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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-K



|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ------------------------------------------------------------------------------------



| | For the fiscal year ended December 31, 2004
| | -------------------------------------------



Commission file number 1-5881



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BNS Holding, Inc.

(Exact name of Registrant as specified in its charter)



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|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|DELAWARE                                                       |  | 201953457                           
|(State or other jurisdiction of incorporation of organization) |  | (I.R.S. Employer Identification No.)



25 Enterprise
Center, Suite 103, Middletown, Rhode Island 02842

(Address of principal executive offices and zip code)



Registrants telephone number, including area code: 401-848-6300



Securities registered pursuant to Section 12(b) of the
Act:



|                                    |  |                                          
|----------------------------------- |  | -----------------------------------------
|Title of each class                 |  | Name of each exchange on which registered
|CLASS A COMMON STOCK-PAR VALUE $.01 |  | BOSTON STOCK EXCHANGE                    
|PREFERRED STOCK PURCHASE RIGHTS     |  | BOSTON STOCK EXCHANGE                    



Securities
registered pursuant to Section 12 (g) of the Act:



CLASS
B COMMON STOCKPAR VALUE $.01

(Title of Class)



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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No ̈.



Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrants knowledge, in
definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ̈



Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).     Yes ̈No  x.



The aggregate market value (as calculated under the rules) of the voting common stock held by non-affiliates of the Registrant was approximately $18,134,664 as of June 30, 2004.



There were 3,019,119 shares of Class A Common Stock and 6,325 shares of Class
B Common Stock, each having a par value of $.01 per share, outstanding as of February 28, 2005.



DOCUMENTS INCORPORATED BY REFERENCE



None.



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##### Table of Contents

BNS Holding, Inc.



INDEX



|         |  |                                                                                                |  |     
|-------- |  | ---------------------------------------------------------------------------------------------- |  | ----
|         |  |                                                                                                |  | Page
|PART I   |  |                                                                                               
|Item 1   |  | Business                                                                                       |  | 3   
|         |  | General                                                                                        |  | 3   
|         |  | Sale of Metrology Business, Xygent, North Kingstown Property and U.K. Subsidiary               |  | 3   
|         |  | Strategic Alternatives                                                                         |  | 4   
|         |  | Employees                                                                                      |  | 5   
|         |  | Availability of Filings with the SEC                                                           |  | 5   
|Item 2   |  | Properties                                                                                     |  | 5   
|Item 3   |  | Legal Proceedings                                                                              |  | 5   
|Item 4   |  | Submission of Matters to a Vote of Security Holders                                            |  | 8   
|         | 
|PART II  |  |                                                                                               
|Item 5   |  | Market for Registrants Common Stock and Related Stockholder Matters                           |  | 9   
|Item 6   |  | Selected Financial Data                                                                        |  | 10  
|Item 7   |  | Managements Discussion and Analysis of Financial Condition and Results of Operations          |  | 11  
|Item 7A  |  | Qualitative and Quantitative Disclosures About Market Risk                                     |  | 21  
|Item 8   |  | Financial Statements and Supplementary Data                                                    |  | 22  
|Item 9   |  | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure           |  | 41  
|Item 9A  |  | Controls and Procedures                                                                        |  | 41  
|Item 9B  |  | Other Information                                                                              |  | 41  
|         | 
|PART III |  |                                                                                               
|Item 10  |  | Directors and Executive Officers of the Registrant                                             |  | 41  
|Item 11  |  | Executive Compensation                                                                         |  | 44  
|Item 12  |  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |  | 47  
|Item 13  |  | Certain Relationships and Related Transactions                                                 |  | 49  
|Item 14  |  | Principal Accountant Fees and Services                                                         |  | 50  
|         | 
|PART IV  |  |                                                                                               
|Item 15  |  | Exhibits, Financial Statement Schedules, and Reports on Form 8-K                               |  | 52  
|         |  | Signatures                                                                                     |  | 56  



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##### Table of Contents

PART I



ITEM 1
BUSINESS



THE BUSINESS OF THE
COMPANY



Effective December 14, 2004, BNS Co. (BNS
Co.) completed a reorganization (the Holding Company Reorganization) in which BNS Holding, Inc. (BNS Holding) became the holding company and sole stockholder of BNS Co., which was prior to December 14, 2004 the publicly
traded company (and prior to April 2001 named Brown & Sharpe Manufacturing Company). The Holding Company Reorganization was effected by a merger under Section 251(g) of the General Corporation Law of the State of Delaware, which permits the
formation of a holding company structure without a vote of the stockholders of the publicly-held company. By virtue of the Holding Company Reorganization, BNS Co. became a direct, wholly-owned subsidiary of BNS Holding. Except for some technical
changes, the provisions of the certificate of incorporation of BNS Holding after the effective time of the Holding Company Reorganization and BNS Co. prior to the effective time of the Holding Company Reorganization are identical. The authorized
capital stock of BNS Holding after the effective time of the Holding Company Reorganization and the designations, rights, powers and preferences of such capital stock, and its qualifications, limitations and restrictions, are identical to those of
BNS Co. prior to the effective time of the Holding Company Reorganization. Stockholders received securities of the same class showing the same proportional interests in BNS Holding, having the same designations, rights, powers and preferences, and
having the same qualifications, limitations and restrictions, as those held in BNS Co. BNS Holding is the successor registrant of BNS Co. for the purposes of filings with the Securities and Exchange Commission.



Unless the context otherwise requires, references to the Company,
we or our in this Annual Report on Form 10-K refer to BNS Holding. In addition, references to the 1999 Equity Incentive Plan or 1999 EIP refer to the BNS Co. 1999 Equity Incentive Plan which was adopted by
BNS Holding on December 14, 2004 in connection with the Holding Company Reorganization.



General



BNS Holding, which is
headquartered in Middletown, Rhode Island, was formed in December 2004 for the purpose of the Holding Company Reorganization and did not have active operations prior to December 14, 2004. BNS Co., a subsidiary of BNS Holding, has been in business
since 1833, although the corporate entity itself was established much later. Prior to the sale by BNS Co. of its Metrology Business in 2001, the sale of BNS Co.s interest in its development stage measuring software subsidiary, Xygent Inc., in
2002, the sale of BNS Co.s North Kingstown, Rhode Island property which consisted of an industrial and office building along with the adjoining acreage (a total of approximately 169 acres, all in Rhode Island) (the Rhode Island
Property or North Kingstown Property) in 2003, and the sale of BNS Co.s United Kingdom subsidiary (the U.K. Subsidiary) on June 16, 2004, BNS Co. was previously engaged in the Metrology Business and the design,
manufacture and sale of precision measuring tools and instruments and manual and computer controlled measuring machines.



The Company at present has no trade or business operations but is searching for a suitable business to acquire. As previously disclosed in its June 11,
2004 press release, after completion of the sale of the U.K. Subsidiary, BNS Co., and then subsequently the Company, began a search for a suitable acquisition candidate. As of the date of this Annual Report on Form 10-K, no candidate has been
identified.



Sale of Metrology Business, Xygent, North Kingstown Property and U.K. Subsidiary



On June 16, 2004, pursuant to a Purchase and Sale Agreement dated as of February 5, 2004 between BNS Co., its Cayman Island subsidiary BNS
International, Ltd., and Bath Road Holdings, Limited, and after



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stockholder approval on June 11, 2004, BNS Co. sold its real estate holdings in the United Kingdom for 5.5 million British Pounds ($9.77 million as of the
date of the closing on June 16, 2004), which constituted the sale of substantially all of BNS Co.s remaining assets. The purchase price had been determined by arms-length negotiations between representatives of BNS Co. and representatives of
Bath Road Holdings, Limited, the purchaser. The transaction was in the form of the sale of the stock of the BNS Co.s U.K. Subsidiary (BNS Company (Property Holdings) Ltd.) that held title to the property and the sale of BNS Co.s note
receivable from the U.K. Subsidiary.



BNS Co. reported a gain
of $9.31 million net of expenses on the sale. Net proceeds received amounted to $9.66 million out of which an escrow account, as part of the Purchase and Sale Agreement, was established. The escrow account balance at December 31, 2004 of .63 million
British Pounds ($1.21 million as of December 31, 2004) is held jointly by BNS Co.s and purchasers respective U.K. solicitors for any tax that the U.K. government may claim against the former U.K. Subsidiary for the then U.K. operation
and will be held in escrow until such time as any inquiry from the U.K. government as to taxes is closed. This escrow account is included in restricted cash on the consolidated balance sheet. Should any such tax liability arise, the amount of the
gain on the sale would be reduced. On July 30, 2004, BNS Co. received a post-closing adjustment in the amount of .031 million British Pounds ($.056 million at the time of the adjustment) representing the net working capital of the U.K.
Subsidiary at the time of closing. This amount has been included in the gain presented above.



On March 14, 2005, the Company was informed by the U.K. Inland Revenue Service that the Company is not liable for any corporation tax on capital gains resulting from the 2004 sale of the U.K. Subsidiary. The Company
was also informed that the condition giving rise to its contingent liability relating to the sale of the Metrology Business in 2001 has been resolved. Accordingly, a $1.3 million reserve for this contingency, classified as a long term liability on
the Companys Consolidated Balance Sheets, has been reversed and recorded as a gain included in Discontinued Operations for the year ending December 31, 2004.



On August 26, 2003, pursuant to a Purchase and Sale Agreement, dated as of April 28, 2003, as amended, between BNS Co. and
Wasserman RE Ventures LLC (Wasserman), BNS Co. sold the North Kingstown Property and reported a gain of $15.25 million net of expenses on the sale. BNS Co. received proceeds of $18.68 million net of expenses. Additionally, BNS Co.
established an environmental escrow account in the amount of $.331 million to cover certain environmental remediation costs. This escrow account, which had a balance of $.269 million at December 31, 2004, is presented as restricted cash on the
consolidated balance sheet except for the interest earned which is presented as part of the unrestricted cash. The utilization of the funds in the escrow have been reported as a component of gain from sale of discontinued operations. The purchase
price for the North Kingstown Property was determined by arms-length negotiation between representatives of BNS Co. and representatives of Wasserman. In connection with the sale of the North Kingstown Property, BNS Co. relocated its
headquarters to its present business location in Middletown, Rhode Island.



On August 16, 2002, BNS Co. entered into a Securities Purchase Agreement with a subsidiary of Hexagon AB of Stockholm, Sweden (Hexagon) for the purchase BNS Co.s 77% interest in Xygent Inc.
(Xygent), a development stage measuring software business unit. Hexagon paid $2.25 million in cash on August 20, 2002 for BNS Co.s interest, and was obligated to pay BNS Co. a deferred purchase price of up to $.75 million subject
to possible adjustment relating to an Xygent equity value calculation as of August 16, 2002, as specified in the Securities Purchase Agreement. Hexagon subsequently disputed the equity value calculation. The dispute was submitted to arbitration, as
required by the Securities Purchase Agreement, and the arbitration determined a deferred purchase price payment of $.604 million, which was paid on January 22, 2003.



Strategic Alternatives



As
previously disclosed, the sale of the North Kingstown Property and the sale of the U.K. Subsidiary are part of BNS Co.s plan to sell its remaining assets and seek other strategic alternatives. Such plan may now involve the sale of the Company
through a merger or other change in control transaction, or the acquisition of an



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operating business with existing or prospective taxable earnings that can be offset by use of the Companys net operating loss carry-forwards
(NOLs). In the past BNS Co. has also considered a liquidation, either through a dissolution, formation of a liquidating trust and liquidation proceedings in the Chancery Court in Delaware, or in a Chapter 11 federal bankruptcy
reorganization proceeding, both of which would involve provisions for payments to creditors (including contingent claims) and contemplated distributions to stockholders. However, the Companys current focus is on the acquisition of an operating
business. As of the date of this Annual Report on Form 10-K, no candidate has been identified, and no assurance can be given that the Company will find a suitable candidate and if it does, that it will be able to utilize its existing NOLs.



Employees



At February 28, 2005
the Company had one full time employee located at its corporate headquarters in Middletown, Rhode Island, plus its President, CEO, and CFO, who is a consultant to the Company. There was one additional part-time employee at December 31, 2004, who
left the Company in January 2005. The Company also relies on various outside service providers for legal, accounting and tax support.



Availability of Filings with the SEC



The Companys public filings with the Securities and Exchange Commission (SEC), including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all exhibits and amendments to these
reports, are available on the SECs web site, which is www.sec.gov. Copies of these filings may also be obtained free of charge by contacting the Corporate Secretary at BNS Holding, Inc., 25 Enterprise Center, Suite 103,
Middletown, Rhode Island 02842, or by telephone at (401) 848-6400.



ITEM
2
PROPERTIES



The following table
sets forth certain information concerning the Companys facility:



|                         |  |               |  |                  |  |                 
|------------------------ |  | ------------- |  | ---------------- |  | ----------------
|Location                 |  | Owned/ Leased |  | Principal Use    |  | Approximate Area
|Middletown, Rhode Island |  | Leased        |  | Executive Office |  | 1,540 Sq. Ft.   



The Companys
Middletown, Rhode Island offices are leased for a term of three years commencing on July 1, 2003.



ITEM 3
LEGAL PROCEEDINGS



The
Companys BNS Co. subsidiary is a defendant in a variety of legal claims that arise in the normal course of business.



Environmental Matters



Subsequent to the sale of Xygent to Hexagon in 2002, the nature of each of BNS Co. and, subsequent to its incorporation in December 2004, BNS
Holdings operations have not been affected by environmental laws, rules and regulations relating to these businesses. However, because BNS Co. and its subsidiaries and predecessors, prior to the sale of BNS Co.s Metrology Business to
Hexagon on April 27, 2001 (and prior to sales of other divisions made in prior years) conducted manufacturing operations in locations at which, or adjacent to which, other industrial operations were conducted from time to time by BNS Co., BNS Co. is
subject to environmental claims. As with any such operations that involved the use, generation, and management of hazardous materials, it is possible that prior practices, including practices that were deemed acceptable by regulatory authorities in
the past, may have created conditions which could give rise to liability under current or future environmental laws. Because the law in these areas is developing rapidly, and because environmental laws are subject to amendment



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and widely varying degrees of enforcement, the BNS Co. subsidiary may be subject to, and the Company cannot predict with any certainty, the nature and amount
of environmental claims related to these operations or locations, including the Rhode Island Property owned by the BNS Co. subsidiary, which property was sold on August 26, 2003 (but with certain environmental liabilities retained) that may arise in
the future.



A Phase II environmental investigation on BNS
Co.s former Rhode Island Property, completed in June 2002, indicated certain environmental problems on the property. The results of the study showed that certain contaminants in the soil under the property and minor groundwater issues exceeded
environmental standards set by the Rhode Island Department of Environmental Management (RIDEM). After extensive testing, the BNS Co. subsidiary submitted a Remedial Action Work Plan (RAWP) to RIDEM, and on November 7, 2002,
RIDEM issued a letter approving the RAWP. In April of 2003, BNS Co. awarded a contract for the remediation work and engaged an environmental engineering firm to supervise the remediation work and perform ongoing monitoring of the affected areas. The
remediation work was substantially complete as of December 2003, and in connection with the August 26, 2003 sale of the Rhode Island Property, BNS Co. established an escrow account in the amount of $.331 million to cover any additional remediation
costs that may arise. At December 31, 2004, the balance of the escrow account was $.269 million. The BNS Co. subsidiary has obtained insurance against additional known and unknown environmental liabilities at the Rhode Island Property. However,
there is no assurance that BNS Co. will not incur additional costs for remediation above the escrowed amount and insurance limits, and that ongoing monitoring of contaminants will not indicate further environmental problems.



In addition, the BNS Co. subsidiary has obtained contaminated land insurance
coverage to insure against unknown environmental issues relating to the former U.K. property, which was owned by the U.K. Subsidiary. In addition, BNS Co. received a report dated October 2000, which was updated in July 2003, from an independent
environmental consulting firm indicating no evidence of environmental issues relating to that property. However, there is no assurance that such issues will not be identified in the future, whether such issues are identified through the actions of
the land fill operator operating on the property or the buyer of BNS Co.s former U.K. Subsidiary or as the result of other factors, as the buyer continues to operate the property as a land fill. With the sale by BNS Co. of the U.K. Subsidiary
on June 16, 2004, there is no assurance that there will be no retained liabilities relating to the U.K. Property, although BNS Co. has made no environmental representations or indemnifications under the applicable Purchase and Sale Agreement for the
U.K. Subsidiary.



Product Liability and Other Matters



The Companys BNS Co. subsidiary receives claims from time to time for
toxic tort injuries related to the alleged use of asbestos material in pumps sold by its former pump division, and other product liability claims relating to the use of machine tools sold by divisions of BNS Co. which were sold many years ago. Most
of these suits are toxic tort claims resulting primarily from the use of small internal seals that allegedly contained asbestos and were used in small fluid pumps manufactured by BNS Co.s former pump division, which was sold in 1992. The
Company expects that its BNS Co. subsidiary will continue to be subject to additional toxic tort claims in the future.



The Company is unable to identify the number and location of fluid pumps manufactured by BNS Co. and, therefore, is unable to estimate the aggregate
number of unasserted claims which might be filed in the future, which is necessary in order to reliably estimate any financial exposure. This product line was introduced in the late 1800s. The materials alleged to contain asbestos were used
for an undetermined period of time ending in the late 1960s. The claims relate to exposure to this asbestos material. BNS Co. (then named Brown & Sharpe Manufacturing Company) sold its pump division in 1992 but remains subject to claims
related to products manufactured prior to that date.



Since
1994 the Companys BNS Co. subsidiary has been named as a defendant in a total of 538 known claims (as of February 28, 2005) relating to these pumps. In many cases these claims involve more than 100 other defendants. Fifty-four of those claims
were filed prior to December 31, 2001. In 2002 BNS Co. was named



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in 98 additional claims; in 2003 there were a total of 193 new claims filed; and BNS Co. has received notice of another 178 claims in 2004. As of February
28, 2005, BNS Co. has received notice of another 15 claims. In 2002, 42 claims were settled for an aggregate of approximately $30,000 exclusive of attorneys fees. In March 2004 a plaintiffs attorney settled one claim for $500 and filed
for dismissal in another 67 claims. In September 2004 another five claims were dismissed. During the fourth quarter of 2004, 64 claims were dismissed and another seven claims were settled for $500 each. Another 12 claims have been dismissed or
closed on various dates. There were 340 known claims open and active as of February 28, 2005. However, under certain circumstances, some of the settled claims may be reopened.



The Company believes BNS Co. has significant defenses to any liability for toxic tort claims on the merits. It should be
noted that, to date, none of these toxic tort claims have gone to trial and therefore there can be no assurance that these defenses will prevail. Settlement and defense costs to date have been insignificant.



In the late 1980s, insurance companies began issuing policies with
specific exclusions for claims relating to asbestos. BNS Co. has identified continuous insurance coverage (on an occurrence basis) from 1974 through 1988 that does not include such exclusions, with estimated aggregate coverage limits of
approximately $158 million for these policy years. The Company estimates that the aggregate remaining self insured retention (deductible) relating to these policy years is approximately $3.3 million. Additionally, the Company has identified
secondary evidence (such as past billings), indicating that BNS Co. had additional insurance coverage from 1970 through 1973 that does not include such exclusions. The Company is currently in the process of confirming that these policies were in
place and the amount of the remaining self insured retention (deductible) relating to these years. There is no assurance that the insurer will recognize this secondary information as evidence that the policies were in place. Although there are no
indications that the aforementioned insurance coverage has eroded from past claims, there is no assurance of this due to incomplete Company insurance records. Policies issued for BNS Co. beginning in 1989 contained exclusions relating to asbestos.
BNS Co.s insurance records for the periods prior to 1970 are incomplete and do not indicate what insurance coverage is available to BNS Co. for asbestos and other product liability claims arising prior to that time. The estimated aggregate
coverage limits noted above relate to a number of insurance carriers. In general, these carriers have acknowledged the evidence of coverage but have declined to verify the coverage or limits until such time as the limits apply. There can be no
assurance that, even if BNS Co. has insurance coverage for asbestos and other product liability claims under its policies, it will be able to recover from its insurers in the event that such insurance companies are no longer solvent, have ceased
operations, or choose to dispute the coverage or limits of the policies identified by the Company.



BNS Co. annually receives retroactive billings or credits from its insurance carriers for any increase or decrease in claims reserves as claims are filed,
settled or dismissed, or as estimates of the ultimate settlement and defense costs for the then-existing claims are revised. In addition, the Company has recorded a liability of $349,000 on the consolidated balance sheet relating to the open and
active claims against BNS Co. as of December 31, 2004. This liability represents an estimate of the likely costs to defend against or settle these claims by BNS Co. beyond the amounts reserved by the insurance carriers and previously funded, through
the retroactive billings, by BNS Co. However, there can be no assurance that the Company will not need to take additional charges against BNS Co. in connection with the defense, settlement or judgment of these existing claims. Projecting the costs
of future claims is subject to variables that are extremely difficult to predict, and there can be no assurance that the number of future claims and the related costs of defense, settlements or judgments will be consistent with the experience to
date relating to existing claims.



