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Helical Bar plc
report &
accounts
2011
Contents
Report of the directors
Report of independent auditor
Investors
2 Performance indicators
4 Chairman’s statement
6 Chief Executive’s statement
9 Business review
24 Portfolio statistics
26 Property portfolio
32 Performance and risk
36 Financial review
39 Corporate responsibility
41 The board of directors and
senior management
43 Shareholder information
44 Corporate governance report
48 Directors’ remuneration report
55 Report of independent auditor
Financial statements
57 Index to the financial statements
58 Consolidated income statement
59 Consolidated statement
of comprehensive income
60 Group and company balance sheets
62 Group and company cash
flow statements
63 Group and company statements
of changes in equity
64 Notes to the financial statements
89 Ten year review
90 Investor information
91 Glossary of terms
92 Financial calendar
92 Advisors
Front cover and inside cover
200 Aldersgate Street, London EC1
Helical Bar plc 2011 page 1
Helical Bar is a property development and investment
company. We create shareholder value through a
wide variety of high margin activities with property
investment at our core. The intention is that property
investment should provide a stable income stream
to cover overheads and interest costs. Our spread
of activities gives us the flexibility to deploy capital
rapidly across our business and focus on whatever
opportunities offer the best returns at different points
of the property cycle.
Financial highlights
Group’s share of net rental income1
Profit before tax, property write-downs and investments gains2
Final proposed dividend per share3
Diluted EPRA net asset value per share4
2011
£17.8m
£2.9m
3.15p
253p
2010
£14.9m
£9.7m
0.25p
272p
1 Group’s share of net rental income includes the consolidated net rental income and the Group’s share of net rental
income of Joint Ventures
2 Pre-tax loss as adjusted for property write-downs and net gain on sale and revaluation of
investment properties (see Results for the year section of the Financial Review on page 36)
3 For 2010 a second interim dividend of 2.75p was paid
4 Calculated in accordance with the best practice recommendations of EPRA.
page 2 Helical Bar plc 2011
performance indicators
Total Portfolio - Unleveraged Returns
Helical
IPD Benchmark
Helical’s percentile rank
Source: Investment Property Databank
Annualised over
1 year
%pa
3 years
%pa
5 years
%pa
10 years
%pa
20 years
%pa
2.7
11.7
96
1.4
-0.9
24
5.5
0.7
4
11.5
14.9
6.7
4
8.2
0
“0” = top ranked fund
Note: excludes the surplus but includes writedowns arising from the directors’ valuation of trading and development stock.
The Investment Property Databank (“IPD”) produces a number of independent benchmarks which are regarded as the main indices of unleveraged commercial property
returns. The IPD Benchmark referred to above is the IPD Universe of March Valued Funds.
Total Gross Shareholder Return
Total Returns
Helical Bar plc
UK Equity Market
Listed Real Estate Sector Index
Direct Property - Monthly data
1 Growth over 1 year, 3 years etc. to 31.03.11
1 year
%pa
-19.3
8.7
12.6
10.7
1
2
3
4
Performance measured over
15 years
%pa
10 years
%pa
5 years
%pa
3 years
%pa
20 years 25 years5
%pa
%pa
-9.0
5.4
-6.0
3.7
-11.6
-10.4
-1.4
-0.2
9.0
4.7
3.1
6.6
14.3
15.2
21.4
6.8
6.0
8.4
8.6
5.4
8.1
9.5
6.4
8.9
2 Growth in FTSE All-Share Return Index over 1 year, 3 years etc. to 31.03.11
3 Growth in FTSE 350 Real Estate Super Return Index over 1 year, 3 years, 5 years and 10 years to 31.03.11
For data prior to 30 September 1999 FTSE All Share Real Estate Sector Index has been used
4 Growth in Total Return of IPD UK Monthly Index (All Property) over 1 year, 3 years etc to 31.03.11
5 Growth in Direct Property since inception (December 1986)
Source: Hewitt New Bridge Street/Thomson Reuters
Net Asset Values
Diluted EPRA net asset value per share
2011
p
253
2010
p
272
2009
p
286
2008
p
352
2007
p
374
performance indicators Helical Bar plc 2011 page 3
Group’s share of investment
properties
2009
£213.0m
2010
£235.2m
2011
£315.0m
page 4 Helical Bar plc 2011
chairman’s statement
In the year to 31 March 2011 Helical has continued to
transform its property holdings, realising cash from the
sales of both non-income producing
properties and assets with limited
potential going forward, and
reinvesting in growth assets
which offer much promise
for future years.
2010
£14.9m
2011
£17.8m
Group’s share of
net rental income
This rolling of the “drum” as we
rotate out of the old and into the
new has changed the shape of the
Group’s property portfolio and its
prospects for the future, albeit at
a cost of limited write-downs and
losses. The last four years have
been a difficult period for property
companies but, by protecting our
shareholders, with limited calls for
new capital and only at net asset
value per share or at a premium,
we believe we have now set a solid
platform for future growth.
Results
The profit before tax, property
write-downs and investment gains
reduced to £2.9m (2010: £9.7m).
Development losses, before stock
write-downs, totalled £1.7m (2010:
profits of £8.7m). There were
trading losses of £0.4m (2010: £nil)
and a reduced contribution from the
Group’s share in the results of joint
ventures of £2.9m (2010: £3.7m).
However, write-downs of trading
and development stock of £14.9m
(2010: £10.0m), mainly resulting
from a write-down of the Group’s
office developments in Glasgow
and Crawley and reductions in
the carrying value of land held
for industrial and change of use
potential, and an impairment of
the group’s available-for-sale
investments of £1.8m (2010: £nil)
are set against these profits. The
Group’s share of net rental income
was £17.8m (2010: £14.9m). Net
rental income, excluding that in
joint ventures, remained steady at
£14.2m (2010: £14.2m). Loss before
tax was £6.3m (2010: profit £7.9m).
Administration costs reduced from
£8.7m to £7.1m with a credit for
share awards of £0.2m (2010:
charge £1.2m). Net finance costs
before capitalised interest reduced
from £11.5m to £10.5m due to a
lower average level of borrowings
during the year and lower average
interest rates. Capitalised interest
increased to £4.2m from £3.2m.
There was a profit on the mark
to market valuation of the Group’s
financial instruments of £1.8m
(2010: £1.2m). The Group made a
loss on currency movements of
£0.1m (2010: £1.1m) on its Polish
operations.
The investment portfolio rose 2.5%
including sales and purchases (2010:
5%) or 1.7% on a like-for-like basis,
reflected as a gain on revaluation of
£2.7m (2010: £13.1m). A profit on
sale of investment properties of
£4.8m compares with a loss of
£4.9m in the previous year.
Diluted loss per share was 3.6p
(2010: earnings 9.1p) and diluted
EPRA loss per share was 6.4p
(2010: 0.1p).
The Group’s diluted EPRA net
asset value per share fell by 7%
to 253p (2010: 272p). The
directors’ valuation of trading
and development stock showed
a surplus of £32m (2010: £33m).
The Board is recommending to
shareholders an additional final
dividend of 3.15p per share, payable,
if approved, after the Annual General
Meeting in July. Taken with the interim
dividend paid in December 2010 of
1.75p (2009: 1.75p) it represents a
total dividend of 4.90p (2010: 4.75p),
an increase of 3.2% for the year.
chairman’s statement Helical Bar plc 2011 page 5
Silverthorne Road,
Battersea, London SW8
Financing
In the year to 31 March 2011,
Helical repaid £45m of debt from
the sale of properties including
Fieldgate Street, Paignton, Watford,
Crawley and industrial units at
Southampton, Southall and
Kidlington. Since the year end, the
Group has repaid £10m of loans
from the sale of 61 Southwark Street.
At 31 March 2011 the Group had
net borrowings of £241.3m (2010:
£228.8m) and gross property values
of £532.2m (2010: £494.5m), with
these property values and net
borrowings including the Group’s
share of its joint venture properties
and borrowings. The ratio of net
borrowings to the value of the
property portfolio (including directors’
valuation of stock) was 45.3%
(2010: 46.3%). Net debt to equity
gearing at 31 March 2011 was 81%
(2010: 84%).
At 31 March 2011, the Group had
£75.3m (2010: £92.6m) of fixed
rate borrowings with an average
effective interest rate of 5.77%
(2010: 6.43%) and an average
maturity of 2.3 years (2010: 2.3
years) and £91m of interest rate
caps at an average of 4.9% (2010:
£34m at 6.00%). In addition, the
Group has a £40m interest rate
floor at 4.50% until 2013.
Placing
In December 2010, Helical issued
10,730,000 ordinary 1p shares at
270p per share, raising £28.0m net
of costs. The Group was delighted
that over 30 institutional investors
participated in this Placing, including
many new shareholders. The Placing
was also supported by the Group’s
management with each director
participating in a total management
investment of over £1.1m.
Outlook
As outlined in our half year statement,
Helical is now actively pursuing new
investment and development
opportunities. We are pleased with
the number and quality of
investment purchases, in particular
our acquisition at Barts, London
EC1, making full use of the proceeds
from our recent placing. The number
of sales achieved during the year,
and subsequently, draw a line under
the difficulties of the last four years
and the Group can move forward
confidently.
