Document mq8w6N406z95VrxQ502KpOj24

Annual report 1966 Contents Notice of meeting ..... page 1 Picture of new group headquarters . . 2 Stockholders' diary. .... 3 List of directors and officers . .. 4 Chairman's letter to the stockholders . . 5 Group financial highlights . . 6 Directors' report ..... 7 Group profit and loss account. .. 10 Group balance sheet . ' . .. 11 Company balance sheet .... 12 Notes on the accounts . . .. 13 Auditors' report . .. .. 15 Group financial statistics 1957 -1966 . . 16 The group's income for 1966 and how it was used. ...... 18 Pictures of U.S.A. and New Zealand factories 19 List of subsidiaries, branches and associates 20 Notice of meeting Notice is hereby given that the sixty-sixth annual general meeting of Baker Perkins Holdings Limited will be held in the Queen's Room, Baltic Exchange Chambers, 14-20 St, Mary Axe, London, E.C.3 on 8th June 1967 at 12.15 p.m. for the following purposes -- 1. To receive the directors' report and the accounts . of the company for the year ended 31st December '1966. !' 2. To re-eiect directors. 3. To transact any other business of an annual general meeting. Only ordinary stockholders of the company are entitled to attend and vote at the meeting. An ordinary stock holder is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a stockholder. IRth M-.W lnc7 By. order of the board of directors, J. S. HARDY, The headquarters of Baker Perkins Holdings Limited at Westwood, Peterborough Stockholders' diary Ordinary stock interim dividend 1966 final dividend 1966 7% cumulative preference stock 5f% debenture stock 1979/84 6i% debenture stock 1981/86 (see note 8 on the accounts) 6f% convertible unsecured loan stock 1982/85 (see note 8 on-the accounts) Results for the year ended 31st December 1966 Annual report 1966 Results for the six months ended 30th June 1967 Interim report 1967 66th annual general meeting.. Paid on 30th November 1966. Announced on 10th May 1967. If approved, payment to be made on 16th June 1967. Dividend paid half-yearly on 31st March and 30th September. Interest paid half-yearly on'31st May and 30th November. Interest paid half-yearly on 31st March and 30th September. Announced on 10th May 1967. Posted to stockholders on 15th May 1967. To be announced during September 1967. To be posted to stockholders during September 1967. To be held in the Queen's Room, Baltic Exchange Chambers, 14-20 St. Mary Axe, London, E.C.3 on 8th June 1967. Finance Act 1965 The market value of Baker Perkins Holdings Limited stocks on 6th April 1965 for the purpose of the long term capital gains tax were -- 5f% debenture stock 6^% debenture stock Preference stock Ordinary stock (100) (100) (1) (1) 91 0 95 10 18 1 19 0 0 6 6 The 6f% convertible unsecured loan stock was issued at par on 15th June 1965. TU/s aIaaa /Arvmonw nmuloinne /vf fKa nonnlu fn rAmnonvr Baker Perkins. Holdings Ltd- Board of directors Chairman A. i. Baker, c.b.e, j.p., m.a., M.i.Mech.&, M.i.Prod.E Chairman of group management. Vice chairman J. F. M. Braiihwaite, m.a. Vice chairman of group management. Directors K. C. P, Barrington, f.c.a. Non-executive director.. A managing director of Morgan Grenfell A Co. Ltd. W. A. B. Brown, m.a., M.i.Mech.E. Managing director; Rose Fprgrove Ltd., " H. CrOWther, J.P., A.M.I.Mech.E Non-executive director. Retired member of group management. S. C. Hargreaves, M.A., A.M.I.Mech.E Director, Baker Perkins Ltd. P. B. Harley, B.com. (u.s.aj. President, Baker Perkins Inc. N. Mountain; Managing director, Baker Perkins Ltd. ,J. M. Peake, M.A., A.M.I.Mech.E, F.I.M.A. Group planning director. W. S. B. Sampson, f.c.a., f.c.i.s. Member of group management. Finance director. L. P. Simpson, B.Sc. (Tech.)., M.I.Prod.E Deputy managing director, Baker Perkins Ltd. R. H. Wilkins, o.b.e, f.c.i.s. Member of group management Secretary J. S. Hardy, m.a., f.c.i.s. Auditor^ Price Waterhouse & Co. ' Bankers Lloyds Bank Limited Morgan Grenfell & Co. Limited Solicitors Clifford-Turner & Co. , Head office and registered transfer office Westwood, Peterborough ~ a, London office 13 Stanhope Gate. Park Lane.- London Wsl. Chairman's letter to the stockholders The overseas group had another good year, earning than Baker Perkins Limited by the credit squeeze, but 21-8% before tax on capital employed, which fell only most of them expect to do as well or better than they did slightly short of its record performance in 1965. For the in 1966. first time, capital employed overseas exceeded that employed in the United Kingdom companies. However, 1966 was a disappointing year with the United Kingdom group making a return of only 3-4% on capital employed which, for reasons set out in the directors' report, was below our expectations. Order-taking was somewhat lower than we had hoped for, but most companies started 1967 with a reasonable head of orders. It is with deepest regret that I report the death on 15th November 1966 of C. N. Brown at the early age of 57. He had been with the company for 36 years and was a director of the parent