Document yk0eOV1NBXoQw9w6Nbedb4gVE

-- X C PLAINTIFF'S EXHIBIT APV-12 BAKER PERKINS LIMITED SIXTY-FIRST ANNUAL REPORT & ACCOUNTS FOR THE YEAR ENDED DECEMBER 31st, 1961 BAKER PERKINS LIMITED SIXTY - FIRST ANNUAL REPORT AND ACCOUNTS FOR THE YEAR ENDED DECEMBER 31st, 1961 DIAMOND JUBILEE Baker Perkins Limited, originally registered as a limited liability company under the name of Joseph Baker & Sons Limited in 1902, completes 60 years of trading later this year. The origins of the Company, however, date back many more years. Jacob Perkins arrived from the United States and started an engineering business in 1819, and in 1876 Joseph Baker came over from Canada and founded a business which led to the formation ofthe Company which amalgamated in 1919 with Perkins Engineers Limited. Jacob Perkins' inventions in the applications of high pressure steam, heating and refrigeration, and Joseph Baker's bakery equipment and ovens, were revolutionary in their time, and the amalgamated companies have continued to the present day to be leaders in the design of baking equipment. Over the years, however, it has been the policy ofBaker Perkins Limited to diversify its interests to create a broadly-based business. The main products now manufactured and sold by the Parent Company are ovens and machinery for the production of bread, flour confectionery and biscuits,, chocolate and sugar confectionery machinery and plant and equipment for chemical and rubber processing, foundries and institutional and industrial laundries. In addition, the subsidiary companies which are listed on a following page provide other products and services which are in the main complementary to those of the Parent Company, either in the industries they serve or in the basic techniques they employ. The whole Group is engaged in the provision of capital equipment for the manufacture or processing of goods which meet certain basic needs. A film has recently been made by the Baker Perkins Film Unit covering the history and the products of the Group, and it will be shown to stockholders following the Annual General Meeting. 1 BAKER PERKINS LIMITED DIRECTORS Chairman *A. I. BAKER, C.B.E., J.P., M.A., M.I.Mech.E., M.LProd.E. Vice-Chairman *J. F.' M. BRAITHWAITE, M.A. C. N. BROWN N. MOUNTAIN J..S. CAROLIN, M.B.E., F.C.A J. M. PEAKE, M.A., A.M.I.Mech.E. *H. CROWTHER, J.P., A.M.I.Mech.E. W. S. B. SAMPSON, F.C.A., A.C.I.S. C. A. W. DUMBLETON, M.LMech.E. L. P. SIMPSON, B.Sc.(Tech)., M.I.Prod.E. S. C. HARGREAVES, M.A., AM.I.Mech.E. *R. H. WILKINS, O.B.E., F.C.I.S. G. D. WILSON, B.Sc. *Members of the Board ofManagement. Secretary J. S. HARDY, M.A., A.C.I.S. Auditors PRICE WATERHOUSE & CO. . Bankers LLOYDS BANK LTD. MORGAN GRENFELL & CO. LTD. Solicitors CLEFFORD-TURNER & CO. Head Office and Registered Transfer Office Westwood Works, Peterborough! London Office 13, Stanhope Gate, Park Lane, London W.l. 2 BAKER PERKINS LIMITED t iC To Ordinary Stockholders NOTICE IS HEREBY GIVEN that the Sixty-first Annual General Meeting will be held at the Westwood Works Sports dub House, Alma Road, Peterborough, on 30th May 1962 at 7.30 p.m. for the following purposes:-- 1. To receive and, if approved, to adopt the Directors' Report and the Accounts of the Company for the year ended 31st December 1961. 2. To declare a dividend. 3. To elect Directors. 4. To fix the remuneration of the Auditors for 1961. 5. To transact any other business of an Annual General Meeting. A Stockholder entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him. A proxy need not be a Stockholder. Registered Office, Westwood Works, i . Peterborough. 7th May, 1962. By order of the Board of Directors, J. S. HARDY, Secretary. DIVIDEND AND INTEREST PAYMENTS Subject to the approval of the Stockholders at the Meeting, the warrants for the dividend on the Ordinary Stock will be posted on 31st May 1962 to Stockholders whose names appear on the Register on-17th May 1962. Dividend and interest payments are normally made at the following times:-- 5% Debenture Stock .. 6i% Debenture Stock .. 7% Preference Stock .. Ordinary Stock .. 30th November (interim) 31st May (final) 3 CHAIRMAN'S REVIEW This year the Annual Accounts have been presented with a new look in the hope that you will find them easier to read and more informative than in the past. Another innovation this year is to hold the Annual General Meeting in Peterborough in the evening to give our local stock holders a chance to attend. We do not propose to do this every year and we hope that other stockholders will bear with us on this occasion. You will note from page 1 that we propose to show a new film about the Company after the meeting. ACCOUNTS. I am pleased to report that the net profit after taxation for 1961 attributable to Baker Perkins Ltd. amounted to 686,000 compared with 530,000 in 1960. This result was achieved in spite of the poor results of your United States subsidiary, which just managed to break even in 1961, compared with its substantial contribution