,000 (2022 – £1,296,000).
The total cost of non-depreciable assets included in freehold land and buildings was £3,158,000 (2022 – £3,164,000).
Braime Group PLC Annual Report & Accounts 2023
46 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
9.
INTANGIBLE ASSETS
At 31st December 2023
Cost
Accumulated amortisation
Net book value
At 31st December 2022
Cost
Accumulated amortisation
Net book value
Year ended 31st December 2023
Opening net book value
Additions
Amortisation
Exchange differences
Closing net book value
Year ended 31st December 2022
Opening net book value
Additions
Amortisation
Exchange differences
Closing net book value
Goodwill and
software
£’000
Distribution
rights
£’000
Total
£’000
151
(133)
18
155
(135)
20
20
–
(1)
(1)
18
25
–
(6)
1
20
725
(254)
471
725
(109)
616
616
–
(145)
–
471
–
725
(109)
–
616
876
(387)
489
880
(244)
636
636
–
(146)
(1)
489
25
725
(115)
1
636
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
47
10. RIGHT OF USE ASSETS
At 31st December 2023
Cost
Accumulated depreciation
Net book value
At 31st December 2022
Cost
Accumulated depreciation
Net book value
Year ended 31st December 2023
Opening net book value
Additions
Depreciation
Exchange differences
Closing net book value
Year ended 31st December 2022
Opening net book value
Additions
Depreciation
Exchange differences
Closing net book value
Buildings
£’000
IT Equipment
£’000
Vehicles
£’000
550
(149)
401
437
(294)
143
67
(41)
26
174
(107)
67
515
(225)
290
447
(232)
215
Buildings
£’000
IT Equipment
£’000
Vehicles
£’000
143
414
(138)
(18)
401
247
–
(116)
12
143
67
–
(38)
(3)
26
81
33
(53)
6
67
215
189
(111)
(3)
290
304
5
(102)
8
215
Total
£’000
1,132
(415)
717
1,058
(633)
425
Total
£’000
425
603
(287)
(24)
717
632
38
(271)
26
425
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 and a lease liability (see note 15b).
11. INVENTORIES
Raw materials
Work in progress
Finished goods
Goods in transit
2023
£’000
696
211
11,078
602
12,587
2022
£’000
883
293
11,421
692
13,289
During the twelve months ended 31st December 2023 the Group increased charges against finished goods inventories of £195,000
(2022 – reduction of £76,000) following reassessment of the saleability of certain stock items (note 2).
Braime Group PLC Annual Report & Accounts 2023
48 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
12. TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
Prepayments
2023
£’000
6,923
528
522
7,973
2022
£’000
7,819
620
321
8,760
Included in other receivables is £211,000 (2022 – £nil) of corporation tax repayable, £212,000 (2022 – £513,000) in relation to a
VAT claim. 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.
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
2023
£’000
4,850
298
100
1,743
6,991
2023
£’000
1,267
275
100
2,127
3,769
2022
£’000
5,767
359
107
2,402
8,635
2022
£’000
348
200
144
2,527
3,219
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
Bank loans – secured
Lease liabilities
Hire purchase creditors
Other creditors (non-current)
Note
15a
15b
15c
2023
£’000
1,618
482
164
61
2,325
2022
£’000
1,932
263
78
70
2,343
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
49
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
%
GBP development loan
GBP term loan
US dollar bank loan
US dollar term loan
EUR term loan
2.75% over Bank of England base rate
2.50% over Bank of England base rate
4.00% fixed
3.74% fixed
1.31% fixed
Year of
maturity
2024
2027
2023
2024
2034
2023
£’000
1,267
271
657
690
2,885
2023
£’000
978
678
–
29
1,200
2022
£’000
348
293
822
817
2,280
2022
£’000
–
824
44
82
1,330
The GBP development loan relates to the chain cell project. This was converted to a five-year term loan in February 2024 on an
interest rate term of 2.5%. The GBP term loan relates to the construction of the Hunslet Road warehouse and is secured by a fixed
and floating charge over certain assets of certain Group companies. The US dollar term loans form part of the Group funding
arrangements. 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 EUR term loan relates to the French warehouse and is secured against the property.
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
Lease
Payments
£’000
Finance
Charges
£’000
Net Present
Value
£’000
341
300
234
875
(66)
(36)
(16)
(118)
275
264
218
757
At 31st December 2022 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
Over five years
£’000
£’000
£’000
236
122
172
12
542
(36)
(23)
(20)
–
(79)
200
99
152
12
463
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.
Braime Group PLC Annual Report & Accounts 2023
50 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
15. FINANCIAL LIABILITIES – NON-CURRENT (CONTINUED)
At 31st December 2023, the Group had 35 leased RoU assets by category as follows: Buildings: 5, IT equipment: 6, and Vehicles: 24.