company for almost 20 years. He rendered invaluable service for very many years as head of the important bakery machinery, division and latterly as a member of the board of management of Baker Perkins Limited. Since the beginning of this year, order-taking in our largest subsidiary, Baker Perkins Limited, has been good. It is encouraging that a large part of this is from our traditional bakery and biscuit customers. Equip ment for the food industries, which cater for basic human needs, makes up by far the largest part of its business and receives constant top level attention from the management, it is no accident that the one major diversification of this company, also caters for a basic human need in supplying machinery for the printing For many years we have devoted a great deal of time and money to training at all levels, and I was very pleased when the Engineering.Industry Training Board made a grant to the group as a whole at a high rate which recognises that our training is of top quality. I have personally devoted a good deal of time to our manage ment development programme and I am satisfied that we have a lot of first class young men who will be a great strength to the group in the future. industry. This division has concentrated on the latest Relations with employees have been excellent. I thank printing techniques and has specialised in web offset on your behalf my colleagues on the board for their un machinery, particularly for colour printing. It has ob failing support and our employees throughout the world tained some very good orders and it is of interest that it for their loyalty and hard work in a year that was far from has been successful in breaking into the highly com easy. petitive U.S. market with two complete installations. In all, the division has either delivered or taken orders for 4 million of equipment in just over 3 years. The prospects for Baker Perkins-Limited are therefore en couraging. It is to be hoped that increasing government expen diture against the background of a stagnant economy will not tax the resources of British industry to the point where its capacity to re-equip and make its way in an increasingly competitive environment is permanently An important event during the year was the decision to damaged. form, as from 1st January 1967, Rose Forgrove Limited from the four companies, Rose Brothers (Gains borough) Limited, The Forgrove Machinery Company Limited, The Northern Manufacturing Company Limited and Job Day and Sons Limited. W. A. B. Brown, previously managing director of Forgrove, is managing director of the new company, and R. H. Wilkins is chairman. It was also decided to build a new factory to Similarly if the United Kingdom is to avoid a further brain drain to other European countries on entering the Common Market, then the weight of direct personal. taxation must be eased and greater incentives offered without leaving it to private industry to try and compete with higher but ineffective gross salaries which only burden costs still further. - accommodate under one roof the production previously The economies of the U.S.A. and certain European carried on by Forgrove in two separate establishments countries are definitely less buoyant than they were, in Leeds. This is part of the rationalisation process making forecasting results for the current year more which the group has been carrying out over the past difficult than ever. Taking home and overseas together, years and which is now beginning to show results. You I hope the overall result for the group will be somewhat will notice from page 20 that the number of United better than 1966, but it will probably not reach the. peak Kingdom subsidiary companies has been reduced from of 1965. .' 16 in 1964 to 10 at present. The position in the other United Kingdom subsidiaries varies and some of them have been affected rather more . ... A. I. BAKER. Baker Perkins Holdings Limited -- Group financial highlights Sales to customers United Kingdom -- Home -- Export .Overseas manufacture .. 12,264,570 6,230,696 10,181,891 1966 28,677,157 % 42.8 21-7 35-5 100-0 1965 1.1,774,006 5,890,702 10,503,011 28,167,719 % 41-8 20-9 37-3 100-0 Capital employed (Capital, reserves and minority interests in subsidiaries) United Kingdom companies.................................... .. 6,519,510 Overseas companies........................................................... 6,947,623 13,467,133 6,578,095 6,529,225 13,107,320 Profit before taxation United Kingdom companies Overseas companies 223,850 1,512,538 1,736,388 %on capital employed 3-4 21-8 12-9 % on capital employed . 391,711 . 6-0 1,714,631 2,106,342 26-3 16-1 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 -- per 1 unit -- gross total Cash flow (retained profits plus depreciation) Caoital expenditure on property, plant and machinery .. 