Giles Weaver
Chairman
15 June 2011
page 6 Helical Bar plc 2011
Clyde Shopping Centre,
Clydebank
chief executive’s statement
Property is a long term game. It always has been and always
will be. In the early 90s it took Helical six years to recover fully
from the bottom of the market in 1991 to strong growth in 1997.
Then, having reached the point where income covered interest,
overheads and dividends from investment buying in 1994-95,
we set about rebuilding our development portfolio. Whilst
doing so, we lagged our peer group but by 1997 we were a
major participant in the City and one of the largest suppliers
of out-of-town retail in the UK in 1997 and 1998. By 2001, we
had trebled the size of the Company and by the end of 2004
had returned £156 million to our shareholders.
I now find us in a similar situation
to that which faced us in 1996.
By prudent use of our limited
capital and making full use of
the proceeds of our two small
and accretive fund raisings, we
have regained our ground so that
once more our net rental income
covers our interest, overhead and
dividends. Once again we are
preparing an extraordinary and
diverse development programme.
I cannot promise to quite match
our accelerated performance of
the late 90s. I see no “driver” in
our economy equal to the dot.
com boom of those days but
I am pleased to report that we
have cleared the decks of our
‘legacy’ properties and can now
concentrate on moving forward
free of the shackles of the past.
We see ongoing value in the
good secondary market where,
for example, shopping centre
equivalent yields at 7.75% are at
a record premium to bond rates.
Whilst interest rates remain low, we
are enjoying the cash flow from our
recent investment purchases.
Buying £125m of property at
an average 8% yield plus whilst
borrowing at an average 4.4%
provides an historic differential.
Experience suggests you buy, buy,
buy in such unusual circumstances,
but the key is choosing your targets
carefully, having full regard to the
difficulties being encountered by
tenants and the pitfalls of ever
shortening leases.
We will continue to buy good
secondary shopping centres and
industrial estates although we are
witnessing more interest in these
sectors and a gradual reduction
in yields. Targeted assets are of
institutional quality which could
generally benefit from capital
expenditure and value enhancing
initiatives. Key to our acquisition
strategy are affordable occupational
costs for our tenants (low rents) and
good tenant demand for space.
Careful, disciplined stock picking
remains our key focus and the value
of detailed due diligence before
bidding cannot be underestimated.
London has always been our major
playground. We are making good
progress on lettings at 200
Aldersgate (370,000 sq ft of offices)
and our current development
programme in the City comprises
two schemes of circa 750,000 sq ft
at Mitre Square and Barts which will
be coming forward over the next
few years. In West London, our
residential/mixed use portfolio is
looking promising. We are confident
of gaining planning consent at
Fulham Wharf (100,000 sq ft
Sainsbury’s store, 463 residential
units) where we act for Sainsburys,
and at our joint venture with
Grainger at Hammersmith Town
Hall (110,000 sq ft council offices,
40,000 sq ft retail, 320 residential
units). After several years of
negotiation with other land owners
and the planning authorities, we are
now able to move forward and
apply for planning at our White City
site of 10 acres with a mixed use
scheme of up to two million sq ft
held jointly with our partner, Aviva.
We hope to be ready to start on site
by the end of 2012.
chief executive’s statement Helical Bar plc 2011 page 7
In all these cases we see values
moving positively forward. Our total
equity invested in these six London
schemes is less than £30m so we
continue our well proven theme of
maximising the return on our equity.
As the development market
recovers, we are also now able to
rekindle our retail projects under the
Helical Retail banner, working with
the supermarket chains to obtain
planning on optioned schemes
throughout the UK, and continue
our town-centre development at
Shirley, Birmingham anchored
by an 80,000 sq ft Asda store.
Poland offers opportunity and
will remain on our target list as
we develop and complete our
two out-of-town retail schemes
(a 1.1 million sq ft programme) and
we look to expand our involvement
in this region with large scale
warehouse/logistics developments,
similarly on a pre-let/pre-sold basis
with our partners, Thameling, who
are ex-Prologis.
In December I referred to our
‘retirement village’ portfolio and that
we were reviewing our options. As
we finalise our successful scheme
at Liphook (generating a total
estimated profit of £13m, with £7m
still to come), we will now look to
start to develop out schemes this
year at Horsham (154 units) and
Exeter (159 units), with Great Alne
in Warwickshire (132 units) to follow
in 2012. All three have now
received planning consent with
similar £10m to £15m plus profit
projections spread over three to
five years. To recapture equity, we
plan to sell our sites at Milton in
Cambridge and part of Exeter,
as well as a site for open market
housing at Telford upon finalising
planning later this year. A 40-acre
residential site at Cawston (50%
share) will follow in 2013/14. These
sale receipts, subject to planning,
are estimated to total £25m plus.
It has been a long and hard four
years since the warning bells
sounded in mid 2007. It has
required patience and discipline,
however, the slate is now clean and
the platform established to enable
us to return to our outperforming
ways. A special thanks to our
shareholders and to our banks for
their support throughout.
Michael Slade
Chief Executive
15 June 2011
page 8 Helical Bar plc 2011
200 Aldersgate Street
London EC1
Helical Bar plc 2011 page 9
business review
Helical Bar is a property development and investment company;
our aim is to make excellent returns for our shareholders
(which include the management team who own 16% of the
company) through a wide variety of high margin activities.
Property portfolio - how we invest our capital
Retail
In town
31%
Out of
town
Poland
11%
Offices
4%
Retirement
villages
13%
London
25%
Provincial 3%
While our core areas include
London office and mixed use
development, we are able to
deploy capital to whichever
part of the property market we
believe offers the best returns
at different points in the cycle.
Industrial
11%
2%
Change of use/
mixed use
page 10 Helical Bar plc 2011
business review
Our Portfolio – how we invest our capital
Helical seeks to provide a continuing flow of development
profits. It has good experience across the different sectors of
Village
Retail
offices, retail, industrial, mixed use and residential schemes.
%
%
These developments are either pre let or speculative and
29
Investment
12
2
Trading and development
financed either by Helical or by third party funding partners.
13
Total
London Provincial In Town Out of Town
Offices
%
Retail Poland
%
Change Mixed Retirement
Industrial
%
Offices
%
of Use
%
Use
%
31
23
25
11
11
11
%
1
3
2
3
4
1
2
1
1
2
1
9
1
1
–
–
–
Total
%
67
33
100
Note: excludes the surplus arising from the directors’ valuation of trading and development stock.
The tables below describe how we allocate our resources between investment and development, and between the various sectors.
The property portfolio tables on pages 26 to 31 explain which properties sit in each category and give more detail on these properties.
Investment
The investment portfolio, which is mainly let and income producing, has two main purposes:
1. To provide a steady income stream to cover overheads, dividends and interest
2. To produce above average capital growth over the cycle to contribute to growth in the Group’s net asset value.
We seek to achieve these aims through careful, disciplined stock picking, generally of multi-let London offices, shopping centres,
industrial estates and mixed portfolios. Our key aim is to be confident that there is sustainable demand from occupiers for all of
our assets.
We frequently reposition our properties through significant refurbishment or extensions. We work closely with our tenants to
maintain full occupancy and these relationships often lead to opportunities to increase value through re-gearing leases or moving
tenants within a building as they expand or contract. Finally, at certain points in the cycle we may buy entirely vacant buildings
(such as The Morgans, Cardiff or Shepherds Building, London W14) with a view to carrying out a major refurbishment, where we
are confident that the occupational market is strong enough to allow the whole building to be let quickly.
London offices
Provincial offices
Industrial
In-town retail
Out-of-town retail
Retirement villages
Total
Note: Barts, London EC1 is held as an investment
Value
£m
108.9
7.6
42.1
137.7
14.3
4.4
315.0
Equity
£m
44.2
2.0
19.7
57.2
6.2
0.7
130.0
business review Helical Bar plc 2011 page 11
Development
We employ a wide variety of approaches in our development activities. The principal aim is to maximise our share of profits
leveraging our capital employed and managing the risks inherent in the development process given the size of our balance sheet.
The table below explains how the process works and some of the different ways in which we are involved in our schemes.
Deal type
Planning
Pre-letting
Acquire,
solely or in
joint venture
Barts,
White City
Acquire via option/
conditional purchase
agreement (e.g. subject
to planning) or be
appointed as ‘preferred
developer’
Shirley Town Centre,
King Street Hammersmith,
Mitre Square
Appointed as
Development Manager
(profit payable at certain
milestones e.g. planning,
letting or completion of
construction)
Fulham Wharf
Barts, Fulham
Wharf, White
City, King Street
Hammersmith,
Shirley Town Centre,
Telford, Cawston
(Rugby)
‘Forward fund’ i.e. sell
site to an investor who
meets development costs
with Helical receiving a
profit share
Turawa (Poland)
Gliwice
(Poland),
Mitre Square
Bring in JV partner
to share percentage
of costs and profits
with Helical retaining
an equity interest
and profit share
Retirement villages
200 Aldersgate,
Southall, Hailsham
(industrial
development),
The Hub (Glasgow)
Delivery options
Develop ourselves,
complete lettings/
sales and retain/
sell
Retirement villages
Construction
Stockport,
Liphook
Post construction -
Letting/sale
page 12 Helical Bar plc 2011
business review
Trading & development
Helical seeks to provide a continuing flow of development
As highlighted at the half year, our primary concern over the last two years has been to recover equity from those assets
profits. It has good experience across the different sectors of
with limited potential and, in particular, from those assets which are either non-income producing or where void costs exceed
offices, retail, industrial, mixed use and residential schemes.
income. In today’s market the only way to achieve sales of these assets is to be competitive on pricing and this has involved
write-downs and sales below book value.