The average remaining lease commitments were: Buildings: 2.6 years, IT equipment: 2.2 years, and Vehicles: 1.9 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 2023 was £347,000 (2022 – £327,000).
At 31st December 2023 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 2023 were as follows:
Within one year
One to two years
Two to five years
Future
Payments
£’000
Interest
Charges
£’000
HP
Creditor
£’000
113
80
100
293
(13)
(10)
(6)
(29)
100
70
94
264
Hire purchase payments, interest charges and liabilities as at 31st December 2022 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
The decrease in deferred tax liability relates primarily to the increase in taxable losses.
Balance at start of year
(Credit)/charge to income statement during the year
Balance at end of year
Future
Payments
£’000
Interest
Charges
£’000
HP
Creditor
£’000
151
62
20
233
(7)
(3)
(1)
(11)
2023
£’000
186
(209)
67
44
2023
£’000
92
(48)
44
144
59
19
222
2022
£’000
195
(171)
68
92
2022
£’000
24
68
92
Deferred tax has been recognised at a blended rate of 29% (2022 – 29%) on accelerated capital allowances in 4B Elevator Components
Limited and 25% (2022 – 25%) in respect of the Company, 4B Braime Components Limited and Braime Pressings Limited.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
51
17. PROVISION FOR LIABILITIES
Balance at start of year
Charged to income statement during the year
Utilised in year
Transferred to accruals
Provision for liabilities at end of year
2023
£’000
–
–
–
–
–
2022
£’000
1,054
350
(923)
(481)
–
As reported previously, serious structural faults were discovered in 2021 on the supporting walls of the chain cell area of our Grade II
listed property in Leeds. 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. A provision for liabilities was raised in the accounts because at the
time of publication of the 2021 annual report there remained uncertainty over the cost of restoration and the type of materials to be
used awaited the decision of local authority conservation officers. These costs were provided for to the best of the directors’ estimate at
the time and the repair costs treated as exceptional in 2021 and 2022. The project was completed in July 2023.
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
2023
£’000
2022
£’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.
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 £3,240,000 (2022 -
£3,194,000), 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.
Braime Group PLC Annual Report & Accounts 2023
52 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
19. FINANCIAL INSTRUMENTS (CONTINUED)
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 terms
loans.
Forward contracts
There were no forward currency contracts outstanding at 31st December 2023 (31st December 2022 – £nil).
Fixed interest term loans
Fixed interest term loans as at 31st December 2023 were US dollar term bank loans of £29,000 (2022 – £126,000) and euro bank
term loans of £1,200,000 (2022 – £1,330,000) (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 £65,000
(2022 – £66,000), the interest due on bank loans repayable after one year but not more than five years totals £102,000 (2022 –
£141,000), and the interest due on bank loans repayable after more than five years totals £30,000 (2022 – £50,000).
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 2023
Sterling
Euro
US dollar
Other
Floating rate
financial assets
£’000
Fixed rate
financial assets
£’000
Financial assets
Total
£’000
(1,489)
534
1,939
1,189
2,173
–
–
–
137
137
(1,489)
534
1,939
1,326
2,310
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.
Floating rate
financial assets
£’000
Fixed rate
financial assets
£’000
Financial assets
Total
£’000
(1,394)
696
1,422
734
1,458
–
–
–
–
–
(1,394)
696
1,422
734
1,458
Currency
As at 31st December 2022
Sterling
Euro
US dollar
Other
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
53
The currency and interest rate profile of the Group’s interest bearing financial liabilities is shown below:
Currency
As at 31st December 2023
Sterling
Euro
US dollar
Other
Currency
As at 31st December 2022
Sterling
Euro
US dollar
Other
Floating rate
financial liabilities
£’000
Fixed rate
financial liabilities
£’000
Financial liabilities
Total
£’000
(3,692)
(229)
–
–
(3,921)
(360)
(1,396)
(35)
(459)
(2,250)
(4,052)
(1,625)
(35)
(459)
(6,171)
Floating rate
financial liabilities
£’000
Fixed rate
financial liabilities
£’000
Financial liabilities
Total
£’000
(3,747)
(276)
–
–
(4,023)
(312)
(1,477)
(145)
(207)
(2,141)
(4,059)
(1,753)
(145)
(207)
(6,164)
Interest rate and currency of financial assets and liabilities
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 2023
Sterling
Euro
US dollar
Other
Sterling
£’000
Euro
£’000
US dollar
£’000
Other
currencies
£’000
–
–
(877)
(509)
(1,386)
1,076
–
(136)
–
940
(1,304)
–
–
(67)
(1,371)
3,174
–
–
–
3,174
Total
£’000
2,946
–
(1,013)
(576)
1,357
Braime Group PLC Annual Report & Accounts 2023
54 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
19. FINANCIAL INSTRUMENTS (CONTINUED)
Non interest bearing financial assets/(liabilities) (continued)
Functional currency
As at 31st December 2022
Sterling
Euro
US dollar
Other
Risk sensitivity
Sterling
£’000
Euro
£’000
US dollar
£’000
–
–
(829)
(619)
(1,448)
969
–
(160)
–
809
20
–
–
(111)
(91)
Other
currencies
£’000
2,906
–
–
–
2,906
Total
£’000
3,895
–
(989)
(730)
2,176
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 £18,000
(2022 – £27,000).