to the Group's profits in the previous year. I referred to this possibility in my Review last year, but happily this reduction in profits was offset by the contribution made by tire new companies joining the Group. The subsidiaries acquired during the early part of 1961, namely, William Jack & Sons Ltd., Rose Brothers (Gainsborough) Ltd. and James Halley & Sons Ltd., were referred to -last year. Their acquisition mainly accounts for the increase of approximately 3,000,000 in the item "Subsidiary Companies" in the Parent Company Balance Sheet. The fact that the accounts of these newly-acquired subsidiaries have been consolidated this year should be kept in mind when com paring the 1961 figures with those for 1960. These new acquisitions were largely financed by the Rights Issue and an additional 1,500,000 Debenture Stock issued in the early part of 1961. The income from your associated companies was considerably greater. This was particularly the case with your German Associate, which constitutes an important investment in the European Common Market. Borrowed money has been emphasized more prominently in the revised layout of the Balance Sheet at 31st December 1961 as it totalled 5,870,000 for the Group at the year end, and formed an important part of the financial structure. Interest on borrowed money- amounted to 358,000 in 1961. Apart from the above-mentioned new acquisitions, our capital expenditure in 1961 has been kept to a minimum. Your Board's policy is to maintain its plant and machinery in first-class order and to adopt new ideas as far as practicable. We constantly strive to replace our equipment regularly and to increase efficiency, but the high cost of money in this country during the past few years has made it difficult to justify the cost of financing this. It may be essential for the Bank of England to use its power to vary the bank rate freely for external reasons, but it should not underestimate the effect of discouraging capital investment at home, which tends to be postponed until interest rates are lower. This can place us at a disadvantage with our overseas competitiors, who enjoy more modest and stable rates of interest. It is universally recognised that as machinery and plant wear out, the replacement cost is greatly in excess of the original cost, which is the amount upon which depreciation is calculated under generally accepted accounting principles. Unfortunately the accounting profession has been unable to agree a uniform method of reflecting in annual accounts provision for this additional cost of replacing fixed assets. The Group has in the past made allocations amounting to 1,446,000 out of taxed profit to a capital reserve for replacement of fixed assets part of which has been capitalised in Bonus Issues. No allocations have been made in 1961 for this purpose, as it is considered that the provision made jn the past is adequate. UNITED KINGDOM COMPANIES. Baker Perkins Limited. Westwood Works, Peterborough, remains as the Head Office for the Group, and with our continued expansion it is found that an increasing amount of time of senior executives is spent on the activities of your subsidiaries outside Peterborough. Baker Perkins Limited, through its operations in Peterborough and Bedewell, made a slightly increased contribution to the trading profit of the Group. 4 V. Forgrove Machinery Co. Ltd. and Rose Brothers (Gainsborough) Ltd. With the acquisition of Rose Brothers (Gainsborough) Ltd. and its subsidiary, Job Day & Sons Ltd., at the beginning of 1961, the Group has a very large stake in the packaging and wrapping machinery industry. Forgrove, Rose, and Job Day had a good year and made sub stantial and satisfactory contributions to profits. Close collaboration and consultation is elimi nating wasteful duplication of design and manufacturing effort, so that all three companies can give the best possible service to customers. James Halley & Sons Ltd, The acquisition of James. Halley & Sons Ltd. last year has reintroduced printing machinery into our range of products. This has been found particularly suitable for manufacture at Peter borough. We can give this, company-much-needed additional manufacturing capacity and are confident that it is a most worth-while addition to.the Group. William Jack & Sons Ltd. The acquisition of this company has consolidated our position in the laundry industry and we hope to improve our competitive position in the lines of machinery produced. William Douglas & Sons (Engineering)' Ltd. ' This company had a good year, dining which considerable expansion' took place, partly arising out of the merger with Alfred Porter & Co. Ltd. It has good growth potential and will play an important part in the Group in the future. We increased our holding in this company from 90% to 95% during the year. Other U.K. Subsidiaries. The other United Kingdom subsidiaries made a profit with the exception of two which made small losses in 1961. Attention is being focussed on them