As of February 28, 2005, no
toxic tort or asbestos claims have been filed against BNS Holding, which came into existence in December 2004 and has never conducted any active business operations. There can be no assurance, however, that monies received by BNS Holding from its
wholly-owned subsidiary by way of reimbursement for public company reporting costs that were formerly the responsibility of BNS Co. or by way of dividends or otherwise might not under some circumstances be subject to claims against BNS
Co.



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It has become apparent that the uncertain prospect of additional toxic tort claims being asserted in the
future, and the impact of this uncertainty on the valuation of BNS Co., and hence on the Company, has had and may continue to have, at least for the short term, some adverse effects on the Companys ability to determine any prospective
distributions to shareholders or to negotiate a satisfactory sale, merger or other change in control transaction with a third party. These claims would also affect the ability of the Company, or its BNS Co. subsidiary, to carry out a fairly rapid
liquidation proceeding, either through a dissolution, formation of a liquidating trust and liquidation proceedings in the Chancery Court in Delaware, or in a Chapter 11 federal bankruptcy reorganization proceeding, both of which would involve
provisions for payments to creditors and contemplated distributions to stockholders.



There have also been a few miscellaneous claims against the BNS Co. subsidiary relating to employment activities, environmental issues, sales tax audits and personal injury claims.



ITEM 4SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



Not applicable.



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PART II



ITEM 5MARKET FOR REGISTRANTS COMMON STOCK AND RELATED STOCKHOLDER MATTERS



The Companys Class A Common Stock is listed on the Boston Stock Exchange under the symbol BNC and is traded on the NASD Over-the-Counter
(OTC) Bulletin Board, where market makers and other dealers provide bid and ask quotations. Since December 15, 2004, the Companys Class A Common Stock has traded on the OTC Bulletin Board under the symbol BNSIA and prior to the
Holding Company Reorganization on December 14, 2004, the stock of BNS Co. traded on the OTC Bulletin Board under the symbol BNSXA. The Companys Class B Common Stock is generally nontransferable, except to lineal descendants, and
thus has no established trading market, but it can be converted into Class A Common Stock at any time. Set forth below are the quarterly high and low closing prices for the Class A Common Stock of the Company (and of BNS Co. prior to the Holding
Company Reorganization on December 14, 2004) on the OTC Bulletin Board during the last two fiscal years.



|            |  |      |      |     |   |     
|----------- |  | ---- | ---- | --- | - | ----
|Fiscal Year |  | High |      | Low
|2004        |  |      |      |     |   |     
|4th Quarter |  | $    | 6.77 |     | $ | 6.47
|3rd Quarter |  |      | 6.60 |     |   | 6.05
|2nd Quarter |  |      | 6.40 |     |   | 5.90
|1st Quarter |  |      | 6.75 |     |   | 5.55
|            |  |     
|2003        |  |      |      |     |   |     
|4th Quarter |  | $    | 5.75 |     | $ | 5.03
|3rd Quarter |  |      | 5.03 |     |   | 4.40
|2nd Quarter |  |      | 5.10 |     |   | 2.60
|1st Quarter |  |      | 2.75 |     |   | 2.51



In May of 2001 BNS Co.
made a cash distribution to shareholders following the sale of the Metrology Business to Hexagon. Since 1990, no other dividends or distributions have been paid by BNS Co. (through December 13, 2004) or by the Company (after December 13, 2004). See
Liquidity and Capital Resources and Risk Factors: Environmental and Product Liability Risks sections of Managements Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this
Annual Report. At the present time, the Company does not intend to pay a dividend or make a distribution to stockholders in the near future.



At February 28, 2005, the Company had approximately 1,355 shareholders of record of its Class A Common Stock and 559 shareholders of record of its Class B
Common Stock.



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ITEM 6
SELECTED FINANCIAL DATA



The
following selected data, prepared on a consolidated basis, should be reviewed in conjunction with Part II, Item 7Managements Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated
Financial Statements and Notes thereto in Item 8 of this Annual Report.



|                                                              |  |                                             |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |         |  
|------------------------------------------------------------- |  | ------------------------------------------- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - |  | - | ------- | -
|                                                              |  | Year ended December 31,                     |       
|                                                              |  | 2004                                        |        |   | 2003 |   |        | 2002 |  |   | 2001   |   |  | 2000 |       
|                                                              |  | (in thousands except per share information) |       
|Statement of Operations Data                                  |  |                                             |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |         |  
|Revenue                                                       |  | $                                           |       |   |      | $ |       |      |  | $ |       |   |  | $    |       |   |  | $ |        |  
|Loss from continuing operations                               |  |                                             | (2,005 | ) |      |   | (3,328 | )    |  |   | (3,209 | ) |  |      | (5,899 | ) |  |   | (15,125 | )
|Net income (loss)                                             |  | $                                           | 8,770  |   |      | $ | 12,917 |      |  | $ | (5,919 | ) |  | $    | 21,170 |   |  | $ | (57,309 | )
|Net loss per common share,Basic, from continuing operations   |  | $                                           | (0.67  | ) |      | $ | (1.13  | )    |  | $ | (1.10  | ) |  | $    | (2.06  | ) |  | $ | (5.51   | )
|Net income (loss) per common share,Basic                      |  | $                                           | 2.92   |   |      | $ | 4.37   |      |  | $ | (2.03  | ) |  | $    | 7.38   |   |  | $ | (20.88  | )
|Net loss per common share,diluted, from continuing operations |  | $                                           | (0.67  | ) |      | $ | (1.13  | )    |  | $ | (1.10  | ) |  | $    | (2.06  | ) |  | $ | (5.51   | )
|Net income (loss) per common share,Diluted                    |  | $                                           | 2.92   |   |      | $ | 4.37   |      |  | $ | (2.03  | ) |  | $    | 7.38   |   |  | $ | (20.88  | )
|Average shares outstanding                                    |  |                                             | 3,003  |   |      |   | 2,954  |      |  |   | 2,920  |   |  |      | 2,867  |   |  |   | 2,745   |  
|Cash dividends per share                                      |  |                                             |       |   |      |   |       |      |  |   |       |   |  | $    | 15.25  |   |  |   |        |  
|Balance Sheet Data                                            |  |                                             |        |   |      |   |        |      |  |   |        |   |  |      |        |   |  |   |         |  
|Total assets                                                  |  | $                                           | 23,084 |   |      | $ | 16,617 |      |  | $ | 9,263  |   |  | $    | 19,283 |   |  | $ | 250,645 |  
|Long-term debt including current maturity                     |  |                                             |       |   |      |   |       |      |  | $ | 2,360  |   |  | $    | 3,317  |   |  | $ | 65,176  |  

---

|(1) | The 2004 net income includes a gain from the sale of U.K. Subsidiary of $9,248 or $3.08 per share, and a gain of $1,351 resulting from the resolution of a contingent liability
relating to the sale of the Metrology Business in 2001.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The 2003 net income includes a gain from the sale of the North Kingstown Property of $15,255 or $5.16 per share
|--- | ---------------------------------------------------------------------------------------------------------------

|(3) | The 2002 net income includes a loss from the disposal of BNS Co.s interest in Xygent of $916 or $0.31 per share.
|--- | -----------------------------------------------------------------------------------------------------------------

|(4) | The 2001 net income includes a gain from the disposal of the Metrology Business to Hexagon AB in the amount of $47,113 or $16.43 per share.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------

|(5) | The 2001 net income includes $6,566, which represents the payment of a prepayment penalty in connection with the repayment of the long-term senior debt and the write-off of debt
acquisition costs previously capitalized.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) | The 2000 loss includes a change in accounting principle as the Company adopted SEC Staff Accounting Bulletin No. 101 (SAB 101). The effect of applying this change in
accounting principle was a charge for the cumulative effect of the change amounting to $27,401 (net of an income tax benefit of $600) or $9.98 per share.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(7) | On May 10, 2001 BNS Co. (then the publicly-held entity) effected a one-for-five reverse stock split. Accordingly, all periods presented have been restated to reflect this reverse
stock split.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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ITEM 7MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Overview



The Company at present has no active trade or business operations but is searching for a suitable business to acquire. As previously disclosed in its June
11, 2004 press release, after completion of the sale of the U.K. Subsidiary, BNS Co. (and then after December 14, 2004, the Company) began a search for a suitable acquisition candidate. As of the date of this Annual Report on Form 10-K, no candidate
has been identified.



As previously discussed in Item 1 of this
Annual Report, effective December 14, 2004, BNS Co. completed a reorganization in which BNS Holding became the holding company and sole stockholder of BNS Co., which was prior to December 14, 2004 the publicly traded company. By virtue of this
reorganization, BNS Co. became a direct, wholly-owned subsidiary of BNS Holding. BNS Holding was formed in December 2004 for the purpose of this reorganization and did not have active operations prior to December 14, 2004. Unless the context
otherwise requires, references to the Company below refer to BNS Holding. The consolidated financial statements of BNS Holding include the accounts of BNS Co.



On November 16, 2000 BNS Co. entered into an Acquisition Agreement with Hexagon for the sale of the Metrology Business
assets, including the assumption of most related liabilities, which closed on April 27, 2001. On August 16, 2002, BNS Co. entered into a Securities Purchase Agreement with a subsidiary of Hexagon for the sale of BNS Co.s interest in Xygent, a
development stage measuring software business. On August 26, 2003, pursuant to a Purchase and Sale Agreement, dated as of April 28, 2003, as amended, between BNS Co. and Wasserman, BNS Co. sold its North Kingstown Property which consisted of an
industrial and office building along with the adjoining acreage (a total of approximately 169 acres, all in Rhode Island). On June 16, 2004, pursuant to a Purchase and Sale Agreement dated as of February 5, 2004 between BNS Co., its Cayman Island
subsidiary BNS International, Ltd., and Bath Road Holdings, Limited, and after stockholder approval on June 11, 2004, BNS Co. sold its U.K. Subsidiary.



The accompanying financial statements present the U.K. Subsidiary, the North Kingstown Property, Xygent, and the Metrology Business as discontinued
operations. The financial statements for prior periods have been restated. The discussions below relate only to the continuing operations of the Company on a consolidated basis, unless otherwise noted.



Forward-Looking Statements



This Managements Discussion and Analysis of Financial Condition
and Results of Operations as well as other portions of this Report contain forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of assumptions, risks,
and uncertainties that could cause the actual results of the Company to differ materially from those matters expressed in or implied by such forward-looking statements. They involve known and unknown risks, uncertainties, and other factors, which
are in some cases beyond the control of the Company. Additional information regarding these risk factors and uncertainties is described more fully in the Companys SEC filings. A copy of all filings may be obtained from the SECs web site,
www.sec.gov, or by contacting the Corporate Secretary at the Companys headquarters or by telephone at (401) 848-6400. The Company does not maintain a web site. This Managements Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the Companys Consolidated Financial Statements and the Notes thereto included elsewhere in this Annual Report.



Critical Accounting Policies



Managements discussion and analysis of financial condition and results of operations are based upon the consolidated financial statements, which
have been prepared in accordance with accounting principles generally accepted in the United States of America. The accounting policies used in reporting the financial results are



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reviewed on a regular basis. The preparation of these financial statements requires the use of estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, estimates, including those related to accounts receivable, product liability, taxes, and legal contingencies are evaluated.
The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities
that are not readily apparent from other sources. Results may differ from these estimates due to actual outcomes being different from those on which we based our assumptions. These estimates are reviewed by management on an on-going basis. The
following critical accounting policies affect the more significant judgments and estimates used in the preparation of the consolidated financial statements.



Allowance for Doubtful Accounts



Allowances for doubtful accounts are maintained for estimated losses resulting from the inability of customers to make required payments. If the financial
condition of customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.



Contingencies



The Company periodically records the estimated impacts of various conditions, situations or circumstances involving uncertain outcomes. These events are
called contingencies, and the Companys accounting for such events is prescribed by SFAS 5, Accounting for Contingencies. SFAS 5 defines a contingency as an existing condition, situation, or set of circumstances
involving uncertainty as to possible gain or loss to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur.



SFAS 5 does not permit the accrual of gain contingencies under any circumstances. For loss contingencies, the loss must be accrued if (1) information
is available that indicates it is probable that the loss has been incurred, given the likelihood of the uncertain future events; and (2) that the amount of the loss can be reasonably estimated.



The accrual of a contingency involves considerable judgment on the part of
management. The Company uses its internal expertise, and outside experts (such as lawyers, tax specialists, insurance specialists and engineers), as necessary, to help estimate the probability that a loss has been incurred and the amount (or range)
of the loss.



The Companys BNS Co. subsidiary is
currently involved in certain legal disputes and environmental proceedings, including toxic tort claims, other product liability claims and claims relating to other former business activities. See Litigation in Item 3 of this Annual
Report. An estimate of the probable costs for the resolution of these claims has been accrued. This estimate has been developed in consultation with outside counsel and other experts and is based upon an analysis of potential results, including a
combination of litigation and settlement strategies. It is believed that these proceedings will not have a material adverse effect on our consolidated results of operations or financial condition. It is possible, however, that future results of
operations for any particular quarterly or annual period could be materially affected by changes in our assumptions, or the effectiveness of our strategies, related to these proceedings. It is also possible that future results of operations for any
particular quarterly or annual period could be materially affected by additional claims against BNS Co. or claims against BNS Holding, Inc. arising from new legal disputes, including future toxic tort claims, and environmental proceedings.



Recent Accounting Pronouncements



In December 2004, the FASB issued SFAS No. 123 (revised 2004)
Share-Based Payment (Statement 123(R)). Statement 123(R) replaces SFAS No. 123 Accounting for Stock-Based Compensation, supersedes



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APB Opinion No. 25 Accounting for Stock Issued to Employees, and amends SFAS No. 95 Statement of Cash Flows. Statement 123(R)
requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Per APB Opinion No. 25, compensation expense was recognized only to the extent the
fair value of the common stock exceeded the stock option exercise price at the measurement date. In addition, SFAS No. 123 allowed pro forma disclosure as an alternative to financial statement recognition. Statement 123(R) is effective for public
companies at the beginning of the first interim or annual period beginning June 15, 2005. We expect to adopt Statement 123(R) in the fourth quarter of fiscal 2005.



Results of Operations



2004 Compared to 2003



The Company on a consolidated basis recorded net income of $8.8 million and $12.9 million in 2004 and 2003, respectively. The 2004 and 2003 results
include the following:



|                                    |  |             |      |   |              |   |      |  
|----------------------------------- |  | ----------- | ---- | - | ------------ | - | ---- | -
|                                    |  | In millions |     
|                                    |  | 2004        |      |   | 2003Restated |  
|Loss from continuing operations     |  | $           | (2.0 | ) |              | $ | (3.3 | )
|Income from discontinued operations |  |             | 10.8 |   |              |   | 16.2 |  
|                                    |  |             |      |   |              |   |      |  
|Net income                          |  | $           | 8.8  |   |              | $ | 12.9 |  
|                                    |  |             |      |   |              |   |      |  



The loss from
continuing operations in 2004 is less than 2003 by $1.3 million. The Company has continued to reduce corporate level administration expenses over the last year. Both periods include legal and professional costs incurred in connection with the sale
of assets and exploration of strategic alternatives. Included in the operating loss for 2004 was an additional insurance expense amounting to $.3 million resulting from a change in an insurance policy prepaid in 2003. This prepaid policy was
originally estimated to provide BNS Co. with a three-year run off insurance coverage in the event that the Company decided to liquidate after the sale of its U.K. Subsidiary in 2004. As BNS Co. did not liquidate, the policy was revised in the third
quarter of 2004. The insurer applied a portion of the 2003 prepaid balance to the revised policy. The remaining $.3 million of the initial prepaid policy was expensed during the third quarter ended September 30, 2004. The operating loss in 2003
included $.5 million pertaining to the accrual for sales and use tax examination liabilities. This additional accrual was the result of additional sales and use tax liabilities which became known during the quarter ended June 30, 2003.



No Interest expense was incurred in 2004, compared with interest expense
of $.1 million in 2003. The interest in 2003 represents interest owed on an outstanding liability to a former CEO of BNS Co. The decrease in the amount of interest expense is attributable to the fact that this liability was paid in 2003.



Other income, net amounted to $.3 million in 2004 compared with $.1
million in 2003. Other income, net in 2004 consists primarily of interest income. Other income, net in 2003 consisted of interest income and income related to the cancellation of insurance on executives no longer with the Company. Interest income
increased primarily as a result of higher cash balances in 2004.



No income taxes are provided for the U.S. operation as the Company (consolidated) has substantial net operating losses from prior years that are available to offset otherwise taxable current earnings.



Discontinued operations amounted to income of $10.8 million in 2004 compared
with income of $16.2 million in 2003. The income reported in discontinued operations in 2004 contains primarily the gain on sale of the Companys U.K. Subsidiary of $9.3 million, and a gain of $1.3 million resulting from the resolution of a
contingent liability relating to the sale of the Metrology Business in 2001. The income reported in 2003 related to the gain on the sale of the North Kingstown Property ($15.2 million) and the operations of the North Kingstown Property and the U.K.
Subsidiary ($1.0 million), before the later sale of each property.



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2003 Compared to 2002



BNS Co. recorded net income of $12.9 million in 2003 and a net loss of $5.9 million in 2002. The 2003 and 2002 results include the following:



|                                           |  |              |      |   |               |   |      |  
|------------------------------------------ |  | ------------ | ---- | - | ------------- | - | ---- | -
|                                           |  | In millions  |     
|                                           |  | 2003Restated |      |   | 2002 Restated |  
|Loss from continuing operations            |  | $            | (3.3 | ) |               | $ | (3.2 | )
|Income (loss) from discontinued operations |  |              | 16.2 |   |               |   | (2.7 | )
|                                           |  |              |      |   |               |   |      |  
|Net income (loss)                          |  | $            | 12.9 |   |               | $ | (5.9 | )
|                                           |  |              |      |   |               |   |      |  



The loss from
continuing operations in 2003 and 2002 includes BNS Co.s corporate headquarters activities. Although BNS Co. decreased recurring general and administrative expenses in 2003, general and administrative expenses during 2003 were slightly higher
than in 2002. In 2003 this increase was predominantly due to expenses of $.4 million for advisory services and commission related to the ongoing marketing of the U.K. Subsidiary and the ongoing development of strategic alternatives for the Company.



Interest expense amounted to $.1 million in 2003 compared with
$.1 million in 2002. As a result of the rental operations of the North Kingstown Property being reclassified to discontinued operations, interest expense consists substantially of interest owed on an outstanding pension benefit liability owed to a
former CEO of BNS Co. and the settlement of a state sales and use tax examination. Interest expense attributable to the declining balance owed to the former CEO and the fact that BNS Co. paid the entire balance due to the former CEO in the third
quarter of 2003 resulted in a decrease of interest expense. However, this was offset by the interest paid related to the state sales and use tax examination.



Other income, net amounted to $.1 million in 2003. This is compared with $.2 million in 2002. Other income, net, consists predominantly of interest
income. During 2002, other income, net contained a gain of $.1 million related to the receipt of shares received as a result of the demutualization of an insurance company.



No income taxes are provided for in the continuing U.S. operation as the Company has net operating losses available to
offset otherwise taxable net income.



Discontinued operations
amounted to income of $16.2 million for the year 2003. This is compared with losses of $2.7 million in 2002. The loss reported in 2002 contains the loss from the Xygent operations along with the income from rental operations of the North Kingstown
facility and the net operating income generated by the U.K. Subsidiary in 2002. The gain from the sale of the North Kingstown Property recorded in the third quarter of 2003 is $15.3 million. This gain has been recorded net of an income tax expense
of $.2 million. Although the Company (consolidated) has sufficient net operating losses, this tax is attributable to the federal alternative minimum tax.



Liquidity and Capital Resources



The Company had unrestricted cash of approximately $20.9 million at December 31, 2004 after the completion of the sale of the U.K. Subsidiary. This
represents a significant increase from the cash balance at December 31, 2003 of $14.1 million. The increase is principally the result of the receipt of the net proceeds from the sale of the U.K. Subsidiary of $9.7 million, of which $1.2 million has
been placed in escrow and is presented as restricted cash. The unrestricted cash is further reduced by the net cash outflow from operations of approximately $1.8 million.



