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Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2015 www.henryboot.co.uk Stock Code: BHY Financial Statements Notes to the Financial Statements continued for the year ended 31 December 2015 13. Investment properties continued The sensitivity analysis to significant changes in unobservable inputs relating to fair value measurements (Level 3) are set out below: Impact on valuation 2015 £’000 Industrial Land Leisure Office Retail Yield – improvement by 0.5% — — — 1,026 5,932 Rental value per sq ft – increase by £1 average — — — 454 4,041 Costs to complete – increase by 1% — 1 — 30 313 Land value per acre – increase by 5% 26 105 — — — Impact on valuation 2014 £’000 Industrial Land Leisure Office Retail Yield – improvement by 0.5% 2,385 — 265 1,041 5,573 Rental value per sq ft – increase by £1 average 9,959 — 339 479 2,912 Costs to complete – increase by 1% 872 10 28 32 371 Land value per acre – increase by 5% — 424 — — — Investment properties under construction are developments which have been valued at 31 December 2015 at fair value by the Directors of the Company using the residual method at £21,617,000 (2014: £42,443,000). The residual method of valuation involves estimating the gross development value of the property using market-derived capitalisation yields and market-derived future income streams. From this gross development value the remaining gross development costs to be incurred are deducted, using market-derived data cost estimates or the actual known costs and including cost contingencies for construction risk as appropriate. In addition a deduction for the anticipated development profits yet to be earned is made, taking into account the progress of the development to date in line with key milestones. 14. Investments Total Parent Company – shares in Group undertakings £’000 Cost At 1 January 2014 35,772 Additions — At 31 December 2014 and 2015 35,772 Fair value adjustments At 1 January 2014 (32,403) Reversal of provisions for losses 440 At 31 December 2014 (31,963) Provisions for losses (788) At 31 December 2015 (32,751) Carrying amount At 31 December 2015 3,021 At 1 January 2015 3,809 At 1 January 2014 3,369 The original cost of shares has been reduced by provisions for losses where necessary and enhanced where the Directors have considered it appropriate to reflect in the valuation increases of a permanent nature in the underlying net asset values of subsidiary companies. Such enhancements were £1,115,000 in 1975 and £1,135,000 in 1989. Amounts due from and to subsidiary companies are listed in notes 16 and 21 and details of all subsidiary companies are listed in note 35. All trading subsidiaries operate in the United Kingdom and are wholly owned, with the exception of: • Road Link (A69) Holdings Limited which is 61.2% owned by Henry Boot Construction Limited; • Capitol Park Property Services Limited which is 5% owned by, and under board control of, Henry Boot Developments Limited; • Waterloo Court Management Company Limited which is 17% owned by, and under board control of, Henry Boot Developments Limited; • Stonebridge Projects Limited which is 50% owned by, and under board control of, Henry Boot Land Holdings Limited; and • Stonebridge Offices Limited which is indirectly 50% owned by, and under board control of, Henry Boot Land Holdings Limited. They are all incorporated in the United Kingdom. All subsidiary companies have only one class of ordinary issued share capital. 114
Henry Boot PLC Annual Report and Financial Statements for the year ended 31 December 2015 www.henryboot.co.uk Stock Code: BHY 15. Investment in joint ventures and associates 2015 2014 Group Joint ventures £’000 Associates £’000 Total £’000 Joint ventures £’000 Associates £’000 Cost At 1 January 1,367 — 1,367 180 — 180 Share of profit for the year 923 — 923 1,187 — 1,187 Additions — 1,500 1,500 — — — At 31 December 2,290 1,500 3,790 1,367 — 1,367 The Group’s share of its joint ventures’ and associates aggregated assets, liabilities and results are as follows: 2015 2014 Joint ventures £’000 Associates £’000 Total £’000 Joint ventures £’000 Associates £’000 Investment property 5,884 — 5,884 5,348 — 5,348 Current assets 654 1,500 2,154 348 — 348 Total assets 6,538 1,500 8,038 5,696 — 5,696 Current liabilities (948) — (948) (249) — (249) Non-current liabilities (3,300) — (3,300) (4,080) — (4,080) Net investment 2,290 1,500 3,790 1,367 — 1,367 Joint ventures £’000 2015 2014 Associates £’000 Total £’000 Joint ventures £’000 Associates £’000 Revenue 458 — 458 485 — 485 Administration and other expenses (175) — (175) (320) — (320) Increase in fair value of investment properties 690 — 690 1,002 — 1,002 Operating profit 973 — 973 1,167 — 1,167 Finance (costs)/income (50) — (50) 35 — 35 Profit before tax 923 — 923 1,202 — 1,202 Tax — — — (15) — (15) Share of profits after tax 923 — 923 1,187 — 1,187 Details of the Group’s investments in joint ventures and associates are listed in note 35. 16. Trade and other receivables Group 2015 £’000 Parent Company Trade receivables 50,270 42,135 73 177 Prepayments 12,326 4,606 672 159 Amounts owed by related companies 2,359 8,161 — — Amounts owed by Group undertakings — — 196,966 193,866 64,955 54,902 197,711 194,202 Due within one year 54,448 50,065 197,711 194,202 Due after more than one year 10,507 4,837 — — 64,955 54,902 197,711 194,202 Included in the Group’s trade receivable balance are receivables with a carrying amount of £4.3m (2014: £4.0m) which are past due at the reporting date and for which the Group has not provided, as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral over these balances. 2014 £’000 2015 £’000 Total £’000 Total £’000 Total £’000 2014 £’000 Shareholder Information Financial Statements Governance Strategic Report Overview 115
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