to make them profitable in the future. EXPORTS. Baker Perkins (Exports) Ltd. was formed in 1950 to handle the Group's exports from this country, and for the last few "years has been accommodated in premises in Swallow Street, Picca dilly, London.. With constantly expanding export trade,'more accommodation became necessary, and during 1961 the company moved into new and larger premises at No. 13 Stanhope Gate, Park Lane, London W.l. The London headquarters of the Group are also housed in the same self-contained building, which was officially opened in August of. last year by the Rt. Hon. Frederick Enroll,. M.P., then Minister of State, Board of Trade. Your Company is proud to have played its part in the country's export drive, and exports from the United Kingdom for 1961 amounted to 4,300,000, a record for the Group. Exports to countries other than those where the Group has a subsidiary or associated company are handled through more than 80 agents, covering practically the whole world. Exports, however, are not the total of our overseas trade, and machinery manufactured by the overseas subsidiary companies amounted to a further 6,400,000. In total, therefore, over 10,700,000, or 45 % of the Group's turnover of 23,700,000 was sold outside the United Kingdom. I thought it would be interesting, to include a world map at the end of the Report this year, to show the countries to which the Group's- products have been shipped and where we have factories and offices. Our bankers have assisted by granting the Company medium and long-term advances secured against specific export contracts, and for the first time we arranged revolving acceptance credits of 250,000, specifically for financing exports. With the continued support of our bankers, I feel confident of meeting the increasing overseas demand for our products without the special Govern ment finance which is being planned for some exporters. The help received from the Export Credits Guarantee Department is invaluable. OVERSEAS COMPANIES. The Company is particularly conscious of the desire and-inherent right of the newlydeveloping countries to establish industries themselves for the manufacture- of machinery- It is the policy of your Company to meet these natural desires wherever practicable, and we realise the need for our products in all parts of the world if the standard of living is to be- improved. 5 The burden of taxation is heavy and restrictions are onerous in many countries, but despite this there has been a steady growth in most of our overseas companies, although not so rapid as we would like to see. North America. The poor results of your United States subsidiary, Baker Perkins Inc., referred to previously, are attributable to the intense competition for the diminished volume of business available in 1961, resulting in an inability to obtain adequate prices. In addition, its Canadian subsidiary made a substantial loss, mainly because the recession in Canada's business activity coincided with an expansion of the company's manufacturing facilities and selling organisation and the introduction of additional lines. These efforts unfortunately have not yet produced the increase in turnover that was hoped for. In successive Annual Reports I have repeatedly commented upon the fact that it seems inherent in the trading conditions experienced by your North American subsidiaries that they should be subject to wide fluctuations. It is, therefore, essential to take a long-term view, although the effect on the Group's profits from year to year can be considerable. However, you will be pleased to know that the President of Baker Perkins Inc. was able to report recently to his Stock holders that incoming orders, particularly from the baking industry, are now increasing at a heartening rate. He expects that order-taking will accelerate in both the Food and Chemical Divisions during the remainder of 1962. This should help results in both 1962 and 1963. In spite of the improved outlook for the next two years, your Board feels that it may be desirable to diversify your business in the United States, and the directors of Baker Perkins Inc. are studying the possibilities of broadening the base of their operations. My regular visit to the United States last year was made to coincide with the Bakery Exhibition at Atlantic City, which is held once every six years. The President of your United States subsidiary has just been over to this country for extended consultations. South America. During the year Molins Machine Company Ltd. acquired 50% of the increased capital of Baker Perkins Molins do Brasil, S.A., and that company therefore ceased to be a subsidiary, with the result that its accounts are no longer consolidated with those of Baker Perkins Ltd. Our sales representatives have made extensive visits to the other countries in South America, with satisfactory results. Australasia. Total annual sales in Australia and New Zealand in 1961 exceeded 1,000,000 sterling for the first