There is no assurance that the future months expenses of the Company will not be greater than anticipated, or that its
expected cash flow will not be less than anticipated, and that a liquidity problem may not arise as a result of poor economic conditions, lower investment returns, environmental problems, expenses and liabilities



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associated with product liability claims or expenses of maintaining the Company as a public reporting company (see Risk Factors: Liquidity
Risk; There may not be adequate resources for funding the operation of the Company).



The Companys ability to continue as a going-concern relies on its ability to achieve positive cash flow from investment earnings on its undistributed cash and the earnings of any acquired business. The Company
currently has no active trade or business (see Risk Factors: Going Concern Qualification in Audit Report). As previously disclosed, having sold its remaining assets, it is the Companys intention to seek other strategic
alternatives, including searching for a suitable acquisition candidate.



Cash Flow



Net cash used in operations in 2004
was $3.0 million compared with $6.9 million in 2003 and $5.3 million in 2002. In the calculation of net cash used in operations for the year ended December 31, 2004, the net income of $7.4 million was reduced by the gain on sale of the U.K.
Subsidiary of $9.3 million, and a gain of $1.3 million resulting from the resolution of a contingent liability relating to the sale of the Metrology Business in 2001. In the calculation of net cash used in operations for the year ended December 31,
2003, the net income of $13 million was reduced by gain on sale of the North Kingstown Property of $15.3 million, by the establishment of environmental escrow of $.3 million, by the payment of $1.7 million settlement of a compensation dispute to its
former CEO and $1.9 million plus interest to another former CEO of BNS Co. representing pension benefits. In the calculation of net cash used in operations for the year ended December 31, 2002, the net loss of $5.9 million was increased by the loss
on the sale of Xygent of $.9 million, by the loss from the discontinued operations of $1.8 million and decreased by the payment of pension obligations of $.7 million.



Net cash provided by investing transactions for 2004 was $9.7 million which pertains to the proceeds from the sale of the
U.K. Subsidiary. Net cash provided by investing transactions for 2003 was $19.5 million which included $.6 million as the final settlement received by BNS Co. from Hexagon related to the sale of Xygent, $18.7 million from proceeds of the sale of the
North Kingstown Property, $.4 million as the final settlement received by BNS Co. related to the disposal of BNS Co.s Electronics Division in 2002 and $.1 million from the disposal of the available for sale securities.



Cash used in financing activities in 2003 was $2.4 million which pertains to
the payment of the entire outstanding mortgage liability. Cash used in financing activities in 2002 was $.1 million. Financing transactions during 2002 consisted of $.9 million repayment on the mortgage offset by the April 2002 purchase of a net
minority interest in Xygent by Hexagon of $1 million. There were no cash flows associated with financing activities in 2004.



Cash provided by (used in) the discontinued operations amounted to $.1 million, $0.7 million and ($1.5) million in 2004, 2003 and 2002, respectively.



Working Capital



Excluding the assets related to discontinued operations, the Company had
working capital related to the continuing operations of $20.5 million at December 31, 2004 and $13.9 million at December 31, 2003. This increase in working capital is primarily the result of the sale of the North Kingstown Property and the U.K.
Subsidiary, which held the U.K. property.



The Companys
sole source of cash following the sale of BNS Co.s U.K. Subsidiary in June 2004 is from interest earned on its cash deposits.



Off-Balance Sheet Arrangements



The Company on a consolidated basis had no off balance sheet arrangements (as defined in the applicable SEC rule) during fiscal 2004.



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Contractual Obligations



The following table summarizes our contractual obligations (as defined in the applicable SEC rule) as of December 31, 2004 and the anticipated effect
of these obligations on our liquidity in future years (in thousands):



|                                                 |  |       |    |                |   |          |  |          |    |                 |   |  |  
|------------------------------------------------ |  | ----- | -- | -------------- | - | -------- |  | -------- | -- | --------------- | - |  | -
|                                                 |  | Total |    | Lessthan 1year |   | 1-3years |  | 3-5years |    | Morethan 5years
|Long Term Debt Obligations                       |  |       |   |                |   |         |  |          |   |                 |  |  | 
|Capital Lease Obligations                        |  |       |   |                |   |         |  |          |   |                 |  |  | 
|Real Estate Lease Obligation (expires July 2006) |  | $     | 41 |                | $ | 29       |  | $        | 12 |                 |  |  | 
|Purchase Obligations                             |  |       |   |                |   |         |  |          |   |                 |  |  | 
|Other Long Term Liabilities                      |  |       |   |                |   |         |  |          |   |                 |  |  | 
|                                                 |  |       |    |                |   |          |  |          |    |                 |   |  |  
|Total Contractual Obligations                    |  | $     | 41 |                | $ | 29       |  | $        | 12 |                 |  |  | 
|                                                 |  |       |    |                |   |          |  |          |    |                 |   |  |  



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RISK FACTORS



After completing the sale of its Metrology Business to Hexagon on April 27, 2001, after completing the sale on August 20,
2002 to Hexagon Holdings, Inc. of its interest in its Xygent development stage measuring software business, in which BNS Co. had then held a 77% equity interest (with Hexagon holding the balance), after completing the sale of the North Kingstown
Property to Wasserman on August 26, 2003, and after the sale of the U.K. Property to Bath Road Holdings, Limited on June 16, 2004, BNS Co. did not have an active trade or business, and following the Holding Company Reorganization, the Company does
not have an active trade or business but is in the process of searching for a suitable acquisition candidate. As of the date of this Annual Report on Form 10-K, no candidate has been identified, and no assurance can be given that the Company will
find a suitable acquisition candidate.



In addition to the
foregoing, the risks remaining with respect to BNS Co.s sale of its former Metrology Business, the former development stage Xygent measuring software business, and the North Kingstown Property are that BNS Co. might have to make an
indemnification payment to the respective buyers with respect to BNS Co.s representations and warranties concerning the businesses respectively sold or a payment to a third party with respect to a retained liability.



Environmental and Product Liability Risks



As discussed above, effective December 14, 2004, BNS Co. completed a
reorganization in which BNS Holding became the holding company and sole stockholder of BNS Co. By virtue of this reorganization, BNS Co. became a direct, wholly-owned subsidiary of BNS Holding. BNS Holding was formed for the purpose of this
reorganization and did not have any active operations prior to December 14, 2004.



Subsequent to the sale of Xygent to Hexagon in 2002 as discussed above, the nature of each of BNS Co. and, subsequent to its incorporation in December 2004, BNS Holdings operations have not been affected by
environmental laws, rules and regulations relating to these businesses. However, because BNS Co. and its subsidiaries and predecessors, prior to the sale of the BNS Co. Metrology Business to Hexagon on April 27, 2001 (and prior to sales of other
divisions made in prior years) conducted manufacturing operations in locations at which, or adjacent to which, other industrial operations were conducted from time to time by BNS Co., BNS Co. is subject to environmental claims. As with any such
operations that involved the use, generation, and management of hazardous materials, it is possible that prior practices, including practices that were deemed acceptable by regulatory authorities in the past, may have created conditions which could
give rise to liability under current or future environmental laws. Because the law in these areas is developing rapidly, and because environmental laws are subject to amendment and widely varying degrees of enforcement, the BNS Co. subsidiary may be
subject to, and the Company cannot predict with any certainty, the nature and amount of environmental claims related to these operations or locations, including the Rhode Island Property owned by the BNS Co. subsidiary, which property was sold on
August 26, 2003 (but with certain environmental liabilities retained) that may arise in the future.



A Phase II environmental investigation on BNS Co.s former Rhode Island Property, completed in June 2002, indicated certain environmental problems on
the property. The results of the study showed that certain contaminants in the soil under the property and minor groundwater issues exceeded environmental standards set by the Rhode Island Department of Environmental Management (RIDEM).
After extensive testing, the BNS Co. subsidiary submitted a Remedial Action Work Plan (RAWP) to RIDEM, and on November 7, 2002, RIDEM issued a letter approving the RAWP. In April of 2003, BNS Co. awarded a contract for the remediation
work and engaged an environmental engineering firm to supervise the remediation work and perform ongoing monitoring of the affected areas. The remediation work was substantially complete as of December 2003, and in connection with the August 26,
2003 sale of the Rhode Island Property, BNS Co. established an escrow account in the amount of $.331 million to cover any additional remediation costs that may arise. At December 31, 2004, the balance of the escrow account was $.269 million. The BNS
Co. subsidiary has obtained insurance against



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additional known and unknown environmental liabilities at the Rhode Island Property. However, there is no assurance that BNS Co. will not incur additional
costs for remediation above the escrowed amount and insurance limits, and that ongoing monitoring of contaminants will not indicate further environmental problems.



The BNS Co. subsidiary has obtained contaminated land insurance coverage to insure against unknown environmental issues
relating to the property which was owned by the U.K. Subsidiary. In addition, BNS Co. received a report dated October 2000, which was updated in July 2003, from an independent environmental consulting firm indicating no evidence of environmental
issues relating to that property. However, there is no assurance that such issues will not be identified in the future, whether such issues are identified through the actions of the land fill operator operating on the property or the buyer of BNS
Co.s former U.K. Subsidiary or as the result of other factors, as the buyer continues to operate the property as a land fill. With the sale by BNS Co. of the U.K. Subsidiary on June 16, 2004, there is no assurance that there will be no
retained liabilities relating to the U.K. Subsidiary, although BNS Co. has made no environmental representations or indemnifications under the applicable Purchase and Sale Agreement for the U.K. Subsidiary.



In addition, as previously disclosed, the Companys BNS Co. subsidiary
receives claims from time to time for toxic tort injuries related to the alleged use of asbestos material in pumps sold by its former pump division, and other product liability claims relating to the use of machine tools sold by divisions of BNS Co.
which were sold many years ago. Most of these suits are toxic tort claims resulting primarily from the use of small internal seals that allegedly contained asbestos and were used in small fluid pumps manufactured by BNS Co.s former pump
division, which was sold in 1992. The Company expects that its BNS Co. subsidiary will continue to be subject to additional toxic tort claims in the future. As a matter of Delaware law the directors of BNS Co. and the directors of BNS Holding, Inc.
are each required to take the probability of future claims into its consideration of various matters.



The Company is unable to identify the number and location of fluid pumps manufactured by BNS Co. and, therefore, is unable to estimate the aggregate
number of unasserted claims which might be filed in the future, which is necessary in order to reliably estimate any financial exposure. This product line was introduced in the late 1800s. The materials alleged to contain asbestos were used
for an undetermined period of time ending in the late 1960s. The claims relate to exposure to this asbestos material. BNS Co. (then named Brown & Sharpe Manufacturing Company) sold its pump division in 1992 but remains subject to claims
related to products manufactured prior to that date.



Since
1994 the Companys BNS Co. subsidiary has been named as a defendant in a total of 538 known claims (as of February 28, 2005) relating to these pumps. In many cases these claims involve more than 100 other defendants. Fifty-four of those claims
were filed prior to December 31, 2001. In 2002 BNS Co. was named in 98 additional claims; in 2003 there were a total of 193 new claims filed; and BNS Co. has received notice of another 178 claims in 2004. As of February 28, 2005 BNS Co has received
notice of another 15 claims. In 2002, 42 claims were settled for an aggregate of approximately $30,000 exclusive of attorneys fees. In March 2004 a plaintiffs attorney settled one claim for $500 and filed for dismissal in another 67
claims. In September 2004 another five claims were dismissed. During the fourth quarter of 2004, 64 claims were dismissed and another seven claims were settled for $500 each. Another 12 claims have been dismissed or closed on various dates. There
were 340 known claims open and active as of February 28, 2005. However, under certain circumstances, some of the settled claims may be reopened.



The Company believes BNS Co. has significant defenses to any liability for toxic tort claims on the merits. It should be noted that, to date, none of
these toxic tort claims have gone to trial and therefore there can be no assurance that these defenses will prevail. Settlement and defense costs to date have been insignificant.



In the late 1980s, insurance companies began issuing policies with specific exclusions for claims relating to
asbestos. BNS Co. has identified continuous insurance coverage (on an occurrence basis) from 1974 through 1988 that does not include such exclusions, with estimated aggregate coverage limits of approximately $158



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million for these policy years. The Company estimates that the aggregate remaining self insured retention (deductible) relating to these policy years is
approximately $3.3 million. Additionally, the Company has identified secondary evidence (such as past billings), indicating that BNS Co. had additional insurance coverage from 1970 through 1973 that does not include such exclusions. The Company is
currently in the process of confirming that these policies were in place and the amount of the remaining self insured retention (deductible) relating to these years. There is no assurance that the insurer will recognize this secondary information as
evidence that the policies were in place. Although there are no indications that the aforementioned insurance coverage has eroded from past claims, there is no assurance of this due to incomplete Company insurance records. Policies issued for BNS
Co. beginning in 1989 contained exclusions relating to asbestos. BNS Co.s insurance records for the periods prior to 1970 are incomplete and do not indicate what insurance coverage is available to BNS Co. for asbestos and other product
liability claims arising prior to that time. The estimated aggregate coverage limits noted above relate to a number of insurance carriers. In general, these carriers have acknowledged the evidence of coverage but have declined to verify the coverage
or limits until such time as the limits apply. There can be no assurance that, even if BNS Co. has insurance coverage for asbestos and other product liability claims under its policies, it will be able to recover from its insurers in the event that
such insurance companies are no longer solvent, have ceased operations, or choose to dispute the coverage or limits of the policies identified by the Company.



BNS Co. annually receives retroactive billings or credits from its insurance carriers for any increase or decrease in claims reserves as claims are
filed, settled or dismissed, or as estimates of the ultimate settlement and defense costs for the then-existing claims are revised. In addition, the Company has recorded a liability of $349,000 on the consolidated balance sheet relating to the open
and active claims against BNS Co. as of December 31, 2004. This liability represents an estimate of the likely costs to defend against or settle these claims by BNS Co. beyond the amounts reserved by the insurance carriers and previously funded,
through the retroactive billings, by BNS Co. However, there can be no assurance that the Company will not need to take additional charges in connection with the defense, settlement or judgment of these existing claims. Projecting the costs of future
claims is subject to variables that are extremely difficult to predict, and there can be no assurance that the number of future claims and the related costs of defense, settlements or judgments will be consistent with the experience to date relating
to existing claims.



As of February 28, 2005, no toxic tort or
asbestos claims have been filed against BNS Holding, which came into existence in December 2004 and has never conducted any active business operations. There can be no assurance, however, that monies received by BNS Holding for its wholly-owned
subsidiary by way of reimbursement for public company reporting costs that were formerly the responsibility of BNS Co. or by way of dividends or otherwise might not under some circumstances be subject to claims against BNS Co.



It has become apparent that the uncertain prospect of
additional toxic tort claims being asserted in the future, and the impact of this uncertainty on the valuation of BNS Co., and hence on the Company, has had and may continue to have, at least for the short term, some adverse effects on the
Companys ability to determine any prospective distributions to shareholders or to negotiate a satisfactory sale, merger or other change in control transaction with a third party. These claims would also affect the ability of the Company, or
its BNS Co. subsidiary, to carry out a fairly rapid liquidation proceeding, either through a dissolution, formation of a liquidating trust and liquidation proceedings in the Chancery Court in Delaware, or in a Chapter 11 federal bankruptcy
reorganization proceeding, both of which would involve provisions for payments to creditors and contemplated distributions to stockholders.



The U.S. Senate has in the past considered a bill that would establish an asbestos trust fund. This fund would have been financed by affected companies
and insurers, and would have provided compensation to claimants. The current administration has recently expressed interest in reviving consideration of legislation relating to asbestos claims. However, no legislative action is currently under
consideration, and there can be no assurance that any such legislation will be passed or as to the impact on the Company of any such legislation as might become effective.



19



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##### Table of Contents

Trading of the Companys Class A Common Stock on the OTC Bulletin Board



BNS Co.s Class A Common Stock ceased trading on the New York Stock
Exchange on Friday, February 8, 2002 and commenced trading on the OTC Bulletin Board under the symbol BNSXA (BNSIA after the December 14, 2004 Holding Company Reorganization) and was listed on the Boston Stock Exchange on
Monday, February 11, 2002. There is no assurance that there will continue to be a sufficient number of securities firms prepared to make an active trading market in our stock, and the public perception of the value of the Class A Common Stock could
be materially adversely affected.



The market price of the
Companys Class A Common Stock could decline as a result of sales of shares by the Companys existing shareowners, as a result of the Companys possible failure to meet the listing standards of the Boston Stock Exchange.



The Companys cumulative net operating losses (NOLs) may become
significantly limited



The Company had NOLs of
approximately $52.2 million at December 31, 2004, which were available to offset taxable earnings in the future. In the event of a change of ownership within the meaning of Section 382 of the Internal Revenue Code, the ability of the
Company to use these NOLs to offset future taxable earnings becomes significantly limited. While the Companys management and tax advisors believe the Company has not, as of February 11, 2005, experienced such a change of
ownership, based on their examination of public shareholder documents filed with the SEC, it appears that the Company is close to the threshold for such a change.



In addition, if the company were to acquire an operating business in the future, there can be no assurance that the Company
will be able to utilize its NOLs.



Going Concern
Qualifications in Audit Opinion



The Company received a
report from its independent auditors for the year ended December 31, 2004, containing an explanatory paragraph stating that the Companys lack of current trade or business operations and its recurring operating losses from continuing operations
raise substantial doubt about the Companys ability to continue as a going concern.



Liquidity Risk: There may not be Adequate Resources for Funding the Operations of the Company



There is no assurance that the future expenses of the Company (including the expenses of maintaining the Company as a public reporting Company
under SEC regulations and the expenses and liabilities associated with toxic tort asbestos claims against the Company, as discussed above) will not be greater than anticipated and investment earnings (which are, as a practical matter, limited by the
Companys inability to make investments that would require it to register as an investment company under the Investment Company Act of 1940) will not be less than anticipated and that, as a result, a liquidity problem may not arise.



Potential Acquisition Candidate



The Company is currently searching for a suitable acquisition candidate.
There is no assurance that the Company will identify such a candidate or consummate an acquisition, if it identifies such an acquisition candidate. In addition, if the Company were to consummate any such acquisition, there can be no assurance that
the Company will be able to successfully manage or operate such business.



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##### Table of Contents

ITEM 7A
QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK



The Company has no derivative financial instruments or derivative commodity instruments. Since August 2003, the Company (including BNS Co.) has had no long-term debt (the mortgage on the North Kingstown Property was
repaid when that property was sold on August 26, 2003).



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##### Table of Contents

ITEM 8FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA



|                                                                                                   |  |            
|-------------------------------------------------------------------------------------------------- |  | -----------
|                                                                                                   |  | Page Number
|Report of Independent Registered Public Accounting FirmErnst & Young LLP                          |  | 23         
|Consolidated Statements of Operations for the Years Ended December 31, 2004, 2003 and 2002         |  | 24         
|Consolidated Balance Sheets at December 31, 2004 and 2003                                          |  | 25         
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2004, 2003 and 2002         |  | 26         
|Consolidated Statements of Shareowners Equity for the Years Ended December 31, 2004, 2003and 2002 |  | 27         
|Notes to Consolidated Financial Statements                                                         |  | 28  40    



22



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##### Table of Contents

Report of Independent Registered Public Accounting Firm



To the Shareholders and Directors

of BNS Holding, Inc.



We have audited the accompanying consolidated balance sheets of BNS Holding, Inc. as of December 31, 2004 and 2003, and the related consolidated
statements of operations, shareowners equity, and cash flows for each of the three years in the period ended December 31, 2004. These financial statements are the responsibility of the Companys management. Our responsibility is to
express an opinion on these financial statements based on our audits.



We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial position of BNS Holding, Inc. at December 31, 2004 and 2003, and the consolidated results of its operations and its cash flows for each of the three years in the period ended
December 31, 2004, in conformity with accounting principles generally accepted in the United States.



The accompanying financial statements have been prepared assuming that BNS Holding, Inc. will continue as a going concern. As more fully described in Note
2, the Company has no active trade or business operations and has recurring operating losses from continuing operations. This condition raises substantial doubt about the Companys ability to continue as a going concern. Managements plans
in regard to these matters are also described in Note 2. The financial statements do not include any adjustments to reflect the possible future effects of the recoverability and classification of assets or the amounts and classification of
liabilities that may result from the outcome of this uncertainty.



/s/ ERNST & YOUNG LLP



Providence, Rhode
Island

February 18, 2005, except as to Note 16 as to which the date is March 14, 2005



23



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##### Table of Contents

PART I. FINANCIAL INFORMATION



|Item 1. | FINANCIAL STATEMENTS*
|------- | ---------------------



BNS Holding, Inc.



