2016_Halma_ARA_160610_2

Notes to the Accounts continued
1 SEGMENTAL ANALYSIS continued
The accounting policies of the reportable segments are the same as the Group’s accounting policies. Acquisition transaction costs,
adjustments to contingent consideration and release of fair value adjustments to inventory (collectively ‘acquisition items’) are
recognised in the Consolidated Income Statement. Segment profit, before these acquisition items and the other adjustments, is
disclosed separately above as this is the measure reported to the Chief Executive for the purpose of allocation of resources and
assessment of segment performance.
These adjustments are analysed as follows:
Amortisation
of acquired
intangible
assets
£000
Transaction
costs
£000
Adjustments
to contingent
consideration
£000
Acquisition items
Release of
fair value
adjustments
to inventory
£000
Total
amortisation
charge and
acquisition
items
£000
53 weeks to 2 April 2016
Disposal of
operations
(note 29)
£000
Process Safety (3,462) – – – (3,462) – (3,462)
Infrastructure Safety (2,398) (1,101) (827) (842) (5,168) (34) (5,202)
Medical (13,018) (2,926) (826) (768) (17,538) 590 (16,948)
Environmental & Analysis (4,225) – 111 – (4,114) – (4,114)
Total Segment & Group (23,103) (4,027) (1,542) (1,610) (30,282) 556 (29,726)
Total
£000
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
The transaction costs arose mainly on the acquisitions (see note 24) of Value Added Solutions, LLC (VAS), Firetrace USA, LLC
(Firetrace), Visiometrics, S.L. (Visiometrics), and CenTrak Inc. (CenTrak), which were acquired on 19 May 2015, 5 October 2015,
16 December 2015 and 3 February 2016 respectively.
The £827,000 charge in the Infrastructure Safety sector related to a revision in the estimate of the remaining contingent consideration
payable on Advanced Electronics Limited (Advanced) acquired in the prior year. The £826,000 charge in the Medical sector related to
exchange differences arising on the revaluation of Visiometric’s contingent consideration which is denominated in Euros. The remaining
£111,000 credit to contingent consideration related to a revision in the estimate of the remaining payable on a prior year acquisition
(ASL) from £197,000 to £86,000.
The release of fair value adjustments to inventory arises from revaluing the inventories of Firetrace and CenTrak at acquisition.
The £590,000 profit on disposal in the Medical sector relates to the disposal of 8.8% of the Group’s ownership interest in Optomed Oy
on 26 August 2015. See note 29 for further details. The £34,000 loss on disposal of operations relates to warranty claims arising on the
Monitor disposal in the prior year.
Amortisation
of acquired
intangible
assets
£000
Transaction
costs
£000
Adjustments
to contingent
consideration
£000
Acquisition items
Release of
fair value
adjustments
to inventory
£000
Total
amortisation
charge and
acquisition
items
£000
52 weeks to 28 March 2015
Disposal of
operations
(note 29)
£000
Process Safety (3,026) (928) – (538) (4,492) – (4,492)
Infrastructure Safety (765) (486) (102) (130) (1,483) 1,076 (407)
Medical (12,156) (21) (1,581) – (13,758) 354 (13,404)
Environmental & Analysis (4,007) – 2,303 – (1,704) – (1,704)
Total Segment & Group (19,954) (1,435) 620 (668) (21,437) 1,430 (20,007)
The transaction costs arose mainly on the acquisitions of Rohrback Cosasco Systems Inc. (RCS), Advanced and Plasticspritzerei AG,
which were acquired in the prior year. The charge of £1,581,000 to contingent consideration related mainly to a revision in the estimate
of the remaining MST payable from US$6,504,000 to US$9,061,000. The £2,303,000 credit to contingent consideration related to a
revision in the estimate of the remaining ASL payable from £2,500,000 to £197,000. The release of fair value adjustments to inventory
arose from revaluing the inventories of RCS and Advanced at acquisition.
Total
£000
Halma plc Annual Report and Accounts 2016 117 119