time, resulting in a record net profit for Baker Perkins Pty. Ltd. of Melbourne. As impor tation was lower owing to Government restrictions, this satisfactory result is in large part due to an increase in the sale of equipment manufactured in that country by our associated company, Gordon Brothers (Pty.) Ltd. Baker Perkins (N.Z.) Ltd. in Auckland doubled its turnover. In spite of severe import restrictions, we were nevertheless able to export more to that country, and in addition there was an increasing contribution from the new manufacturing facilities. Africa. In spite of the political uncertainties and the resultant somewhat depressed trading conditions. Baker Perkins South Africa (Pty.) Ltd. again made a profit. This was a creditable achievement under the circumstances. Exports from the United Kingdom to other parts of the African Continent were considerably more than during 1960. Asia and Far East The Vice-Chairman, Mr. Braithwaite, has made a visit this year to India, Japan and Hong Kong, and further consideration will be given to improving our competitive position in these parts of the world. Europe. Forgrove Gun.b.H., which sells wrapping and packaging machinery in Germany, Austria and Switzerland, increased its turnover considerably in this highly competitive market, and made a larger profit. 6 The Company awaits with interest the outcome of the negotiations for the United Kingdom's entry into the European Common Market. Whatever the final decision, the likely problems that will arise have been reviewed, and your Board feels that the Company will be reasonably placed. In order to be prepared for any eventuality in the developing scene in Europe, Baker Perkins A.G., a wholly-owned subsidiary, is to be formed in Switzerland, together with its subsidiary, BakerPerkins Engineers G.m.b.H., to be set up to control the Group's activities in Spain. MANAGEMENT AND STAFF. At the end of the year under review Mr. H. J. Wenban retired from the Parent Company's Board at his own request, having served since 1943, when the Forgrove Machinery Co. Ltd., of which he was Chairman, merged with Baker Perkins. He had held the office of Director longer than most of his colleagues and his advice and experience of the Company's affairs will be missed. Mr. Wenban has also retired as Managing Director of Forgrove, but I am glad to say that he has agreed to remain as Chairman of Forgrove, and will continue to take an active interest in the wrapping machinery affairs of the Group. In September Mr. W. S. B. Sampson accepted an invitation to join the Board as Finance Director and, as required by the Company's Articles of Association, he retires at the forthcoming Annual General Meeting and presents himself for re-election. Mr. Sampson returned to this country from Washington D.C. after having served as Chief Accountant to the International Finance Corporation, an affiliate of the World Bank, since its formation in 1956. His wide ex-, perience in international finance and his association with various types of business enterprises in this country and abroad are already proving of great value. This Group now has over 10,000 employees, widely spread throughout this country and abroad, including over 1,000 apprentices under training. In addition, the associated companies have over 5,000 employees. I mentioned earlier the acquisitions that took place during the first three months of 1961. The integration of these new members into the Group and the assistance which has been willingly provided and accepted from the Parent Company at all levels has imposed a considerable extra burden of work on nearly all staff in the companies concerned. We welcome these new members into the Group, and to them and to all employees I should like to record this acknowledgement of their loyal hard work and to thank them for their continuing co-operation. THE FUTURE. The total of bank advances remains high at 2,870,000 because the additional funds raised early in 1961 by the successful Rights Issue and the issue of 1,500,000 in Debenture Stock were used to purchase the new acquisitions referred to earlier in this Review. These bank borrowings are largely made to finance working capital required for the increased volume of business, par ticularly exports, as explained previously. Although our bankers are meeting our present needs, we may be consulting our advisers later this year about raising more permanent capital We are most conscious of our obligation to pay a satisfactory dividend to our Stockholders if we are to be able to raise the new capital which may be required in the future to keep the business healthy and prosperous. This factor can be overlooked in these days, when requests for dividend limitation, increased wages and appeals for reduced prices are given more publicity. So far, the current year has started fairly well, and I hope that a reasonable result will once again be achieved in the year 1962. Attention is being focussed on those operations of the Group where the best profit can be made, and as time goes on the rationalisation of the many members of the Group should produce economies and bring with it benefits of cross-fertilisation of ideas and experience. Your Board considers that this will result in a steady long-term growth. A. I. BAKER, Chairman. 