Document 1wBGzQvqjRGMa5zkdb52ZqZm

Annual report 1965 A Halley-Aller web offset printing press built by Baker Perkins Ltd. for East Midland Litho Printers Ltd., Peterborough. It is used for printing newspapers and magazines in full colour at speeds of up to 30,000 copies an hour. f Four Rownson quay-mounted traversing pocket apron ship unloaders with luffing boom, automatic apron adjustment and weather protection supplied to Win. Muller & Co., N.V.,-at Beatrixhaven, Rotterdam, to discharge stems and cartons of bananas simultaneously from four holds at 3,500 units or one million bananas an hour. Baker Perki ns Ho I dings Limited Board of directors Chairman A. I. Baker, c.b.e, j.p., m.a., M.i.Mech.E, M.i.Prod.E Chairman of group management. Vice chairman J. F. M. Braithwaite, m.a. ` Member of group management. Chairman, Baker Perkins Ltd. , ... " -" Directors K. C. P. Barrington, f.c.a. >. Non-executive director. ' A managing 'director of Morgan Grenfell .& Co. Ltd.' C. N. Brown. . Member of board of management and vice chairman, Baker Perkins Ltd. . W. A. B. Brown, M.A..M.I.Me(ih.E Managing director, The Forgrove Machinery Co'. Ltd. H. CrOWther, J.P.,A.M.!.Mech.E Member of group-management. p Chairman, Baker Perkins (Exports) Ltd. . . v' ," ' T. E. M. Douglas, E.A., 'A.M.I.Mech.E, A.M.Insi.R, ' Managing director, Douglas-Rownson Ltd^ ............... S. C. Hargreaves, m.a., A.M.I.Mech.E Director, Baker Perkins Ltd. ! ,P. B. Harley, B.com. (u.s.a.). President, Baker Pdrkin's.Inc.''*' ' ' ' N. Mountain. ! s Chairman of board of management, Baker Perkins Ltd. J. M. Peake, M.A., A.M.I.Mech.E Vice chairman of board of management, Baker Perkins Ltd. W. S. B. Sampson, f.c.a., f.cxs. Member of. group management. Finance director. : L. P. Simpson, B.Sc. (Tech.).. M.I.ProdlE i Member of board of management, Baker Perkins Ltd. R. H. Wilkins, o.b.e, f.c.i.s. Member of group management. Chairman of wrapping and packaging companies.. Secretary J. S. Hardy, m.a., f.c.i.s. - Auditors Price Waterhouse & Co. Bankers Lloyds Bank Limited . .Morgan Grenfell & Co.. Limited- Solicitors Clifford-Ttimer & Co.. Head office and registered transfer.office Westwood, Peterborough ft f " ` * ' 1 * London Office 13,`Stanhope Gate,-Park Lane, London W'.T. u>eiivv/] VI IVIIIO liwiuiliyo 1_I (III LfcJU Group financial highlights Sales to customers United Kingdom --Home -- Export Overseas manufacture 11,774,006 5,890,702 10,503,011 1965 28,167,719 0/o/ 41,8 20-9 37-3 100-0 1964 11,546,688 5,311,626 8,322,153 25,180,467 % 45-8 21-1 33-1 100-0 Capital employed (Capital, reserves and minority interests in subsidiaries) United Kingdom companies............................................... 6,578,095 Overseas companies 6,529,225 13,107,320 6,328,747 5,995,591 12,324,338 Profit before taxation . United Kingdom companies Overseas companies 391,711 1,714,631 2,106,342 % on capital employed 6-0 26-3 16-1 657,197 % on capital employed 10-4 1,002,284 16-7 1,659,481 13-4 Profit after taxation attributable to stockholders of Baker Perkins Holdings Limited.................................... .. .. .. Earnings after tax per 1 unit of ordinary stock .. .. .. Dividends payable to ordinary stockholders -- net * ,, .. .. * Cash flow (retained profits plus depreciation) .. .. .. Capital expenditure on property, plant and machinery . .. 1,026,897 5/-d. 271,046 .' 1,390,057 1,252,408 - 674,444 3/3d 275,564 " 983,826 775,594' Chairman's review A. I. Baker Results For your convenience, the year's results have been sum marised on the opposite page under the heading "Group Financial Highlights". I am pleased to report that sales and profits for the group have reached a new high level. This was entirely due to a further substantial increase in overseas earnings, which increased from 1,002,000 to 1,715,000. Sales to customers totalled 28,168,000, an increase of 11*9% over the previous year's figure of 25,180,000. Profit before taxation of 2,106,000 repre sents an increase in the ratio of profit to capital em ployed from 134% to 16-1%, which is a welcome improvement. Dividend income tax deducted from it in the same way as in the past. The group charge for taxation for 1965 was 881,000 compared with 848,000 for 1964, representing approxi mately 42% and 51% respectively'of the profit before taxation. Corporation tax at the rate established in the 1966 Budget of 40% commenced to apply to the United Kingdom trading profits of the group from 1st January 1965. The charge for taxation in the group profit and loss account is some 55,000 less than it would have been under the old system, and there has also been a release of 54,000 from tax deferred due to accelerated capital allowances, as shown in note 4 on the accounts. When considering dividend policy, the board decided that it would be unwise to recommend an increase in the total distribution for the year 1965 in view of the poor results of the United Kingdom group of companies as a whole. In addition, the demand upon the group's cash resources is expected