CONSOLIDATED
STATEMENTS OF OPERATIONS



For the Years Ended December
31, 2004, 2003 and 2002

(dollars in thousands, except per share data)



|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                                                      |  | 2004 |        |   | 2003 |   |        | 2002 | 
|General and administrative expenses                                                   |  | $    | 2,354  |   |      | $ | 3,275  |      |  | $ | 3,288  |  
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Operating loss                                                                        |  |      | (2,354 | ) |      |   | (3,275 | )    |  |   | (3,288 | )
|Interest expense                                                                      |  |      |       |   |      |   | 135    |      |  |   | 121    |  
|Other income, net                                                                     |  |      | 349    |   |      |   | 82     |      |  |   | 200    |  
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                                                       |  |      | (2,005 | ) |      |   | (3,328 | )    |  |   | (3,209 | )
|Income (loss) from discontinued operations, net of income taxes of $2, $222, and $247 |  |      | 176    |   |      |   | 990    |      |  |   | (1,794 | )
|Gain (loss) on sale of business                                                       |  |      | 10,599 |   |      |   |       |      |  |   | (916   | )
|Gain from sale of building, net of income taxes of $210 in 2003                       |  |      |       |   |      |   | 15,255 |      |  |   |       |  
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Net income (loss)                                                                     |  | $    | 8,770  |   |      | $ | 12,917 |      |  | $ | (5,919 | )
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Net income (loss) per share basic and diluted:                                        |  |      |        |   |      |   |        |      |  |   |        |  
|Continuing operations                                                                 |  | $    | (0.67  | ) |      | $ | (1.13  | )    |  | $ | (1.10  | )
|Discontinued operations                                                               |  |      | 3.59   |   |      |   | 5.50   |      |  |   | (0.93  | )
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Net income (loss) per common share basic and diluted                                  |  | $    | 2.92   |   |      | $ | 4.37   |      |  | $ | (2.03  | )
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  
|Shares used in computation                                                            |  |      | 3,003  |   |      |   | 2,954  |      |  |   | 2,920  |  
|                                                                                      |  |      |        |   |      |   |        |      |  |   |        |  



* The accompanying
notes are an integral part of the financial statements



24



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##### Table of Contents

|Item 1. | FINANCIAL STATEMENTS*
|------- | ---------------------



BNS Holding, Inc.



CONSOLIDATED
BALANCE SHEETS



December 31, 2004 and 2003

(dollars in thousands, except share data)



|                                                                                                              |  |      |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | -
|                                                                                                              |  | 2004 |         |   | 2003 |  
|ASSETS                                                                                                        |  |      |         |   |      |   |         |  
|Current Assets:                                                                                               |  |      |         |   |      |   |         |  
|Cash                                                                                                          |  | $    | 20,922  |   |      | $ | 14,101  |  
|Other receivable, net of $37 allowance in 2003                                                                |  |      | 5       |   |      |   | 142     |  
|Asset held for sale or disposition                                                                            |  |      |        |   |      |   | 493     |  
|Assets related to discontinued operations                                                                     |  |      |        |   |      |   | 375     |  
|Prepaid expenses & other current assets                                                                       |  |      | 661     |   |      |   | 1,158   |  
|                                                                                                              |  |      |         |   |      |   |         |  
|Total current assets                                                                                          |  |      | 21,588  |   |      |   | 16,269  |  
|Equipment                                                                                                     |  |      | 37      |   |      |   | 37      |  
|Less accumulated depreciation                                                                                 |  |      | 25      |   |      |   | 20      |  
|                                                                                                              |  |      |         |   |      |   |         |  
|                                                                                                              |  |      | 12      |   |      |   | 17      |  
|Restricted cash                                                                                               |  |      | 1,484   |   |      |   | 331     |  
|                                                                                                              |  |      |         |   |      |   |         |  
|                                                                                                              |  | $    | 23,084  |   |      | $ | 16,617  |  
|                                                                                                              |  |      |         |   |      |   |         |  
|LIABILITIES AND SHAREOWNERS EQUITY                                                                           |  |      |         |   |      |   |         |  
|Current liabilities:                                                                                          |  |      |         |   |      |   |         |  
|Accounts payable and accrued expenses                                                                         |  | $    | 1,047   |   |      | $ | 1,522   |  
|Liabilities related to discontinued operations                                                                |  |      |        |   |      |   | 298     |  
|                                                                                                              |  |      |         |   |      |   |         |  
|Total current liabilities                                                                                     |  |      | 1,047   |   |      |   | 1,820   |  
|Long-term liabilities                                                                                         |  |      |        |   |      |   | 1,351   |  
|Commitments and contingencies                                                                                 |  |      |        |   |      |   |        |  
|Shareowners equity                                                                                           |  |      |         |   |      |   |         |  
|Preferred stock; $1.00 par value; authorized 1,000,000 shares; none issued                                    |  |      |        |   |      |   |        |  
|Common Stock:                                                                                                 |  |      |         |   |      |   |         |  
|Class A, par value, $.01; authorized 30,000,000 shares; issued 2,999,051 in 2004 and 3,000,342 shares in 2003 |  |      | 30      |   |      |   | 30      |  
|Class B, par value, $.01; authorized 2,000,000 shares; issued 29,911 in 2004 and 35,620 in 2003               |  |      |        |   |      |   | 1       |  
|Additional paid-in capital                                                                                    |  |      | 87,072  |   |      |   | 87,071  |  
|Accumulated deficit                                                                                           |  |      | (64,605 | ) |      |   | (73,375 | )
|Unamortized value of restricted stock awards                                                                  |  |      | (5      | ) |      |   | (40     | )
|Accumulated other comprehensive income                                                                        |  |      |        |   |      |   | 214     |  
|Treasury stock: 8,518 shares in 2004 and 2003 at cost                                                         |  |      | (455    | ) |      |   | (455    | )
|                                                                                                              |  |      |         |   |      |   |         |  
|Total shareowners equity                                                                                     |  |      | 22,037  |   |      |   | 13,446  |  
|                                                                                                              |  |      |         |   |      |   |         |  
|                                                                                                              |  | $    | 23,084  |   |      | $ | 16,617  |  
|                                                                                                              |  |      |         |   |      |   |         |  



* The accompanying
notes are an integral part of the financial statements



25



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##### Table of Contents

BNS Holding, Inc.



CONSOLIDATED
STATEMENTS OF CASH FLOWS



For the Years Ended December
31, 2004, 2003 and 2002

(dollars in thousands)



|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|----------------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | - | ------- | ---- |  | - | ------ | -
|                                                                                          |  | 2004 |         |   | 2003 |   |         | 2002 | 
|Cash Used in Operations:                                                                  |  |      |         |   |      |   |         |      |  |   |        |  
|Net income (loss)                                                                         |  | $    | 8,770   |   |      | $ | 12,917  |      |  | $ | (5,919 | )
|Adjustment to reconcile net earnings to net cash provided (used) in operating activities: |  |      |         |   |      |   |         |      |  |   |        |  
|(Income) loss from discontinued operations                                                |  |      | (176    | ) |      |   | (990    | )    |  |   | 1,794  |  
|(Gain) loss from disposal of business/property                                            |  |      | (10,599 | ) |      |   | (15,255 | )    |  |   | 916    |  
|Restricted cash for environmental and tax escrow                                          |  |      | (1,215  | ) |      |   | (331    | )    |  |   |       |  
|Investment shares received                                                                |  |      |        |   |      |   |        |      |  |   | (94    | )
|Gain on sale of trading securities                                                        |  |      | (20     | ) |      |   |        |      |  |   |       |  
|Depreciation and amortization                                                             |  |      | 32      |   |      |   | 145     |      |  |   | 136    |  
|Unfunded pension                                                                          |  |      |        |   |      |   | (1,886  | )    |  |   | (752   | )
|Changes in Working Capital:                                                               |  |      |         |   |      |   |         |      |  |   |        |  
|Decrease in other receivables                                                             |  |      | 137     |   |      |   | 748     |      |  |   | 271    |  
|Decrease (increase) in prepaid expenses and other current assets                          |  |      | 497     |   |      |   | (646    | )    |  |   | (165   | )
|(Decrease) increase in accounts payable and accrued expenses                              |  |      | (475    | ) |      |   | (1,601  | )    |  |   | (1,469 | )
|Increase in other assets                                                                  |  |      |        |   |      |   | (3      | )    |  |   |       |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Net Cash Used In Continuing Operations                                                    |  |      | (3,049  | ) |      |   | (6,902  | )    |  |   | (5,282 | )
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Cash Provided by (Used in) Discontinued Operations                                        |  |      | 142     |   |      |   | 747     |      |  |   | (1,524 | )
|Investment Transactions:                                                                  |  |      |         |   |      |   |         |      |  |   |        |  
|Capital expenditures                                                                      |  |      |        |   |      |   |        |      |  |   | (14    | )
|Proceeds from sale of U.K. Property, net of expenses                                      |  |      | 9,655   |   |      |   |        |      |  |   |       |  
|Proceeds from sale of business, net of expenses                                           |  |      |        |   |      |   | 1,028   |      |  |   | 3,175  |  
|Proceeds from sale of building, net of expenses                                           |  |      |        |   |      |   | 18,684  |      |  |   |       |  
|Payment related to sale of Electronics Division                                           |  |      |        |   |      |   | (307    | )    |  |   |       |  
|Payment related to sale of Metrology Business                                             |  |      |        |   |      |   |        |      |  |   | (1,200 | )
|Purchase of trading securities                                                            |  |      | (4,980  | ) |      |   |        |      |  |   |       |  
|Proceeds from sale of trading securities                                                  |  |      | 5,000   |   |      |   | 97      |      |  |   |       |  
|Proceeds from sale of company shares                                                      |  |      | 8       |   |      |   |        |      |  |   |       |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Cash Provided by Investment Transactions                                                  |  |      | 9,683   |   |      |   | 19,502  |      |  |   | 1,961  |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Financing Transactions:                                                                   |  |      |         |   |      |   |         |      |  |   |        |  
|Payment of notes payable                                                                  |  |      |        |   |      |   | (2,360  | )    |  |   |       |  
|Payment on mortgage                                                                       |  |      |        |   |      |   |        |      |  |   | (957   | )
|Purchase of minority interest                                                             |  |      |        |   |      |   |        |      |  |   | (688   | )
|Contribution from minority interest                                                       |  |      |        |   |      |   |        |      |  |   | 1,500  |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Cash Used in Financing Transactions                                                       |  |      |        |   |      |   | (2,360  | )    |  |   | (145   | )
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Effect of Exchange Rate Changes on Cash                                                   |  |      | 45      |   |      |   | 62      |      |  |   | 155    |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Cash and Cash Equivalents:                                                                |  |      |         |   |      |   |         |      |  |   |        |  
|Increase (decrease) during the period                                                     |  |      | 6,821   |   |      |   | 11,049  |      |  |   | (4,835 | )
|Beginning balance                                                                         |  |      | 14,101  |   |      |   | 3,052   |      |  |   | 7,887  |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Ending balance                                                                            |  | $    | 20,922  |   |      | $ | 14,101  |      |  | $ | 3,052  |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Supplementary Cash Flow Information:                                                      |  |      |         |   |      |   |         |      |  |   |        |  
|Interest Paid                                                                             |  | $    |        |   |      | $ | 222     |      |  | $ | 361    |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  
|Taxes Paid                                                                                |  | $    | 32      |   |      | $ | 365     |      |  | $ | 290    |  
|                                                                                          |  |      |         |   |      |   |         |      |  |   |        |  



The accompanying notes
are an integral part of the financial statements



26



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##### Table of Contents

BNS Holding, Inc.



CONSOLIDATED
STATEMENTS OF SHAREOWNERS EQUITY



For the Years
Ended December 31, 2004, 2003 and 2002

(in thousands)



|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|---------------------------------------------- |  | -------- | - |  | ----------- | -- | - | ------------------------ | - | ------ | --------------- |  | - | ----------------------------------------- | - |  | ----------------------------------------- | ---- | - | ------------- | - | ---- | ------------ |  | - | ---- | - |  | - | ------ | -
|                                               |  | Shares * |   |  | CommonStock |    |   | Additionalpaid incapital |   |        | Retaineddeficit |  |   | Unamortizedvalue ofrestrictedstock awards |   |  | Accumulatedothercomprehensiveincome(loss) |      |   | Treasurystock |   |      | Total Equity | 
|Balance Dec. 31, 2001                          |  | 2,925    |   |  | $           | 30 |   |                          | $ | 85,950 |                 |  | $ | (80,373                                   | ) |  | $                                         |     |   |               | $ | (3   | )            |  | $ | (455 | ) |  | $ | 5,149  |  
|Net loss                                       |  |         |   |  |             |   |   |                          |   |       |                 |  |   | (5,919                                    | ) |  |                                           |     |   |               |   |     |              |  |   |     |   |  |   | (5,919 | )
|Foreign currency translation adjustment        |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           |     |   |               |   | 155  |              |  |   |     |   |  |   | 155    |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|Comprehensive loss                             |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   | (5,764 | )
|Restricted stock awards                        |  | 76       |   |  |             |   |   |                          |   | 219    |                 |  |   |                                          |   |  |                                           | (219 | ) |               |   |     |              |  |   |     |   |  |   |       |  
|Amortization of restricted stock awards        |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           | 131  |   |               |   |     |              |  |   |     |   |  |   | 131    |  
|Acquisition of subsidiary minority interest    |  |         |   |  |             |   |   |                          |   | 812    |                 |  |   |                                          |   |  |                                           |     |   |               |   |     |              |  |   |     |   |  |   | 812    |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|Balance Dec. 31, 2002                          |  | 3,001    |   |  | $           | 30 |   |                          | $ | 86,981 |                 |  | $ | (86,292                                   | ) |  | $                                         | (88  | ) |               | $ | 152  |              |  | $ | (455 | ) |  | $ | 328    |  
|Net income                                     |  |         |   |  |             |   |   |                          |   |       |                 |  |   | 12,917                                    |   |  |                                           |     |   |               |   |     |              |  |   |     |   |  |   | 12,917 |  
|Foreign currency translation adjustment        |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           |     |   |               |   | 62   |              |  |   |     |   |  |   | 62     |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|Comprehensive income                           |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   | 12,979 |  
|Restricted stock awards                        |  | 35       |   |  |             | 1  |   |                          |   | 90     |                 |  |   |                                          |   |  |                                           | (91  | ) |               |   |     |              |  |   |     |   |  |   |       |  
|Amortization of restricted stock awards        |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           | 139  |   |               |   |     |              |  |   |     |   |  |   | 139    |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|Balance Dec 31, 2003                           |  | 3,036    |   |  | $           | 31 |   |                          | $ | 87,071 |                 |  | $ | (73,375                                   | ) |  | $                                         | (40  | ) |               | $ | 214  |              |  | $ | (455 | ) |  | $ | 13,446 |  
|Net income                                     |  |         |   |  |             |   |   |                          |   |       |                 |  |   | 8,770                                     |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   | 8,770  |  
|Foreign currency translation adjustment        |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           |     |   |               |   | (214 | )            |  |   |     |   |  |   | (214   | )
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|Comprehensive income                           |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           |     |   |               |   |     |              |  |   |     |   |  |   | 8,556  |  
|Restricted stock awards                        |  | 7        |   |  |             |   |   |                          |   | 44     |                 |  |   |                                          |   |  |                                           | (44  | ) |               |   |     |              |  |   |     |   |  |   |       |  
|Amortization of restrictedstock awards         |  |         |   |  |             |   |   |                          |   |       |                 |  |   |                                          |   |  |                                           | 60   |   |               |   |     |              |  |   |     |   |  |   | 60     |  
|Restricted stock awards forfeited and canceled |  | (14      | ) |  |             | (1 | ) |                          |   | (51    | )               |  |   |                                          |   |  |                                           | 19   |   |               |   |     |              |  |   |     |   |  |   | (33    | )
|Income from sale of company shares             |  |         |   |  |             |   |   |                          |   | 8      |                 |  |   |                                          |   |  |                                           |     |   |               |   |     |              |  |   |     |   |  |   | 8      |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  
|                                               |  | 3,029    |   |  | $           | 30 |   |                          | $ | 87,072 |                 |  | $ | (64,605                                   | ) |  | $                                         | (5   | ) |               | $ |     |              |  | $ | (455 | ) |  | $ | 22,037 |  
|                                               |  |          |   |  |             |    |   |                          |   |        |                 |  |   |                                           |   |  |                                           |      |   |               |   |      |              |  |   |      |   |  |   |        |  

---

* Number of shares have been restated to reflect the
effect of the one-for-five reverse stock split in 2001



The
accompanying notes are an integral part of the financial statements



27



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##### Table of Contents

BNS Holding, Inc.



NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share and per share data)



|1. | SIGNIFICANT ACCOUNTING POLICIES
|-- | -------------------------------



Business



Effective December 14, 2004, BNS Co. completed a reorganization (the Holding Company Reorganization) in which BNS Holding, Inc. (the
Company) became the holding company and sole stockholder of BNS Co., which was prior to December 14, 2004 the publicly traded company (and prior to April 2001 named Brown & Sharpe Manufacturing Company). The Holding Company
Reorganization was effected by a merger under Section 251(g) of the General Corporation Law of the State of Delaware, which permits the formation of a holding company structure without a vote of the stockholders of the publicly held company. By
virtue of the Holding Company Reorganization, BNS Co. became a direct, wholly-owned subsidiary of BNS Holding, Inc. BNS Holding, Inc. was formed for the purpose of the Holding Company Reorganization and did not have any active operations prior to
December 14, 2004. The reorganization has been accounted for as a change in reporting entity.



Prior to the sale of its Metrology Business in 2001, the sale of its interest in its development stage measuring software subsidiary, Xygent Inc. in 2002, the sale of its North Kingstown, Rhode Island property which
consisted of an industrial and office building along with the adjoining acreage in 2003, and the sale of the U.K. Subsidiary on June 16, 2004, the Company was previously engaged in the Metrology Business and the design, manufacture and sale of
precision measuring tools and instruments and manual and computer controlled measuring machines.



The Company at present has no active trade or business operations but is searching for a suitable business to acquire. As previously disclosed by BNS Co.
in its June 16, 2004 press release, after the completion of the sale of the U.K. Subsidiary, BNS Co. and then the Company began the search for a suitable acquisition candidate. As of February 28, 2005, no candidate has been identified.



Basis of Presentation



The consolidated financial statements of the Company include the accounts of
BNS Co. All inter-company transactions have been eliminated from the consolidated financial statements.



The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates.



Certain account balances for the prior years have been reclassified to conform to the current year financial statement presentation.



Equipment



Equipment is carried at cost and is being depreciated principally on a straight-line basis over an estimated useful life from 5 to 7 years. Depreciation
expense was $5, $6, and $5 in 2004, 2003 and 2002, respectively.



Foreign
Currency



Assets and liabilities of those subsidiaries
located outside the United States whose cash flows are primarily in local currencies are translated at year-end exchange rates, and income and expense items are translated at average monthly rates. Translation gains and losses are accounted for in a
separate shareowners equity account



28



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



titled accumulated other comprehensive income (loss). At December 31, 2004, the Company no longer had any operations outside the U.S.



Comprehensive Income



Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting shareowners equity
that, under accounting principles generally accepted in the United States of America, are excluded from net income (loss). For the Company, such items consist of foreign currency translation gains and losses. Accumulated other comprehensive income
at December 31, 2003 was comprised of currency translation adjustments of $214. During the year ended December 31, 2004, the historical balance in cumulative translation adjustments was recognized in earnings, as the Companys U.K. Subsidiary,
to which the amount related, was sold.



Stock Incentive Plans



The Company accounts for its stock compensation
arrangements under the provisions of APB 25, Accounting for Stock Issued to Employees (see Note 8 for further details).



Income Taxes



The Company provides for income taxes under the provisions of SFAS No. 109, Accounting for Income Taxes. SFAS No. 109 requires an asset and liability
based approach in accounting for income taxes.



Deferred income
tax assets and liabilities are recorded to reflect the tax consequences on future years of temporary differences of revenue and expense items for financial statement and income tax purposes. Valuation allowances are provided against assets which are
not likely to be realized.



Cash and Cash Equivalents



Cash and cash equivalents are comprised of cash on hand and deposits in
banks with a maturity of three months or less. The carrying amount of cash and cash equivalents approximates fair value.



Fair Value of Financial Instruments



The Companys financial instruments consist primarily of cash and cash equivalents, receivables and trade payables. Fair value estimates have been
determined by the Company, using available market information and appropriate valuation methodologies. The carrying value of cash and cash equivalents, receivables and trade payables is considered to be representative of their respective fair value,
due to the short term nature of these instruments.



Receivables



Receivables are carried at original invoice amount less
an estimate made for doubtful receivables resulting from the inability of customers to make required payment. This amount of the reserve is based on an analysis of the receivable outstanding. If the financial condition of the customers were to
deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required which would result in an additional expense in the period such determination was made. Receivables are written off when deemed
uncollectible. Recoveries of receivables previously written off are recorded when received. No interest is recorded on receivables.