7 REPORT OF THE DIRECTORS The Directors submit their report and the audited' Statement of Accounts for the year ended 31st December 1961. The consolidated results of the Group are shown in the Group Profit and Loss Account set out on the opposite page, and are summarised below:-- 1960 1,193,201 629,813 530,042 . 18,008 47,046. 166,772 298,216 Profit before taxation ......................................... Net Profit after taxation.......................................... Profit attributable to Baker Perkins Ltd. Dividends, less income tax, for 1961 -- Preference Stock -- 7 % Ordinary Stock --11% Interim paid, 6d. per 1 stock (2i%) Final recommended, l/9d, per 1 stock (8f%) Net Profit retained by the Group 1961 .. 1,294,427 .. 696,594 .. -686,072 ......................... 18,008 ............... 61,148 214,018 392,898 CAPITAL. The authorised capital of the Company was increased to 6,420,000 at the last Annual General Meeting and of this 4,413,343 has been issued. SUBSIDIARY COMPANIES. During the year the Company acquired the issued share capital of Rose Brothers (Gainsborough) Ltd. and James Halley & Sons Ltd. 80% of the issued share capital of William Jack & Sons Ltd. was also acquired. These were referred to by the. Chairman on pages 13 and 14 of the 1960 Annual Report. - DIRECTORS. ' The Directors, acting under Article 85 of the Company's Articles of Association appointed W.- S. B. Sampson as a Director of the Company, and he is now eligible for re-election. ' .V" ' ...........= . The Directors retiring by rotation are A. I. Baker, C. A. W. Dumbleton, J. M. Peake and S. C. Hargreaves, wh6, being eligible,' offer themselves for re-election. AUDITORS. . . . ........ Messrs. Price Waterhouse & Co. will co. ntin ue in office, ( . I. ./ . >- 19th April, 1962. . By order of the Board, j. s. HARDY, Secretary. 8 BAKER PERKINS LIMITED AND SUBSIDIARY COMPANIES GROUP PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st DECEMBER, 1961. 1960 . 1,239,541 344,753 21,486 ' 117,974 86,250 78,064 1,357,515 164,314 1,193,201 563,388 629,813 99,771 530,042 18,008 47,046 166,772 231,826 . 298,216 3,142,735 983,709 2,457,242 3,440,951 Manufacturing and Trading Profit (Note 6) After deducting: Depreciation ......................................... Replacement of Fixed Assets Reserve .. Income from associated companies Debenture Interest Bank and other Interest Profit before Taxation ............................ Taxation (Note 7) ......................................... Net Profit after Taxation............................ Net Profit attributable to Minority Interests.. Profit for the year attributable to Baker . Perkins Ltd. (Note 8) ............................ Dividends less income' tax on: 7% Preference Stock ............................ Ordinary Stock: Interim, 6d. per 1 stock Final recommended, l/9d. per 1 stock Net Profit retained By the Group .. Balance brought forward from the previous year.................................................................. Adjustment on sale of controlling interest in subsidiary .. .. Less Revenue Reserves capitalised by a subsidiary........................................ Unappropriated profit carried forward: Baker Perkins Ltd. ............................ Subsidiaries..................................................... 1961 ... . 1,418,675 474,371 -- 165,500 193,383 234,635 1,653,310 358,883 1,294,427 597,833 696,594 10,522 686,072 18,008 61,148 214,018 3,440,951 57,193 3,498,144 75,000 293,174 392,898 3,423,144 1,138,657 2,677,385 3,816,042 See notes to the accounts. 9 BAKER PERKINS LIMITED BALANCE SHEET AT 31st DECEMBER 1961 I960 1,683,886. 257,605 1,941,491 2,262,751 3,483,533 1,743,014 5,990 5,232,-537 1,189,412 604,297 86,254 166,772 2,046,735 3,185,802 7,390,044 420,000 3,072,397 3,492,397 614,540 983,709 1,598,249 5,090,646 69,953 1,500,000 729,445 2,229,445 7,390,044 Fixed Assets (Note 1) 1-and, Buildings, Plant and Machinery Investments in Associated Companies 1961 1,937,612 430,791 Subsidiary Companies (Note 2) Current Assets (Note 3) Stock and work in progress Debtors ............................ Cash .. 3,364,724 2,613,256 9,717 2,368,403 5,224,936 Less: Current Liabilities (other than Bank Advances) Creditors ......................................... Progress payments .. .. Current taxation .. .. .. Recommended Ordinary Dividend 1,698,996 195,186 4,595 214,018 5,987,697 2,112,795 3,874,902 11,468,241 Financed as follows: Capital and Reserves Capital 7 per cent Cumulative Preference Ordinary........................................ Authorised in Shares ,of 1 each 420,000 6,000,000 Issued and converted into Stock 420,000 3,993,343 Reserves Capital (Note 4) .. . .. ... Revenue........................................ 