to increase in view of the capital expenditure programme that we have undertaken. For the taxation reasons given below, the directors declared a second interim ordinary dividend, which was paid on 15th March 1966, in lieu of the final dividend which would normally be-paid in June. This made a total distribution of 2/3d. per 1 unit of ordinary stock (11-25%) for 1965, the same as 1964. In future, the whole of the group's trading profits earned in the United Kingdom and dividends received from overseas will (subject to double taxation relief) be charged with corporation tax instead of income tax and profits tax of 56-25% and this should reduce the United Kingdom taxation charged in the group profit and loss account. However, as stated above, incometax deducted from dividends paid will require to be handed over to the Inland Revenue. Overseas taxes will be available for relief against corporation tax only. This will result in part of the United States tax incurred on dividends from Baker Perkins Inc. being unavailable for relief against United Kingdom taxes. Taxation In view of its importance I am dealing at some length with the taxation position this year. Due to certain pro visions of the 1965 Finance Act, the company took ad vantage of the savings in taxation which could accrue by anticipating payment of the final dividend by declar ing asecond.interim dividend. In the past, dividends paid by the company have been paid net of income tax, but from 6th April 1966 income tax at the standard rate will be deducted from dividends.and paid-to the Inland Revenue in addition to the corporation tax levied on the company's profits. By paying a second interim dividend before 5th ADril 1966 the comoanv was able to retain the The future effect of the new legislation can be illustrated by reference to profits at a level of those earned in 1965 with the same proportion of overseas and United King dom profits. On the new taxation basis (under present legislation) as compared with the old basis, the reduc tion in the retained earnings after paying the preference dividend and an ordinary dividend of 2/3d. in the would have been of the order of 145,000, made up as follows: t ". Income tax at standard rate of 8/3d. deducted from dividends paid 200;000 less reduction in taxation on profits . by change to corporation tax at 40% 55,000 Reduction in retained earnings .. 145,000 Chairman's review continued Finance United Kingdom As announced in my speech at the annua! general meeting on 9th June 1965, an issue of 2,050,000 6|% Convertible unsecured loan stock 1982/85 was made on 15th June 1965 and the terms of conversion are set out in note 8 on the accounts. The issue was partly left with the underwriters due to the prevailing market conditions but dealings have been at a premium now for some time. The cash flow of the group, for the year 1965 amounted to 1,390,000 compared with capital expenditure on pro perty, plant and machinery of 1,252,000 as shown in the "Group Financial Highlights". The amount tied up in stocks and debtors at 31st December 1965 amounted to 19,800,000, which is about 1,800,000 increase compared with the previous yearend. As stated in my review last year, the cost of the new Douglas-Rownson factory at Basingstoke of 350,000 was financed through a long lease which was completed after the end of the year so that this sum was included in debtors at 31st December 1965. Some increase in stocks and debtors arises from the increased turnover and rising costs, but the credit squeeze and the high cost of borrowing money has also had its effect. I should perhaps point out that the bank balances at 31st December 1965 of approximately 1,500,000 include . about 1,000,000 in the United States allocated for expan sion in North America. Bank advances in the United Kingdom which include about 1,000,000 for financing exports covered by E.C.G.D. guarantee are well within the present facilities available from our bankers. The cost of borrowing at the present high interest rates has increased the interest charge in the profit and loss account to 503,000 for 1965, compared with 372,000 in the preceding year. The group's largest investments in the United Kingdom are in Baker Perkins Limited with approximately 3,400 employees at its two factories, and in the three com panies comprising the wrapping and packaging machin ery group, namely, Forgrove, Rose and Job Day, with just over 3,000 employees in their seven factories. The latter together made a useful contribution to profits and Forgrove in particular continued its noteworthy achieve ment in exporting 50% of its turnover. Baker Perkins Limited had a less successful year, partly owing to the considerable costs of development work and of additional staff engaged on new projects, particu larly in the printing machinery division now established at Peterborough. The initial development and marketing of a complex range of web fed rotary offset printing presses was always considered to be a long term project