749,320 3/7d 2/3d 461,476 - 945,137 1,208,094 1,026,897 5/-d 2/3d 461,365 1,390,057- 1,252,408 Directors' report In submitting their sixty-sixth annual report, together with the audited accounts of the group for the year ended 31st December 1966, the directors have included much of the information previously given in the chairman's review as it is felt that this pattern is more likely to be followed in the future when the present Companies Bill becomes law. food machinery and wrapping and packaging machinery, whilst also manufacturing machinery for the chemical, foundry, laundry and printing industries. The inter national character of the group and the importance of its overseas interests are reflected in the size of the group's sales in markets outside the United Kingdom, as shown in the.following table:-- Results Group sales in 1966 amounted to 28,677,157 represent ing a small increase over 1965. Profit before taxation was 1,736,388 compared with 2,106,342 in 1965. The profit after taxation attributable to the stockholders of Baker Perkins Holdings Limited for 1966 was 749,320 compared with 1,026,897 in 1965, a reduction of approxi mately 28%. Taxation removed 45% of the profit due to the high proportion of profit earned abroad, where the rate of corporation tax is higher than in the United Kingdom. The reduction in the profits of the group was due to a combination of factors, the most important of which were the provisions for obsolete stocks arising from the rationalisation of our chemical and plastics machinery activities, the increased cost of research and develop ment of new lines of machinery and the economic climate which prevailed during 1966. The group financial statistics on page 16 include this year the rate of profit, before taxation and interest, on funds employed which it is thought will be helpful for stockholders who use the Exchange Telegraph and Moodies Services. It is disappointing to record a fall to a rate of 10-3% compared with 12-1% in 1965. As the chairman stated in the 1965 annual report, this is not as high as it should be and the immediate target rate remains at 15% on funds employed but this'is not by any means regarded as a ceiling. The group profit sharing scheme for United Kingdom companies does not participate in profits earned by the overseas companies and it will be seen from the'group financial highlights that for the past two years most of the profits have been earned by theoverseas companies. As the United Kingdom companies only earned 3-4% on. capital employed in 1966, the board decided that there would be no group profit share for the year. Summary of operations The group is Britain's leading manufacturer of industrial 1966 United Kingdom 000 .12,265 % 42-8 North America .. 9,433 32-9 Europe, excluding United Kingdom 2,825 9-9 Australasia 1,738 6-0 Rest of World .. 2,416 8-4 Total 28,677 100-0 1965 000 11,774 % 41-8 9,528 33-8 2,429 2,115 2,322 28,168 8-6 7-5 8-3 100-0 Last year, the chairman commented in his review on the disparity between the contribution made by the overseas member companies of the group and that made by the United Kingdom companies. This situation continued in 1966 and in the aggregate the results of the United Kingdom companies were most disappointing. Al though the majority succeeded in maintaining a satis factory level of ordertaking and sales in difficult circum stances and several, particularly the smaller -ones, achieved very good results, the provisions previously mentioned and the increased cost of research and development in certain lines reduced the final total result to an unsatisfactory level. Home trade The United Kingdom in 1966 was dominated by the economic situation and the measures taken by the government, particularly those in July, to combat the increasing balance of payments difficulties. The opera tions of the United Kingdom member companies must be set against this background which adversely affected a number of them. The wrapping and packaging machinery companies namely, Forgrove, Rose, and Job Day again had a successful year. The planned reorganisation of this part of the group became effective at the end of the year and, from. 1st January 1967, Rose Forgrove Limited Directors1 report continued commenced to trade with three operating divisions, Forgrove, Rose and Job Day. Baker Perkins Limited continued its policy of developing new products and, as indicated last year, its most im portant long term project is the development and marketing of the range of web fed rotary offset printing presses. In the chairman's review last year, the possible effect of the government's Prices and Incomes Policy on the bread baking industry was mentioned and, as expected, the hesitation of the industry to proceed with capital expenditure had an effect on the contribution' made by this division to the company's profits. To some extent, this was offset by increased exports of biscuit and other food machinery. During the year the process of reorganisation previously mentioned was continued and, by the end of the year, the activities of Baker Perkins Limited had been grouped into a number of product divisions to provide the maximum concentration for each