6,420,000 -------------- 1,293,464 . 1,138,657 4,413,343 Future United Kingdom Taxation Income Tax 1962/63 .. .. - Borrowed Money Debenture Stock (Note 5) 1,500,000 5$ per cent 1979/84 ... 1,500,000 6i per cent 1981/86 .. 1,500,000 .1,500,000 2,432,121 6,845,464 70,000 Bank Advances ............................ 3,000,000 1,552,777 See notes to the accounts.. A. I. BAKER \ tv W. S. B. SAMPSON J Dir?ctors 4,552,777 11,468,241 BAKER PERKINS LIMITED AND SUBSIDIARY COMPANIES GROUP BALANCE SHEET AT 31st DECEMBER 1961 I960 3,939,240 409,166 4,348,406 6,760,088 5,610,750 751,327 13,122,165 2,469,983 966,156 513,366 166,772 - 4,116,277- 9,005,888 13,354,294 420,000 3,072,397 3,492,397 1,401,987 3,440,951 4,842,938 8,335,335 1,712,561 206,928 1,500,000 1,500,000 1,599,470 3,099,470 13,354,294 Fixed Assets (Note 1) Land, Buildings, Plant and Machinery investments in Associated Companies Current Assets (Note 3) Stock and work in progress Debtors ........................................ Cash and United States Treasury Bills Less: Current Liabilities (other than Bank Advances) Creditors ........................................ Progress payments .. ,. Current taxation......................... , Recommended Ordinary Dividend 3,566,807 626,289 409,754 214,018 Financed as follows: Capital and Reserves applicable to Stockholders of Baker Perkins Ltd. Capital 7 per cent Cumulative Preference Ordinary........................................ Reserves Gapital (Note 4)........................... Revenue ........................................ Capital and Reserves applicable to Minority Interests Future United Kingdom Taxation Income Tax 1962/63 Borrowed Money . Debenture Stock (Note 5) 1,500,000 5} per cent 1979/84 .. 1,500,000 6i per cent 1981/86 .. Bank Advances (Secured 993,465; 1960 494,931) See notes to the accounts. 1961 5,069,306 582,752 8,487,262 8,224,292 609,250 17,320,804 5,652,058 4,816,868 12,503,936 18,155,994 420,000 3,993,343 1,933,177 3,816,042 4,413,343 ` 5,749,219 10,162,562 1,641,715 481,570 1,500,000 1,500,000 3,000,000 2,870,147 ; 5,870,147 18,155,994 NOTES TO THE ACCOUNTS 1. FIXED ASSETS . Land, Buildings, Plant and Machinery. GROUP Freehold and leasehold land and buildings Plant, machinery and equipment Motor vehicles ..................................... 1961 Cost Deprec. 2,901,587 5,751,685 424,222 696,601 3,104,432 207,155 9,077,494 4,008,188 i960 Cost Deprec. - 2,411,331 4,208,675 327,892 577,034 2,283,185 148,439 6,947,898 3,008,658 Net PARENT COMPANY Freehold and leasehold land and buildings Plant, machinery and equipment Motor vehicles ..................................... 5,069,306 1,114,457 2,129,585 170,603 3,414,645 259,629 1,139,068 78,336 1,477,033 3,939,240 979,270 1,892,354 171,100 3,042,724 239,273 1,049,348 70,217 1,358,838 Net 1,937,612 1,683,886 Depreciation includes amounts provided by subsidiaries prior to acquisition by the Parent Company. Commitments for capital expenditure at the balance sheet dates, not provided in the accounts, are estimated for the Group at 224,000 (177,000) and for the Parent Company at 61,000 (142,000). Investments in Associated Companies. Investments in associated companies are at cost or as valued by the Directors in 1948. 2. SUBSIDIARY COMPANIES. Investments in, and amounts due to and from subsidiary companies, are as follows: Shares at cost or as valued by the Directors in 1926 1961 4,006,629 Balances on current account; Due by Subsidiaries..................................... 1,608,435 Less Due to Subsidiaries ......................... 390,128 1960 1,619,859 755,093 112,201 1,218,307 642,892 5,224,936 2,262,751 3. CURRENT ASSETS Group debtors include debts totalling 608,523 not due within one year.' United States Treasury Bills are at cost, 319,363, and had a market value at 31st December 1961 of 319,960. Stock and work in progress is included in the accounts at the lower of cost or net realisable value. CAPITAL RESERVES At 31st December 1960 .......................... Premiums on issue of ordinary shares .. Share and Debenture issue expenses Debenture discount .. Goodwill arising on acquisition of further subsidiaries ..................................... Revenue reserves capitalised by a subsidiary Exchange adjustments arising on consoli dation ................................................. At 31st December 1961 Parent Company Share Premium Account Fixed Asset Replacement Reserve Total 91,858 756,558 (55,134) (22,500) '522,682 614,540 756,558 (55,134) (22,500) 770,782 522,682 1,293,464 Group Total 1,401,987 756,558 (55,134) (22,500) (245,199) 75,000 22,465 1,933,177 12 NOTES TO THE ACCOUNTS--continued 5. DEBENTURE STOCK On the 30th November 1964 and annually thereafter the Company shall set aside and apply 30,000 in the redemption at par of the 1979/84 stock to be selected by drawings and must apply a further 30,000 in respect of the 1981/86 stock from 30th November 1966, unless already purchased in the open market at a price not exceeding 105 per cent. 6. MANUFACTURING AND TRADING PROFIT The manufacturing and trading profit of 1,418,675 includes the profits of four new subsidiaries as from 1st January 1961 and two as from 19th January 1961. The profits accruing from these companies exceeded a reduction in the profits of the group as previously constituted which arose by reason of substantially lower profits in the United States subsidiary. Emoluments of the Directors of Baker Perkins Ltd. paid by the Company and its Subsidiaries were Directors Fees 3,081 (3,125) and remuneration for services as managers 120,377 (102,861). Pensions and other payments to past Directors and their dependants were 8,773 (8,773). 