and therefore was not expected to show much return in the early years. This is particularly so with the applica tion of this process to newspaper printing, including the facility for colour, which is not only new to this company, but also in some respects to the industry. Measures of rationalisation and reorganisation continue .to be undertaken in Baker Perkins Limited and other companies in the United Kingdom. At the end of the year under review Baker Perkins Granbull Limited was merged into Baker Perkins Chemical Machinery Limited as the plastics division of the latter company. In October William Douglas & Sons (Engineering) Limited of Putney and Rownson Conveyors Limited -of King's Cross moved to their fine new leasehold offices and factory at Basingstoke and on 1st January 1966 merged their operations under the name of Douglas-Rownson Limited. The removal of the employees and their families and the equipmentfrom three factories naturally caused a certain amount of disruption to production which resulted in a trading loss for the year. . Summary of operations The overseas member companies of the group made an even greater contribution to profits last year than in 1964, both in real terms and as a percentage of the whole, The results of the United Kingdom companies, on the other hand, were disappointing and below those of 1964 in total. Comparative statistics are given in "Group Financial Hinhliohts". ' Research and development of new ideas and machines, particularly for the increased automation of the pro- cesses which are handled by our products, continues to demand more and more of the group's resources of men and money. We serve a wide range of industries as well as a variety of processes within them and results depend on economic as well as technical success; those that are successful inevitably require adaptation as? almost everv order for a line of intenrate>rl enuinmant wiifiirman's review continued includes variations in its specification that are unique to that one plant. Baker Perkins (Exports) Limited handles the overseas sales of bakery, biscuit, chocolate and confectionery and wrapping and packaging machinery and I am pleased to report that last year it achieved a record turnover of exports from this country of 4,000,000. Adding to this the other types of equipment exported from the United Kingdom directly by other subsidiaries, total exports reached 5,891,000 or 33% of the output of the United 1 Kingdom factories. This figure was over 500,000 higher than last year and the steady increase in export turnover is only achieved by unremitting hard work and self sacrifice on the part of the directors and staff of Baker Perkins (Exports) Limited and the other companies who constantly travel the world in search of orders. Our skilled engineers play an equally important part and have to spend long periods separated from their families while they erect, and service our equipment in many countries, often under difficult and trying conditions. Our sincere thanks are due to them all. In addition, exporting is markedly less profitable than selling in the home market and, while we are grateful for the small increase in the export rebate, it is inadequate to cover the extra costs involved. If exporting is to be made attractive the Government needs to find a way, by differential taxation or some other means, to help industry to meet the extra burden of expense. Overseas trend is upward. At the present time the back log is somewhat lower than at the same time last year and it appears that total sales and profits will be lower in 1966 than those realised in 1965. However, your board of directors and management are confident that the operating base of your company is sound and well founded to grow along with the industries we serve. We are enthusiastic and optimistic about the future growth of Baker Perkins Inc." Canadian Baker Perkins Limited, whose figures are consolidated with Baker Perkins Inc. above, had another unsuccessful year but prospects for 1966 are improved and profitable operations for the year are forecast. Our companies in Australia and New Zealand formerly had an accounting year which ended in September. This has now been changed to December, so that the figures in the accounts include fifteen months' trading for the period from October 1964 to December 1965, although this has no significant effect on the comparison of trading results of 1965 and 1964. Both companies had higher turnover and profits. Of the total turnover of the two companies of 1,800,000 sterling, nearly 50% was manufactured in Australasia, either by our associate company, Gordon Brothers Proprietary Limited in Melbourne,-or at our own factory in Auckland. Baker Perkins South Africa Pty. Limited is a sales and manufacturing company employing about 200 people. Last year it enjoyed considerably improved trading conditions and, relative to its size, made a very good contribution to group profits. Once again Baker Perkins Inc. U.S.A. surpassed all previous