29



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



Recently Issued Accounting Pronouncements



In December 2004, the FASB issued SFAS No. 123 (revised 2004) Share-Based Payment (Statement
123(R)). Statement 123(R) replaces SFAS No. 123 Accounting for Stock-Based Compensation, supersedes APB Opinion No. 25 Accounting for Stock Issued to Employees, and amends SFAS No. 95 Statement of Cash
Flows. Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values. Per APB Opinion No. 25, compensation expense was
recognized only to the extent the fair value of the common stock exceeded the stock option exercise price at the measurement date. In addition, SFAS No. 123 allowed pro forma disclosure as an alternative to financial statement recognition. Statement
123(R) is effective for public companies at the beginning of the first interim or annual period beginning June 15, 2005. The Company expects to adopt Statement 123(R) in the fourth quarter of fiscal 2005.



|2. | GOING CONCERN
|-- | -------------



Since 2001 the Company has completed various business disposals affecting substantially all of the Companys operations. The Company at present has
no trade or business operations.



These disposal activities are
part of the Companys overall plan to sell its remaining assets and to seek strategic alternatives. Such strategic alternatives may involve the sale of the Company through a merger or other change in control transaction, or the acquisition of
an operating business with existing or prospective taxable earnings that can be offset by use of the Companys net operating loss carry-forwards (NOLs). As of February 18, 2005 no definitive determination has been made as to
which, if any, strategic alternatives the Company will pursue. This uncertainty raises substantial doubt about the Companys ability to continue as a going concern.



The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classifications of
liabilities that might be necessary should the Company be unable to continue as a going concern.



|3. | DISCONTINUED OPERATIONS
|-- | -----------------------



On August 16, 2002, BNS Co. entered into a Securities Purchase Agreement with a subsidiary of Hexagon for the purchase of BNS Co.s interest in
Xygent a development stage measuring software business unit. Hexagon paid BNS Co. $2,250 in cash on August 20, 2002, and was obligated to pay BNS Co. a deferred purchase price of up to $750 subject to possible adjustment relating to a Xygent equity
value calculation as of August 16, 2002, as specified in the Agreement. Hexagon subsequently disputed the equity value calculation. The dispute was submitted to arbitration, as required by the Securities Purchase Agreement, which resulted in a
deferred purchase price payment of $604, which was paid on January 22, 2003. In connection with the sale of Xygent, BNS Co. was released from its lease in Warwick, Rhode Island and relocated its headquarters to BNS Co.s North Kingstown
Property.



The Securities Purchase Agreement requires that BNS
Co. indemnify Hexagon for certain matters, including matters concerning BNS Co.s representations and warranties concerning Xygent. Prior to the sale of BNS Co.s interests to Hexagon, Hexagon held 23% of the issued and outstanding shares
of Xygent and BNS Co. held 77% of the issued and outstanding shares of Xygent. The purchase price was determined by arms-length negotiation between representatives of BNS Co. and Hexagon.



30



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



On August 26, 2003, pursuant to a Purchase and Sale Agreement dated as of April 28, 2003, as amended
between BNS Co. and Wasserman RE Ventures LLC (Wasserman), BNS Co. sold the North Kingstown Property which consisted of an industrial and office building along with the adjoining acreage (a total of approximately 169 acres, all in Rhode
Island) and reported a gain of $15,255 net of expenses on the sale. BNS Co. received proceeds of $18,684 net of expenses. Additionally, BNS Co. established an environmental escrow account in the amount of $331 to cover certain environmental
remediation costs. This escrow account is presented as restricted cash on the consolidated balance sheet except for the interest earned which is presented as part of the unrestricted cash. The purchase price was determined by arms-length negotiation
between representatives of BNS Co. and representatives of Wasserman. In connection with the sale of the North Kingstown Property, BNS Co. relocated its headquarters to its present business location in Middletown, Rhode Island.



On June 16, 2004, pursuant to a Purchase and Sale Agreement dated as of
February 5, 2004 between BNS Co., its Cayman Island subsidiary BNS International, Ltd., and Bath Road Holdings, Limited, and after stockholder approval on June 11, 2004, BNS Co. sold its real estate holdings in the U.K. for 5.5 million British
Pounds ($9.77 million at the time of the sale), which constituted the sale of substantially all of BNS Co.s assets. The purchase price had been determined by arms-length negotiations between representatives of BNS Co. and representatives of
Bath Road Holdings, Limited. The transaction was in the form of the sale of the stock of BNS Co.s U.K. Subsidiary that held title to the property and the sale of the Companys note receivable from the U.K. Subsidiary.



The assets and liabilities related to the Metrology Business, Xygent, the
North Kingstown Property and the U.K. Subsidiary for all periods presented have been reclassified to assets and liabilities of discontinued operations. The total gain recognized on this sale was $9,248 net of expenses.



BNS Co. reported a gain of $9.31 million net of expenses on the sale. Net
proceeds received amounted to $9.66 million out of which an escrow account, as part of the Purchase and Sale Agreement, was established. The escrow account balance at December 31, 2004 of .63 million British Pounds is held jointly by BNS Co.s
and purchasers respective U.K. solicitors for any tax that the U.K. government may claim against the former U.K. Subsidiary for the then U.K. operation and will be held in escrow until such time as any inquiry from the U.K. government as to
taxes is closed. This escrow account is included in restricted cash on the consolidated balance sheet. Should any such tax liability arise, the amount of the gain on the sale would be reduced. On July 30, 2004, BNS Co. received a post-closing
adjustment in the amount of .031 million British Pounds ($.056 million at the time of the adjustment) representing the net working capital of the U.K. Subsidiary at the time of closing. This amount has been included in the gain presented above.



|                                                 |  |      |        |      |   |        |  |   |        |  
|------------------------------------------------ |  | ---- | ------ | ---- | - | ------ |  | - | ------ | -
|                                                 |  | 2004 |        | 2003 |   | 2002   | 
|Revenue                                          |  | $    | 68     |      | $ | 2,284  |  | $ | 3,526  |  
|Income (loss) from operations, net of income tax |  |      | 176    |      |   | 990    |  |   | (1,794 | )
|Gain (loss) on disposal                          |  |      | 10,599 |      |   | 15,255 |  |   | (916   | )
|                                                 |  |      |        |      |   |        |  |   |        |  
|Net income (loss) from discontinued operations   |  | $    | 10,775 |      | $ | 16,245 |  | $ | (2,710 | )
|                                                 |  |      |        |      |   |        |  |   |        |  



|4. | INCOME TAXES
|-- | ------------



Income (loss) from continuing operations before income taxes consisted of the following:



|                                                    |  |      |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                    |  | 2004 |        |   | 2003 |   |        | 2002 | 
|Domestic                                            |  | $    | (2,005 | ) |      | $ | (3,328 | )    |  | $ | (3,209 | )
|Foreign                                             |  |      |       |   |      |   |       |      |  |   |       |  
|                                                    |  |      |        |   |      |   |        |      |  |   |        |  
|Loss from continuing operations before income taxes |  | $    | (2,005 | ) |      | $ | (3,328 | )    |  | $ | (3,209 | )
|                                                    |  |      |        |   |      |   |        |      |  |   |        |  



31



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



The following table reconciles the income tax provision (benefit) at the U.S. statutory rate to that
in the financial statements:



|                                   |  |      |      |   |      |   |        |      |  |   |        |  
|---------------------------------- |  | ---- | ---- | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                   |  | 2004 |      |   | 2003 |   |        | 2002 | 
|Taxes Computed at 34%              |  | $    | (682 | ) |      | $ | (1,131 | )    |  | $ | (1,091 | )
|Net operating losses not benefited |  |      | 682  |   |      |   | 1,131  |      |  |   | 1,091  |  
|                                   |  |      |      |   |      |   |        |      |  |   |        |  
|Income tax provision               |  | $    |     |   |      | $ |       |      |  | $ |       |  
|                                   |  |      |      |   |      |   |        |      |  |   |        |  



The Company has
reclassified the income taxes related to the U.K. Subsidiary, the North Kingstown Property, the Metrology Business and Xygent to the income (loss) from discontinued operations. The Company has recorded an income tax provision related to discontinued
operations of $2, $222, and $247 for the years ended December 31, 2004, 2003, and 2002, respectively.



The components of the Companys deferred tax assets and liabilities as of December 31, 2004 and 2003 are as follows:



|                          |  |      |        |      |   |       
|------------------------- |  | ---- | ------ | ---- | - | ------
|                          |  | 2004 |        | 2003
|Deferred tax assets:      |  |      |        |      |   |       
|Other receivable reserve  |  | $    |       |      | $ | 44    
|Loss carryforwards        |  |      | 18,742 |      |   | 16,270
|Accrued expenses          |  |      | 284    |      |   | 290   
|Other                     |  |      | 119    |      |   | 119   
|                          |  |      |        |      |   |       
|Gross deferred assets     |  |      | 19,145 |      |   | 16,723
|Less valuation allowance  |  |      | 19,140 |      |   | 16,718
|                          |  |      |        |      |   |       
|Deferred tax asset        |  | $    | 5      |      | $ | 5     
|                          |  |      |        |      |   |       
|Deferred tax liabilities: |  |      |        |      |   |       
|Asset basis differences   |  | $    | 5      |      | $ | 5     
|                          |  |      |        |      |   |       
|Deferred tax liability    |  | $    | 5      |      | $ | 5     
|                          |  |      |        |      |   |       



A valuation allowance
has been established due to the uncertainty of realizing certain tax credit and loss carryforwards and a portion of the other deferred tax assets.



For income tax purposes, the Company has a U.S. operating loss and capital loss carryforwards of $50,477 and $2,655, respectively. The U.S. net operating
loss carryforward expires between 2018 and 2023.



|5. | RELATED PARTY TRANSACTIONS
|-- | --------------------------



During 2004, 2003 and 2002, a Director of BNS Co. was a partner of a law firm that provides legal services to BNS Co. Total fees incurred to this law firm
during 2004, 2003 and 2002 were $565, $773 and $1,081, respectively.



32



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



|6. | OTHER INCOME AND EXPENSE
|-- | ------------------------



Other income (expense), net from continuing operations includes:



|                                         |  |      |     |      |   |      |  |   |    
|---------------------------------------- |  | ---- | --- | ---- | - | ---- |  | - | ---
|                                         |  | 2004 |     | 2003 |   | 2002
|Interest income                          |  | $    | 278 |      | $ | 78   |  | $ | 75 
|Income from insurance company investment |  |      |    |      |   |     |  |   | 93 
|Other income (expenses)                  |  |      | 71  |      |   | 4    |  |   | 32 
|                                         |  |      |     |      |   |      |  |   |    
|Other income (expense), net              |  | $    | 349 |      | $ | 82   |  | $ | 200
|                                         |  |      |     |      |   |      |  |   |    



|7. | ALLOWANCE FOR DOUBTFUL ACCOUNTS
|-- | -------------------------------



The activity in the Companys allowance for doubtful accounts is as follows:



|     |  |                              |     |                                                    |   |     |               |  |                        |     |  |   |   
|---- |  | ---------------------------- | --- | -------------------------------------------------- | - | --- | ------------- |  | ---------------------- | --- |  | - | --
|     |  | Balance atBeginningof Period |     | AmountCharged, netofRecoveriesto Costs andExpenses |   |     | Deductions(1) |  | Balanceat End ofPeriod
|2004 |  | $                            | 37  |                                                    | $ |    |               |  | $                      | 37  |  | $ |  
|2003 |  | $                            | 87  |                                                    | $ | 45  |               |  | $                      | 95  |  | $ | 37
|2002 |  | $                            | 826 |                                                    | $ | (30 | )             |  | $                      | 709 |  | $ | 87

---

|(1) | Write-offs of uncollectible accounts.
|--- | -------------------------------------



|8. | INCENTIVE AND RETIREMENT PLANS
|-- | ------------------------------



Stock Incentive Plans



On February 12, 1999, BNS Co. adopted the 1999 Equity Incentive Plan (the 1999 Plan). The Company adopted this plan in connection with the
December 14, 2004 Holding Company Reorganization. Under the provisions of the Companys 1999 Plan, a variety of stock and stock based incentive awards, including stock options, are available to be granted to eligible key employees of the
Company and its subsidiaries. The Plan permits the granting of stock options which qualify as incentive stock options under the Internal Revenue Code and non-statutory options which do not so qualify. No options were granted since 2000. The options
previously granted under the 1999 Plan were exercisable for a seven-year term, of Class A Common Stock granted at exercise prices between $1.875 and $2.375 per share. As a result of the sale of the Metrology Business, all of the options previously
granted under the 99 Plan became exercisable upon the closing date of the transaction. All options not exercised at that time have since expired.



The Company elected to follow Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25) and related Interpretations in
accounting for its employee stock options because, as discussed below, the alternative fair value accounting provided for under SFAS No. 123, Accounting for Stock-Based Compensation (FAS 123), requires use of valuation models that were not developed
for use in valuing employee stock options. Under APB 25, because the exercise price of the Companys employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is recognized.



Pro forma information regarding net income and earnings per share is
required by FAS 123, which also requires that the information be determined as if the Company has accounted for its employee stock options granted subsequent to December 31, 1994 under the fair value method of that Statement. Since all options
previously granted have expired and have no impact on these financial statements no additional disclosure is made under FAS 123.



33



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



In February 2004, April 2003 and April 2002, BNS Co. granted restricted stock awards covering 7,000,
35,000 and 75,715 shares of common stock, respectively, to directors of BNS Co. as a means of retaining and paying directors retainer fees, thereby rewarding them for long-term performance and to increase their ownership in the company. Shares
awarded under the plan entitle the shareowners to all rights of common stock ownership except the shares may not be sold, transferred, pledged, assigned, or otherwise encumbered or disposed of during the restriction period. The shares granted in
April 2002 vested on July 18, 2003, except for 5,715 shares which became fully vested in June 2002. The shares granted in April 2003 vested on July 21, 2004, except for 10,000 shares which have been forfeited. The shares granted in February 2004
will vest on April 30, 2005, except for 4,000 shares which have been forfeited. The shares were recorded at the fair market value on the date of issuance as deferred compensation and the related amount is being amortized to operations over the
vesting period. Compensation expense related to these shares of restricted stock was $27, $139 and $132 in 2004, 2003 and 2002, respectively. During 2004, 14,000 shares were forfeited and cancelled when 4 directors ceased to serve as directors after
the June 11, 2004 Annual Meeting.



Profit Incentive Plan



Under the provisions of BNS Co.s Amended Profit
Incentive Plan (PIP) as originally approved in 1979, awards of cash could be made as bonuses to certain management employees. No awards were made under the plan for 2004, 2003 and 2002 respectively, based on performance objectives for the respective
year. This plan was adopted by the Company in connection with the Holding Company Reorganization. Subsequent to year end, in January 2005, the Companys Board of Directors terminated the PIP.



Savings Plans



BNS Co. had a 401(k) plan for U.S. employees, which included retirement income features consisting of employer contributions
and employee tax deferred contributions. Contributions under all plans were invested in professionally managed portfolios. No expenses related to this plan were recorded in 2004, 2003 and 2002, respectively. BNS Co. has discontinued making either
employee or matching contributions to the plan, and has received approval from the Internal Revenue Service to terminate and liquidate the plan.



|9. | NET INCOME (LOSS) PER SHARE
|-- | ---------------------------



Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period.
Diluted income (loss) per share is the same as basic income (loss) per share in 2004, 2003 and 2002 because the computation of diluted income (loss) per share would have an anti-dilutive effect on income (loss) per share. The computation of basic
and diluted income (loss) per share is as follows:



|                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|--------------------------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | -
|                                                          |  | 2004 |        |   | 2003 |   |        | 2002 | 
|Numerator:                                                |  |      |        |   |      |   |        |      |  |   |        |  
|Loss from continuing operations before extraordinary item |  | $    | (2,005 | ) |      | $ | (3,328 | )    |  | $ | (3,209 | )
|Income (loss) from discontinued operations                |  |      | 10,775 |   |      |   | 16,245 |      |  |   | (2,710 | )
|                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Net income (loss)                                         |  | $    | 8,770  |   |      | $ | 12,917 |      |  | $ | (5,919 | )
|                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Denominator for basic and diluted income (loss) per share |  |      | 3,003  |   |      |   | 2,954  |      |  |   | 2,920  |  
|                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Net income (loss) per sharebasic and diluted             |  |      |        |   |      |   |        |      |  |   |        |  
|Loss from continuing operations                           |  | $    | (0.67  | ) |      | $ | (1.13  | )    |  | $ | (1.10  | )
|Income (loss) from discontinued operations                |  |      | 3.59   |   |      |   | 5.50   |      |  |   | (0.93  | )
|                                                          |  |      |        |   |      |   |        |      |  |   |        |  
|Basic and diluted income (loss) per share                 |  | $    | 2.92   |   |      | $ | 4.37   |      |  | $ | (2.03  | )
|                                                          |  |      |        |   |      |   |        |      |  |   |        |  



34



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



|10. | RESTRICTED CASH
|--- | ---------------



Restricted Cash consists of the environmental escrow account established in connection with the sale of the North Kingstown Property and the tax escrow
account established in connection with the sale of the U.K. Subsidiary. It is anticipated that the funds in these escrow accounts will not be released for more than one year. During 2004, the Company recorded $70 of foreign exchange gain related to
the U.K. escrow account.



|11. | LONG-TERM LIABILITIES
|--- | ---------------------



Long-term liabilities consisted of estimated taxes related to the sale of the Metrology Business in 2001 that the Company would have been required to
reimburse the purchaser should such taxes have been assessed. (See Note 16 below):



|                      |  |      |   |      |   |      
|--------------------- |  | ---- | - | ---- | - | -----
|                      |  | 2004 |   | 2003
|Long-term liabilities |  | $    |  |      | $ | 1,351
|                      |  |      |   |      |   |      



|12. | PREFERRED STOCK PURCHASE RIGHTS
|--- | -------------------------------



On February 13, 1998, the Board of BNS Co. approved a new Rights Plan and declared a dividend purchase right (a Right) for every outstanding share of BNS
Co.s Class A Common Stock and Class B Common Stock to be distributed on March 9, 1998 to stockholders of record as of the close of business on that date. The Company assumed the Rights Plan in connection with the Holding Company Reorganization
on December 14, 2004. The Rights expire on February 13, 2008 or upon the earlier redemption of the Rights, and they are not exercisable until a distribution date on the occurrence of certain specified events. On October 10, 2002 the BNS Co. Board
approved an amendment to the Rights Plan to increase the percentage threshold which would trigger distribution of the Rights and reduce the exercise price of each Right under the Plan. On October 6, 2003, the BNS Co. Board approved an amendment to
the Rights Plan to decrease the percentage threshold which would trigger distribution of the Rights and on December 8, 2004, the BNS Co. Board approved an amendment to the plan to increase the percentage threshold for certain existing shareholders
and their transferees which would trigger distribution of the Rights.



Each Right entitles the holder to purchase from the Company one one-hundredth of a share of Series B Participating Preferred Stock, $1.00 par value per share, at a price of $12.00 per one one-hundredth of a share, subject to adjustment. The
Rights will, on the distribution date, separate from the Common Stock and become exercisable ten days after a person has acquired beneficial ownership of 5% (or 45% in the case of stockholders, and certain of their transferees, who together with
their affiliates beneficially held 5% or more of BNS Co.s outstanding Common Stock on October 6, 2003) or more of the outstanding shares of Common Stock of the Company or commencement of a tender or exchange offer that would result in any
person owning 5% (or 45% in the case of stockholders, and certain of their transferees, who together with their affiliates beneficially held 5% or more of BNS Co.s outstanding Common Stock on October 6, 2003) or more of the Companys
outstanding Common Stock.



Each holder of a Right will in such
event have the right to receive shares of the Companys Class A Common Stock having a market value of two times the exercise price of the Right, which has been set at $12.00; and in the event that the Company is acquired in a merger or other
business combination, or if more than 25% of its assets or earning power is sold, each holder of a Right would have the right to receive common stock of the acquiring company with a market value of two times the exercise price of the Right.
Following the occurrence of any of these events, any Rights that are beneficially owned by any acquiring person will immediately become null and void. The Company, by a majority vote of the Board, may redeem the Rights at a redemption price of $.01
per Right.