product line by the combination of sales and design and development under one divisional manager. Baker Perkins Jaxons Limited of Glasgow, which has been a member of the group for six years, increased its profits to a record level in 1966. In the last eighteen months this company has marketed the Swiftlay Cabinet Coat Press which has make a considerable contribution to the efficiency of the laundry trade which it serves and to the profits of the United Kingdom group of com panies. Mention was made last year of the removal to new lease hold offices and factory at Basingstoke of DouglasRownson Limited and 1966 proved to be a difficult year for this company. The disruption to production caused by the removal to Basingstoke and the economic condi tions affecting the industries which this company serves resulted in a trading loss for the year. Steele and Cowlishaw Limited of Stoke-on-Trent had a successful year and increased its profits. This company has now become more diversified and offers a wide range of products for the chemical industry. The capacity of the company is being expanded. At the. end of 1966 it was decided to rationalise the chemical.machinery interests of the group and Baker Perkins Limited took over from Baker Perkins Chemical Machinery Limited the responsibility for certain products which the latter company had previously handled. At the same time certain other activities were concentrated under Steele and Cowlishaw Limited at Stoke-on-Trent. Exports Baker Perkins (Exports) Limited which handles the overseas sales of bakery, biscuit, chocolate, confect ionery, wrapping and packaging machinery again had a successful year and increased its turnover of exports from this country to 4,500,000. With other types of equipment exported from the United Kingdom directly by other subsidiaries, the total exports from the United Kingdom reached 6,231,000 being an increase of nearly 6% over 1965. it is only fitting to record that the government has assisted exporters through its export rebates, export credit guarantees and advantageous terms of financing which were available even in the tightest part of the credit squeeze. Overseas trade Baker Perkins Inc., U.S.A., again had a successful year with total sales of $24,109,000, profit before tax of $2,860,000 and profit after tax of $1,569,000. This repre sents a major contribution to the results of the group as a whole. Orders received in the food machinery division were less than the record levels of 1965 but demand was steady and this division is building up a more satis factory level of unexecuted orders.. The chemical divi sion orders were greater in 1966 than in any previous year and it now has a record amount of unexecuted orders in hand. The company's research and develop ment programme continues to generate new products and better designs which are enhancing their product line and improving earlier models in several important categories. Canadian Baker Perkins Limited, whose figures are consolidated with those of Baker Perkins Inc. previously mentioned, had a successful year in 1966 after several years of unprofitable operations. Negotiations are currently in progress to broaden the basis of the Canadian company's business. The member companies in Australia and New Zealand had a good year and profits, were considerably higher than in 1965. The newly established branch in Tokyo of Baker Perkins Far East A.G. which,was formed to serve the Far Eastern markets had a satisfactory level .of activity during its second year of operation but local competition is in creasing rapidly. . Directors' report continued Capital expenditure The capital expenditure on land, buildings, plant and machinery amounted to 1,208,000 as set out in note 5 (a) on the accounts, which compares with an expenditure of 1,252,000 in the preceding year. If the group is to maintain or increase its share of the expanding market in wrapping and packaging machinery, improved manufacturing facilities are needed and the directors have approved the construction of a new factory in Leeds at a cost in excess of 1,000,000 under ' lease-back arrangements described below. It is the intention that this factory will take over the activities of the two existing factories of Rose Forgrove Limited at Dewsbury Road and on the Seacroft estate in Leeds, which in due course will be sold. The new factory is to be built on a site at Seacroft of some thirteen acres, which was acquired by the group about six years ago for this purpose and it will give Rose Forgrove Limited a much-needed headquarters and provide room for ex pansion for the foreseeable future. The group has contracted-to acquire for 70,000 the factory adjoining the West Bromwich premises of James Halley & Sons Limited. Apart from the above two properties, the value of new capital projects sanctioned for the year 1967 is under 1,000,000. Finance It was not necessary to raise any new capital during 1966, but it was decided that the new factory in Leeds to be builtfor Rose Forgrove