achievements with total sales of $25,279,000 and profit before tax of $3,470,000, and after tax of $1,826,000. This outstanding performance made a major contribution to the results of the group as a whole. In his annual report the president of the Americancompany emphasized the growing importance of the chemical machinery division although the food machi nery division continues to be the larger of the two. As to the future of Baker Perkins Inc. \ cannot do better than to quote from his report-- .. "The business of your company historically has tended to fluctuate from year to year in volume of sales, and hence profits, but the general The branch of Baker Perkins (Exports) Limited in Bombay, India, continued to be hampered by Indian import regulations but showed a profit on its operations. Forgrove G.m.b.H., our subsidiary in Germany, which sells the group's wrapping and packaging, chocolate and confectionery and certain other types of machinery in Germany, Switzerland and Austria, achieved the feat of increasing its turnover for the ninth -successive year and made a good profit. This is a fitting tribute to a young and able team who have built up the company from very small beginnings in 1956.to being the group's largest single overseas sales outlet for wrapping and packaging machinery. Steps were taken towards the end of last year to set up Chairman's review continued our own sales organisation in France to handle the sales of equipment formerly handled by our sales agents or by direct visits from the United Kingdom. Early in 1966 a branch of our Swiss company was formally registered in Paris. All the companies in the group, including those over seas, are actively engaged in selling their products outside their own country, either directly or through agents. Some of these agents have been acting for group member companies for very many years and have built up considerable expertise in our products and provided a continuing flow of orders for our factories. I should like to take this opportunity of thanking them for their loyalty and support. Management and staff The results for the year testify to the determined efforts of staff at all levels of responsibility. To them all, I express the thanks and appreciation of the directors and stockholders. The largest operating subsidiary, Baker Perkins Limited of Peterborough, continues to pioneer developments in the personnel and industrial training fields, for which the company has justly earned renown over a long period of time. With the full co-operation of the Amal gamated Engineering Union at national and local level, we have introduced at Peterborough a four-year period of training for certain categories of craft apprentice to replace.the traditional five year period. The standard of knowledge and skill which the apprentice acquires has not only been maintained but improved and is con firmed by tests which must be passed at intervals during the training programme before he can proceed to the next stage. This development, which represents a major break through in the speedier provision of young men with the necessary skills for the complicated technological and engineering problems of today, has been aided by the introduction of a revolutionary teaching process. Our group training officer and his staff, in collaboration with the Department of Psychology of Sheffield University, have evolved a system of programmed instruction in various basic craft practices. From the specially pre pared booklets, which are now being published by Heinemann and International Tutor Machines, and are available to the public, apprentices are able to acquire knowledge relating to their craft at their own pace. This has speeded up the process of learning, retention is better and the apprentice has the benefit of completely integrated theoretical and practical training. These two important developments in training procedures, which are likely to be adopted widely throughout the engineer ing industry of this country in. due course, recently formed the subject of a debate in the House of Commons which received considerable publicity. The future I find it more difficult than usual to forecast the out come of the present year. The impact of the Govern ment's prices and incomes policy on the bread baking industry last autumn resulted in a not unexpected hesitation to proceed with planned capital expenditure upon major new plants. It is expected that this situation will prove to be of a temporary nature but, until resolved, it will have its effect upon the profits of Baker Perkins Limited. In other areas orders have been reasonably well sustained so far, but general economic uncer tainties beset this country. Inflation, if it is allowed to continue at a greater rate here than abroad, will even tually make, us uncompetitive in our export markets. In our overseas companies, results generally are un likely to be as good as in 1965, when they were at record levels. Earlier in this report I have quoted the views of the