Currency rate sensitivity
A weakening in the value of sterling by 10% will benefit the operating profit by a figure not exceeding £360,000 (2022 – £355,000).
A strengthening of sterling by 10% will reduce the operating profit by a figure not greater than £295,000 (2022 – £290,000).
These amounts are estimates. Actual results in the future may differ materially from these due to development in the global financial
markets which may cause fluctuations in interest and exchange rates to vary. The amounts stated above should not be considered a
projection of likely future events and losses.
Borrowing facilities
The Group has the following undrawn committed borrowing facilities:
Expiring in one year or less
2023
£’000
3,390
2022
£’000
2,830
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
55
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 Chief Financial Officer. Where the amount of the facility is above a certain level agreement of the board is
needed.
All surplus cash is managed 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 (2022 –
1,440,000). There are no potentially dilutive shares in issue.
Dividends paid
Equity shares
Ordinary shares
Interim of 9.00p (2022 – 8.20p) per share paid on 26th May 2023
Interim of 5.25p (2022 – 4.75p) per share paid on 13th October 2023
‘A’ Ordinary shares
Interim of 9.00p (2022 – 8.20p) per share paid on 26th May 2023
Interim of 5.25p (2022 – 4.75p) per share paid on 13th October 2023
Total dividends paid
An interim dividend of 9.50p per Ordinary and ‘A’ Ordinary share will be paid on 24th May 2024.
2023
£’000
2022
£’000
43
25
68
87
50
137
205
39
23
62
79
46
125
187
Braime Group PLC Annual Report & Accounts 2023
56 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
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 2022. The market value of Scheme assets at 6th April 2022 was
£8,655,000. The funding level at 6th April 2022 was 110% 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 2025. 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.
Based on the existing valuation, the Group expects to pay contributions of around £57,000 during the year to 31st December 2024.
The weighted average duration of the defined benefit obligation is approximately 12 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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
57
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
Balance at 1st January
Service cost – current
Administration costs
IInterest cost/(income)
Included in comprehensive
income – 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
2023
£’000
6,081
36
–
292
328
–
222
–
43
–
2022
£’000
9,618
68
–
171
239
–
(3,128)
13
(413)
2023
£’000
2022
£’000
(6,081)
(9,618)
–
85
(342)
(257)
101
–
–
–
–
108
(175)
(67)
754
–
–
–
2023
£’000
2022
£’000
–
36
85
(50)
71
101
222
–
43
–
68
108
(4)
172
754
(3,128)
13
(413)
–
(385)
2,646
(385)
2,646
265
(3,528)
(385)
2,646
(120)
(882)
–
8
(261)
(253)
–
8
(256)
(248)
(52)
(8)
261
201
(44)
(8)
256
204
(52)
–
–
(52)
–
19
(44)
–
–
(44)
–
128
Balance at 31st December
6,421
6,081
(6,421)
(6,081)
Net remeasurement gain taken
to other comprehensive income
(265)
3,528
284
(3,400)
The asset ceiling arises as based on the assumptions adopted there is a net pension scheme asset of £1,137,000 at 31st December
2023 but as Braime Pressings Limited does not have an unconditional right to any surplus of the scheme, the surplus of £1,137,000
has not been recognised in the Group balance sheet and therefore assets have been reduced by £1,137,000 to £6,421,000 so as to
equal scheme liabilities at that date.
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 £101,000 (2022 – £754,000) but the interest effect of
asset ceiling are recognised in the profit for the year.
The actual return on assets during the year was a gain of £727,000 (2022 – loss of (£2,471,000)).
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.