7. .TAXATION The charge for taxation is made up as follows: United Kingdom income tax ........................... United Kingdom- profits tax- .. ......................... Foreign and Dominion tax (net after relief) Total taxation based on the profit of the year Deduct .Prior year's tax liability adjustment' .. ..................................... .................. .. ..................................... 1961 430,896 124,110 46,755 1960 287,132 52,510 246,518 ' .. v.' '.. .. 601,761 ... ' 3j928' 586,160 22,772 ' 597,833 - 563,388 .The charge for United Kingdom taxation has been reduced by 56,000 (35,500) due to Investment Allowances.- ; ' '' .(Capital, allowances obtained-to date have had the effect of.deferring United Kingdom taxation.to the extent of 301,000 (164,700) calculated at current rates of tax. Corresponding additional charges for taxation will fall upon the profits of future years during which the relative assets are in use. 8. PROFIT ATTRIBUTABLE TO THE PARENT COMPANY Net profit of the Group attributable to Baker Perkins Ltd. of 686,072 (530,042) includes 448,122 (319,846) which was dealt with in the parent company profit and loss account. 9. CONTINGENT LIABILITIES At the balance sheet dates these amounted to 448,000 (455,697) for the Group, of which 281,343 relates ' to contingent liabilities in respect of discounted trade bills. For the Parent Company the amount was 151,000 (9,000) excluding guarantees relating to Subsidiaries. 10. RATES OF EXCHANGE Fixed assets overseas (and depreciation thereon) have been expressed in sterling at the exchange rates ruling . at the dates of acquisition, and other overseas assets and liabilities at the rates ruling at 31st December 1961. 11. SUBSIDIARIES' ACCOUNTING DATES The accounts of three overseas subsidiaries are made up to 30th September 1961 and one other to 30th November 1961. The differences between intercompany balances amounting to 28,979 have been included in debtors. 1 For convenience of management the accounting dates of these overseas subsidiaries do not coincide with the . date of the parent company. REPORT OF THE AUDITORS TO THE MEMBERS OF BAKER PERKINS LIMITED In our opinion the annexed 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 1961 and the profit for the year ended on that date of the company and of the group consisting of the company and its subsidiaries. We have obtained all the information and explanations which we considered necessary. In our opinion the company 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.G.2. 19th April, 1962. PRICE WATERHOUSE & Co., Chartered Accountants. . 14 BAKER PERKINS LIMITED AND SUBSIDIARY COMPANIES GROUP FINANCIAL STATISTICS 5 . ' (in 000) Assets employed in the Group Fixed Assets .. Net Current Assets (before deducting bank advances) Net Assets .. ............................ 1957 3,119 6,107 9,226 1958 3,770 7,089 10,859 1959 . 3,878 8,105 11,983 1960 4,348 9,006 13,354 1961 5,652 12,504 18,156 Financed as follows Ordinary Capital ............................ Capital and Revenue Reserves Ordinary Stockholders' Equity Preference Capital............................ Minority Shareholders in Subsidiaries Future Tax Reserves Borrowed Money 1,769 4,113 5,882 420 975 316 1,633 9,226 2,201 4,832 7,033 420 1,522 274 1,610 10,859 2,357 5,226 7,583 420 1,603 182 2,195 11,983 *3,072 4,843 7,915 420 1,713 207 3,099 13,354 3,993 5,749 9,742 . 420 1,642 482 5,870 18,156 Sales and Profits Sales Depreciation and Replacement Reserve Trading Profit and income from Associated Companies Interest on Borrowed Money Taxation Net Profit ............................ Minorities Share of Net Profit Net Profit attributable to Baker Perkins Ltd. .. ' Preference Dividend .. Ordinary Dividends .. Ratios Cover for Ordinary Dividends Dividends Paid................................... Net Profit attributable to Baker Perkins Ltd. as % of Ordinary Stockholders' Equity 13,780 452 1,227 133 . 