president of Baker Perkins Inc. about the prospects for his company. Present forecasts show that a reasonable overall profit should result, but it is already apparent that it will be significantly less than the record level achieved in 1965. We have again attempted to make the contents of this annual report as informative as possible to give stock holders a full picture of the group's activities. As an expression of the directors' desire to foster interest by members in the company's affairs, may I warmly welcome all ordinary stockholders to meet members of the board at the annual general meeting on 15th June 1966. . .. ; ' ". Baker Perkins Holdings Limited Report of the directors The directors submit their report and the audited statement of accounts for the year ended 31st December 1965. The group results are shown in the profit and loss account and are summarised below-- 1965 Profit attributable to stockholders of the company.......................................................... 1,026,897 Dividends-- Preference stock -- 7% less income tax at 8/3d. (7/9d.) in the ................................... 17,456 Ordinary stock -- 11^% First interim 1/- (6d.)per1 stock less income tax at 8/3d. (7/9d.) in the paid 30th November 1965 ......................... .. ..................................................................... ......................... 120,429 Second interim1/3d. (6d.)per1 stock less income tax at 8/3d.(7/9d.)in the paid 15th March 1966 150,617 Final recommended nil (1/3d. per 1 stock less income tax at 8/3d. in the ) .. -- Addition to reserves .. .. .. .. .. .. .. 738,395 During 1965 the company increased' its interest in Baker Perkins Inc. U.S.A. from 66-5% to 67-2% by the acquisition of a further 8,116 shares for 41,010 in cash. William Douglas & Sons (Engineering) Limited and Rownson Conveyors Limited have merged their trading operations under the new name of Douglas-Rownson Limited. On 1st January 1966 the trading activities of Baker Perkins Granbull Limited were transferred to become a division of Baker Perkins Chemical Machinery Limited. On 1st ^February 1966 a branch of the Swiss subsi diary was registered in Paris under the name of Baker Perkins S.A. for the importation and sale of group products in France. The directors retiring by rotation are W. A. B. Brown, H. Crowther, T. E. M. Douglas and R. H. Wilkins and, being eligible, they offer themselves for re-election. Price Waterhouse & Co. have signified their consent to continue in office as auditors. By order of the board of directors, J. S. HARDY, Secretary. 19th Mav 1966. 1964 674,444 18,008 62,657 62,657 150,250 380,872 I Baker Perkins Holdings Limited ---------- Group profit and loss account for the year ended 31st December, 1965 Sales to customers ............................................. . Income from associated companies (note 1) Costs and expenses (note 2).................................. . Bank and loan interest payable (note 3) . Profit before taxation .................................. - Taxation (note 4)........................................................ . Profit after taxation............................................. * `1965 28,167,719 436,443 28,604,162 25,994,629 2,609,533 503,191 2,106,342 881,138 1,225,204 1964 25,180,467 287,258 25,467,725 23,435,576 2,032,149 372,668 1,659,481 847,549 811,932 Attributable to stockholders of Baker Perkins Holdings Limited Dividends jess income tax -- Preference stock........................................................... Ordinary stock .. ,............................................... .. .. Retained in the business-- Baker Perkins Holdings Limited .................................... Subsidiaries............................................... ......................... 17,456 271,046 421,956 316,439 288,502 738,395 1,026,897 18,008 275,564 ', 8,645 372,227 .293,572 380,872 674,444 Attributable to minority stockholders of subsidiaries Dividends....... ................................. ......................... .. Retained in the business.. ............................................... 96,606 101,701 26,949 110,539 ' .198,307 : 1,225,204 - ... 137,488811,932 Baker Perkins Holdings Limited Group balance sheet 31st December, 1965 Fixed assets ......................... ......................... Land, buildings, plant and machinery (note 5) .. Investments in associated companies (note 1) 1965 6,197,617 861,043 7,058,660 Net current assets (note 6) Stock and work in progress , , , , ... 9,413,112 Debtors.................................... , . , , .. 10,396,827 Bank balances and cash 1,590,493 21,400,432 Less-- Bank advances ......................... . Creditors.................................... . . Progress payments .. Taxation.................................... .. Ordinary dividend (net) .. 