2023
% of total
assets
2022
% of total
assets
55.4%
23.3%
3.6%
0.6%
17.1%
–
58.0%
21.1%
3.5%
0.9%
16.5%
–
100.0%
100.0%
2023
£’000
4,187
1,761
272
45
1,293
(1,137)
6,421
2022
£’000
4,128
1,502
249
64
1,174
(1,036)
6,081
Braime Group PLC Annual Report & Accounts 2023
58 Financial Statements
Notes to the accounts (continued)
For the year ended 31st December 2023
21. PENSION COSTS (CONTINUED)
21.5 Reconciliation of effect of asset ceiling
Effect of asset ceiling at start
Interest on effect of asset ceiling
Actuarial losses
Effect of asset ceiling at end
21.6 Key assumptions and sensitivities
The key actuarial assumptions at balance sheet date are shown below:
2023
£’000
1,036
51
50
1,137
2022
£’000
282
5
749
1,036
2022
4.90%
3.45%
3.45%
3.30%
2023
4.55%
3.35%
3.35%
3.20%
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
2021 projections using a long-term
improvement rate of 1% pa and 2020
and 2021 weight parameters of 0%
115% of the S3NA tables with CMI
2021 projections using a long-term
improvement rate of 1% pa and 2020
and 2021 weight parameters of 0%
No allowance has been made for
members to take tax free cash
No allowance has been made for
members to take tax free cash
70% future income value,
30% market value
70% future income value,
30% market value
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.
Approximate effect on liability £’000
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%)
Braime Group PLC Annual Report & Accounts 2023
77
(86)
(130)
120
(13)
12
(5)
7
109
(109)
Strategic Report
Governance
Financial Statements
59
22. NOTES SUPPORTING CONSOLIDATED CASH FLOW STATEMENT
Cash and cash equivalents
Cash at bank and in hand
Bank overdraft
2023
£’000
2,310
(138)
2,172
2022
£’000
1,458
(672)
786
Major non-cash transaction
During the year the Group acquired tangible assets of £235,000 (2022 – £nil) subject to finance under hire purchase agreements
(2022 – £nil). The value of the hire purchase finance on these assets were £214,000 (2022 – £nil).
23. CAPITAL COMMITMENTS
There were capital commitments of £226,000 (2022 – £594,000) which are contracted but not provided for in these financial statements.
24. SUBSIDIARIES
Subsidiary
Principal activity
i
Registered in and operating from Hunslet Road, Leeds,
West Yorkshire, LS10 1JZ, England, UK:
Proportion of shares held 2023 and 2022
Ordinary
Shares
Preference
Shares
Braime Pressings Limited
4B Braime Components Limited
T.F. & J.H. Braime (Holdings) P.L.C.
Manufacture of metal presswork
Distribution of bulk material handling components
Dormant
100%
100%
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
Distribution of bulk material handling components
100%
vi
Incorporated in and operating from B1/41 Bellrick Street,
Acacia Ridge, Queensland, 4110, Australia:
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%
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.
4B Braime Components Limited opened a branch in Sharjah, UAE in July 2023. This trades as 4B Middle East.
25. RELATED PARTY TRANSACTIONS
The total remuneration for key management personnel for the year including directors totalled £2,024,000 (2022 – £1,567,000).
There were no other related party transactions during the year.
Braime Group PLC Annual Report & Accounts 2023
60 Financial Statements
Company balance sheet
For the year ended 31st December 2023
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 loss for the financial year
Note
3
4
5
8
9
10
11
12
2023
£’000
–
8,988
1,978
2022
£’000
–
8,412
1,978
10,966
10,390
3,625
3,625
9,316
1,943
11,259
(7,634)
3,332
640
258
2,434
360
85
180
1,809
2,434
(547)
2,010
2,010
6,506
1,730
8,236
(6,226)
4,164
726
252
3,186
360
85
180
2,561
3,186
(141)
These financial statements were approved and authorised for issue by the board of directors on 22nd April 2024 and signed on its behalf by:
Nicholas Braime, Chairman Cielo Cartwright, Chief Financial Officer
The notes on pages 61 to 67 form part of these financial statements.
Company statement of changes in equity
For the year ended 31st December 2023
Balance at 1st January 2022
Comprehensive income for the financial year – loss
Dividends paid
Balance at 31st December 2022
Comprehensive income for the financial year – loss
Dividends paid
Balance at 31st December 2023
Called up
Share Capital
£’000
Revaluation
Reserve
£’000
Capital
Redemption
Reserve
£’000
360
–
–
360
–
–
360
85
–
–
85
–
–
85
180
–
–
180
–
–
180
Retained
Earnings
£’000
2,889
(141)
(187)
2,561
(547)
(205)
Total
£’000
3,514
(141)
(187)
3,186
(547)
(205)
1,809
2,434
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.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
61
Notes to the Company accounts
For the year ended 31st December 2023
1. COMPANY INFORMATION
Braime Group PLC is a Company limited by shares, incorporated in England & Wales. Its registered office is Hunslet Road, Leeds,
LS10 1JZ. The Company is a holding company. Details of the Group’s activities are provided on page 7.
2. ACCOUNTING POLICIES
2.1 Accounting convention
These financial statements have been prepared in accordance with Financial Reporting Standard 102 ‘The Financial Reporting
Standard applicable in the UK and Republic of Ireland’ and the Companies Act 2006.