These developments are either pre let or speculative and
Since March 2009 we have sold circa £120m of trading and development stock of which £85m has been non-income
producing, with £76m and £60m sold respectively in the year to 31 March 2011. This sales programme has generated
financed either by Helical or by third party funding partners.
significant cash surpluses, which we have re-deployed into new investment opportunities.
London offices
Provincial offices
Industrial
In-town retail
Out-of-town retail
Retirement villages
Change of use
Mixed use
Poland
Total
Book Value
£m
Fair Value
£m
Surplus of Fair Value
over Book Value
£m
Equity (calculated
from Fair Value)
£m
12.5
7.9
9.5
9.6
3.5
59.6
4.2
4.2
50.1
161.1
14.5
8.0
9.5
9.8
3.5
73.6
6.3
12.9
55.4
193.5
2.0
0.1
–
0.2
–
14.0
2.1
8.7
5.3
32.4
14.5
1.1
9.5
8.3
1.4
35.2
6.3
12.9
34.6
123.8
Note: The tables above include the Group’s share of investment, trading and development properties held in joint ventures.
Losses from the Group’s development programme of £1.7m (2010: profits of £8.7m) were increased by provisions of £14.9m
(2010: £10.0m) made against the carrying value of development stock. Of the total provisions, £10.2m were recognised at
30 September 2010. Although profits were generated at our successful retirement village scheme at Bramshott Place, Liphook,
losses were made on the sales of Crawley and Fieldgate Street and our industrial developments at Oxford, Kidlington and
Southampton as we greatly reduced our stock of non-income producing office and retail developments. These losses were
increased by the overhead costs of our retail development joint ventures in the UK and Poland.
At both the half year and year end we assessed the carrying value of our remaining trading and development stock and this
led to total write-downs of £14.9m, (of which £4.7m was in the second half of the year) primarily against office buildings in
Crawley and Glasgow and our industrial developments.
business review Helical Bar plc 2011 page 13
Offices
The focus of the Group over the last year has been on those schemes recently
completed or under construction, looking for tenants for the space, where
vacant, and progressing a small number of major schemes for the future.
Mitre Square,
London EC3
The Hub, Pacific Quay,
Glasgow
Mitre Square,
London EC3
The Hub, Pacific Quay,
Glasgow
200 Aldersgate Street, London EC1
Mitre Square, London EC3
The Hub, Pacific Quay, Glasgow
Originally developed in the late 1980’s,
this 370,000 sq ft office building has
remained vacant since Clifford Chance
left for Canary Wharf in 2005. In 2010,
we were appointed under an asset and
development management agreement
with the owners of the building. We
have re-freshed and re-clad parts of
the building, creating a “vertical village”
for office users. These works were
completed in November 2010 and the
building is being marketed to potential
tenants with an encouraging level of
interest already being shown.
Legal agreements have been signed
to acquire the site at Mitre Square,
London EC3 from the City of London
and Ansbacher. Planning permission has
been granted for a new Grade A office
development of 270,000 sq ft and we
now have a deliverable scheme which
we are able to start once a pre-let or
funding partner is found.
The Hub, Pacific Quay, Glasgow was
completed in 2009. This 60,000 sq
ft building offers flexible office space
with an onsite cafe and events area.
Located in the midst of a media
hotbed with BBC Scotland and STV
as neighbours, this scheme has been
partly let to The Digital Design Studio,
the commercial arm of Glasgow School
of Art, Shed Media and other high-tech,
media-orientated tenants. Letting has
been slower over the last 12 months
but we expect interest to pick up as the
market improves.
page 14 Helical Bar plc 2011
business review
Barts, London EC1
In joint venture with the Baupost Group LLC
we have purchased the freehold interest
in land and buildings at Bartholomew Close,
Little Britain and Montague Street.
business review Helical Bar plc 2011 page 15
page 16 Helical Bar plc 2011
business review
Retail
Europa Centralna, Gliwice
In the UK we have two retail schemes:
This scheme is being developed
on land to the south of Gliwice at
the intersection of the A4 and A1
motorways. This highly visible site has
unparalleled accessibility and will be a
major regional shopping destination.
The retail park and shopping centre,
comprising approximately 67,000 sq
m (720,000 sq ft) of retail space, will
incorporate three distinct parts, being
a foodstore, DIY and household goods
and fashion. The scheme has been 50%
pre-let to Tesco, Castorama, H & M,
Media Expert and others. Construction
is due to commence by Q3 2011 with
completion expected in Q3 2012.
Parkgate, Shirley, West Midlands
At Parkgate, Shirley we have revised
our plans for the redevelopment of this
site and have submitted a new planning
application to Solihull Metropolitan
Borough Council, the results of which
we expect in Summer 2011. The
development will, however, continue
to include an 85,000 sq ft Asda
supermarket, 64,000 sq ft of retail and
circa 120 residential apartments and
townhouses.
Leisure Plaza, Milton Keynes
At Leisure Plaza, Milton Keynes, we have
planning consent for a 165,000 sq ft
retail store, 65,000 sq ft casino, 50,000
sq ft ice rink and 25,000 sq ft of other
leisure. We are working with the various
interested parties in this development to
bring it forward with a view to starting
construction later this year.
In Poland we have three schemes
totalling over 117,600 sq m
(1.2m sq ft):
Park Handlowy Mlyn, Wroclaw
Wroclaw is a large city in West Poland,
some 100km from the German border
and 470km south of Warsaw. This
9,600 sq m (103,000 sq ft) out of town
retail development was completed in
December 2008 and is fully let to a
number of domestic and international
retailers including T K Maxx, Media
Expert, Makro, Deichmann, Smyk,
Komfort and others.
Park Handlowy Turawa, Opole
Opole is located approximately 40km
to the west of Wroclaw along the A4
motorway and is the administrative centre
of the Opole province. This shopping
centre and retail park is anchored by a
Carrefour Hypermarket and a Praktiker
DIY store and comprises approximately
41,000 sq m (440,000 sq ft) of retail
space. The scheme has been forward
funded and sold to Standard Life and was
completed in March 2011. Negotiations
continue with potential tenants to let the
remaining space.
business review Helical Bar plc 2011 page 17
Park Handlowy Mlyn,
Wroclaw
page 18 Helical Bar plc 2011
business review
Mixed use
Industrial development
Fulham Wharf,
Fulham Wharf,
London SW6
London SW6
King Street,
King Street,
Hammersmith
Hammersmith
London W6
London W6
Tiviòt Way,
Stockport
King Street, Hammersmith,
London W6
We have a development agreement with
the London Borough of Hammersmith
& Fulham, in partnership with residential
specialist Grainger plc, for the
regeneration of the west end of King
Street, Hammersmith. We submitted a
planning application in November 2010
for new council offices, a foodstore and
restaurants around a new public square,
over 320 new homes and a new public
footbridge across the Great West Road,
which will re-connect Hammersmith
Town Centre to the River Thames and
Furnival Gardens.
We have built 120 units totalling over
570,000 sq ft for onward sale to owner
occupiers at two sites in Oxford, as
well as at Southampton, Southall
(West London) and Hailsham. We have
sold 111 of these units (543,000 sq
ft) including all of Southampton and
the two Oxford sites, with just nine
units remaining at Southall, of which
three have been sold since the year
end. In addition, we own a site in
Stockport with planning permission for
trade counters, industrial units and a
builders’ merchant, self storage and
car showroom. Infrastructure works
have recently completed at this site and
parcels of land have been sold to Big
Yellow and Infiniti (a car dealership).
White City, London W12
Following the publication of the draft
White City Opportunity Area Planning
Framework for public consultation
we are now seeking to progress
with a planning application for the
redevelopment of the 10 acre site which
we hold with our partner Aviva. A full
professional team is currently being
appointed with a view to submitting
in the Spring of 2012. The project will
involve 1.5 – 2m sq ft of mixed use
space with a residential bias.
Fulham Wharf, London SW6
At Fulham Wharf we have submitted,
with landowner Sainsbury’s, a planning
application for a 100,000 sq ft new
foodstore, together with 463 residential
units at Sands End in Fulham. The
proposal is to demolish the adjacent
dilapidated buildings, construct a new
store with housing above and turn the
existing store into new housing, creating
new public spaces and enhancing
access to a Thames riverside walkway
within the development. Helical will
receive a fee once planning permission
is secured together with a profit share.
business review Helical Bar plc 2011 page 19
Retirement villages
A retirement village is a private residential community in which active over-55s are able to live
independently in retirement. Residents have typically down-sized from a larger family home into
a cottage or apartment with no maintenance or security issues. With access to a central
clubhouse containing a bar and restaurant facilities and health and fitness rooms and
surrounded by maintained grounds, this retirement option is proving increasingly popular.