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



|13. | CONTINGENCIES
|--- | -------------



The Companys BNS Co. subsidiary is a defendant in a variety of legal claims that arise in the normal course of business. These include claims
received for toxic tort injuries related to the use of asbestos material in pumps sold by its fluid pump division, and other product liability claims relating to the use of machine tools sold by divisions of the Company which were sold many years
ago. Most of these suits are toxic tort claims resulting primarily from the use of small internal seals that allegedly contained asbestos and were used in small fluid pumps manufactured by BNS Co.s former pump division, which was sold in 1992.
The Company expects that its BNS Co. subsidiary will continue to be subject to additional toxic tort claims in the future. As a matter of Delaware law the directors of BNS Co. and the directors of BNS Holding, Inc. are each required to take the
probability of future claims into its consideration of various matters.



The Company is unable to identify the number and location of fluid pumps manufactured by BNS Co. and, therefore, is unable to estimate the aggregate number of unasserted claims which might be filed in the future, which is necessary in order
to reliably estimate any financial exposure. This product line was introduced in the late 1800s. The materials alleged to contain asbestos were used for an undetermined period of time ending in the late 1960s. The claims relate to
exposure to this asbestos material. BNS Co. (then named Brown & Sharpe Manufacturing Company) sold its pump division in 1992 but remains subject to claims related to products manufactured prior to that date.



Since 1994 the Companys BNS Co. subsidiary has been named as a
defendant in a total of 538 known claims (as of February 28, 2005) relating to these pumps. In many cases these claims involve more than 100 other defendants. Fifty-four of those claims were filed prior to December 31, 2001. In 2002 BNS Co. was
named in 98 additional claims; in 2003 there were a total of 193 new claims filed; and BNS Co. has received notice of another 178 claims in 2004. As of February 28, 2005 BNS Co has received notice of another 15 claims. In 2002, 42 claims were
settled for an aggregate of approximately $30,000 exclusive of attorneys fees. In March 2004 a plaintiffs attorney settled one claim for $500 and filed for dismissal in another 67 claims. In September 2004 another five claims were
dismissed. During the fourth quarter of 2004, 64 claims were dismissed and another seven claims were settled for $500 each. Another 12 claims have been dismissed or closed on various dates. There were 340 known claims open and active as of February
28, 2005. However, under certain circumstances, some of the settled claims may be reopened.



The Company believes BNS Co. has significant defenses to any liability for toxic tort claims on the merits. It should be noted that, to date, none of these toxic tort claims have gone to trial and therefore there can
be no assurance that these defenses will prevail. Settlement and defense costs to date have been insignificant.



In the late 1980s, insurance companies began issuing policies with specific exclusions for claims relating to asbestos. BNS Co. has identified
continuous insurance coverage (on an occurrence basis) from 1974 through 1988 that does not include such exclusions, with estimated aggregate coverage limits of approximately $158 million for these policy years. The Company estimates
that the aggregate remaining self insured retention (deductible) relating to these policy years is approximately $3.3 million. Additionally, the Company has identified secondary evidence (such as past billings), indicating that BNS Co. had
additional insurance coverage from 1970 through 1973 that does not include such exclusions. The Company is currently in the process of confirming that these policies were in place and the amount of the remaining self insured retention (deductible)
relating to these years. There is no assurance that the insurer will recognize this secondary information as evidence that the policies were in place. Although there are no indications that the aforementioned insurance coverage has eroded from past
claims, there is no assurance of this due to incomplete Company insurance records. Policies issued for BNS Co. beginning in 1989 contained exclusions relating to asbestos. BNS Co.s



36



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



insurance records for the periods prior to 1970 are incomplete and do not indicate what insurance coverage is available to BNS Co. for asbestos and other
product liability claims arising prior to that time. The estimated aggregate coverage limits noted above relate to a number of insurance carriers. In general, these carriers have acknowledged the evidence of coverage but have declined to verify the
coverage or limits until such time as the limits apply. There can be no assurance that, even if BNS Co. has insurance coverage for asbestos and other product liability claims under its policies, it will be able to recover from its insurers in the
event that such insurance companies are no longer solvent, have ceased operations, or choose to dispute the coverage or limits of the policies identified by the Company.



BNS Co. annually receives retroactive billings or credits from its insurance carriers for any increase or decrease in claims
reserves as claims are filed, settled or dismissed, or as estimates of the ultimate settlement and defense costs for the then-existing claims are revised. In addition, the Company has recorded a liability of $349,000 on the consolidated balance
sheet relating to the open and active claims against BNS Co. as of December 31, 2004. This liability represents an estimate of the likely costs to defend against or settle these claims by BNS Co. beyond the amounts reserved by the insurance carriers
and previously funded, through the retroactive billings, by BNS Co. However, there can be no assurance that the Company will not need to take additional charges in connection with the defense, settlement or judgment of these existing claims.
Projecting the costs of future claims is subject to variables that are extremely difficult to predict, and there can be no assurance that the number of future claims and the related costs of defense, settlements or judgments will be consistent with
the experience to date relating to existing claims.



As of
February 28, 2005, no toxic tort or asbestos claims have been filed against BNS Holding which came into existence in December 2004 and has never conducted any active business operations. There can be no assurance, however, that monies received by
BNS Holding for its wholly-owned subsidiary by way of reimbursement for public company reporting costs that were formerly the responsibility of BNS Co. or by way of dividends or otherwise might not under some circumstances be subject to
claims against BNS Co.



It has become apparent that the
uncertain prospect of additional toxic tort claims being asserted in the future, and the impact of this uncertainty on the valuation of BNS Co., and hence on the Company, has had and may continue to have, at least for the short term, some adverse
effects on the Companys ability to determine any prospective distributions to shareholders or to negotiate a satisfactory sale, merger or other change in control transaction with a third party. These claims would also affect the ability of the
Company, or its BNS Co. subsidiary, to carry out a fairly rapid liquidation proceeding, either through a dissolution, formation of a liquidating trust and liquidation proceedings in the Chancery Court in Delaware, or in a Chapter 11 federal
bankruptcy reorganization proceeding, both of which would involve provisions for payments to creditors and contemplated distributions to stockholders.



The U.S. Senate has in the past considered a bill that would establish an asbestos trust fund. This fund would have been financed by affected companies
and insurers, and would have provided compensation to claimants. The current administration has recently expressed interest in reviving consideration of legislation relating to asbestos claims. However, no legislative action is currently under
consideration, and there can be no assurance that any such legislation will be passed or as to the impact on the Company of any such legislation as might become effective.



A Phase II environmental investigation on BNS Co.s former Rhode Island Property, completed in June 2002, indicated
certain environmental problems on the property. The results of the study showed that certain contaminants in the soil under the property and minor groundwater issues exceeded environmental standards set



37



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share and per share data)



by the Rhode Island Department of Environmental Management (RIDEM). After extensive testing, the BNS Co. subsidiary submitted a Remedial Action
Work Plan (RAWP) to RIDEM, and on November 7, 2002, RIDEM issued a letter approving the RAWP. In April of 2003, BNS Co. awarded a contract for the remediation work and engaged an environmental engineering firm to supervise the
remediation work and perform ongoing monitoring of the affected areas. The remediation work was substantially complete as of December 2003, and in connection with the August 26, 2003 sale of the Rhode Island Property, BNS Co. established an escrow
account in the amount of $.331 million to cover any additional remediation costs that may arise. At December 31, 2004, the balance of the escrow account was $.269 million. The BNS Co. subsidiary has obtained insurance against additional known and
unknown environmental liabilities at the Rhode Island Property. However, there is no assurance that BNS Co. will not incur additional costs for remediation above the escrowed amount and insurance limits, and that ongoing monitoring of contaminants
will not indicate further environmental problems.



In addition,
the BNS Co. subsidiary has obtained contaminated land insurance coverage to insure against unknown environmental issues relating to the former U.K. property, which was owned by the U.K. Subsidiary. In addition, BNS Co. received a report dated
October 2000, which was updated in July 2003, from an independent environmental consulting firm indicating no evidence of environmental issues relating to that property. However, there is no assurance that such issues will not be identified in the
future, whether such issues are identified through the actions of the land fill operator operating on the property or the buyer of BNS Co.s former U.K. Subsidiary or as the result of other factors, as the buyer continues to operate the
property as a land fill. With the sale by BNS Co. of the U.K. Subsidiary on June 16, 2004, there is no assurance that there will be no retained liabilities relating to the U.K. Property, although BNS Co. has made no environmental representations or
indemnifications under the applicable Purchase and Sale Agreement for the U.K. Subsidiary.



There have also been a few miscellaneous claims relating to employment activities, environmental issues, sales tax audits and personal injury claims.



In January 2003, BNS Co. reached a settlement and made a payment of $1.7 million to its former CEO and CFO to settle a
dispute as to the amount due him to settle a compensation arrangement which had not been finalized but was in the process of being finalized, and to resolve a severance dispute. This entire amount had been accrued as of December 31, 2002.



During 2002, BNS Co. settled a dispute with two former
executives as to the amounts due them under their Change-In-Control contracts that were triggered by the 2001 Hexagon transaction. The terms of the settlement of an arbitration proceeding included payment of a negotiated amount plus reasonable and
properly documented legal and accounting fees and disbursements incurred by the former employees. The Company had adequately provided for this liability.



|14. | LEASES
|--- | ------



The Company has a three year non-cancelable lease obligation for office space which began in 2003. Lease expense in 2004 was $26. Future minimum lease
payments under this lease aggregate $41. Of this amount, annual minimum payments are $29 and $12 for years 2005 through 2006, respectively.



38



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except share data)



|15. | QUARTERLY DATA (UNAUDITED)
|--- | --------------------------



|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|-------------------------------------------------------------------------- |  | ------------------------ | ----- | - | -------------- | - | ----- | -------------- |  | - | -------------- | - |  | -------------- | ----- | - |  | - | ----- | -
|                                                                           |  | PreviouslyReportedMar 31 |       |   | RestatedMar 31 |   |       | ReportedJun 30 |  |   | ReportedSep 30 |   |  | ReportedDec 31 |      
|2004                                                                       |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|Revenue                                                                    |  | $                        | 68    |   |                | $ |      |                |  | $ |               |   |  | $              |      |   |  | $ |      |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|Loss from continuing operations                                            |  |                          | (637  | ) |                |   | (701  | )              |  |   | (367           | ) |  |                | (681  | ) |  |   | (256  | )
|Income (loss) from discontinued operations, net of income taxes            |  |                          | (46   | ) |                |   | 18    |                |  |   | 9,342          |   |  |                | 52    |   |  |   | 1,363 |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|Net income (loss)                                                          |  | $                        | (683  | ) |                | $ | (683  | )              |  | $ | 8,975          |   |  | $              | (629  | ) |  | $ | 1,107 |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|Net income (loss) per share, basic and diluted, from continuing operations |  | $                        | (0.21 | ) |                | $ | (0.23 | )              |  | $ | (0.12          | ) |  | $              | (0.23 | ) |  | $ | (0.09 | )
|Discontinued operations                                                    |  |                          | (0.02 | ) |                |   |      |                |  |   | 3.12           |   |  |                | 0.02  |   |  |   | 0.45  |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  
|Net income (loss) per common share-basic and diluted                       |  | $                        | (0.23 | ) |                | $ | (0.23 | )              |  | $ | 3.00           |   |  | $              | (0.21 | ) |  | $ | 0.36  |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                |       |   |  |   |       |  



In June 2004, the
Company sold its U.K. Subsidiary and its real estate holdings in the U.K. As a result of this transaction, all activity related to the U.K. Subsidiary is required to be presented as discontinued operations for the three months ending March 31, 2004.



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##### Table of Contents

BNS Holding, Inc.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(dollars in thousands, except share data)



|15. | QUARTERLY DATA (UNAUDITED) (continued)
|--- | --------------------------------------



|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|-------------------------------------------------------------------------- |  | ------------------------ | ----- | - | -------------- | - | ----- | -------------- |  | - | -------------- | - |  | ------------------------ | ------ | - | -------------- | - | ----- | - |  | - | ----- | -
|                                                                           |  | PreviouslyReportedMar 31 |       |   | RestatedMar 31 |   |       | ReportedJun 30 |  |   | ReportedSep 30 |   |  | PreviouslyReportedDec 31 |        |   | RestatedDec 31 |  
|2003                                                                       |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|Revenue                                                                    |  | $                        | 188   |   |                | $ |      |                |  | $ |               |   |  | $                        |       |   |                | $ |      |   |  | $ |      |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|Loss from continuing operations                                            |  |                          | (449  | ) |                |   | (582  | )              |  | $ | (1,237         | ) |  |                          | (760   | ) |                |   | (559  | ) |  |   | (749  | )
|Income (loss) from discontinued operations, net of income taxes            |  |                          | 297   |   |                |   | 430   |                |  |   | 354            |   |  |                          | 15,318 |   |                |   | (47   | ) |  |   | 143   |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|Net income (loss)                                                          |  | $                        | (152  | ) |                | $ | (152  | )              |  | $ | (883           | ) |  | $                        | 14,558 |   |                | $ | (606  | ) |  | $ | (606  | )
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|Net income (loss) per share, basic and diluted, from continuing operations |  | $                        | (0.15 | ) |                | $ | (0.20 | )              |  | $ | (0.42          | ) |  | $                        | (0.25  | ) |                | $ | (0.19 | ) |  | $ | (0.26 | )
|Discontinued operations                                                    |  |                          | 0.10  |   |                |   | 0.15  |                |  |   | 0.12           |   |  |                          | 5.14   |   |                |   | (0.02 | ) |  |   | 0.09  |  
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  
|Net income (loss) per common share-basic and diluted                       |  | $                        | (0.05 | ) |                | $ | (0.05 | )              |  | $ | (0.30          | ) |  | $                        | 4.89   |   |                | $ | (0.21 | ) |  | $ | (0.17 | )
|                                                                           |  |                          |       |   |                |   |       |                |  |   |                |   |  |                          |        |   |                |   |       |   |  |   |       |  



In June 2004, the
Company sold its U.K. Subsidiary and its real estate holdings in the U.K. As a result of this transaction, all activity related to the U.K. subsidiary is required to be presented as discontinued operations for all periods presented. The previously
reported results included in the Companys Form 10-Q for the three months ending March 31, 2003, June 30, 2003, September 30, 2003 are restated here to reflect the classification of the U.K. subsidiary as discontinued operations.



On August 2003, the Company sold its North Kingstown Facility. As a result of
this transaction, all activity related to the North Kingstown Facility is required to be presented as discontinued operations for all periods presented. The previously reported results included in the Companys Form 10-Q for the three months
ending March 31, 2003 and June 30, 2003 are restated here to reflect the classification of the North Kingstown Facility as discontinued operations.



|16. | SUBSEQUENT EVENTS
|--- | -----------------



On March 14, 2005, the Company was informed by the U.K. Inland Revenue Service that the Company is not liable for any corporation tax on capital gains
resulting from the 2004 sale of the Companys U.K. Subsidiary. The Company was also informed that the condition giving rise to its contingent liability relating to the sale of the Metrology Business in 2001 has been resolved. Accordingly, a
$1.3 million reserve for this contingency, classified as a long term liability on the Companys Consolidated Balance Sheets, has been reversed and recorded as a gain included in Discontinued Operations for the year ending December 31, 2004.



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##### Table of Contents

ITEM 9CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES



None.



ITEM 9ACONTROLS AND PROCEDURES



The Companys management, which consists of the Companys President and Chief Executive Officer who is also the Companys Chief Financial Officer, has evaluated the Companys disclosure controls and procedures as of
December 31, 2004, and has concluded that these controls and procedures are effective. There have been no significant changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect,
the Companys internal control over financial reporting.



ITEM 9BOTHER INFORMATION



None.



PART III



ITEM 10DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT



Directors.



The
following table summarizes information regarding directors of the Company as of February 28, 2005. The directors service as a director of BNS Co. prior to the December 14, 2004 Holding Company Reorganization is included when determining the
year the director was first elected as a director of the Company.



|                        |  |                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|----------------------- |  | ------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name (Age)              |  | YearFirstElectedaDirector |  | Principal Occupation During Last Five Years and Directorships inPublic Reporting and Other
Companies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|Richard M. Donnelly(61) |  | 1999                      |  | Currently a principal in the firm of Donnelly Associates, a consulting firm to manufacturing industries, and an industrial Partner in Ripplewood Holdings, private equity investors; from 1995 to
1998, President of General Motors Europe; Formerly a Director of: Powerway, Inc., a privately-held software company; currently a director of Oshkosh Truck Corp., and Capstone Turbine Corporation (NASDAQ-listed); and Chairman of the Board of Niles
Parts Co. Ltd., Japan, a private company majority owned by Ripplewood Holdings; and a director of AsahiTec, a publicly traded Japanese company majority owned by Ripplewood Holdings; and Chairman of HIT, a Belgium-based casting company owned by
Ripplewood Holdings, LLC.
|                        |  |                          
|J. Robert Held(65)      |  | 1996                      |  | Currently a consultant to the computer industry; from 1988 to 1995, President, Chief Executive Officer, and a Director of Chipcom Corporation, a computer communications company; Currently a
Director of: Art Technology Group, a public (NASDAQ-listed) CRM company, and Azimuth Inc., a start-up in the wireless market; until 2004, a director of e-studio, a web casting business, and ESI, a software company.                                                                                                                                                                                                                                                                                                                  



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|                      |  |                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--------------------- |  | ------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name (Age)            |  | YearFirstElectedaDirector |  | Principal Occupation During Last Five Years and Directorships inPublic Reporting and Other
Companies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|James Henderson (47)  |  | 2004                      |  | From March 2002 to present, Vice President, Steel Partners, Ltd., a management and advisory company; from August 1999 to March 2002, Vice President, Steel Partners Services, Ltd.; from November
2003 to present, President and COO and from September 2003 Vice President of Operations, WebFinancial Corporation, a commercial and consumer lender (public company); from January 2000 to present, Director, WebBank, an FDIC Insured Utah Industrial
Loan Corp.; from December 2001, President, Gateway Industries, Inc, a database development and website design & development services firm (public company); from January 2002, Director, SL Industries, Inc., a manufacturer and marketer of Power
and Data Quality systems and equipment; from November 2003, Director, Del Global Technologies Corp., a manufacturer and marketer of medical imaging equipment & power conversion subsystems; from December 1999 to September 2003 and from July 2002
until March 2003, a Director and acting CEO, respectively, of ECC International Corp. a manufacturer and marketer of computer controlled simulators for military weapons; from January 2001 to August 2001, President, MDM Technologies, Inc, a direct
mail & marketing company; from October 1998 to June 1999, President and COO and various other positions, Aydin Corp.
|                      |  |                          
|Jack Howard(43)       |  | 2004                      |  | From October 1993 to present, representative, Steel Partners II, LP and since March 2003, Vice President of Steel Partners, L.L.C., the general partner of Steel Partners II, LP; from 1996 to
present, Director and from 1997, Vice President, Web Financial Corp., a commercial and consumer lender (public company); from January 1989 to present, Principal, Mutual Securities, Inc., a registered broker-dealer.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                      |  |                          
|Kenneth N. Kermes(69) |  | 2000                      |  | Chairman of the Board of Directors of BNS Holding since December 2004 and from May 2001 to December 2004, Chairman of the Board of BNS Co.; From January 2004 to September, 2004, Director of
Major Gifts, Advancement Department of the University of Rhode Island; From April 2002 to January 2004, Vice President of Planning and Service Development, South County Hospital; from May 2001 to April 2002, Partner of SeaView Capital, a private
equity firm; from May 2000 to May 2001, Interim President and Chief Executive Officer of BNS Co.; from 1999 to 2000, Partner of SeaView Capital, a private equity firm; from 1998 to 1999, partner of Bay View Equity Partners, a private equity firm;
from 1994 to 1998, Vice President for Business and Finance and Chief Financial and Administrative Officer, University of Rhode Island; from 1998 to date, Director, AT Wall, a metal stamping company; from 1996 to date, director of Bradford Soap
International, a soap manufacturing company.                                                                                                                                                                                                                                                                                                                                 



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Messrs. Howard and Henderson were both recommended to the Board by Steel Partners II, L.P.
(Steel) which holds approximately 38.8% of the Companys Class A Common Stock at February 14, 2005. Mr. Henderson is the Vice President of Steel Partners, Ltd., which provides financial, management advisory, and clerical services to
Steel and several other entities, and Mr. Howard is the Vice President of Steel Partners, L.L.C., the general partner of Steel, and has served as a representative of Steel. The Company is party to a Confirmatory Agreement with Steel, as described
below in Item 13 of this Annual Report.



Executive Officers



The following table summarizes information regarding Executive Officers
of the Company as of February 28, 2005.



|               |  |     |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-------------- |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Name           |  | Age |  | Positions Held During the Last Five Years                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|Michael Warren |  | 54  |  | Since January 24, 2003, President & CEO and since December 20, 2002 Vice President & CFO, of BNS Co. (and of BNS Holding after December 13, 2004); from 2000 to present, President,
Michael Warren Associates, Inc., management consulting firm; from 2000 to 2002, Consultant, Resources, Inc., management consulting firm; from 1997 to 2000, Executive Vice President, U.S. Restaurant Properties, Inc., real estate investment trust;
from 1996 to 1997, Vice President and CFO, South East Fast Food Partners, Inc., a food services corporation.