The financial statements have been prepared under the historical cost convention, as described below.
As a consequence the Company has elected to measure freehold land and buildings leased to other group companies, previously
measured at fair value, under the historical cost convention. The fair value at the date of transition has been used as its deemed cost
at this date.
Investment properties fair valued at 31st December 2016 of £4,533,000 have been redesignated as freehold property and the
difference between the deemed cost and its historic cost treated as a revaluation reserve. As at 1st January 2016 this resulted in the
creation of a revaluation reserve of £85,000, with a corresponding decrease in retained earnings.
The functional currency of the Company is considered to be pounds sterling.
2.2 Financial Reporting Standard 102 – reduced disclosure exemptions
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements as permitted by
FRS102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”.
•
•
•
•
•
The requirements of Section 7 Statement of Cash Flows;
the requirement of Section 3 Financial Statement Presentation paragraph 3.17 (d);
the requirements of Section 11 Financial Instruments paragraphs 11.39 to 11.48A;
the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.29;
the requirement of Section 33 Related Party Disclosures paragraph 33.7.
Intangible assets
2.3
Acquired bespoke software is included at cost and amortised in equal annual instalments over a period of 5 years which is its
estimated useful economic life. Provision is made for any impairment.
2.4 Property, plant and equipment
Property, plant and equipment is stated at purchase cost together with any incidental expenses of acquisition, net of depreciation
and any provision for impairment.
Depreciation is provided on all tangible assets, at rates calculated to write off the cost less estimated residual value of each asset over
its expected useful life.
• Land and buildings
25 – 50 years on a straight line basis
• Plant and machinery
4 – 5 years on a straight line basis
• Fixtures and fittings
4 – 5 years on a straight line basis
• Motor vehicles
4 – 5 years on a straight line basis
Residual value represents the estimated amount which would currently be obtained from the disposal of an asset after deducting
estimated costs of disposal, if the asset were already at an age and in the condition expected at the end of its estimated useful life.
The need for any fixed asset impairment write down is assessed by comparison of the carrying value of the assets against the higher
of realisable value and value in use.
The gain or loss arising on the disposal of an asset is determined on the difference between the sale proceeds and the carrying value
of the asset, and is recognised in the profit and loss account.
.
Braime Group PLC Annual Report & Accounts 2023
62 Financial Statements
Notes to the Company accounts (continued)
For the year ended 31st December 2023
2. ACCOUNTING POLICIES (CONTINUED)
2.5 Financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
All financial assets and liabilities are initially measured at transaction price (including transaction costs). If an arrangement constitutes
a financing transaction, the financial asset or financial liability is measured at the present value of the future payments discounted at
a market rate of interest for a similar debt instrument.
The following assets and liabilities are classified as basic financial instruments – cash and bank balances, trade creditors, accruals,
bank loans and inter-company balances.
Cash and bank balances, trade creditors, accruals and inter-company balances (being repayable on demand) are measured at the
amortised cost equivalent to the undiscounted amount of cash or other consideration expected to be paid or received.
Bank loans are initially measured at the present value of future payments, discounted at a market rate of interest and subsequently
measured at amortised cost using the effective interest method.
Impairment of assets
2.6
Assets are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an
impairment loss is recognised in profit and loss as described below.
Non financial assets
An asset is impaired where there is objective evidence that, as a result of one or more events that occurred after initial recognition,
the estimated recoverable value of the asset has been reduced. The recoverable amount of an asset is the higher of its fair value less
costs to sell and its value in use
Financial assets
For financial assets carried at cost less impairment, the impairment loss is the difference between the asset’s carrying amount and the
best estimate of the amount that would be received for the asset if it were sold at the reporting date.
Where indicators exist for a decrease in impairment loss, and the decrease can be related objectively to an event occurring after the
impairment was recognised, the prior impairment loss is tested to determine reversal. An impairment loss is reversed on an individual
impaired financial asset to the extent that the revised recoverable value does not lead to a revised carrying amount higher than the
carrying value had the impairment loss not been recognised.
2.7 Cash and cash equivalents
Cash and cash equivalents include cash in hand and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities, except where a legal right of set off exists.
Investments
2.8
Investments in subsidiaries are measured at cost less impairment.
2.9 Taxation
Current tax, including UK corporation tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date and
that give rise to an obligation to pay more tax or a right to pay less tax in the future. Timing differences are differences between the
Company's taxable profits and its results as stated in the financial statements that arise from the inclusion of gains and losses in tax
assessments in different periods from those in which they are recognised in the financial statements.
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that, on the basis of all available evidence, it can
be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing
differences can be deducted.