Limited, referred to in the preced ing paragraph on capital expenditure, should be financed by a sale and lease-back arrangement, which was effected on satisfactory terms. The group financial highlights show that the cash flow in 1966 dropped to 945,000 from the record figure of 1,390,000 in the preceding year. This drop is partly accounted for by income tax of approximately 200,000 deducted from dividends which now has to be handed over to the Inland Revenue, as explained on page 5 of the 1965 annual report. A considerable amount of money continues to be tied up in stocks and debtors, which amounted to 19,900,000 as at 31st December 1966, representing an increase of about 100,000 compared with the previous year's in crease of 1,800,000. This considerable"slowing down in the rate of increase comDared with the nrevinus veer reflects the great attention paid by the management to this problem. Dividends A final gross dividend of Is. 3d. per 1 ordinary stock unit payable on 16th June 1967, is recommended; income tax will be deducted from this at 8s. 3d. in the . This dividend, together with the interim dividend of Is. Od. paid on 30th November 1966, will make a total gross distribution of 2s. 3d. per 1 ordinary stock unit in respect of 1966, the same rate as for 1965. The gross dividend paid or payable to stockholders on the ordinary stock of 461,476 together with the dividend on the 7% preference stock of 29,400 totals 490,876. Due to the major taxation changes in 1965, the company will incur a liability of 487,844 in respect of dividends to stockholders compared with 288,502 in 1965. The undistributed 1966 profits added to revenue reserves amount to 261,476 compared with 738,395 in 1965. Board of directors The directors record with regret the death of C. N. Brown on 15th November 1966. T. E. M. Douglas resigned from the board on 29th July 1966. There have been no other changes to the board during 1966. The directors retiring by rotation are A. L Baker, P. B. Harley, N. Mountain and L.' P. Simpson and, being eligible, they offer themselves for re-election. The interests of all the directors of the company and their family interests (as defined in the general under taking of the Stock Exchange, London) did not in aggregate, in respect of either share capital or voting control, exceed 5 per cent. Auditors Price Waterhouse & Co. have signified their consent to continue in office as auditors. Personnel The directors record their thanks for the hard work and faithful-service of over 9,000 employees, at home and overseas, who have responded at all levels to the difficulties of the past year. ini-h IWlav 1QR7 By order of the board of directors, J. S. HARDY,. Rarrotarv Baker Perkins Holdings Limited------------- Group profit and loss account for the year ended 31st December 1966 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........................................................... 1966 28,677,157 413,158 29,090,315 26,796,825 2,293,490 557,102. 1,736,388 785,430 950,958 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 Attributable to stockholders of Baker Perkins Holdings Limited Dividends, gross -- Preference stock.............................................................. Ordinary stock ............................................... V. .. .. Income tax deducted and retained .................................... 29,400 461,476 490,876 3,032 Retained in the business-- Baker Perkins Holdings Limited .. .. .. .. Subsidiaries................................................................................. 103,355 158,121 29,400 461,365 . 490,765 . . 202,263 487,844 '421,956 316,439. 261,476 749,320 288,502 738,395 1,026,897 Attributable to minority stockholders of subsidiaries 201,638 950.958 : 198,307 . 1,225,204 Baker Perkins Holdings Limited Group balance sheet 31st December 1966 Fixed asseis Land, buildings, plant and machinery (note 5) .. Investments in associated companies (note 1) .. 1966 6,650,333 1,004,251 7,654,584 Net current assets (note 6) .Stock and work in progress.................................... Debtors.................................... ......................... Bank balances and cash .. . ......................... Less-- Bank advances .. ............................................... Creditors...................................................................... Progress payments ............................................... Taxation Ordinary dividend, gross (1965 net). . 9,107,016 10,819,886 888,092 20,814,994 3,470,209 4,338,069 1,364,995 207,871 256,376 9,637,520 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 1,970,130 5,229,252 11,177,474 18,832,058 11,301,391 420,000 11,721,391 1965 6,197,617 861,043 7,058/660 9,413,112 10,396,827 1,590,493 21,400,432 2,953,351 4,712,724 1,341,379 710,284 150,617 9,868,355 * 11,532,077 18,590,737 4,102,009 1,815,910 5,137,429 11,055,348 420,000 11,475,348 Minority interests in subsidiaries 1,745,742 1,631,972 Taxation deferred by capital allowances .. Loans (note' 8)......................................................... 