Bramshott Place,
Liphook, Hampshire
Bramshott Place,
Liphook, Hampshire
The original Bramshott Place Village
was an Elizabethan mansion built in
1580 by a local merchant. Whilst this
was demolished in the mid 19th Century
and replaced by Bramshott Grange, the
original Grade II listed Tudor Gatehouse
remains and has been fully restored.
Bramshott Grange operated most
recently as a hospital for the elderly but
closed in 1987. The land and buildings
remained derelict until Helical acquired
them in 2001. Changing planning from its
previously designated employment use to
a retirement village took several years but
was eventually achieved in 2006.
The development of 151 cottages and
apartments, and the new clubhouse,
started in late 2007 and has proceeded
in phases as units are sold. Currently,
we have sold 69 units with reservations
on a further 20 units. Construction of the
final phase of 55 units has started.
Cherry Tree Yard, Faygate,
Horsham, West Sussex
Cherry Tree Yard, a 30 acre site, had
operated as a sawmill with outside
storage for many years. Now vacant,
we were granted planning permission,
at appeal, in May 2009 following a public
inquiry where the Inspector allowed a
development comprising a retirement
village of 148 units, eight affordable
housing units, a 50 bed residential care
home and a central facilities clubhouse
building. Demolition has been completed
and enabling works will commence
shortly with construction of the retirement
village and clubhouse, to be built in
phases, expected to commence in late
2011. Following changes the scheme is
now for 154 retirement village units.
Maudsley Park, Great Alne,
Warwickshire
This is a Green Belt site which has
320,000 sq ft of built footprint and
benefits from Major Development Site
planning policy. Measuring 82 acres this
site received outline planning permission
in April 2011 for a retirement village of
132 units plus 47 extra care units.
Demolition and enabling works will
commence in late 2011 with
construction to follow in 2012.
St Loye’s College, Exeter
This 19 acre site was acquired in 2007
from the St Loye’s Foundation, a long
established rehabilitation college in the
city of Exeter. Resolution to grant
planning permission was obtained in
October 2009 for a retirement village of
206 units, a 50 bed residential care
home, an affordable “extra-care” block
of 50 units and a central facilities
clubhouse building. Construction of the
retirement village and clubhouse in
phases is expected to commence
during 2012.
Ely Road, Milton, Cambridge
This 21 acre site was acquired from
EDF in 2006 and was previously used
as a training centre and depot. Located
within the Green Belt, planning
permission has been obtained for a
retirement village of 101 units and a
central facilities clubhouse building.
page 20 Helical Bar plc 2011
Morgans Arcade, Cardiff
Inset: Clyde Shopping Centre, Clydebank
business review Helical Bar plc 2011 page 21
Idlewells,
Sutton-in-Ashfield
The Guineas,
Newmarket
Investment Portfolio
In recent years we have retained those
assets identified as having potential for
future growth, or which provided a strong
cash flow to the business, having
disposed of assets which had reached
their maximum potential. The remaining
portfolio provides a source of income to
cover overheads and finance costs as well
as the potential for future capital growth.
Acquisitions
Having made our first significant investment
property acquisition for four and a half
years in January 2010, acquiring Clyde
Shopping Centre in Glasgow with joint
venture partners, we bought a mainly
industrial portfolio for £46.5m in June
2010 (£48.6m gross cost).
The portfolio comprised nine assets,
of which six are multi-let industrial units,
one is a single let industrial and two are
offices (one located in Eastcheap in the
City). Two of these assets were sub-sold
for £15.8m pre-completion, leaving
seven assets yielding 10.5% net. Four
further assets have been sold since
acquisition for a profit of £5.1m and
there are valuation gains on the retained
assets of £0.5m. One further asset is
currently under offer for sale at its book
value. The remaining portfolio yields
10% on cost.
In addition, in the year to 31 March 2011,
we bought two shopping centres, in
Newmarket and Sutton-in-Ashfield (with
the contracts to purchase a further retail
parade having just been exchanged)
and an industrial estate in East Kilbride.
Newmarket was acquired for a NIY of
8.0% from the Administrators acting for
Lloyds Bank. The centre has been
undermanaged for some time and
potential asset management initiatives
include letting vacant units and
implementing the consented extension.
Sutton-in-Ashfield was acquired for a
NIY of 8.5% with scope to implement
rent reviews and amalgamate units.
We also acquired an office property
adjacent to our development site at
White City, which forms a key part of
the proposed development, for £9.6m,
a yield of 7.25%.
Barts, London EC1
In joint venture with the Baupost Group
LLC (Baupost 66.7%, Helical 33.3%) we
have purchased for £55m the freehold
interest in land and buildings at
Bartholomew Close, Little Britain and
Montague Street. The existing buildings
comprise 387,000 sq ft. The current
income from the NHS is circa £3.5m per
annum which reflects an initial yield of
6.3%. A major mixed use development
comprising over 450,000 sq ft of offices,
residential and retail is proposed and
it is intended to submit a planning
application later this year. Vacant
possession will be obtained from 2014
enabling redevelopment to commence.
Sales
Since last year we have completed sales
at Eastcheap London EC3, Witham,
Woking and Sawston (from the industrial
portfolio) at circa 30% above acquisition
cost, and at Crawley and Paignton at
2% above the 31 March 2010 valuation.
There was a valuation increase of 2.5%
in the year to 31 March 2011 including
capex, sales and purchases which
compares to the IPD monthly index
of 5.4% over the same period.
The breakdown of the investment portfolio is as follows:
Portfolio
weighting
Initial Reversionary
Yield
Yield
Yield on
letting voids
Equivalent
Yield (AiA)
Industrial
London Offices
South East offices
Retail
Total
%
14
31
3
52
100
%
7.9
6.3
7.4
7.2
7.0
%
9.5
8.1
8.6
8.0
8.2
%
9.6
7.7
7.4
8.0
8.1
%
8.8
7.7
7.5
7.6
7.8
page 22 Helical Bar plc 2011
business review
Shepherds Building,
London W14
Silverthorne Road,
London W8
Helical seeks to provide a continuing flow of development
profits. It has good experience across the different sectors of
offices, retail, industrial, mixed use and residential schemes.
These developments are either pre let or speculative and
financed either by Helical or by third party funding partners.
We hold 51% of our investment
portfolio (£160m, our share) in
four assets:
The Morgans, Cardiff
A prime retail asset on the Hayes
opposite St David’s 2, let to White Stuff,
Moss Bros, Schoon and TK Maxx. New
lettings to Urban Outfitters, Joules and
Dr Martens in the year have increased
rental values from £135 psf to £171 psf.
With current contracted rent of £3.1m
versus ERV of £4.17m, we see many
opportunities for asset management
initiatives and further rental growth over
the medium term.
Clydebank Shopping Centre, Clyde
In January 2010, we completed the
acquisition of Clydebank Shopping
Centre, North West of Glasgow for
£68m (8.3% net yield) from AXA/CIS
(£72.1m gross cost) in a joint venture
with Prime Commercial Properties, with
Helical taking a 60% equity stake. Value
has increased 12.5% since acquisition.
The current annual gross rent is £7.75m
and there is a vacant ERV of £1.5m
pa. There is considerable upside
potential both by way of yield shift and
letting vacant units. Net of head rents,
rental income has moved from £5.8m
at acquisition to £5.75m, but with
£500,000 of net income contracted
once rent frees expire, letting progress
is positive.
Shepherds Building, London W14
151,000 sq ft refurbished office just
south of Shepherds Bush Green and
Westfield shopping centre. The building
is let, mainly to media related tenants,
on an average rent of £22.40 psf. A
break clause was served in December
on £331,000 of income, but by the time
the tenant actually vacates at the end
of May we will have let £305,000 of this
and expect to get a further £65,000
from the remaining three studio units.
These are the only vacancies in the
building. Ongoing tenant demand is
strong with recent lettings at £25 to
£30 psf depending on size, giving good
prospects for rental growth over the
next three to five years.
Silverthorne Road, Battersea,
London SW8
Acquired with vacant possession in
2005 we subsequently fully refurbished
this office and TV studio complex to
create a multi let TV production and
media office hub of approximately
56,000 sq ft.
In 2007 we secured planning consent
for a further 50,000 sq ft of raised floor,
air conditioned office accommodation
over 5 floors which was developed out
during 2008 and concluded in early
2009. The site is currently 56% let by
floor area.
New lettings of circa 15,000 sq ft
in the last three months and the
significant increase in viewings for
larger requirements of 10,000 sq ft
to 20,000 sq ft suggests that the low
total occupational cost of circa £40psf
is making the building increasingly
attractive to those occupiers no longer
able to afford more central locations.
Future Investment
Acquisitions
The three tier market we have previously
referred to continues and, if anything,
the categorisation becomes more
defined, namely:
1. Prime/trophy ‘institutional’ assets
which have limited opportunities to
add value, characterised by
competitive bidding and, especially,
by significant money flows from
foreign investors. These are,
generally, prime retail, South-East
industrial and London.