Deferred tax is measured using the tax rates and laws that have been enacted or substantively enacted by the balance sheet date
and are expected to apply to the reversal of the timing difference. Deferred tax relating to the Company’s properties are measured
using the tax rates and allowances that apply to sale of the asset.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
63
Where items recognised in other comprehensive income or equity are chargeable to or deductible for tax purposes, the resulting
current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the
transaction or other event that resulted in the tax expense or income.
2.10 Foreign currencies
Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are reported at the rate of exchange ruling at the balance sheet
date. Exchange differences are recognised in the income statement in the period in which they arise.
2.11 Hire purchase and leasing commitments
Assets held under finance leases, hire purchase contracts and other similar arrangements, which confer rights and obligations similar
to those attached to owned assets, are capitalised as tangible fixed assets at the fair value of the lease asset (or, if lower the present
value of the minimum lease payments as determined at the inception of the lease) and are depreciated over the shorter of the lease
terms and their useful lives. The capital elements of future lease obligations are recorded as liabilities, while the interest elements are
charged to the profit and loss account over the period of the leases to produce a constant periodic rate of interest on the remaining
balance of the liability.
2.12 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 Company
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 Company that do not yet meet the recognition criteria of an asset are considered
contingent assets.
2.13 Critical accounting judgements and sources of estimation uncertainty
In the application of the Company’s accounting policies, management is required to make judgements, estimates and assumptions
about carrying values of assets and liabilities that are not readily available from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from
these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the
revision affects both current and future periods.
The critical judgements that the directors have made in applying the Company’s accounting policies and the key sources of
estimation uncertainty that have had the most significant effect on the financial statements are described below:
Carrying value of freehold land and buildings
As described in notes 2.1 and 2.4 to the financial statements the Company’s freehold land and buildings are now carried at deemed
cost with reference to a previous independent valuation as at 31st December 2015. Having given consideration to current property
values, depreciation is charged on all property additions since the last assessed revaluation.
Useful economic lives of plant and machinery
The annual depreciation charge for plant and machinery is sensitive to changes in the estimated useful economic lives and residual
values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to
reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition
of the assets.
Braime Group PLC Annual Report & Accounts 2023
64 Financial Statements
Notes to the Company accounts (continued)
For the year ended 31st December 2023
3.
INTANGIBLE ASSETS
Software
£’000
52
–
52
52
–
52
–
–
Total
£’000
12,846
1,288
(49)
14,085
4,434
712
(49)
5,097
8,988
8,412
Cost
At 1st January 2023
Additions
At 31st December 2023
Amortisation
At 1st January 2023
Provided for the year
At 31st December 2023
Net book value
At 31st December 2023
At 31st December 2022
4. TANGIBLE FIXED ASSETS
Cost
At 1st January 2023
Additions
Disposals
At 31st December 2023
Depreciation
At 1st January 2023
Provided for the year
Disposals
At 31st December 2023
Net book value
At 31st December 2023
Freehold
land and
buildings
£’000
Plant and
machinery
£’000
Fixtures
and fittings
£’000
Motor
vehicles
£’000
6,670
774
–
7,444
43
78
–
121
5,932
477
(49)
6,360
4,194
612
(49)
4,757
7,323
1,603
242
37
–
279
195
22
–
217
62
47
2
–
–
2
2
–
–
2
–
–
At 31st December 2022
6,627
1,738
The net book value of tangible fixed assets includes an amount of £219,000 (2022 – £201,000) in respect of assets under finance
leases and hire purchase contracts. The related depreciation on these assets for the year was £170,000 (2022 – £138,000). Assets in
the course of construction which have not been depreciated total £421,000 (2022 – £1,296,000).
The historical cost of the freehold land and buildings is £5,903,000 (2022 – £5,206,000).
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
65
INVESTMENTS
5.
Subsidiary undertakings
At 1st January 2023 and 31st December 2023
The list of subsidiaries is disclosed in note 24 of the consolidated financial statements.
6. EMPLOYEES
Office and management
£’000
1,978
2022
No.
9
2022
£’000
2023
No.
9
2023
£’000
Directors’ remuneration
Emoluments for qualifying service
655
590
Certain directors and the central administration team are paid directly by the Company. Further details of directors’ remuneration are
included in the Group remuneration report.
7. PROFIT FOR THE FINANCIAL YEAR
The Company has taken advantage of the exemption allowed under section 408 of the Companies Act 2006 and has not presented
its own Income Statement in these financial statements.
8. DEBTORS: AMOUNTS RECEIVABLE WITHIN ONE YEAR
Other taxes
Prepayments
Amounts owed by Group undertakings
9. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Bank overdraft
Bank loan – secured
Corporation tax
Trade creditors
Accruals
Hire purchase – secured
2023
£’000
105
32
3,488
3,625
2023
£’000
314
1,139
32
88
283
87
1,943
2022
£’000
183
39
1,788
2,010
2022
£’000
597
152
6
33
811
131
1,730
Bank loans are GBP fixed term and development loans disclosed in note 15a of the Group financial statements. Cross guarantees
exist in respect of certain Group company bank borrowings. At 31st December 2023 the borrowings guaranteed by the Company
amounted to £nil (2022 – £nil).