Each executive officer
holds office until the first meeting of the Board of Directors following the next Annual Stockholders meeting and until his successor is elected or appointed and qualified, unless he dies, resigns, is removed or replaced.



Section 16(a) Beneficial Ownership Reporting Compliance



Based on a review of Forms 3, 4 and 5 furnished to the Company since January
1, 2004, the Company believes that all officers and directors required to file Forms 3, 4 and 5 have filed on a timely basis with respect to transactions reportable for the year 2004.



Audit Committee



The Board of Directors maintains a standing Audit Committee. The Audit Committee of BNS Holding, since December 20, 2004, has been composed of Messrs.
Kermes, Chairman, Donnelly and Held, and prior to December 20, 2004, the Audit Committee of BNS Holding (and BNS Co. prior to December 14, 2004) was composed of Messrs. Kermes, Chairman, Henry D. Sharpe III and Held. The current members of the Audit
Committee satisfy the independence requirements and other established criteria by the Boston Stock Exchange and the Securities and Exchange Commission. The Board of Directors has determined that Mr. Kermes, Chairman of the Audit Committee, is an
audit committee financial expert.



Code of Business Conduct and
Ethics



The Company has adopted a Code of Business Conduct
and Ethics (Code of Ethics), which was adopted by the Company in connection with the Holding Company Reorganization. The Code of Ethics, in accordance with Section 406 of the Sarbanes-Oxley Act of 2002 and Item 406 of Regulation S-K,
constitutes the Companys Code of Ethics for Senior Financial Officers. The Code of Ethics is intended to promote honest and ethical conduct, full and accurate reporting, and compliance with laws as well as other matters. A copy of the Code of
Ethics was included as Exhibit 14.1 to the Companys Annual Report on Form 10-K for fiscal year ended December 31, 2003. A printed copy of the Code of Ethics may also be obtained free of charge by writing to the Corporate Secretary at BNS
Holding, Inc., 25 Enterprise Center, Suite 103, Middletown, Rhode Island 02842.



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##### Table of Contents

ITEM 11EXECUTIVE COMPENSATION



Director
Compensation



On February 23, 2004, the Board of BNS Co.
voted to pay, as payment of the Director Retainer Fee for the year 2004, an award of 1,000 restricted shares of Class A Common Stock, granted under the 1999 Equity Incentive Plan (the 1999 EIP), plus $15,000 in cash to each director in
office on January 1, 2004. On January 20, 2005, the Board of BNS Holding voted to pay, as payment of the Director Retainer Fee for the year 2005, an award of 1,000 restricted shares of Class A Common Stock, granted under the 1999 EIP, plus $15,000
in cash to each director in office on January 1, 2005. No additional retainer is paid to directors who are chairpersons of a committee. See Option/SAR Grants below regarding the vesting terms of these restricted stock grants.



For attendance at meetings during 2004 and 2005, each director receives a
fee of $750 for each Board meeting attended and $500 for each Committee meeting attended as well as a fee of $375 for each teleconference Board meeting, and $250 for each teleconference Committee meeting, which lasts more than one-half hour in
duration.



In connection with the retirement of Roger E. Levien
from the Board of Directors in December 2004, the Board of BNS Holding voted to make a payment to him of $15,500 for past service and foregone directors compensation. Mr. Levien was first elected as a director in 1996.



Executive Compensation



The following table sets forth the annual and long-term compensation during each of the last three fiscal years of Michael
Warren, the President, Chief Executive Officer and Chief Financial Officer of BNS Co. and, after December 14, 2004, of BNS Holding. Michael Warren became BNS Co.s President and Chief Executive Officer on January 24, 2003. Mr. Warren is not an
employee but joined BNS Co. first as a consultant and then as its CFO in December 2002. Mr. Warrens compensation is set forth in the table and detailed under Employment, Severance and other Agreements below. Any compensation
reported in one year is not reported as compensation for a subsequent year.



Summary Compensation Table



|                                          |  |                     |  |                               |  |                 |  |                              |  |                             |  |                                      |  |                 |  |                         
|----------------------------------------- |  | ------------------- |  | ----------------------------- |  | --------------- |  | ---------------------------- |  | --------------------------- |  | ------------------------------------ |  | --------------- |  | ------------------------
|                                          |  |                     |  | Long-Term Compensation Awards
|                                          |  | Annual Compensation |  | Awards                        |  | Payouts        
|(a)                                       |  | (b)                 |  | (c)                           |  | (d)             |  | (e)                          |  | (f)                         |  | (g)                                  |  | (h)             |  | (i)                     
|Name andPrincipal Position                |  | Year                |  | Salary ($)                    |  | Bonus ($)       |  | OtherAnnualCompen-sation ($) |  | RestrictedStockAward(s) ($) |  | SecuritiesUnderlyingOptions/SARs (#) |  | LTIPPayouts ($) |  | AllOtherCompen-sation($)
|Michael Warren President, CEO, and CFO(1) |  | 200420032002        |  | 164,313201,52410,980          |  | 147,675404,000 |  |                           |  |                          |  |                                   |  |              |  |                      

---

|(1) | Mr. Warren acts as a consultant to BNS Holding (and BNS Co. prior to December 14, 2004) pursuant to an agreement between Michael Warren Associates Inc. and BNS Co. (and after
December 14, 2004, BNS Holding). Column (c) represents his consulting fees for 2002, 2003 and 2004. Column (d) represents incentive compensation payments made as a result of the sale of BNS Co.s Rhode Island Property in 2003 and the sale of
the U.K. Subsidiary in 2004.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Option/SAR Grants



Under provisions of the Companys 1999 EIP which was
approved by the stockholders of BNS Co. on April 30, 1999, and adopted by BNS Holding on December 14, 2004 as part of the Holding Company



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##### Table of Contents

Reorganization, a variety of stock and stock based awards, performance cash awards and related benefits, including stock options, both qualified incentive
and non-qualified options, and stock appreciation rights (SARs), may be awarded to executive officers, other key employees of the Company and its subsidiaries, and directors. No options were awarded to any person under the 1999 EIP in
2004 and no SARs have ever been granted under the plan.



On
April 8, 2003, an aggregate of 35,000 shares of restricted stock were awarded to directors in payment of the Director Retainer Fee for the 2003 year, although two of the directors forfeited 5,000 shares each in connection when one director (John M.
Nelson) retired early in June 2004 and the other director (Howard K. Fuguet) decided not to run for re-election at the 2004 Annual Meeting. The remaining 25,000 shares vested on July 21, 2004.



On February 23, 2004, an aggregate of 7,000 shares of restricted stock were
awarded to directors in partial payment of the retainer fee for the 2004 year, although four of the directors (John M. Nelson, Howard K. Fuguet, Henry D. Sharpe III and Roger E. Levien) forfeited their shares in connection with their retirement from
the Board in 2004. These restricted shares are subject to forfeiture and do not vest until the director has continuously served as a director through April 30, 2005.



On January 24, 2005, an aggregate of 5,000 shares of restricted stock were awarded to five directors in partial payment of
the retainer fee for the 2005 year. These restricted shares are subject to forfeiture and do not vest until the director has continuously served as a director through January 24, 2006.



The forfeiture restrictions on restricted stock granted in both February 2004 and January 2005 will lapse and the shares
will vest immediately prior to termination of service as a director on account of death or disability or, if earlier, on the day immediately prior to the happening of certain events, namely, a merger or other business combination or other change in
control transaction, dissolution or filing by the Company under the bankruptcy laws. Prior to vesting or forfeiture of the restricted shares, directors are entitled to receive dividends and to vote the shares.



Aggregated Option Exercises and Fiscal Year-End Values



There are no outstanding options being held and no options were exercised by
the named executive officer at fiscal year end 2004.



Retirement Plans



At December 31, 2004, the Company had no retirement plans
or arrangements calling for payments under employment agreements, severance agreements or change-in-control payments other than the Companys agreement with Michael Warren Associates, Inc. as described below.



Employment, Severance, and Other Agreements



Michael Warren Associates Agreements



From December 1 to December 20, 2002, Michael Warren, and his firm Michael
Warren Associates, Inc., was engaged as a management consultant to the Company pursuant to the terms of his November 20, 2002 engagement letter (the 2002 Warren Agreement). Mr. Warren became Vice President and Chief Financial Officer
effective December 20, 2002 and, in addition, was elected President and Chief Executive Officer effective January 24, 2003. Under the 2002 Warren Agreement, Mr. Warren provided general management consulting services, served as President, CEO and CFO
and performed such other duties as were from time to time agreed upon.



45



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Mr. Warrens compensation during 2004 was based on the terms of his 2002 Warren Agreement, which was
amended on January 24, 2003, April 8, 2003, November 3, 2003 and February 23, 2004. The term of the 2002 Warren Agreement ended on December 31, 2004. Under that agreement, Mr. Warrens compensation is based on a rate of $180 per hour. Under the
2002 Warren Agreement, Mr. Warren received a $404,000 incentive payment in connection with the sale of the Companys Rhode Island Property on August 26, 2003 and a $147,675 incentive payment in connection with the sale of the U.K. Subsidiary,
which closed on June 16, 2004.



Mr. Warrens compensation
during fiscal 2005 is based on the terms of a new consulting agreement with Michael Warren Associates, Inc. dated as of March 7, 2005 (the 2005 Warren Agreement), which replaced the expired 2002 Warren Agreement. Under the 2005 Warren
Agreement, Mr. Warren provides general management consulting services, serves as President, CEO and CFO and performs such other duties as may from time to time be agreed upon. The term of the 2005 Warren Agreement is through December 31, 2005,
unless earlier terminated by Mr. Warren or the Company on 30 days notice. The 2005 Warren Agreement is terminable immediately for cause, as defined in the 2005 Warren Agreement, by the Company. Under the agreement, Mr.
Warrens compensation is based on a rate of $200 per hour. Also under the agreement, Mr. Warren is entitled to additional incentive compensation in the form of a cash bonus in an amount equal to no more than 40% of his firms billings
during the twelve months preceding the Trigger Date of the bonus. The Trigger Date is defined to be the earlier of a) the date on which the Company is sold (provided that the Company is sold during the term of the 2005 Warren
Agreement or within 60 days thereafter), b) the date on which the Company completes the acquisition of another operating company or the assets of another company (provided such acquisition is completed during the term of the 2005 Warren Agreement or
within 60 days thereafter), or c) termination of the 2005 Warren Agreement by the Company other than for cause. The final amount of the bonus will be based on a formula mutually agreed to by Mr. Warren and the Chairman of the Board of
Directors of the Company.



Compensation Committee Interlocks
and Insider Participation



During the year 2004, decisions
with respect to the compensation of the executive officers were made by the Nominating, Compensation and Corporate Governance Committee of BNS Co. (through December 13, 2004) and by Nominating, Compensation and Corporate Governance Committee of BNS
Holding, Inc. after December 13, 2004. This committee was formed by the Board of Directors of BNS Co. on February 23, 2004, when BNS Co.s Compensation and Nominating Committee and the Corporate Governance Committee were combined. During year
2004, the Nominating, Compensation and Corporate Governance Committee of BNS Co. (and then BNS Holding, Inc.) was composed of Messrs. Held, Chairman, Donnelly, Howard, and until his retirement in December 2004, Levien. No member of the Compensation
Committee was an officer of the Company (or any subsidiary) nor is any officer of the Company (or any subsidiary) a member of the compensation committee (or similar body) for any employer of the Companys (and prior to December 14, 2004, BNS
Co.s) Nominating, Compensation and Corporate Governance Committee members.



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##### Table of Contents

ITEM 12
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



|I. | Security Ownership of Certain Beneficial Owners
|-- | -----------------------------------------------



Set forth below, as of February 14, 2005 are the persons or groups known to the Company who beneficially own, under the applicable rules and regulations
of the Securities and Exchange Commission, more than 5% of any class of the Companys voting securities.



|                                                                                                                               |  |                              |  |                                          |  |                 |  |       |  
|------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------- |  | ---------------------------------------- |  | --------------- |  | ----- | -
|Name and Addressof Beneficial Owner                                                                                            |  | Title of Classof CommonStock |  | Amount and NatureOf Beneficial Ownership |  | Percent OfClass | 
|                                                                                                                               |  | Direct                       |  | Indirect                                 | 
|Steel Partners II, L.P.(1) 590 Madison Avenue, 32ndFloor New York, NY 10022                                                    |  | Class AClass B               |  | 1,171,880                               |  |               |  | 38.8 | %
|                                                                                                                               |  |                              |  |                                         
|Warren G. Lichtenstein(1) Chairman, CEO, and Secretary Steel Partners, L.L.C. 590 Madison Avenue, 32ndFloor New York, NY 10022 |  | Class AClass B               |  |                                        |  | 1,171,880      |  | 38.8 | %
|                                                                                                                               |  |                              |  |                                         
|Jack Howard(1) Representative of Steel Partners II, L.P. 590 Madison Avenue, 32ndFloor New York, NY 10022                      |  | Class AClass B               |  | 1,000                                   |  | 600            |  | *    |  
|                                                                                                                               |  |                              |  |                                         
|James Henderson(1) Vice President, Steel Partners, Ltd. 590 Madison Avenue, 32ndFloor New York, NY 10022                       |  | Class AClass B               |  | 1,000                                   |  |               |  | *    |  
|                                                                                                                               |  |                              |  |                                         
|Ingalls & Snyder LLC(2) 61 Broadway New York, NY 10006                                                                         |  | Class AClass B               |  | 282,260                                 |  |               |  | 9.4  | %
|                                                                                                                               |  |                              |  |                                         
|William Reed Simmons, Managing Director of Ingalls & Snyder LLC(2) 61 Broadway New York, NY 10006                              |  | Class AClass B               |  | 262,260                                 |  |               |  | 8.7  | %
|                                                                                                                               |  |                              |  |                                         
|Dimensional Fund Advisors Inc.(3) 1299 Ocean Avenue 11thFloor Santa Monica, CA 90401                                           |  | Class AClass B               |  | 182,108                                 |  |               |  | 6    | %

---

|* | less than one percent (1%)
|- | --------------------------



|(1) | Steel Partners II, L.P., a Delaware limited partnership whose principal business is investing in the securities of small cap companies, has sole voting and dispositive power and is
deemed to have beneficial ownership of the reported shares. Steel Partners, L.L.C., is a Delaware limited liability company whose principal business is acting as the general partner of Steel Partners II, L.P. Warren G. Lichtenstein is the Chairman,
CEO, Secretary and the sole executive officer and managing member of Steel Partners L.L.C. By virtue of his relationships with these partnerships and Steel Partners L.L.C.s relationship with Steel Partners II, L.P., both are deemed to have
beneficial ownership of the reported shares. Mr. Lichtenstein also has sole voting and dispositive power over the reported shares. As representatives of Steel Partners II, L.P., Messrs. Howard and Henderson may be deemed members of the Section 13(d)
reporting Group. Mr. Howard, who has sole voting and dispositive power over his 1,600 shares, holds 600 shares through JL Howard, Inc., an entity controlled by Mr. Howard, which may also be deemed a member of the Group, and 1,000 shares directly.
Mr. Henderson has sole voting and dispositive power over his 1,000 shares. Messrs. Howard and Henderson claim no voting or dispositive power over the Steel Partners II, L.P. shares.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

|(2) | Ingalls & Snyder LLC (I&S), a registered broker-dealer and investment advisor, is deemed to have beneficial ownership over the aggregate 282,260 shares reported,
which are comprised of 41,000 shares held in the accounts of William Reed Simmons (who is a Managing Director of I&S) and certain members of his immediate family and 241,260 shares held in the accounts of I&S customers which I&S has
discretionary authority. Mr. Simmons may be deemed to be the beneficial owner of 262,260 shares, which are comprised of the 41,000 shares mentioned above and 221,260 shares held in accounts of I&S customers which he has discretionary authority
over. I&S has sole voting and dispositive power over 20,000 shares and has shared dispositive power over 262,260 shares. Mr. Simmons has sole voting and dispositive power over 41,000 shares and has shared dispositive power over 221,260 shares.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Dimensional Fund Advisors Inc. (Dimensional), a registered investment advisor, has sole voting and dispositive control over and is deemed to have beneficial ownership of
the reported shares, all of which shares are held in portfolios of various registered investment companies and trusts, all of which Dimensional Fund Advisors Inc. serves as investment manager or advisor. Dimensional disclaims beneficial ownership of
all such shares.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|II. | Security Ownership of Management
|--- | --------------------------------



The following table and accompanying footnotes set forth certain information about the beneficial ownership of the Companys Class A Stock and Class
B Stock as of February 14, 2005 by the directors as a group.



|                                                                                    |  |                              |  |                                        |  |      |                |  |      |  
|----------------------------------------------------------------------------------- |  | ---------------------------- |  | -------------------------------------- |  | ---- | -------------- |  | ---- | -
|Name of Beneficial Owner                                                            |  | Title of Classof CommonStock |  | Amount andNatureof BeneficialOwnership |  |      | PercentOfClass | 
|                                                                                    |  | Direct                       |  | Indirect                               |  |     
|J. Robert Held                                                                      |  | Class AClass B               |  | 18,800                                |  |    |                |  | *   |  
|                                                                                    |  |                              |  |                                       
|Richard A. Donnelly                                                                 |  | Class AClass B               |  | 17,000                                |  |    |                |  | *   |  
|                                                                                    |  |                              |  |                                       
|Kenneth N. Kermes                                                                   |  | Class AClass B               |  | 47,000                                |  |    |                |  | 1.5 | %
|                                                                                    |  |                              |  |                                       
|Jack Howard(1)                                                                      |  | Class AClass B               |  | 1,000                                 |  | 600 | (2)            |  | *   |  
|                                                                                    |  |                              |  |                                       
|James Henderson(1)                                                                  |  | Class AClass B               |  | 1,000                                 |  |    |                |  | *   |  
|                                                                                    |  |                              |  |                                       
|Michael Warren                                                                      |  | Class AClass B               |  |                                      |  |    |                |  |    |  
|                                                                                    |  |                              |  |                                       
|All Directors, nominees for Directors and Executive Officers as a Group (6 persons) |  | Class AClass B               |  | 84,800                                |  | 600 |                |  | 2.8 | %

---

|* | Less than one percent (1%)
|- | --------------------------



|(1) | Messrs. Henderson and Howard along with JL Howard, Inc. may be deemed to be members of a Section 13(d) group comprised of Steel Partners II, L.P., Steel Partners L.L.C. and Warren
G. Lichtenstein. The ownership of Steel Partners II, L.P. of shares of Common Stock of the Company as well as the ownership of Mr. Lichtenstein of shares of Common Stock of the Company is set forth in the Security Ownership of Certain
Beneficial Owners table above.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Mr. Howard holds these 600 shares through a holding company, JL Howard Inc., but he has sole voting authority over the shares.
|--- | ------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

Securities Authorized For Issuance Under Equity Compensation Plan



The following table gives information about the Companys Common Stock
that may be issued upon the exercise of options, warrants and rights under the 1999 Equity Incentive Plan as of December 31, 2004, which was adopted by BNS Holding, Inc. in connection with the Holding Company Reorganization in December 2004. The
1999 Equity Incentive Plan was approved by stockholders on April 30, 1999.



|                                                           |  |                                                                                       |  |                                                                          |  |                                                                                                                                       |    
|---------------------------------------------------------- |  | ------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------- | ---
|Plan Category                                              |  | Number ofSecurities to beIssued UponExercise ofOutstandingOptions, Warrantsand Rights |  | Weighted-AverageExercise Price ofOutstanding Options,Warrants and Rights |  | Number of SecuritiesRemaining Available forFuture Issuance UnderEquity CompensationPlans (ExcludingSecurities Reflected inColumn
(a)) |    
|                                                           |  | (a)                                                                                   |  | (b)                                                                      |  | (c)                                                                                                                                   |    
|Equity compensation plans approved by security holders     |  | 0                                                                                     |  | 0                                                                        |  | 96,645                                                                                                                                | (1)
|Equity compensation plans not approved by security holders |  | 0                                                                                     |  | 0                                                                        |  | 0                                                                                                                                     |    
|                                                           |  |                                                                                       |  |                                                                          |  |                                                                                                                                       |    
|Total                                                      |  |                                                                                       |  |                                                                          |  | 96,645                                                                                                                                |    

---

|(1) | 96,645 shares remain available for issuance under the 1999 Equity Incentive Plan as of December 31, 2004.
|--- | ---------------------------------------------------------------------------------------------------------



ITEM 13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



Michael Warren Associates Agreement.The Company was party to an agreement with Michael Warren Associates, Inc. concerning the compensation of Mr. Warren during 2002-2004. In 2005, the Company entered into a
new agreement with Michael Warren Associates, Inc. concerning Mr. Warrens compensation for 2005. See Employment, Severance, and Other Agreements: Michael Warren Associates, Inc. Agreements above in this Annual Report.