2. Well located ‘institutional’ secondary
assets, which would benefit from
capex and value enhancing initiatives
with good occupational demand.
3. Weak secondary / tertiary assets,
which will in many cases show
dramatic falls in rents, lack of
occupational demand and increasing
voids, a market which Helical is
continuing to avoid.
The opportunity to buy assets with
substantial surplus rental income over
the cost of debt still exists, but demand
is already getting stronger for properties
fitting category 2 above. This is good
news for our existing portfolio, but will
mean that we are facing greater
competition when bidding. We continue
to seek multi-let properties, including
good quality shopping centres, retail
parks, industrial estates and inner-
London offices, at yields of between
7.5% and 9.5% as well as portfolios
offering opportunities for medium term
trading profits (as with our recent
industrial portfolio purchase).
Park Handlowy Turawa,
Opole
business review Helical Bar plc 2011 page 23
Careful, disciplined stock picking of
active management opportunities which
are temporarily below the institutional
radar but out of reach of buyers who
are unable to raise debt is our key focus.
Whilst some of these opportunities will
come from banks selling distressed
assets, we believe they are more likely
to come from over-geared private
property companies and from institutions
and larger REITs looking to rebalance
their portfolios.
Quotient
In January 2007 we acquired a research
facility near Newmarket in a joint venture
with the majority shareholder of Quotient
Biosciences Group Ltd which occupies
the buildings. As part of the transaction,
we acquired a minority stake in Quotient,
a private biosciences company.
Previously held at a value of £13.3m
(cost £1.8m), we have now written
down our investment to £nil to reflect
concerns over trading conditions and its
financial position.
page 24 Helical Bar plc 2011
portfolio statistics
Investment portfolio
Valuation movements
Sector
London offices
Provincial offices
Total offices
In town retail
Out of town retail
Total retail
Industrial
Total
Note: Including sales, purchases and capex
Valuation yields
Sector
Offices
Retail
Industrial
All
Capital values, vacancy rates and lease terms
Sector
All offices
London offices
Retail
Industrial
Total
Lease expiries and tenant break options in:
Percentage of rent roll
Number of leases
Average rent per lease
Valuation
increase/
(decrease)
%
6.7
1.6
5.9
2.1
1.9
2.1
(3.8)
2.5
Weighting
%
31
3
34
47
5
52
14
100
On letting
voids
%
On rack
rental
value
%
Equivalent
%
True
equivalent
%
7.6
8.0
9.6
8.1
8.2
8.0
9.5
8.2
7.9
7.6
8.8
7.8
8.2
7.5
9.3
8.2
Initial
%
6.4
7.2
7.9
7.0
Capital value
psf
£
Vacancy
rate
%
Average
unexpired
lease term
Years
230
257
144
42
120
2013
8.8%
50
18
15
7
11
10
2014
6.8%
44
4.7
2.2
11.1
4.1
8.4
2015
5.9%
41
2011
14.8%
112
2012
6.7%
73
£37,200
£26,400
£49,400
£43,400
£40,200
Lease expiries and tenant breaks in year
Leases renewed
Options not exercised
Tenants holding over
Rents lost at break/expiry
Rents at risk
Contracted rent changes in the year
Rent lost at break/expiry
Rent lost through administration
Leases renewed
Fixed uplifts
New lettings
portfolio statistics Helical Bar plc 2011 page 25
Year to
31 March 2011
£
1,445,300
164,200
699,600
2,309,100
1,039,000
3,348,100
Rent
£
(1,039,000)
(145,300)
1,445,300
1,249,500
1,531,200
%
69
31
100
Change
£
(1,039,000)
(145,300)
251,400
194,800
1,531,200
793,100
Investment Portfolio – changes in rental value
March 2010 –
March 2011
%
March 2010-
September 2010
%
September 2010 -
March 2011
%
Industrial
Out of town retail
In town retail
Total retail
Provincial offices
London offices
Total offices
Total
Development and trading portfolio1, 2
Project type
Change of use
Industrial development for freehold sales
Retirement village development
Office development
Retail development (Helical Poland)
Others – mainly mixed development
Total
-5.4
2.4
2.7
2.6
–
1.6
1.4
1.3
Book
cost
£m
17
13
62
14
50
2
-5.6
-0.3
-0.6
-0.6
–
-2.2
-1.9
-1.6
0.2
2.7
3.3
3.2
–
3.9
3.4
2.9
Write
down
£m
Written
down
book cost
£m
Directors’
valuation
£m
Surplus
over
book cost
£m
–
(3)
(2)
(5)
–
–
17
10
60
9
50
2
28
10
74
11
55
2
11
–
14
2
5
–
32
158
(10)
148
180
(Excluding Group’s share of trading and development properties held in joint ventures)
Notes:
1. Total writedowns in the year were £15m of which £5m were in respect of assets sold by 31 March 2011.
2. Basis of valuation – the Directors’ valuation of the properties is based on current site values.
page 26 Helical Bar plc 2011
property portfolio
Income producing assets
OFFICES
Address
Shepherds Building, Shepherds Bush, London W14
61 Southwark Street, London SE1
200 Great Dover Street, London SE1
80 Silverthorne Road, Battersea, London SW8
82 Silverthorne Road, Battersea, London SW8
Fordham, Newmarket
Barts, London EC1
RETAIL - SHOPPING CENTRE
Address
The Guineas, Newmarket
Idlewells Shopping Centre, Sutton-in-Ashfield
Clyde Shopping Centre, Clydebank
RETAIL - IN TOWN
Address
Morgan Department Store, Cardiff
1 - 5 Queens Walk, East Grinstead
RETAIL - OUT OF TOWN
Address
Otford Road Retail Park, Sevenoaks
Stanwell Road, Ashford
INDUSTRIAL
Address
Standard Industrial Estate, North Woolwich E16
Westgate, Aldridge
Waterfront Business Park, Fleet, Hampshire
Dales Manor Business Park, Sawston, Cambridge
Hawtin Park, Blackwood
Winterhill Industrial Estate, Milton Keynes
Merlin Business Park, Manchester
Crownhill Business Centre, Milton Keynes
Motherwell Food Park, Bellshill
Golden Cross, Hailsham
East Kilbride
Region
London
London
London
London
London
South East
London
Region
South East
Midlands
Scotland
Tenure
Freehold
Freehold
Leasehold
Freehold
Freehold
Freehold
Freehold
Tenure
Leasehold
Freehold
Leasehold
Region
Wales
South East
Tenure
Freehold
Freehold
Region
South East
South East
Tenure
Freehold
Leasehold
Region
London
Midlands
South East
South East
Wales
Midlands
North
Midlands
Scotland
South East
Scotland
Tenure
Freehold
Freehold
Freehold
Freehold
Freehold
Freehold
Leasehold
Leasehold
Leasehold
Freehold
Feuhold
Acquired
2000
1998
2008
2005
2008
2007
2011
Acquired
2011
2011
2010
Acquired
2005
2005
Acquired
2003
2004
Acquired
2002
2006
2000
2003
2003
2004
2010
2010
2010
2001
2011
Area
Sq. ft. (NIA)
151,000
67,000
36,000
56,000
51,000
70,000
387,000
818,000
Area
Sq. ft. (NIA)
111,000
185,000
627,000
923,000
Area
Sq. ft. (NIA)
246,000
37,000
283,000
Area
Sq. ft. (NIA)
42,000
32,000
74,000
Area
Sq. ft. (NIA)
50,000
184,000
45,000
62,000
249,000
24,000
62,000
108,000
79,000
102,000
153,000
1,118,000
property portfolio Helical Bar plc 2011 page 27
Helical
interest
100%
100%
100%
75%
75%
53%
33%
Helical
interest
100%
100%
60%
Helical
interest
100%
89%
Helical
interest
75%
75%
Helical
interest
60%
90%
100%
67%
100%
50%
100%
100%
100%
100%
100%
Description
Media style offices refurbished in 2001
Refurbished with added penthouse suite
Re-development/refurbishment potential
Media style offices refurbished in 2006
Media style offices built in 2008
R & D space and offices on 32 acres
Offices let to NHS, subject to future development
Description
Multi-let shopping centre
Multi-let regional shopping centre
Multi-let regional shopping centre
Description
Refurbished store let as prime retail units + arcades
Retail units 95% let to Sainsbury’s
Description
Retail park let to Wickes, Currys & Carpetright
Solus unit let to Focus DIY store
Description
Multi-let industrial estate
Single-let refurbished industrial unit
Multi-let industrial estate
Multi-let industrial estate
Offices and industrial units
Offices and industrial units
Single let industrial unit
Multi-let industrial estate
Multi-let industrial estate
Industrial units
Multi-let industrial estate
Average
passing rent
£22.42
£21.03
£19.95
£13.98
£20.48
£15.37
£8.81
Average
passing rent
£35-£75
£35-£60
£35-£80
Average
passing rent
£13.14
£12.00
Average
passing rent
£17.37
£17.76
Average
passing rent
£8.18
£2.93
£6.11
£7.28
£2.70
£5.28
£5.50
£5.28
£5.10
£4.26
£3.92
Vacancy
rate
0%
11%
0%
12%
90%
0%
0%
Vacancy
rate
13%
1%
7%
Vacancy
rate
14%
6%
Vacancy
rate
0%
0%
Vacancy
rate
5%
0%
21%
0%
16%
0%
0%
0%
18%
76%
14%
page 28 Helical Bar plc 2011
property portfolio
Development programme
OFFICES
Address
200 Aldersgate Street, London EC1
Mitre Square, London EC3
The Hub, Pacific Quay, Glasgow
INDUSTRIAL
Address
Scotts Road, Southall, West London
Tiviot Way, Stockport
Ropemaker Park, Hailsham
RETAIL - POLAND
Address
Wroclaw
Opole
Europa Centralna, Gliwice
RETAIL - OUT OF TOWN
Address
Leisure Plaza, Milton Keynes
RETAIL - IN TOWN
Address
Parkgate, Shirley, West Midlands
C4.1, Milton Keynes
Bluebrick, Wolverhampton
CHANGE OF USE POTENTIAL
Address
Cawston, Rugby
Arleston, Telford
Region
London
London
Scotland
Region
London
North West
South East
Region
Poland
Poland
Poland
Region
Midlands
Region
Midlands
Midlands
Midlands
Region
Midlands
Midlands
Area
Sq. ft.