Braime Group PLC Annual Report & Accounts 2023
66 Financial Statements
Notes to the Company accounts (continued)
For the year ended 31st December 2023
10. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Bank Loan
Hire purchase creditor – secured
2023
£’000
517
123
640
2022
£’000
672
54
726
The bank loans are secured over the property of the Company. The hire purchase creditors are secured by fixed charges over certain
assets of the Company.
10a. The bank loan comprise amounts payable as follows:
2023
£’000
1,139
171
346
1,656
2023
£’000
250
68
149
(209)
258
2023
£’000
252
6
258
2022
£’000
152
162
510
824
2022
£’000
207
68
149
(172)
252
2022
£’000
118
134
252
Within one year
One to two years
Two to five years
11. PROVISIONS FOR LIABILITIES
Deferred tax liability
Accelerated capital allowances
Rolled over capital gains
Property fair value adjustment
Losses
Balance at start of year
Charged to income statement during the year
Balance at end of year
Deferred tax has been recognised at a rate of 25% (2022 – 25%).
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
67
12. LEASING AGREEMENTS
12a As Lessee:
The Company makes minimum lease payments under non-cancellable operating leases as follows:-
Within one year
One to five years
12b As Lessor:
2023
£’000
2022
£’000
9
20
29
1
–
1
The Company receives minimum lease payments under a non-cancellable operating lease rental with respect to its property as
follows:-
Within one year
One to five years
Later than five years
2023
£’000
160
533
–
693
2022
£’000
167
678
56
901
All maintenance repairs to the premises as well as signage are carried out by the Tenant. At the Company’s option, the Tenant may
remain past the lease termination date on a month-to-month basis at 150% of the current annual base rent, or other agreed rate.
13. 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
2023
£’000
2022
£’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.
14. CAPITAL COMMITMENTS
There were capital commitments of £183,000 (2022 – £594,000) which are contracted but not provided for in these financial
statements.
Braime Group PLC Annual Report & Accounts 2023
68 Financial Statements
Five year record
2023
£’000
2022
£’000
2021
£’000
2020
£’000
2019
£’000
Turnover
48,155
44,879
36,406
32,803
33,433
Profit from operations (before exceptional item)
Profit before tax
Profit after tax
3,748
3,335
2,336
4,449
3,822
2,721
2,489
1,070
750
1,377
1,195
854
2,221
1,746
1,349
Basic and diluted earnings per share
162.22p
188.96p
52.08p
59.31p
93.68p
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
69
Notice of meeting
Notice is hereby given that the SEVENTY FOURTH Annual General Meeting of the members of Braime Group PLC (the ‘Company’)
will be held at the registered office of the Company at Hunslet Road, Leeds, LS10 1JZ on 27th June 2024 at 11.45am.
The Company will take into account any Government guidance or legislation in force at the time of the AGM and will implement
any measures it believes necessary to protect the health and safety of attendees. Any changes to the format of the AGM will be
communicated to shareholders through the Company's website and, where appropriate, by stock exchange announcement.
Ordinary Resolutions
1. To receive and adopt the report of the directors, the statement of accounts and the directors’ remuneration report, for the year
ended 31st December 2023, and the report of the auditors thereon.
2. To confirm the dividends paid on 13th October 2023 and 24th May 2024 on the Ordinary and ‘A’ Ordinary shares.
3. To re-appoint as a director A. Q. Braime, who is retiring by rotation in accordance with the Company’s Articles of Association
and, being eligible, offers himself for re-election.
4. To re-appoint as a director C. O. Braime, who is retiring by rotation in accordance with the Company’s Articles of Association
and, being eligible, offers himself for re-election.
5. To re-appoint as a director C. M. B. Cartwright, who is retiring by rotation in accordance with the Company’s Articles of
Association and, being eligible, offers herself for re-election.
6. To re-appoint Kirk Newsholme as auditors, to hold office from the conclusion of this meeting until the conclusion of the next
Annual General Meeting of the Company at which accounts are laid.
7. To authorise the directors to set the remuneration of the auditors.
By order of the board,
Cielo Cartwright, Secretary
Hunslet Road, Leeds, LS10 1JZ
22nd April 2024
Braime Group PLC Annual Report & Accounts 2023
70 Financial Statements
Notice of meeting (continued)
ACCOMPANYING NOTES
1. A member entitled to vote at the meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not
also be a member of the Company. A form of proxy which may be used to make such appointment and give proxy instructions
accompanies this notice.
