2016_Halma_ARA_160610_2

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Notes to to the the Accounts continued 24 ACQUISITIONS continued (E) CenTrak, Inc. continued The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related intangibles of £21,615,000; and technology related intangibles of £24,287,000; with residual goodwill arising of £66,413,000. The residual goodwill represents: a) the technical expertise of the acquired workforce; b) the opportunity to leverage this expertise across some of Halma’s businesses; and c) the ability to exploit the Group’s existing customer base. The CenTrak acquisition contributed £4,220,000 of revenue and £333,000 of profit after tax for the year ended 2 April 2016. If this acquisition had been held since the start of the financial year, it is estimated that the Group’s reported revenue and profit after tax would have been £23,947,000 and £2,621,000 higher respectively. 25 NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT 53 weeks to 2 April 2016 £000 52 weeks to 28 March 2015 £000 Reconciliation of profit from operations to net cash inflow from operating activities: Profit on continuing operations before finance income and expense, share of results of associate and profit on disposal of operations 142,943 137,063 Depreciation of property, plant and equipment 15,245 14,005 Amortisation of computer software 1,348 1,211 Amortisation of capitalised development costs and other intangibles 5,202 5,505 Impairment of capitalised development costs – 236 Amortisation of acquired intangible assets 23,103 19,954 Share-based payment expense in excess of amounts paid 1,899 3,803 Additional payments to pension plans (7,728) (6,560) Profit on sale of property, plant and equipment and computer software (1,345) (590) Operating cash flows before movement in working capital 180,667 174,627 Increase in inventories (4,809) (1,097) Increase in receivables (8,786) (10,656) Increase in payables and provisions 7,844 5,801 Revision to estimate of, and exchange differences arising on, contingent consideration payable 1,543 (620) Cash generated from operations 176,459 168,055 Taxation paid (27,186) (30,824) Net cash inflow from operating activities 149,273 137,231 53 weeks to 2 April 2016 £000 52 weeks to 28 March 2015 £000 Analysis of cash and cash equivalents Cash and bank balances 53,938 41,230 Overdrafts (included in current borrowings) (4,412) (1,705) Cash and cash equivalents 49,526 39,525 146 144 Halma plc Annual Report and Accounts 2016
Notes to the Accounts continued 25 NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT continued At 28 March 2015 £000 Reclass £000 Cash flow £000 Cash acquired £000 Loan notes repaid/ (issued) £000 Exchange adjustments £000 The net cash outflow from bank loans comprised repayments of £97,000,000 offset by drawdowns of £74,788,000. The net cash inflow from loan notes comprised £167,473,000 from the drawdown of a United States Private Placement (see note 26), and £288,000 from the issue of loan notes in respect of the Advanced acquisition in the prior year, offset by £367,000 repayment of existing Advanced loan notes. The sum of the above £6,187,000 cash inflow and £1,830,000 net cash acquired is equal to the increase in cash and cash equivalents of £8,017,000 in the Consolidated Cash Flow Statement. At 2 April 2016 £000 Analysis of net debt Cash and bank balances 41,230 – 8,894 1,830 – 1,984 53,938 Overdrafts (1,705) – (2,707) – – – (4,412) Cash and cash equivalents 39,525 – 6,187 1,830 – 1,984 49,526 Loan notes falling due within one year – (367) – – 31 – (336) Loan notes falling due after more than one year (657) 367 – – (167,425) (4,397) (172,112) Bank loans falling due after more than one year (139,762) – 22,212 – – (6,246) (123,796) Total net debt (100,894) – 28,399 1,830 (167,394) (8,659) (246,718) STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 26 FINANCIAL INSTRUMENTS Policy The Group’s treasury policies seek to minimise financial risks and to ensure sufficient liquidity for the Group’s operations and strategic plans. No complex derivative financial instruments are used, and no trading or speculative transactions in financial instruments are undertaken. Where the Group does use financial instruments these are mainly to manage the currency risks arising from normal operations and its financing. Operations are financed mainly through retained profits and, in certain geographic locations, bank borrowings. Foreign currency risk is the most significant aspect for the Group in the area of financial instruments. It is exposed to a lesser extent to other risks such as interest rate risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and these policies are summarised below. The Group’s policies have remained unchanged since the beginning of the financial year. Details of the significant accounting policies and methods adopted (including the criteria for recognition, the basis of measurement and the bases of recognition of income and expenses) for each class of financial asset, financial liability and equity instrument are disclosed in the Accounting Policies note. Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 18 to the Accounts, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings as disclosed in the Consolidated Statement of Changes in Equity. The Group is not subject to externally imposed capital requirements. Halma plc Annual Report and Accounts 2016 147 145
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Halma plc Annual Report and Account
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Highlights Another record year of r
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Infrastructure Safety Products whic
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Revenue from outside the USA, UK an
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Our decentralised organisational st
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INCREASING HEALTH AND SAFETY REGULA
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INCREASING DEMAND FOR LIFE-CRITICAL
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Acquisition focus Insight Our marke
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Insight Trapped key interlocking is
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Insight Regulations around the worl
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Insight People are living longer th
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Insight Many processes rely on prec
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Resources and relationships Committ
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GROW INNOVATE ACQUIRE EMPOWER STRAT
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INNOVATE GROW ACQUIRE EMPOWER STRAT
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process and one which is subject to
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Mitigation Increased risk No change
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Mitigation Increased risk No change
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a considerable impact on the oil an
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towards the use of more sensors, no
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A third of American adults suffer f
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Today 1.8 billion people drink faec
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Adjusted profit bridge £m 160 155
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fell from 21% to 20% this year, and
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The Group accounts for post-retirem
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ENVIRONMENTAL MANAGEMENT SYSTEM (EM
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In return, we offer: • The opport
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Our intention is to create effectiv
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PEOPLE AND CULTURE I reported in la
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CAROLE CRAN NON-EXECUTIVE DIRECTOR
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Corporate Governance Report Leaders
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Board governance structure Board Pr
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October 2015 • Group strategic pe
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The Board and Committee evaluations
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Jane Aikman is in her final term, h
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Audit Committee COMMITTEE CHAIRMAN
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POLICY ON AUDITOR INDEPENDENCE AND
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Remuneration Committee COMMITTEE CH
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REMUNERATION POLICY The remuneratio
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Opportunity Maximum opportunity: 15
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EXECUTIVE DIRECTOR SERVICE CONTRACT
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NON-EXECUTIVE DIRECTORS Unless othe
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SINGLE FIGURE OF TOTAL REMUNERATION
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The three-year period over which th
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PERCENTAGE CHANGE IN CEO REMUNERATI
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Date of grant As at 28 March 2015 G
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Other Statutory Information ACTIVIT
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The Companies Act 2006 also require
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Page 111 and 112: Accounting Policies continued KEY A
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Page 121 and 122: Notes to the Accounts continued 1 S
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Page 125 and 126: Notes to the Accounts continued 3 N
Page 127 and 128: Notes to the Accounts continued 6 P
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Page 151 and 152: 26 FINANCIAL INSTRUMENTS continued
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Page 163 and 164: Company Statement of Changes in Equ
Page 165 and 166: Notes to the Company Accounts conti
Page 173 and 174: C12 RESERVES The Capital redemption
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Page 177 and 178: 2009/10 £000 2010/11 £000 2011/12
Page 179 and 180: Principal locations Telephone E-mai
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Page 183 and 184: DIVIDEND REINVESTMENT PLAN The Comp
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