2,953,351 4,712,724 1,341,379 710,284 150,617 9,868,355 11,532,077 18,590,737 Financed as follows: Capital and reserves Issued ordinary capital.. ' .. Capital reserves (note 7) Revenue reserves (note 7) Ordinary stockholders' interest Issued preference capital 4,102,009 1,815,910 5,137,429 11.055.348 420,000 11.475.348 Minority interests in subsidiaries .. Deferred taxation Income tax 1965/1966 .. .................................... Deferred liability due to accelerated capital allow ances .. .......................................................... -- 509,592 Loans (notes).......................... .............................. 1,631,972 ... 509,592 4,973,825 18,590,737 1964 5,637,854 774,056 6,411,910 8,100,271 9,873,935 1,225,627 19,199,833 4,079,181 3,512,082 1,505,011 218,138 212,907 9,527,319 9,672,514 16,084,424 4,091,915 1,758,854 4,503,574 10.354.343 420,000 10.774.343 1,549,995 280,500 511,586 792,086 2,968,000 16,084,424 Baker Perkins Holdings Limited Company balance sheet 31 st December, 1965 Fixed assets Land, buildings, plant and machinery (note 5) .. investments in associated companies (note 1) .. 1965 . 1,625,552 624,004 Subsidiaries Shares at cost........................................................... Amounts receivable............................................... 7,844,296 4,840,093 2,249,556 Amounts payable 12,684,389 ............................................... 156,352 Current assets Debtors...................................................................... Taxation recoverable............................................... 6,778 215,611 12,528,037 222,389 Current liabilities Bank advances .......................................................... Creditors ... ........................................................... Ordinary dividend (net) .................................... 1,480,683 477,452 150,617 14,999,982 2,108,752 12,891,230 Financed as follows: 1964 1,474,084 537,017 2,011,101 7,476,848 4,042,051 11,518,899 896,699 10,622,200 8,319 334,461 342,780 12,976,081 2,450,446 69,439 212,907 2,732,792 10,243,289 Capital and reserves Authorised in shares of 1 each Capital: 7% cumulative preference 420,000 Ordinary .. .. 6,000,000 Issued and converted into stock 420,000 4,102,009 6,420,000 Capital reserves (note 7) Revenue reserves (note 7).................................... 1,216,812 .2,096,584 Deferred taxation Deferred liability due to accelerated capital allowances Loans (note 8) ............................................ . 'fcy'SlL______ > Directors 4,522,009 3,313,396 7,835,405 420,000 4,091,915 1,168,435 1,484,439 82,000 4,973,825 \ 12,891,230 4,511,915 2,652,874 7,164,789 110,500 2,968,000 10,243,289 Associated companies (a) Income European limited partnership -- Profit for year before taxation attributable to the company's interest .. Other companies -- ` Dividends received .. .................................................................................... (b) Investments European limited partnership -- Investment at cost ................................................................................................ Net unremitted profit,from 1st January 1962 ................................................. The capital and unremitted profit attributable to. this investment at 31st December 1965 amounted to approximately 1,109,000 (1,025,000). Prior to 1st January 1962, income was taken into profit only to the extent of remit tances received. Company 1965 1964 205,215 391,261 205,215 304,274 596,476 509,489 Other companies -- Shares, at cost '........................................................................ 27,528 624,004 27,528 537,017 2. Costs and expenses Costs and expenses include -- Depreciation (note 5) ..................................... Directors' emoluments: Fees .. .. Management services Pensions to past directors or their dependants Audit fees and expenses .. 'f........................ 1965 401,493 1964 I 267,084 34,950 436,443 20,174 287,258 Group 1965 1964 205,215 391,261 205,215 304,274 596,476 509,489 264,567 861,043 1965 549,961 3,500 165,221 5,123 21,091 264,567 774,056 1964 492,415 3,437 146,175 5,124 19,313 3. Bank and loan interest Debenture'stock's ........................................................................................................... Convertible unsecured loan stock.................................. Bank and other loans........................................................................................................... I 4. Taxation Based on the profit for the year -- United Kingdom (after relief of 85,000 (51,000) for investment allowances) Corporation tax at 40%.................................................................................... .. Income tax .................................................................. .................................. Profits tax '................................................. .. Overseas (including 119,101 (99,842) on unremitted profit of European limited partnership) ................................................. `....................................................... Less adjustments in respect of previous years (including a release of 54,500 (nil), from tax deferred due to accelerated capital allowances arising from a change in the rate of taxation)..................................... .... .'