370,000
270,000
60,000
700,000
Area
Sq. ft.
18,000
189,000
70,000
277,000
Area
Sq. ft.
103,000
440,000
720,000
1,263,000
Area
Sq. ft.
305,000
305,000
Area
Sq. ft.
149,000
33,000
27,000
209,000
Helical
interest
Dev. Man.
100%
100%
Helical
interest
100%
100%
90%
Helical
interest
50%
50%
50%
Helical
interest
50%
Helical
interest
50%
50%
50%
Helical
interest
100%
100%
property portfolio Helical Bar plc 2011 page 29
Fund/owner
Type of development
Deutsche Pfandbriefbank
Refurbishment completed in Oct 2010
Helical
New office building completed 2009
New office building
Description
Industrial units
Industrial, trade counter etc
Industrial and food store/rest
Type of development
New build
New build
New build
Fund/owner
Helical
Standard Life
Helical
Description
Description
Type of development
Completed development, fully let
Completed
To commence 2011
New build
New build
New build
Consent for 165,000 sq ft retail store, 65,000 sq ft casino, 75,000 sq ft other leisure
Description
85,000 sq ft Asda, 64,000 sq ft retail, 120 residential units
Remaining retail and office units
Refurbished railway station with permission for casino use
Description
32 acre greenfield site with residential potential
19 acre greenfield site with residential potential
page 30 Helical Bar plc 2011
property portfolio
Bramshott Place,
Liphook, Hampshire
Development programme
RETIREMENT VILLAGES
Address
Region
Units
Bramshott Place, Liphook, Hampshire
South East
St Loye’s College, Exeter
Maudsley Park, Great Alne
South West
Midlands
151
159
132
Helical
interest
100%
100%
100%
Description
69 units sold, 20 under offer
Cleared site with detailed consent for a retirement village
320,000 sq ft industrial estate on a 82 acre site with
resolution to grant outline consent for a retirement village
Ely Road, Milton, Cambridge
South East
101
100%
Site with detailed consent for a retirement village
Cherry Tree Yard, Faygate, Horsham
South East
154
100%
Cleared site with detailed consent for retirement village
697
property portfolio Helical Bar plc 2011 page 31
King Street, Hammersmith,
London
MIXED USE DEVELOPMENTS
Address
Region
Helical
interest
White City, London W12
London
Consortium
Consortium interest in a 1.5m – 2m sq ft commercial and residential scheme
King Street, Hammersmith, London
London
50%
Planning application submitted for new council offices, food store,
restaurants and 320 residential units
Fulham Wharf, London SW6
London
Dev. Man.
100,000 sq ft foodstore and 463 residential units
page 32 Helical Bar plc 2011
performance & risk
A property company’s share price should reflect growth in net assets per
share. Our Group’s main objective is to maximise growth in assets from
increases in investment portfolio values and from retained earnings from
other property related activities.
Key performance indicators
and benchmarks
We incentivise management to outperform the
Group’s competitors by setting the right levels for
performance indicators against which rewards
are measured. We also design our remuneration
packages to align management’s interests with
shareholders’ aspirations. Key to this is the
monitoring and reporting against identifiable
performance targets and benchmarks. For a
number of years we have reported on these, the
most important of which are:
Investment Property Databank
The Investment Property Databank (“IPD”)
produces a number of independent
benchmarks of property returns which are
regarded as the main industry indices. IPD
has compared the ungeared performance of
Helical’s total property portfolio against that of
portfolios within IPD for the last 20 years. The
Group’s annual performance target is to exceed
the top quartile of the IPD database. Helical’s
ungeared performance for the year to 31 March
2011 was 2.7% (2010: 8.5%) compared to
the IPD median benchmark of 11.7% (2010:
17.4%) and upper quartile benchmark of 12.1%
(2010: 21.5%).
As referred to in the Chairman’s Statement, the
year to 31 March 2011 was a period during
which the Group continued to transform its
property holdings and this has had an impact
on performance in the year. However, over
three, five and ten years the Group’s property
portfolio continued to outperform the IPD
benchmark.
IPD (all monthly and quarterly valued funds)
Net asset value
Ungeared returns
31.3.11 31.3.10 31.3.09
%
%
%
Helical
2.7
8.5
(6.3)
IPD upper quartile
12.1
21.5
(21.9)
Percentile rank
96
90
1
Net asset value per share represents the share
of net assets attributable to each ordinary
share. Whilst the basic and diluted net asset
per share calculations provide a guide to
performance the property industry prefers to
use an adjusted diluted net asset per share.
The adjustments necessary to arrive at this
figure are shown in note 34 to these accounts.
To 31 March 2011 3 years 5 years 10 years
Helical
IPD benchmark
Percentile rank
1.4
(0.9)
24
5.5
0.7
4
11.5
6.7
4
Management is incentivised to exceed 15%
p.a. growth in net asset value per share.
The adjusted diluted net asset value per share,
excluding trading stock surplus, at 31 March
2011 was 225p (2010: 241p).
Including the surplus on valuation of trading and
development stock, the diluted EPRA net asset
value per share at 31 March 2011 was 253p
(2010: 272p). Diluted EPRA triple net asset
value per share was 246p (2010: 259p).
Other key performance indicators include:
(cid:115)(cid:229)(cid:229)(cid:65)(cid:229)(cid:83)(cid:85)(cid:82)(cid:80)(cid:76)(cid:85)(cid:83)(cid:229)(cid:79)(cid:70)(cid:229)(cid:78)(cid:69)(cid:84)(cid:229)(cid:82)(cid:69)(cid:78)(cid:84)(cid:65)(cid:76)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:229)(cid:79)(cid:86)(cid:69)(cid:82)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)
costs, overheads and dividends
(cid:115)(cid:229)(cid:83)(cid:84)(cid:65)(cid:70)(cid:70)(cid:229)(cid:82)(cid:69)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:65)(cid:86)(cid:69)(cid:82)(cid:65)(cid:71)(cid:69)(cid:229)(cid:76)(cid:69)(cid:78)(cid:71)(cid:84)(cid:72)(cid:229)(cid:79)(cid:70)(cid:229)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)
(cid:115)(cid:229)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:83)(cid:73)(cid:79)(cid:78)(cid:229)(cid:73)(cid:78)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:38)(cid:52)(cid:51)(cid:37)(cid:20)(cid:229)(cid:39)(cid:79)(cid:79)(cid:68)(cid:229)(cid:41)(cid:78)(cid:68)(cid:69)(cid:88)
The returns on shareholder capital earned
by Helical are generally higher than those
measured by IPD due to the use of gearing.
The returns noted above take no account of
the £32m (2010: £33m) surplus of trading and
development stock above book value arising
from the directors’ valuation.
Total Shareholder Return
Total Shareholder Return (“TSR”) measures
the return to shareholders from share price
movements and dividend income and is used to
compare returns between companies listed on
the London Stock Exchange. Helical’s TSR for
the year to 31 March 2011 was -19.3% (2010:
20.2%) compared to the median of the listed
real estate sector of 12.6% (2010: 56.7%).
However, over three, five, ten, fifteen, twenty
and twenty-five years Helical’s TSR has
outperformed the Listed Real Estate Sector
Index as shown on page 2 of this Report and
Accounts.
performance & risk Helical Bar plc 2011 page 33
Risk management summary
How we manage our risks
Risk is an integral part of any company’s business activities and Helical’s ability to identify, assess, monitor and manage each risk
to which it is exposed is fundamental to its financial stability, current and future financial performance and reputation.
Strategic risks
Risk
Reputation
Impact
Action taken to mitigate
Inability to raise new share capital
Deal flow dries up
Management in regular communication with all shareholders
and with major institutional shareholders in face to face meetings.
Maintain high profile in the market.
Continue close contact with all major deal flow sources.
Ensure depth of management.
Long term underperformance
of real estate sector
Share price falls
Pursue outperformance within sector compared with peers.