634 460 60 400 17 102 3-8 10% 6-5 14,300 379 1,001 107 464 430 14 416 17 133 3-0 10% 5-7 15,450 360 894 122 293 479 61 418 18 143 2-8 10% 5-3 18,000 ' 366 1,357 164 563 630 100 530 18 214 *2-4 1H% 6-5 23,700 474 1,653 359 598 696 10 686 18 275 2-4 m% 6-8 Scrip issue in 1960 of 1 for 4 15 SUBSIDIARY COMPANIES AND THEIR DIRECTORS UNTIED KINGDOM The Alliance Foundry Company Limited, Lnton Baker Perkins (Exports) Limited,. London W.l Baker Perkins Granbull limited, Kingston-on-Thames Baker Perkins Jaxons Limited - . London W.l Job Day & Sons Limited, Leeds William Douglas & Sons (Engineering) Limited, London S.W.15 The Forgrove Machinery Company Limited, Leeds James Halley & Sons Limited, West Bromwich (Including Halley Rotopress Corporation) William Jack & Sons Limited, Glasgow, S.W.2 Northern Manufacturing Company.Limited, . Gainsborough, .Lancs. Packman Machinery Limited, Twyford, Berks. Rose Brothers (Gainsborough) Limited, Gainsborough, Lines. Rownson Conveyors Limited, London, N.7 Steele & Cowlishaw Limited, Hanley, Stoke-on-Trent Grey Iron, Precision and Non-Ferrous Castings DIRECTORS .A I. Baker (Chairman) ( )M. A. Farrell Managing F. E, Austin Exporters of the Group's products )H, Crowther (Chairman ( )H. S. Hargreaves Managing .F. H. Arscott, A I, Baker, J. F. M. Braithwaite, W. A. B. Brown, .A. Cramb, J, S Hardy, P. Marlow, D, A. Ogllvie PlasticsProcessing Machinery R. H. Wilkins (Chairman) F. G. Bull (Managing) J, A. W. Gill, N. F, Harwood, J, S, H. Rodman Sales of Laundry Equipment H. Crowther (Chairman)' R. Jack (Managing) W. H. W, Howes, 2), C. Muirhead Packaging Machinery for the tea and food industries . H. S. Ridley (Chairman) J. Naylor (Managing) *H. LZMaddtson, A. V. Naylor, R. G. Radley, R. H. Wilkins.. Bulk Handling, Refrigerating and Air-conditioning Equipment, .A J. Baker (Chairman) T. E. M, Douglas (Managing) L. G. Collins, G. F. A. Crook, .W. S. Douglas, N Mountain Wrapping and Packaging ' Machinery )FT. J, Wenban (Chairman ( )W. A. B. Brown Managing A. I. Baker, L. Brook, P. Dyson, J. N. Edis, J. Horn, N. Mountain, H. S. Ridley, R. H. Wilkins Printing Machinery and Equipment Laundry Machinery Gears and Gear Boxes R. H. Wilkins (Chairman) (A. M. Halley Managing) L. W. Cashmore, P. Marlow, ,J. R. McBride L. P. Simpson H. Crowther (Chairmaii) ` W. Jack (Managing) ,A. P. Calmer, R. Jack, J. T, Jack W. Jack, Jnr., P. Marlow { )H. S. Ridley Chairman W. Hunter (Managing) J. Hunter, H. L. Maadison, T. H. PhlUipson, A. Pycock, .Mrs A. M, Ridley Design Engineers A. I. Baker (Chairman) H. D, Byles (Managing) P. J. Packman, N. Mountain Wrapping and Packaging Machinery Mechanical Handling and Conveyors > H. S. Ridley (Chairman) -R. H. Wilkins (Managing) /.A. Baker, R. A. Bailey; W: AiB. Brown, L .J Hunter, H. j Maddison, N. Mountain T. H. PhlUipson, R. G. Radley .Mrs, A M. Ridley (H. Crowther Chairman and Managing) D, G. Anderson, C, N, Brown, .P. Hoyle, J A. Marriott Equipment for the Paint, Ink and Paper-coating Industries A. I. Baker (Chairman) J. A. Harley (Managing) .J. A, W. GUI, H. S. Hargreaves 16. AUSTRALIA Baker Perkins Proprietary limited, Gardiner, Victoria CANADA Canadian Baker Perkins limited, Brampton, Ontario GERMANY Forgrove G.m.b.H., Cologne NEW ZEALAND Baker Perkins ON.Z.) Limited, Auckland SOUTH AFRICA Baker Perkins South Africa (Proprietary) limited. Johannesburg U.S.A. Baker Perkins Inc,, Saginaw, Michigan (Including Canadian Petersen Oven Company) Manufacture, sales and service of Group Products G. B. G. King (Chairman and Managing) A. J. Baker, H. Crowther, J. D. Allan, E. J. Downey, T. E. Gordon, J. N, Lawrence, W. S. B. Sampson, J. C. Venables Manufacture, sale and service of Group and Associated Companies Products A. G. Robertson (President,) A. J. Baker, E A. Baker, D. H. Bitney. W. C. Dean, P. B. Harley, W. H. Klausing, C. fV. Steinhauer Sale of wrapping, packaging and chocolate and confectionery machinery (E. A. Kal/ayan Manager) Manufacture, sale and service of Group Products G. B. G. King (Chairman) (K. E. Chaafe Managing) A. I. Baker, H. Crowther, J. N. Lawrence, IV- S, B. Sampson Manufacture, sale and service of Group Products J. M. Jameson (Chairman and Managing) A. I. Baker, H. Crowther, T. W. Fargher, A. F. Mosley, C. B. Poole, W. S. B. Sampson Food Processing and Chemical Machinery (P. B. Harley President) .E, A Turner (Executive Vicc-zPresident and General Manager) A. J. Baker, JR. A. Baker, J. F. M. Braithwaite, C. Bryson, M. J. Glennon, H. H. Hennecke, K. A. Mack, W. 1. McDonald, R. W. McKenzie. ASSOCIATED COMPANIES Baker Perkins limited has important investments, but not a controlling interest, in Associated Companies located in Germany, France, Brazil and Australia, in addition to the United Kingdom. 17 SALES BY MAJOR TRADING AREAS United Kingdom................................ 13,000,000 United States and Canada .. .. 6,100,000 Remainder of Westernhemisphere 600,000 Other world trade ...................... 4,000,000 TOTAL SALES --1961 .. 23,700,000 55 26 2 17 .. ( TORONTO SAGINAW MICHIGAN N. AMERICA * ATLANTIC OCEAN c PACIFIC OCEAN S. AMERICA Baker Perkins Limited and its United Kingdom subsidiaries. Overseas companies and branches of Baker Perkins Associated companies Agents Countries to which Baker Perkins Group exported in 1961. BOMBAY MELBOURNE AUCKLAND AS IA INDIAN OCEAN AUSTRAL NEW ZEALAND