............................................... 1965 . 179,887 58,855 264,449 1964 182,831 189,837 503,191 . 372,668 1965 1964 147,710 135,917 678,095 961,722 80,584 881,138 282,782 140,225 456,364 879,371 . 31,822 847,549 Noie& on the accounts continued 8. Loans 5% Debenture stock 1979/84 .......................... 6t% Debenture stock 1981/86 .......................... 6J% Convertible unsecured loan stock 1982/85 1965 1,424,875 1,498,950 2,050,000 4,973,825 ,1964 1,468,000 1,500,000 -- 2,968,000 The debenture stocks are secured by a first floating charge on the assets of the company. The company is required to apply the sum of 30,0.00 annually in redemption of its 5f per c.ent debenture stock 1979/84 at par by drawings or by purchase in the open market at a price not exceeding 105; as from November 1966 it must apply annually a further sum of 30,000 in respect of its 65 per. cent debenture stock 1981/86 on the same terms. The company issued 2,050,000, 6f per cent convertible unsecured loan stock 1982/85 at par during the year. The stock may, at the option of the stockholders, be converted into 1 ordinary stock units of the company on 31 st July in each of the years 1968 to 1971 inclusive; the number of ordinary 1 stock units issued for each 100 of the stock converted will be 44 (45/5d. per unit) in 1968, 42 (47/7d. per unit) in 1969, 40 (50/-d. per unit) in 1970 and 38 (52/8d. per unit) in 1971. The company may redeem the whole or any part of the issue, on or after 31st March 1982, by drawings at par and, at any time, may purchase any of the stock in the open market or by private treaty at a price not exceeding 105. 9. Contingent liabilities There were contingent liabilities in subsidiaries of 314,000 (237,000) in respect of trade bills discounted. The company had guaranteed bank overdrafts of subsidiaries amounting to 540,000 (820,000). 10. Rates of exchange Overseas assets and liabilities have been expressed in sterling at the exchange rates ruling at 31st December 1965. 11. Stock options by a subsidiary Baker Perkins Inc. has granted options to certain of its senior executives to subscribe for 17,668 of its common shares (including 5,334 . shares to one executive who is a director of Baker Perkins Holdings Limited) at prices ranging from $6.65 to $8.00 per share, being the market value of the shares at the respective option dates. Report of the auditors \ to the members of Baker Perkins Holdings Limited In our opinion the foregoing accounts and notes give, so far as concerns members of the company, a true and fair view of the state of affairs as at 31st December 1965 and the profit for the year ended on that date of the company and of the group consisting of the company and its subsidiaries. The accounts of the Europeah'limited partnership referred to in note 1 have been audited by a European firm. We have obtained all the information and explanations which we considered necessary. In our opinion the com pany has kept proper books and the balance sheet of the company, which is in agreement with them and with the said information and explanations, gives with the group accounts and notes in the prescribed mannerthe information required by the Companies Act, 1948. 3 Frederick's Place, Old Jewry, London, E.C.2. ' 10th May, 1966. Price Waterhouse & Co. Chartered Accountants. Baker Perkins Holdings Limited ______________________ Group financial statistics for past ten years (Amounts are expressed in thousands of pounds) Operations Sales ............................................................................................. Depreciation .. .................................. ................................... Profit before taxation .. .......................................................... Taxation............................................................................................ Profit attributable to stockholders of Baker Perkins Holdings. Limited ............................................................................................ Financial position Fixed assets less depreciation ........................ '.. .. .. Net current assets ..................................................................... Loans .. ..................................................................... .. Deferred taxation .............................................................................. Minority interests in subsidiaries................................... .. Preference stock ..................................................................... Ordinary stockholders'equity ............................................... Ordinary stockholders Issued capital.......................................................... . Gross dividend -- amount per unit............................................... rate per unit Net ordinary dividend..................................................................... Rate of profit after taxation earned for equity ......................... Net book value of 1 stock.......................................................... 