517,600 4,847,325 . 18,832,058 509,592 4,973,825 18,590,737 Baker Perkins Holdings Limited Company balance sheet 31st December 1966 1966 Fixed assets Land, buildings, plant and machinery (note 5) .. Investments in associated companies (note 1) .. 1,798,231 771,740 Subsidiaries Shares at cost........................ ......................... Amounts-receivable ................................................... Amounts payable ............................................... 8,027,261 5,516,979 13,544,240 631,053 Current assets Debtors............................................................... Taxation recoverable............................................... 52,473 2,228 Current liabilities Bank advances .......................................................... Creditors..................................................................... Ordinary dividend, gross (1965 net)......................... 1,373,355 469,681 256,376 Financed as follows: Capital and reserves Authorised in shares of 1 each Capital: 7% cumulative preference 420,000 Ordinary .. .. 6,000,000 6,420,000 issued and converted . into stock 420,000 4,102,009 2,569,971 12,913,187 54,701 15,537,859 2,099,412 13,438,447 4,522,009 Capital reserves (note 7) .................................... Revenue reserves (note 7).................................... 1,364,548 2,617,565 Taxation deferred by capital allowances 3,982,113 8,504,122 87,000 Loans (note 8) .. .. A. I. Baker .i ft m \ r Directors - 4,847,325 13,438,447 1965 1,625,552 624,004 2,249,556. 7,844,296 4,840,093 12,684,389 156,352 12,528,037 6,778 . 215,611 222,389 14,999,982 1,480,683 477,452 150,617 2,108,752 12,891,230 420,000 4,102,009 ' 1,216,812 2,096,584 4,522,009 3,313,396 7,835,405 82,000 4,973,825 12,891,230 Notes on the accounts .^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 1966 amounted to approximately 1,270,000 (1,109,000). Prior to 1st January 1962, income was taken into profit only to the extent of remit tances received. Other companies -- Shares, at cost.......................................................................................... .. Company 1966 1965 205,215 538,997 205,215 391,261 744,212 596,476 27,528 771,740 27,528 624,004 2. Costs and expenses Costs and expenses include -- Depreciation (note 5) ................................... Directors' emoluments: Fees ........................ Management .services Pensions to past directors or their dependants Compensation for loss of office as a director .. Audit fees and expenses................................... T966 392,397 1965 401,493 20,761 413,158 34,950 436,443 Group 1966 1965 ' 205,215 538,997 205,215 391,261 744,212 596,476 260,039 ' 1,004,251 1966 578,988' 3,625 160,043 - 5,921 5,890 22,272 264,567 861,043 1965 549,961 3,500 165,221 5,123 21,091 3. Bank and loan interest Debenture stocks ........................ Convertible unsecured loan stock .. Bank and other loans........................ 4. Taxation Based on the profit for the year-- United Kingdom (after relief of 38,000 (85,000) for investment allowances) Corporation tax .. .......................................................................................... Income tax .................................................................... ........................ Double taxation relief.............................................................................. .. .. Overseas-(including177,484(1l9Iloi) on unremitted profit of European limited partnership) .............................................. '.................................................... " Less adjustments in respect of previous years (including in 1965 a release of 54,500 from taxation deferred by capital allowances arising from a change in the rate of taxation) .. ........................ .. .. ...............................' 1966 178,249 138,375 240,478 .557,102 1966 1965 179,887 58,855 264,449 503,191 . 1965. 259,376 ( 9,357) ' (168,688) 742,179 . " 823,510 147,710 135,917 . (193,331) 871,426 961,722 - . 38,080 .. 80,584 ' 785,430 -881,138 Notes on the accounts continued 5. Land, buildings, plant and machinery (a) Group Land and buildings: Cost.............................................. - Depreciation ........................ Net.............................................. Plant and machinery: Cost'............................................. Depreciation .. . Net.............................................. Patents, patterns and tools at cost, less amounts written off Total .............................................................................. (b) Company Land and buildings: Cost..' Depreciation ........................ Net.............................................. Plant and machinery: Cost.................................. ,, Depreciation ........................ Net............................................. Total ............................................. ' ........................ At 31st December 1965 Capital expenditure Sales, disposals and adjustments 000 3,488 1,098 2,390 8,042 4,550 3,492 316 6,198 000 326 -- 326 882 -- 882 -- 1,208 000 23 . 5. 18 247 99 148 -- 166. At 31st Depreciation December for year 1966 000 --. 75 . 75 -- 504 504 -- 579 000 3,791 1,168 2,623 8,677 4,955 . 3,722 305 6,650 2,160 541 1,619 18 11 7 .1,626 187 -- 187 26 -- 26 213 4 1 3 (23) (10) (13) (10) niJ- 2,343 45 585 45 1,758 -- 67 6 27 6 40 51 1,798 Included in land and buildings are leaseholds (long) of 225,000 (216,000) for the group and 184,000 (188,000) for the company. Commitments for capital expenditure at the balance sheet date, are estimated at 311,000 (528,000) for the group and at 14.000 (80,000). for the company. - Investment grants amounting to 69,000 have been deducted in arriving atthe capital expenditure on group plant and machinery in 1966. 6. Net current assets of the group . Stock and work in progress is included in the accounts at the lower of cost and net realisable value. Debtors include the sum of 641,946 (720,720) not due within one year (mainly exports). Bank advances include secured advances to overseas subsidiaries of 402,831 (360,258). Taxation includes United Kingdom corporation tax of 89,724 (89,600) payable 1st January 1968. 7. Reserves Balances -- 31st December 1965 ............................................. Retained profit 1966 ................................................................... Dividend from a subsidiary out of prior years' profits........................ Transfer of net unremitted profitfor 1966 attributable to minority investment in European limited partnership :................................................................. Other adjustments arising on consolidation.................................. Balances--31st December 1966 ........................ .. .. Group. Capital Revenue 1,815,910 5,137,429 261,476 147,736 6,484 1,970,130 ` (147,736) (21,917) . 5,229,252 Company Capital Revenue 1,216,812 2,096,584' 103,355 . 565,362 147,736 (147,736) 1,364,548 2,617,565 Capital reserves include 825,551 (825,551) in respect of share premium account. '* Notes on the accounts continued----- 8. Loans 5f% Debenture stock 1979/84 ................................... 6^% Debenture stock 1981/86 ................................... 6f % Convertible unsecured loan stock 1982/85 1966 ' 1,358,375 1,438,950 2,050,000 4,847,325 1965 1,424,875 1,498,950 2,050,000 4,973,825 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 30,000 annually in redemption of its 5f per cent debenture stock 1979/84 at par by drawings or by purchase in the open market at a price not exceeding 105, together with a further sum of 30,000 in respect of its 6 per cent debenture stock 1981/86 on the same terms. The 2,050,000 per cent convertible unsecured loan stock 1982/85 may, atthe option of the stockholders, be converted into 1 ordinary stock units of the company on 31st 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/- per unit) in 1970 and 38 (52/8d. per unit) in 1971. The company may redeem the whole or any part of the issue oh or after 31st March 1982, by drawings at par and, at anytime, 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 352,698 (314,000) in respect of trade bills discounted. The company had guaranteed bank overdrafts of subsidiaries amounting to 646,517 (549,474). 10. Rates of exchange Overseas assets and liabilities have been expressed in sterling at the exchange rates ruling at 31st December 1966. 11. Stock options by a subsidiary Baker Perkins Inc. has granted options to certain of its senior executives to subscribe for 7,336 of its common shares (including 2,668 shares to one executive who is a director of Baker Perkins Holdings Limited) at $ 6.65 per share, being the market value of the shares at the 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 1966 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 European 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 manner the information required by the Companies Act, 1948. : 3 Frederick's Place, Old Jewry, London, E.C.2. 28th April 1967. . PRICE WATERHOUSE & CO. Chartered Accountants. Baker Perkins Holdings Limited Group financial statistics for the past ten years (Amounts are expressed in thousands of pounds) Operations Sales ............................................................................................ Depreciation ................................................................................. Interest payable................................................................................ Profit before taxation.......................................................... Taxation............................................................................................ Profit attributable to stockholders of Baker Perkins Holdings Limited................................................ Financial position Fixed assets less depreciation ............................................... Net current assets, excluding bank advances........................ Total net assets, excluding bank advances ......................... Loans and bank advances .......................................................... Deferred, taxation ..................................................................... Minority interests in subsidiaries............................................. Preference stock ..................................................................... .Ordinary stockholders' equity ............................ .. Total funds employed .. Rate of profit, before taxation and interest, on funds employed Ordinary stockholders issued capital ..................................................................... Net book value of 1 stock unit ......................... Gross dividend per 1 stock unit............................................... Number of employees .. ....................................... 1957 13,780 452 133 1,094 634 400 1958 1959 14,300 379 107 894 464 416 : 15,450 360 123 772 293 418 3,119 6,107 9,226 3,770 7,089 10,859 1,633 316 975 420 5,882 9,226 1,610 274 1,522 420 7,033 10,859 13-3% . , . 9-2% 1,769 66/6d 2/0d * . 2,201 63/1 Id 2/0d 3,878 8,105 11,983 2,195 182 1,603 420 7,583 11,983 7-5% . 2,357 64/4d. 2/0d 5,730 6,280 . . 6,430 1960 1961 18,000 366 164 1,193 563 530 23,700 474 359 1,294 598 686 1962 22,750 493 375 844 347 501 1963 22,945 487 380 816 500 226 1964 1965 25,180 492 373 1,659 848 674 28,168 550 503 2,106 881 1,027 1966 28,677, 579 557 1,736 785 749. 4,348 9,006 13,354 3,099 207 ' 1,713 420 7,915 13,354 10-2% 5,652 12,504 18,156 5,870 482 . : / 1,642 420 9,742 18,156 9-1% 6,100 13,051 19,151' 6,775 561 1,635 420 9,760 19,151 6-4% 6,126 12,535 18,661 6,392 501 1,691 420 9,657 18,661 6-4% . 6,412 13,751 20,163 7,047 792 1,550 420 10,354 20,163 10-1% 7,059 14,485 21,544 7,927 510 1,632 420 11,055 21,544 12-1% 7,655 14,648 22,303 . 8,318 518 1,746 420 11,301 22,303 10-3% 3,072 51/6d (Scrip issue 1 for 4) 2/3d 7,020 3,993 48/10d 2/3d 9,850 4,019 48/7d 2/3d 4,027 . 47/1 Id 2/3d 9,920 ! 9,080 4,092 50/7d 2/3d 9,200 4,102 53/1 Id 2/3d 9,410 4,102 . 55/2d 2/3d 1 9,190 Baker Perkins Holdings Limited The group's income for 1966 and how it was used (Amounts are expressed in thousands of pounds) 1966 000 % of total Sales to customers outside the group were.................................... and with our income from investments in associated companies of 28,677 413 total income was ................................................................................. 29,090 98-6 1-4 100-0% 1965 % of total 98-5 ' 1-5 100-0% We used this income for -- materials, services and other expenses.................................... wages, salaries and employee benefits.................................... depreciation of fixed assets........................ .......................... interest on borrowed money.......................................................... United Kingdom and foreign taxation on profits dividends to stockholders.......................................................... dividends to minority stockholders of subsidiaries investment in business assets ................................................ and total used was...................... . .................................... 15,530 10,688 579 557 785 488 97 366 29,090 ' 53-4 36-7 2-0 1-9 2-7 1-7 0-3 1-3 100-0% 54-4 34-6 1-9 1-8 2-4 1-7 0-3 2-9 100-0% Note: 1965 percentages of taxation and dividends have been adjusted for comparison. The 22 acre plant site of Baker Perkins Inc. at Saginaw, Michigan, U.S.A. Baker Perkins (N.Z.) Limited at Takapuna, Auckland, New Zealand. Baker Perkins Holding s 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 DEVELOPMENTS LTD., Twyford, Berks. BAKER PERKINS (EXPORTS) LTD., London BAKER PERKINS JAXONS LTD., Glasgow DOUGLAS-ROWNSON LTD., Basingstoke FORMMASTER LTD., London (80%) JAMES HALLEY &. SONS LTD., West Bromwich ROSE FORGROVE LTD., Leeds, Gainsborough, Gateshead, Saxilby and Skegness STEELE & QOWLISHAW LTD., Hanley, Stoke-on-Trent and Twyford, Berks. Castings Food, printing, chemical and foundry machinery Development engineers Machinery exporters Laundry machinery Food processing, mechanical handling and refrigeration plant Printing machinery Printing machinery Wrapping and packaging machinery, flexible bearings, gears and gear boxes Paint, ink and chemical machinery SUBSIDIARIES -- OVERSEAS Australia BAKER PERKINS PTY. LTD., Melbourne Canada CANADIAN BAKER PERKINS LTD., Brampton, Ontario (66f% 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%) Import and manufacture of group products Food, chemical and laundry machinery Import of packaging, confectionery, printing and laundry machinery Import and manufacture o.f group products Import and manufacture of group products Investment company Investment company Food and chemical machinery BRANCHES --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% 6f preference capital) Australia. GORDON.. BROTHERS PTY. LTD., West -.'Brunswick,; Victoria :(40% and 100% of Dairy machinery Food and chemical machinery . Food and refrigeration machinery