Regulatory changes eg SDLT,
abolition of Empty Property rates relief
Transactional and holding costs increase
Lobby Government and industry representatives to mitigate.
Retention of key senior employees
Inability to access and exploit deal flow
Remuneration packages that retain and motivate.
Operational risks
Risk
People related issues
Impact
Low morale
Computer software/hardware failure
Loss of transactional history
Action taken to mitigate
Key management ably assisted by a loyal group of long-standing
employees whose remuneration is designed to retain staff with
full participation in the Company’s Share Incentive Plan.
External IT consultancy used, backed up by technical support
from a number of hardware and software suppliers.
Breaches of authorisation levels
Inappropriate use of Company resources
All significant transactions approved at appropriate level.
Market risks
Risk
Inappropriate balance between
investment and development
and between sectors
Liquidity risks
Risk
Impact
Action taken to mitigate
Returns lower than market
Selecting the most appropriate level of exposure to each sector
is fundamental to the long term success of the company.
Impact
Action taken to mitigate
Inadequate financial resources
Unable to meet liabilities as they fall due
Unable to undertake investment decisions
arising from the Company’s assessment of
the market
Company finances its operations from the cash flow generated
by its property portfolio, bank borrowings, third party financing
and from the capital markets through share issues.
The guiding principle is to ensure that funding is obtained from
diverse providers with a range of maturities backed up by interest
rate protection, where appropriate. Financing and interest rate
protection is discussed further in note 28 on pages 83 and 84.
Credit risks
Risk
Counterparty financial failure
Impact
Action taken to mitigate
Loss arising from failed tenants, lenders,
suppliers etc
The financial assessment of tenants, contractors and potential
partners is part of the daily routine of the Company.
Operational risks
Operational risks are those that the Group
may suffer a loss from inadequate internal
processes, systems, resources, incorrect
decision-making or through external events.
Losses from operational risk can arise from:
– people-related issues such as inadequate
resources, skills or departure of key
personnel;
– software or hardware failure, inadequate
IT security, failure of back-up facilities;
– incorrect or inappropriate use of valuation
models, inappropriate gearing levels,
breaches of authorisation levels;
– fraud from internal or external sources;
– external events leading to a loss of a major
provider of services e.g. contractor failure.
The Group’s approach is not to eliminate
operational risk, but rather to identify the areas
in which it might arise and to contain it within
acceptable limits through the application of
effective controls. Ultimately, the management
of operational risk is dependent upon the
application of sound management judgement.
The close involvement of the executive directors
in the day-to-day running of the business is
critical to that judgement.
The Group has not suffered any material losses
arising from exposure to operational risks in the
year under review.
page 34 Helical Bar plc 2011 performance & risk
Risk governance
The responsibility for the governance of the
Group’s risk profile lies with the Board of
Directors of Helical. The Board is responsible for
setting the Group’s risk strategy by assessing
risks, determining its willingness to accept
those risks and ensuring that the risks are
monitored and that the Group is aware of and,
if appropriate, reacts to changes in those risks.
The Board is also responsible for allocating
responsibility for risk within the Group’s
management structure.
Risk register
The Group maintains a risk assessment register
which enables the Board to focus on perceived
specific key risks, assessing their magnitude
and the probability of negative outcomes. This
risk register is reviewed regularly and strategies
are adopted to minimise and eliminate the risks
identified.
Strategic risks
Strategic risks are those risks that may adversely
affect the Group’s financial performance by
following an inappropriate strategy or by the
failure to execute an appropriate strategy.
Strategic risks arise over a long time frame
where there are fundamental differences between
the business environment in which the Group
operates and the environment assumed on
the establishment of that strategy.
The Group’s reputation is a key component
of its ability to achieve its strategic goals and
success in meeting these goals depends not
only on the effective management of risks
but also on the maintenance of its reputation
among stakeholders i.e. employees, investors,
regulators, business partners, financial
institutions and the public.
Measuring the impact of the Group’s reputation
is not a science and, in the view of the Group,
may best be measured by the willingness of
stakeholders to continue to deal with Helical.
During the last year there have been no signs
that we are not seeing all the opportunities to
deal in property that it would expect and recent
transactions suggest that we continue to be a
Group that others want to deal with. Internally,
risks to the Group’s reputation are mitigated by
the application of an internal Code of Conduct
and “whistle blowing” procedures which are
reviewed annually.
The other main strategic risks identified by the
Group include:
– long-term under-performance of the real
estate sector compared to alternative forms of
investment e.g. equities, gilts;
– regulatory changes which significantly impact
on the attractiveness of real estate as an
investment compared to alternative forms of
investment, or on the attractiveness of investing
in real estate through a listed group; and,
– retention of key senior employees.
The principal strategic risks noted above,
and the underlying drivers of such risks, are
monitored by management and discussed
regularly in the Business Plan presented by the
Group’s Finance Director to the full Board each
year.
In addition the Group receives regular updates
on the impact of economic scenarios on the
real estate sector as well as subscribing to
a number of economic journals in order that
senior employees are kept up-to-date.
The Board has a schedule of matters
specifically reserved to it for decision. The
Board controls the business but delegates
day-to-day responsibility to the executive
management. However, there are a number
of matters which are required to be or, in the
interests of the Group, should only be decided
by the Board of Directors as a whole.
The Board monitors the financial performance
of the Group at regular Board meetings where
comparisons against budgets and forecasts
are made together with a review of key
performance indicators.
The remuneration packages of senior directors
and employees are seen as the key to their
retention and motivation. These remuneration
packages are designed to provide a basic
level of salary at or below the median of the
Group’s peer group but with cash bonuses and
share awards at the top end of the peer group
rewarding outperformance compared to that
peer group.
The most recent annual review of the strategic
risks faced by the Group indicate that the
business of Helical is appropriate to the
business environment in which it competes.
performance & risk Helical Bar plc 2011 page 35
Market risks
Liquidity risks
Credit risks
Market risks arise from the possibility that the
Group may suffer reduced income or a loss
resulting from fluctuations in the values of, or
income from, its real estate portfolio.
Market risk is a key component of the Group’s
long-term strategy with exposure to the various
real estate sectors fluctuating as perceptions
of the future performance of each of those
sectors change. Net asset value growth, a key
performance indicator, is dependent upon an
ability to move easily between sectors at the
appropriate time.
The Group’s directors constantly analyse
fluctuations in market movements using
evidence gathered from a variety of public
and personal sources, using this analysis to
determine the future direction of real estate
investment.
Selecting the most appropriate level of
exposure to each sector is fundamental to the
success of the Group. Measuring that success
is undertaken by comparing the Group’s
portfolio returns over short-, medium- and
long-term periods with those as reported by
Investment Property Databank (“IPD”), the
source of the main real estate sector indices.
In the year under review, the Group’s real
estate portfolio underperformed compared to
the majority of property funds in the IPD index.
However, over the medium- and long-term, the
Group’s performance compares favourably with
the rest of the sector as reported by IPD on
pages 2 and 32.
Liquidity risks arise from having insufficient
financial resources to enable the Group to
meet its obligations as they fall due, or can only
secure them at an excessive cost. Liquidity
risks also arise where the Group has insufficient
resources to enable investment decisions,
arising from its assessment of market risks, to
be executed.
The Group finances its operations from the
cash flow generated by its operations, bank
borrowings, both secured and unsecured and
over short-, medium- and long-term periods,
and from the capital markets through share
issues.
The management of cash and debt is
monitored daily with medium-term cash flows
prepared weekly and long-term cash flows
discussed regularly in management meetings
and presented to the Board at each quarterly
Board meeting.
The Group’s overall approach is to provide
sufficient liquidity to be able to meet, from
cash resources and available facilities, the
expected requirements of the business. The
guiding principle is to ensure that funding is
obtained from diverse providers with a range
of maturities, backed up by interest rate
protection where appropriate. This is to ensure
that a stable flow of financing is available and
to provide protection in the event of market
disruption.
The Group’s cash resources, bank borrowings,
interest rate protection and gearing are noted
on pages 78 to 84.
Credit risk is the possibility that the Group
may suffer a loss from the failure of its tenants,
borrowers, suppliers or other counterparties to
meet their financial obligations to the Group,
including their failure to meet them in a timely
manner. It includes the risks that the Group may
suffer a loss as a result of guarantees to third
parties. Credit risk in order to earn a return is
not a central feature of the Group’s business
activities, rather it is a consequence of those
activities.
The Group is exposed to credit risk in respect of
the financial stability of the tenants and potential
tenants in its real estate portfolio. It is also
exposed to credit risk where cash flows from
the sales of real estate, whether investment or
trading properties or funded developments, are
deferred. The potential failure of major suppliers
such as contractors or sub-contractors also
exposes the Group to credit risk. Guarantees to
third parties, such as banks, where the Group is
in joint venture with partners expose the Group
to risks that those partners are unable to fulfil
their obligations.
The financial assessment of tenants, potential
tenants, contractors and potential partners
are part of the daily routine of the Group. The
assessment of these third parties is undertaken
by the finance department in discussion with
the executive responsible for the real estate
decision.