1956 1957 14,370 453 1,125 627 415 13,780 452 1,094 634 400 3,172 3,922 -- 302 904 420 5,468 3,119 4,474 -- 316 975 420 5,882 1,769 1/1 Od 9-2% 93 7-3% 61/10d . 1,769 2/-d 10% 102 6-5% 66/6d 1958 14,300 379 894 464 416 3,770 5,854 375 274 1,522 420 7,033 . 2,201 2/-d 10% 133 5-7% 63/1 Id Number of employees ........................ 5,950 ` : 5,730 6,280 1959 15,450 360 772 293 418 1960 18,000 366 1,193 563 . 530 1961 23,700 474 1,294 598 686 1962 22,750 493 844 347 501 1963 1964 22,945 487 816 500 226 . 25,180 492 1,659 848 674 1965 28,168 550 2,106 881 1,027 3,878 7,410 1,500 182 1,603 420 7,583 . 4,348 7,407 1,500 207 1,713 420 7,915 5,652 9,634 3,000 482 1,642 420 9,742 6,100 9,276 3,000 561 1,635 420 9,760 6,126 9,143 3,000 501 1,691 420 9,657 6,412 9,672 2,968 ' 792 1,550 420 10,354 7,059 11,532 4,974 510* 1,632 420 11,055 2,357 2/-d 10% 143 5-3% 64/4d 6,430 3,072 2/3d 11-25% '214 6-5% 51/6d Scrip issue 1 for 4 7,020 3,993 2/3d 11-25% 275 6-8% 48/1 Od 9,850 4,019 2/3d 11-25% 277 4-8% 48/7d 9,920 4,027 2/3d 11-25% 277 2-2% 47/11d 9,080 4,092 2/3d 11-25% 276 6-3% 50/7d 4;102 2/3d 11-25% 271 9-1% 53/1 Id 9,200 9,410 The United Kingdom corporation tax liability in respect of 1965 profits is included in current liabilities. In previous years the United Kingdom income tax liability on the year's profits is included in deferred taxation. baKer MerKins Hoiaings Limitea_____________________ How the group used each 1 of income materials and services io/rid wages and salaries 6/11d depreciation 5d interest payable 4d taxation 7d minority interests td ----- Z_ net dividend 3d I undistributed profit ------- 6d Special vacuum dryers of stainless steel jacketed construction for salt processing at International Nickel Co. Ltd., Swansea. These machines are among the many Items of individually engineered milling, mixing and drying equipment produced by Steele & Cowlishaw Ltd. A bank of five Rose ECH wool banding machines at one of Patons and Baldwins' factories. A significant part of the company's output of one ounce balls of wool is auto matically banded using these machines. Baker Perkins Holdings Limited Subsidiaries, branches and associates Ordinary capital wholly owned unless otherwise stated SUBSIDIARIES--UNITED KINGDOM THE ALLIANCE FOUNDRY CO. LTD., Luton BAKER PERKINS LTD., Peterborough and Hebburn-on-Tyne BAKER PERKINS CHEMICAL MACHINERY LTD., Peterborough and Twyford, Berks. BAKER PERKINS DEVELOPMENT'S LTD., Twyford, Berks. BAKER PERKINS (EXPORTS) LTD., London ^ BAKER PERKINS JAXONS LTD., Glasgow JOB DAY & SONS LTD., Leeds' ^ DOUGLAS-ROWNSON LTD., Basingstoke ^THE FORGROVE MACHINERY CO. LTD., Leeds and Gateshead FORMMASTER LTD., London (80%) ^ JAMES HALLEY &. SONS LTp., West Bromwich THE NORTHERN MANUFACTURING CO. LTD., Gainsborough ROSE BROTHERS (GAINSBOROUGH) LTD., Gainsborough, Saxilby and Skegness ^ STEELE & COWLISH AW LTD., Hanley, Stoke-on-Trent Castings Bakery, biscuit, chocolate, confectionery, foundry, printing and rubber machinery Chemical and plastics machinery Development engineers Machinery exporters Laundry machinery Packaging machinery Refrigeration, food processing plant and pumps. Conveyors and mechanical handling plant Wrapping and packaging machinery Printing machinery Printing machinery Gears and gear boxes Wrapping and packaging machinery, flexible bearings Paint, ink and chemical machinery SUBSIDIARIES -- OVERSEAS Australia BAKER PERKINS PTY. LTD., Melbourne . Canada CANADIAN BAKER PERKINS LTD., Brampton, Ontario. (66% owned by Baker Perkins Inc.) Germany FORGROVE G.m.b.H., Cologne New Zealand BAKER PERKINS (N.Z.) LTD., Auckland South Africa. BAKER PERKINS SOUTH AFRICA (PTY.) LTD., Johannesburg Switzerland BAKER PERKINS A.G., Zug BAKER PERKINS FAR EAST A.G., Zug U.S.A. BAKER PERKINS INC. Saginaw, Michigan. (67-2%) Import and manufacture of group products Food, chemical and laundry machinery Import of packaging, confectionery, printing and plastics machinery Import and manufacture of group products Import and .manufacture of group products Investment company investment company Food and chemical machinery BRAN CHES -- OVERSEAS Argentina BAKER PERKINS (EXPORTS) LTD., Buenos Aires France BAKER PERKINS' S.A., Paris India BAKER PERKINS (EXPORTS) LTD., Bombay- Japan ' BAKER PERKINS FAR EAST A.G., Tokyo . Sweden BAKER PERKINS (EXPORTS) LTD., Stockholm Import of group products Import of group products Import of group products Import of group products Import of group products ' - ASSOCIATED COMPANIES (See note 1 on the accounts) . United Kingdom. GRAHAM ENOCK MANUFACTURING CO. - LTD., London. (33-7%) , . Europe' -. ' LIMITED PARTNERSHIP. (26% and 100% of preference capital) ^ Australia GORDON . BROTHERS . PTY. LTD.,' West - ' Brunswick/ -Victoria. . (40% and . 100% . of nreforanrp rsmitpH Dairy machinery Food and chemical machinery ... Food and refrigeration machinery'