2. To be valid, the form of proxy must be received at the Company’s registered office at Hunslet Road, Leeds LS10 1JZ by no later
than 11:45am on 25th June 2024.
3. The return of a completed form of proxy will not prevent a shareholder attending the Annual General Meeting and voting in
person if he/she wishes to do so.
4. In accordance with the Company’s Articles of Association, holders of the ‘A’ Ordinary shares are entitled to attend, but not to
vote at this meeting.
5. There will be available for inspection at the registered office during the Company’s usual business hours (Saturdays, Sundays and
public holidays excluded) from the date of this notice until the date of the Annual General Meeting and for at least fifteen
minutes prior to and during the meeting:
A statement for the period of twelve months to 31st December 2023 of all transactions of each director and, so far as he/she can
reasonably ascertain, of his/her family interests in the Ordinary shares of the Company.
The service contract of each executive director, where applicable and the letter of appointment of each non-executive director.
6. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so for
the Annual General Meeting and any adjournment(s) thereof by using the procedures described in the CREST Manual. CREST
Personal Members or other CREST sponsored members, and those CREST members who have appointed a service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a
‘CREST Proxy Instruction’) must be properly authenticated in accordance with CRESTCo’s specifications, and must contain the
information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes
the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be
valid, be transmitted so as to be received by the issuer’s agent (ID 7RA11) by 11.45am on 25th June 2024. For this purpose, the
time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Application
Host) from which the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After
this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through
other means.
CREST members and, where applicable, their CREST sponsors, or voting service providers should note that CRESTCo does not
make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore,
apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if
the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider, to procure
that his CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable,
their CREST sponsors or voting system providers are referred, in particular, to those sections of the CREST Manual concerning
practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
Braime Group PLC Annual Report & Accounts 2023
Strategic Report
Governance
Financial Statements
71
Explanatory notes of resolutions
The following notes give an explanation of the proposed resolutions. Resolutions 1 to 7 inclusive are proposed as Ordinary
resolutions. This means that for each of those resolutions to be passed, more than half of the votes cast must be in favour of the
resolution.
The directors consider that all of the resolutions to be proposed at the AGM are in the best interests of the Company
and its shareholders as a whole and unanimously recommend that shareholders vote in favour of all of the resolutions,
as the directors intend to do in respect of their own beneficial holdings.
BUSINESS TO BE TRANSACTED AT THE AGM
Details of the resolutions which are to be proposed at the AGM are set out below.
Ordinary resolutions
1. To receive and adopt the report and accounts
The directors are required to present the accounts for the year ended 31st December 2023 to the meeting.
2. Confirmation of dividends
To confirm the interim dividend on the Ordinary and ‘A’ Ordinary shares of 5.25p per share paid on 13th October 2023 and 9.50p
per share paid on 24th May 2024.
Re-appointment of directors
The Articles of Association of the Company require the nearest number to one third of the directors to retire at each Annual General
Meeting. The following directors are retiring by rotation in accordance with the Company’s Articles of Association and, being eligible,
offers themselves for re-election.
3. A. Q. Braime
4. C. O. Braime
5. C. M. B. Cartwright
6. Re-appointment of auditors
The Company is required to appoint auditors at each Annual General Meeting to hold office until the next such meeting at which
accounts are presented.
7. Remuneration of auditors
The resolution proposes the reappointment of the Company’s existing auditors, Kirk Newsholme, and authorises the directors to
agree their remuneration.
Braime Group PLC Annual Report & Accounts 2023
72 Financial Statements
Directors and advisers
Directors
Nicholas Braime, MA (Oxon), MBIM (Chairman)
Mark Cooper
Tony Steels, B.Eng. B.Sc. (Hons) Ph.D
Philip Stockdale, BA (OU)
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
Number
488001 (England and Wales)
Braime Group PLC Annual Report & Accounts 2023
Braime Group PLC
The Group is involved in the
The Group is headquartered in
manufacture of metal presswork
Leeds, United Kingdom, but also
and the distribution of bulk
trades from locations in France,
material handling components.
South Africa, Australia, Thailand,
Our electronics division specialises
China, the United Arab Emirates and
in level controls, intelligent sensors
the United States.
and safety control systems for
bucket elevators and conveyors.
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.
OVER 130 YEARS OF ENGINEERING EXCELLENCE
Front cover: In situ bucket elevator upgrade with 4B components: steel cord belting, mechanical splice, fabricated steel buckets and elevator bolts, USA.
Above: Belt slitting and punching at our headquarters on Hunslet Road, Leeds UK.
Designed and produced by corporateprm, Edinburgh and London
www.corporateprm.co.uk
2023
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Braime Group PLC
Hunslet Road
Leeds LS10 1JZ
England, UK
www.braimegroup.com
Annual Report & Accounts 2023