Confirmatory Agreement with Steel Partners II, L.P. In December
2004, the Company entered into a Confirmatory Agreement (the Confirmatory Agreement) with Steel Partners II, L.P. (Steel), a stockholder of the Company. On February 14, 2005, Steel held approximately 1,171,880 shares of the
Companys Class A Stock (representing approximately 38.8% of the combined outstanding Class A and Class B Common Stock of the Company). The Confirmatory Agreement (including the Companys obligations thereunder) will terminate on December
31, 2009.



Pursuant to the Confirmatory Agreement, Steel has
agreed that, until the elections for directors are held at the 2006 Annual Meeting of Stockholders of the Company, Steel and its affiliates will vote all shares of Common Stock beneficially owned by them in favor of directors who are not affiliated
with, nor are representatives of, Steel (the Non-Steel Representatives) so that at least 60% of the Companys directors are Non-Steel Representatives. The Non-Steel Representatives to be elected at any such stockholder meeting will
be recommended by a newly formed Existing Non-Steel Representatives Directors Committee. This committee, when formed, will consist of Messrs. Donnelly, Held and Kermes.



Steel has also agreed in the Confirmatory Agreement that at the 2006 Annual Meeting, and at each meeting of stockholders
held thereafter prior to December 31, 2009 where directors are elected, Steel will vote its and its affiliates shares to elect at least two Non-Steel Representatives as directors who will be the same as two of the three Non-Steel
Representatives on the Existing Non-Steel Representatives Directors Committee, or successors designated by them as Post 2006 Non-Steel Representatives Nominees (as defined below), or elect at least two Non-Steel Representatives selected by Steel if
there are no Post 2006 Non-Steel Representatives Nominees designated by the Existing Non-Steel Representatives Directors Committee available for election as the Post 2006 Non-Steel Representatives Directors. The Post 2006 Non-Steel Representatives
Directors will include any



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##### Table of Contents

two of Messrs. Kermes, Donnelly and Held, or any successors previously designated by them (the Post 2006 Non-Steel Representatives Nominees) as
long as they remain qualified as Non-Steel Representatives and are willing to serve as directors of the Company and at least two of the Post 2006 non-Steel Representatives Nominees, or successors designated by them from time to time after the
elections at the 2006 Annual Meeting, constitute the Post 2006 Non-Steel Representatives Directors Committee.



In the event that none or only one of the Post 2006 Non-Steel Representatives Nominees, and successors designated by them, are willing and able to stand
for election as Independent Directors, then a committee of the then Non-Steel Representatives of the Board of Directors will nominate a replacement (or replacements, if applicable) candidate (or candidates, as applicable) to fill the Non-Steel
Representatives positions on the Board of Directors. Under the terms of the Confirmatory Agreement, there will be two Non-Steel Representatives on the Board of Directors at all times following the 2006 Annual Meeting through December 31, 2009.
However, in the event that there are no Post 2006 Non-Steel Representatives Directors (or a successor designated by them) or any Post 2006 Non-Steel Representatives Nominees for the Non-Steel Representatives Directors Committee at a given time, then
the remaining directors will (after good faith consultation with any available Post 2006 Non-Steel Representatives Nominees) select the new Non-Steel Representatives Directors.



The Confirmatory Agreement further provides that the approval of the Non-Steel Representatives will be required, or in
certain circumstances the approval of the stockholders, subject to certain exceptions (all as set out in the Confirmatory Agreement) before the adoption or consummation of certain actions, including the following: (1) entering into any contract,
arrangement, understanding or transaction between Steel and the Company; (2) further amending, modifying or repealing of the Companys Rights Plan after the December 2004 amendment, and (3) any amendment, modification or repeal of the
Confirmatory Agreement.



Until the election of directors at the
2006 Annual Meeting, the Board of Directors then in office will not, without the prior approval of at least 66.7% of the members of the Board of Directors then in office, (a) form an executive committee, (b) increase the size of the Board of
Directors above five directors, (c) approve any executive compensation, including option or stock grants to executives, (d) remove a director without cause, or (e) take any other action that would adversely affect the rights and powers of the Steel
representatives as directors or take any action that would adversely affect the rights and powers of the Non-Steel Representatives as directors.



The Company has agreed in the Confirmatory Agreement to recommend election of two representatives of Steel for election as directors at the 2005 Annual
Meeting of Stockholders and the 2006 Annual Meeting of Stockholders. Messrs. Henderson and Howard have been designated by Steel as its representatives for election to the Board at the 2005 Annual Meeting.



Howard K. Fuguet. The law firm of Ropes & Gray LLP, Boston,
Massachusetts, has provided legal services to the Company since 1957. Howard K. Fuguet, who served as a director of BNS Co. until his retirement at the 2004 Annual Meeting, was a partner at Ropes & Gray.



ITEM 14PRINCIPAL ACCOUNTANT FEES AND SERVICES



The following table presents fees paid by the Company for professional services rendered by Ernst & Young LLP for the fiscal years 2004 and 2003.



|                   |  |                  |         |                  |   |       
|------------------ |  | ---------------- | ------- | ---------------- | - | ------
|Fee Category       |  | Fiscal 2004 Fees |         | Fiscal 2003 Fees
|Audit Fees         |  | $                | 86,500  |                  | $ | 88,000
|Audit-Related Fees |  |                  | 10,000  |                  |   | 8,000 
|Tax Fees           |  |                  | 40,000  |                  |   | 0     
|                   |  |                  |         |                  |   |       
|Total Fees         |  | $                | 136,500 |                  | $ | 96,000



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##### Table of Contents

Audit Fees were for professional services rendered for the audit of the Companys
consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Ernst & Young LLP in connection with statutory and regulatory filings or
engagements.



Audit-Related Fees were for assurance and
related services that are reasonably related to the performance of the audit or review of the Companys consolidated financial statements and are not reported under Audit Fees. These services include employee benefit plans audits
and consultations concerning financial accounting and reporting matters not classified as audits.



Tax Fees were for professional services for U.K. tax advice and tax planning.



There were no fees paid to Ernst & Young LLP in either 2004 or 2003 related to other services. No fees were paid to
Ernst & Young LLP for financial information systems design or implementation services during 2004 or 2003.



The Companys Audit Committee has not established any pre-approval procedures, but instead reviews each proposed engagement to determine whether the
provision of services is compatible with maintaining the independence of the independent auditors. Pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. All of the fees shown
above were pre-approved by the Audit Committee.



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PART IV



ITEM 15EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K



(a) (1) and (2) List of Financial Statements and Financial Statement Schedules



Financial Statements filed in Item 8 of this Annual Report:



Consolidated Statements of Operations for the Years Ended December 31, 2004, 2003 and 2002



Consolidated Balance Sheets at December 31, 2004 and 2003



Consolidated Statements of Cash Flows for the Years Ended December 31, 2004,
2003 and 2002



Consolidated Statements of Shareowners
Equity for the Years Ended December 31, 2004, 2003 and 2002



Notes to Consolidated Financial StatementsDecember 31, 2004



All schedules for which provision is made in the applicable accounting regulations of the SEC are omitted because they are not required, are not applicable, or the information is included in the financial statements.



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##### Table of Contents

Exhibit Index



|       |  |                                                                                                                                                                                                                                                                                                                                                                             
|------ |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                                                                                                                                                                                                                     
|       | 
|3.1    |  | Agreement and Plan of Merger by and between BNS Co., BNS Holding, Inc. and BNS Holdings Merger Sub, Inc., filed as Exhibit 99.1 to the
Report on Form 8-K dated December 14, 2004, which is hereby incorporated by reference.                                                                                                                                               
|       | 
|3.2    |  | Amended and Restated Certificate of Incorporation of BNS Holding, Inc. as filed with Secretary of State of the State of Delaware on
December 13, 2004 filed as Exhibit 99.2 to the Report on Form 8-K dated December 14, 2004, which is hereby incorporated by reference.                                                                                                   
|       | 
|3.3    |  | Amended and Restated By-laws of BNS Holding, Inc., filed as Exhibit 99.3 to the Report on Form 8-K dated December 14, 2004, which is hereby
incorporated by reference.                                                                                                                                                                                                      
|       | 
|+10.1  |  | Amended Profit Incentive Plan, as amended through February 14, 1994. Exhibit 10.5 was filed as Exhibit 10.53 to the Form 10-K for the year
ended December 31, 1994, and is hereby incorporated by reference.                                                                                                                                                                
|       | 
|+10.2  |  | Form of Indemnity Agreement with Alfred J. Corso dated May 3, 1995. Exhibit 10.6 was filed as Exhibit 10.62 to the Form 10-Q for the
quarter ended September 30, 1995, and is hereby incorporated by reference.                                                                                                                                                             
|       | 
|+10.3  |  | Form of Indemnity Agreement with Harry A. Hammerly dated October 25, 1996.                                                                                                                                                                                                                                                                                                  
|       | 
|+10.4  |  | Form of Indemnity Agreement with John Robert Held dated October 25, 1996.                                                                                                                                                                                                                                                                                                   
|       | 
|+10.5  |  | Form of Indemnity Agreement with Roger E. Levien dated October 25, 1996. (Also Form of Indemnity Agreement between Company and other Directors and Executive Officers prior to June
2004)                                                                                                                                                                                   
|       | 
|       |  | Exhibits 10.3, 10.4 and 10.5 were filed as Exhibits 10.79, 10.80 and 10.81, respectively, to the Form 10-K for the year ended December 31,
1996, and are hereby incorporated by reference.                                                                                                                                                                                  
|       | 
|10.6   |  | Rights Agreement dated as of February 13, 1998 (Rights Agreement) between Brown & Sharpe Manufacturing Company and
BankBoston N.A., as Rights Agent, filed as Exhibit 1 to Report on Form 8-K dated March 5, 1998, and is hereby incorporated by reference.                                                                                                               
|       | 
|10.7   |  | Form of Certificate of Designation with respect to the Series B Participating Preferred Stock, par value $1.00 per share, of the Company
(filed as Exhibit A to the Rights Agreement, filed as Exhibit A to Report on Form 8-K dated March 5, 1998), and is hereby incorporated by reference.                                                                               
|       | 
|10.8   |  | Amendment to Rights Agreement dated February 13, 1998 filed as Exhibit 10.90.2 to Report on Form 10-Q for quarter ending September 30,
2001, and which is incorporated herein by reference.                                                                                                                                                                                 
|       | 
|+10.9  |  | 1999 Equity Incentive Plan dated February 12, 1999. Exhibit 10.16 was filed as Exhibit 10.109 to the Form 10-Q for the quarter ended June
30, 1999, and is hereby incorporated by reference.                                                                                                                                                                                
|       | 
|10.10  |  | Notice to Stockholders regarding Shareholder Rights Plan dated May 21, 2001 filed as Exhibit 99.1 to Report on Form 8-K filed May 21, 2001,
and is incorporated herein by reference.                                                                                                                                                                                        
|       | 
|10.11  |  | 2002 Stock Purchase Agreement, dated as of April 8, 2002, between Xygent Inc. and BNS Co. relating to the purchase of 13,206 shares of
Common Stock of Xygent in connection of retirement of $1.5 million in intercompany debt. This exhibit was filed as Exhibit 10.31 to the Companys 10-Q for the quarter ending June 30, 2002, and is hereby incorporated by
reference.
|       | 
|10.12  |  | Omnibus Agreement, dated April 19, 2002, by and among Xygent Inc., Brown & Sharpe Inc., Hexagon Holdings, Inc. and Hexagon AB. This
exhibit was filed as Exhibit 10.32 to the Companys 10-Q for the quarter ending June 30, 2002, and is hereby incorporated by reference.                                                                                                 



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##### Table of Contents

|       |  |                                                                                                                                                                                                                                                                                                            
|------ |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                                                                                                                                                    
|       | 
|10.13  |  | Securities Purchase Agreement, dated as of August 16, 2002, by and among BNS Co., Xygent Inc. and Hexagon Holdings, Inc. This exhibit was
filed as Exhibit 1 to the Companys 8-K filed on September 3, 2002, and is hereby incorporated by reference.                                                     
|       | 
|10.14  |  | Amendment No. 2, dated as of October 10, 2002, to the Rights Plan, dated as of February 13, 1998, as amended (the Rights Plan),
originally between BNS Co. and BankBoston N.A. This exhibit was filed as Exhibit 99.1 to the Form 8-K filed on October 15, 2002, and is hereby incorporated by reference.
|       | 
|+10.15 |  | Agreement and Release, dated as of January 27, 2003, between the Company and Andrew C. Genor. The exhibit was filed as Exhibit 10.35 to the
Report on Form 10-K for the year 2002, and is hereby incorporated by reference.                                                                                
|       | 
|+10.16 |  | Amended and Restated Engagement Letter, dated as of January 24, 2003, between Michael Warren Associates, Inc. and BNS Co. (the 2002
Warren Agreement). The exhibit was filed as Exhibit 10.36 to the Report on Form 10-K for fiscal year 2002, and is hereby incorporated by reference.                  
|       | 
|+10.17 |  | Amendment to the 2002 Warren Agreement dated April 8, 2003. This Exhibit was filed as Exhibit 10.39 to the Report on Form 8-K filed
September 10, 2003 and is hereby incorporated by reference.                                                                                                            
|       | 
|+10.18 |  | Amendment to the 2002 Warren Agreement dated November 3, 2003. This Exhibit was filed as Exhibit 10.40 to the Report on Form 10-Q for the
quarter ending September 30, 2003, and is hereby incorporated by reference.                                                                                      
|       | 
|+10.19 |  | Amendment to the 2002 Warren Agreement dated February 23, 2004 and is hereby incorporated by reference. This Exhibit was filed as Exhibit
10.35.3 to the Report on Form 10-K for fiscal 2003, and is hereby incorporated by reference.                                                                     
|       | 
|+10.20 |  | Form of Indemnity Agreement with Michael Warren dated December 20, 2002. The exhibit was filed as Exhibit 10.38 to the Report on Form 10-K
for fiscal 2002, and is hereby incorporated by reference.                                                                                                       
|       | 
|10.21  |  | Agreement relating to Gravel Extraction, Landfilling, Restoration and Aftercare Works at Harmondsworth Land Sipson in the London Borough of
Hillingdon dated November 10, 2000, filed as Exhibit 10.39 to the Annual Report on Form 10-K for fiscal 2003, and is hereby incorporated by reference.         
|       | 
|10.22  |  | Purchase and Sale Agreement dated as of April 28, 2003 between BNS Co. and Wasserman RE Ventures LLC filed as Exhibit 99.1 to Report on
Form 8-K filed September 10, 2003 and is hereby incorporated by reference.                                                                                         
|       | 
|10.23  |  | Purchase and Sale Agreement dated as of February 5, 2004 between BNS Co., BNS International, Ltd. and Bath Road Holdings Limited filed as
Exhibit 10.41 to the Annual Report on Form 10-K for fiscal 2003, and is hereby incorporated by reference.                                                        
|       | 
|10.24  |  | Amendment No. 3, dated as of October 6, 2003, to the Rights Plan. This exhibit was filed as Exhibit 99.1 to the Form 8-K filed on October
7, 2003, and is hereby incorporated by reference.                                                                                                                
|       | 
|10.25  |  | Confirmatory Agreement, dated as of December 8, 2004, between BNS Co. and Steel Partners II, L.P., filed as Exhibit 99.1 to the Report on
Form 8-K dated December 9, 2004, and is hereby incorporated by reference.                                                                                        
|       | 
|10.26  |  | Amendment No. 4, dated as of December 8, 2004 to the Rights Plan filed as Exhibit 99.2 to the Report on Form 8-K dated December 9, 2004,
and is hereby incorporated by reference.                                                                                                                          
|       | 
|10.27  |  | Rights Agreement Assumption Agreement by and among EquiServe Trust Company, N.A., BNS Co. and BNS Holding, Inc., filed as Exhibit 99.4 to
the Report on Form 8-K dated December 14, 2004, and is hereby incorporated by reference.                                                                         



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##### Table of Contents

|       |  |                                                                                                                                                                                                                                                                    
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                                                                                                            
|       | 
|+10.28 |  | Instrument of Adoption and Assumption by BNS Holding, Inc. of Indemnity Agreements between BNS Co. and Various Directors and Officers of
BNS Co., filed as Exhibit 99.5 to the Report on Form 8-K dated December 14, 2004, and is hereby incorporated by reference.
|       | 
|+10.29 |  | Instrument of Adoption and Assumption by BNS Holding, Inc. of BNS Co.s 1999 Equity Incentive Plan, filed as Exhibit 99.6 to the
Report on Form 8-K dated December 14, 2004, and is hereby incorporated by reference.                                              
|       | 
|+10.30 |  | Instrument of Adoption and Assumption by BNS Holding, Inc. of Agreement between BNS Co. and Michael D. Warren Associates, Inc., filed as
Exhibit 99.7 to the Report on Form 8-K dated December 14, 2004, and is hereby incorporated by reference.                  
|       | 
|10.31  |  | Instrument of Adoption and Assumption by BNS Holding, Inc. of the Confirmatory Agreement between BNS Co. and Steel Partners II, L.P., filed
as Exhibit 99.4 to the Report on Form 8-K dated December 14, 2004, and is hereby incorporated by reference.            
|       | 
|+10.32 |  | Form of 2004 Indemnity Agreement between the Company and each of its directors and officers, filed as Exhibit 10.43 to the Quarterly Report
on Form 10-Q for the quarter ending June 30, 2004 and is hereby incorporated by reference.                             
|       | 
|+10.33 |  | 2005 Engagement Letter, dated as of March 7, 2005, between Michael Warren Associates, Inc. and the Company, filed as Exhibit 99.1 to the
Current Report on Form 8-K dated March 7, 2005, and is hereby incorporated by reference.                                  
|       | 
|14.1   |  | Code of Business Conduct and Ethics, filed as Exhibit 14.1 to the Annual Report on Form 10-K for fiscal year 2003, and is hereby
incorporated by reference.                                                                                                        
|       | 
|21     |  | Subsidiaries of the Registrant, filed herewith.                                                                                                                                                                                                                    
|       | 
|23     |  | Consent of Independent Registered Public Accounting FirmErnst & Young LLP, filed herewith.                                                                                                                                                                        
|       | 
|31.1   |  | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a), filed herewith.                                                                                                                                                                               
|       | 
|31.2   |  | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a), filed herewith.                                                                                                                                                                               
|       | 
|32     |  | Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) and Section 906 of the Sarbanes-Oxley Act
of 2002 (subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code), filed herewith.           

---

|+ | This identifies management contracts or compensatory plans.
|- | -----------------------------------------------------------



Financial Statement Schedules  No financial statement schedules were filed for the year ended December 31, 2004.



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##### Table of Contents

SIGNATURES



Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



|                     |  |  |  |                                      
|-------------------- |  |  |  | -------------------------------------
|                     |  |  |  | BNS Holding, Inc.                    
|                     |  |  |  | (REGISTRANT)                         
|                     |  | 
|Date: March 15, 2005 |  |  |  | By: /s/ MICHAEL D. WARREN            
|                     |  |  |  | Michael D. Warren                    
|                     |  |  |  | President and Chief Executive Officer



Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.



|                                                     |  |           |  |                                                                                                                                                                                           |  |          
|---------------------------------------------------- |  | --------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------
|/S/ KENNETH N. KERMES                                |  | 3/15/2005 |  | /S/ JACK HOWARD                                                                                                                                                                           |  | 3/15/2005
|Kenneth N. Kermes Chairman of the Board and Director |  | Date      |  | Jack Howard Director                                                                                                                                                                      |  | Date     
|                                                     |  |           | 
|/S/ JAMES HENDERSON                                  |  | 3/15/2005 |  | /S/ RICHARD M. DONNELLY                                                                                                                                                                   |  | 3/15/2005
|James Henderson Director                             |  | Date      |  | Richard M. Donnelly Director                                                                                                                                                              |  | Date     
|                                                     |  |           | 
|/S/ J. ROBERT HELD                                   |  | 3/15/2005 |  | /S/ MICHAEL D. WARREN                                                                                                                                                                     |  | 3/15/2005
|J. Robert Held Director                              |  | Date      |  | Michael D. Warren President and ChiefExecutive Officer VicePresident and ChiefFinancial Officer(Principal Executive Officer) (Principal Financial Officer) (Principal Accounting Officer) |  | Date     



56