2016_Halma_ARA_160610_2

Notes to the Accounts continued
23 SHARE-BASED PAYMENTS continued
The fair value of the awards was calculated using an appropriate simulation method to reflect the likelihood of meeting the marketbased
performance conditions, which, until the current year, attached to half of the award, using the following assumptions:
2016 2015 2014
Expected volatility (%) – 21% 24%
Expected life (years) 3 3 3
Share price on date of grant (p) 757.0 569.9 568.5
Option price (p) Nil Nil Nil
Fair value per option (%) 100% 62.4% 63.2%
Fair value per option (p) 745.2 355.9 359.3
Awarded under ESP PSP PSP
The expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous three years.
Cash settled
Awards under the above plans are normally settled in shares but may be settled in cash at the Board’s discretion or where required by
local regulations. Cash settled awards follow the same vesting conditions as the plans under which they are awarded.
24 ACQUISITIONS
In accounting for acquisitions, adjustments are made to the book values of the net assets of the companies acquired to reflect their fair
values to the Group. Acquired inventories are valued at fair value adopting Group bases and any liabilities for warranties relating to past
trading are recognised. Other previously unrecognised assets and liabilities at acquisition are included and accounting policies are
aligned with those of the Group where appropriate.
The Group made four acquisitions during the year: Value Added Solutions LLC (VAS); Firetrace USA, LLC (Firetrace); Visiometrics, S.L.
(Visiometrics); and CenTrak Inc. (CenTrak).
The four acquisitions in the year contributed £21,798,000 of revenue and £3,128,000 of profit after tax for the year ended 2 April 2016.
If these acquisitions had been held since the start of the financial year, it is estimated the Group’s reported revenue and profit after tax
would have been £38,362,000 and £5,565,000 higher respectively.
The combined fair value adjustments made for all acquisitions, excluding acquired intangible assets recognised and deferred
tax thereon, resulted in net adjustments to goodwill of negative £3,262,000.
Below are summaries of the assets and liabilities acquired and the purchase consideration of:
a) The total of VAS, Firetrace, Visiometrics and CenTrak;
b) VAS, on a stand-alone basis;
c) Firetrace, on a stand-alone basis;
d) Visiometrics, on a stand-alone basis; and
e) CenTrak, on a stand-alone basis.
Due to their contractual dates, the fair value of receivables acquired (shown below) approximate to the gross contractual amounts
receivable. The amount of gross contractual receivables not expected to be recovered is immaterial.
There are no material contingent liabilities recognised in accordance with paragraph 23 of IFRS 3 (revised).
£919,000 and £17,297,000 of goodwill arising on the acquisitions of VAS and Firetrace respectively are expected to be deductible
for tax purposes.
As at the date of approval of the financial statements, the acquisition accounting for VAS and all prior year acquisitions is complete.
Other than VAS, the accounting for certain balances on current year acquisitions is provisional. These balances mainly comprise the
valuation of CenTrak’s acquired intangible assets, as a result of the proximity of its acquisition date to the year end, and the initial
considerations which are subject to the net tangible asset adjustments and other contractual clauses being agreed.
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Halma plc Annual Report and Accounts 2016