In the year under review bad debts constituted
less than 2% of gross rental income.
page 36 Helical Bar plc 2011
financial review
Consolidated income statement
Results for the year
The profit before tax, property write-downs, investment property gains and impairment of investments reduced to £2.9m (2010: £9.7m). Investment
property gains comprised a revaluation surplus of £2.7m (2010: £13.1m) and a gain on the sale of investment properties of £4.8m (2010: loss of
£4.9m). Offset against these profits were property write-downs of trading and development stock of £14.9m (2010: £10.0m), mainly resulting from a
write-down of the Group’s office developments in Glasgow and Crawley and reductions in the carrying value of land held for industrial and change of
use potential, and an impairment of available-for-sale investments of £1.8m (2010: £nil). Loss before tax was £6.3m (2010: profit of £7.9m).
Development losses, before stock write-downs, totalled £1.7m (2010: profits of £8.7m). There were trading losses of £0.4m (2010: £nil) and there was a reduced
contribution from the Group’s share in the results of joint ventures of £2.9m (2010: £3.7m). Net rental income, excluding that in joint ventures, remained steady at
£14.2m (2010: £14.2m).
Net rental income
The Group’s share of net rental income increased to £17.8m (2010: £14.9m) including its share of net rental income of joint ventures. Excluding joint
ventures, net rental income remained at £14.2m. Rental costs decreased to £4.4m (2010: £4.7m). Tenant bad debts remain low at less than 2% of
gross rental income.
Development profits
Development profit from the scheme in Liphook was offset by stock write-downs of £14.9m (2010: £10.0m) and below book value sales at Crawley
and Southampton to give a development loss for the year of £16.6m (2010: £1.3m).
Trading losses
Trading losses for the year were £0.4m (2010: £nil).
Share of results of joint ventures
During the year the Group’s share of results from joint venture partners was £2.9m (2010: £3.7m) mainly due to the Group’s share of net income and
the revaluation surplus from its investment in the Clyde Shopping Centre.
Gain on sale and revaluation of investment properties
During the year the Group sold investment properties with book values of £27.9m (2010: £40.4m) on which it made a £4.8m gain (2010: loss of
£4.9m). The properties sold included Eastcheap, Sawston Trade Park, Witham and Woking (which were bought in the year as part of the Focus
portfolio), and Paignton. The revaluation surplus for the year was £2.7m (2010: £13.1m).
Administrative expenses
Administrative expenses decreased to £7.0m (2010: £8.7m) primarily driven by a reduction in the cost of share awards. Administrative expenses,
before share based payments credit increased to £7.3m (2010: £6.7m).
Finance costs, finance income and derivative financial instruments
Interest payable on bank loans, before capitalised interest, decreased from £11.0m to £9.7m due to a fall of average interest rates and a small reduction in
the level of borrowings. Capitalised interest increased to £4.2m from £3.2m. Finance income earned on cash deposits decreased to £0.7m (2010: £1.0m).
Net finance costs
Interest payable on bank loans
Other interest payable
Finance arrangement costs
Interest capitalised
Finance costs
Interest receivable
2011
£000
9,690
675
806
(4,179)
6,992
(652)
2010
£000
10,956
696
872
(3,196)
9,328
(1,039)
2009
£000
15,890
362
321
(6,855)
9,718
(2,082)
Derivative financial instruments have been valued on a mark to market basis and a credit of £1.8m (2010: £1.2m) has been recognised in the Income
Statement.
Foreign exchange losses and gains
A foreign exchange loss of £0.1m (2010: £1.1m) has been recognised in respect of the Group’s retail developments in Poland.
financial review Helical Bar plc 2011 page 37
Taxation
The deferred tax asset is principally derived from tax losses which the Group believe will be utilised against profits in the foreseeable future.
Dividends
The Board is recommending to shareholders at the Annual General Meeting on 26 July 2011 a final dividend of 3.15p per share to be paid on 28 July
2011 to shareholders on the register on 1 July 2011. This final dividend, amounting to £3,213,000 has not been included as a liability at 31 March
2011, in accordance with IFRS.
During the year the Group paid the 2010 final dividend of 0.25p per share and an interim dividend for 2011 of 1.75p per share.
Dividends
First interim
Second interim
Prior period final
Total
(Loss)/earnings per share
2011
pence
2010
pence
2009
pence
1.75
–
0.25
2.00
1.75
2.75
2.75
7.25
1.75
–
2.75
4.50
Loss per share in the year to 31 March 2011 was 3.6p (2010: earnings per share of 9.1p) per share and on a diluted basis was 3.6p (2010: earnings of
9.1p) per share. Diluted EPRA loss per share increased to 6.4p (2010: 0.1p) per share.
(Loss)/earnings per share
(Loss)/earnings per share
Diluted (loss)/earnings per share
Diluted EPRA (loss)/earnings per share
2011
pence
(3.6)
(3.6)
(6.4)
2010
pence
9.1
9.1
(0.1)
2009
pence
(56.6)
(56.6)
9.0
(Loss)/earnings per share calculations are based on the weighted average number of shares held in the year. This is a different basis to the net asset
value per share calculations which are based on the number of shares at 31 March 2011.
In accordance with IAS 33 on Earnings per Share, no weighting adjustment has been made for share awards in existence during the years to 31 March
2011 and 31 March 2009 as losses were made during those years. Accordingly, the basic and diluted loss per share for these years are the same.
Consolidated balance sheet
Investment portfolio
During the year investment properties with a book value of £27.9m were sold. New properties of £74.6m were acquired (including the Focus portfolio,
East Kilbride and two shopping centres in Sutton-in-Ashfield and Newmarket). The purchase of Barts is included in these accounts as an investment in
joint ventures. In addition, around £3.2m of capital expenditure was spent on refurbishing various office, industrial and retail buildings. At 31 March 2011
there was a revaluation surplus, net of joint venture share, of £2.7m (2010: £13.1m) on the investment portfolio.
Investment portfolio
Cost or valuation at 1 April
Additions at cost
Transferred from land, trading and development properties
Disposals
Profit share partners’ share of revaluation
Revaluation
Cost or valuation at 31 March
2011
£000
2010
£000
2009
£000
219,901
241,287
306,778
77,864
4,192
16,011
–
–
(27,902)
(40,438)
(657)
1,756
1,514
(9,005)
(6,006)
2,670
13,104
(68,005)
271,876
219,901
241,287
page 38 Helical Bar plc 2011 financial review
Net asset values
After removing the effect of the Placing in the year, equity shareholders’ funds, on which the net asset value per share is calculated, have decreased
by £15.2m. This has led to a 7% decrease in adjusted diluted net assets per share to 225p (2010: 241p). Taking into account the directors’ valuation
of trading and development stock of £32m (2010: £33m), the diluted EPRA net assets per share decreased by 7% to 253p (2010: 272p).
Net asset values per ordinary share
Diluted
Adjusted diluted
Diluted EPRA
Diluted EPRA triple net asset value
2011
pence
2010
pence
2009
pence
218
225
253
246
228
241
272
259
226
242
286
269
The net asset value per share calculations are included in Note 34 of this statement.
Borrowings and financial risk
Net debt has increased from £203.0m to £206.1m. Taken with an increase in net assets of £12.8m, the Group’s net gearing has fallen from 84% to 81%.
The fair value of the Group’s investment, trading and development portfolio at 31 March 2011 was £451.9m (2010: £435.4m). With net borrowings of
£206.1m (2010: £203.0m) the ratio of net borrowings to the value of the property portfolio was 45.6% (2010: 46.6%).
At 31 March 2011 the Group had £75.4m (2010: £92.6m) of fixed rate borrowings with an average effective interest rate of 5.77% (2010: 6.43%) and
an average length of 2.3 years (2010: 2.3 years), and £91m of interest rate caps at an average of 4.9% (2010: £34m at 6.00%). In addition, the Group
had a £40m interest rate floor at 4.50% until 2013.
Net debt and gearing
Net debt
Gearing
2011
2010
2009
£206.1m
£203.0m
£224.7m
81%
84%
95%
The Group seeks to manage financial risk by ensuring that there is sufficient financial liquidity to meet foreseeable needs and to invest surplus cash
safely and profitably. As at 15 June 2011 the Group has over £95m of cash and agreed, unutilised, bank facilities as well as £59m (2010: £32m) of
uncharged property on which it could borrow funds. Helical’s average interest rate is 4.35%.
Going concern
The directors have reviewed the current and projected financial position of the Group making reasonable assumptions about future trading performance.
The key areas of sensitivity are:
(cid:115)(cid:229)(cid:84)(cid:73)(cid:77)(cid:73)(cid:78)(cid:71)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:229)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)
(cid:115)(cid:229)(cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:229)(cid:79)(cid:70)(cid:229)(cid:76)(cid:79)(cid:65)(cid:78)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:229)(cid:67)(cid:65)(cid:83)(cid:72)(cid:229)(cid:109)(cid:79)(cid:87)(cid:83)
(cid:115)(cid:229)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:73)(cid:84)(cid:83)(cid:229)(cid:73)(cid:77)(cid:80)(cid:65)(cid:67)(cid:84)(cid:229)(cid:79)(cid:78)(cid:229)(cid:67)(cid:79)(cid:86)(cid:69)(cid:78)(cid:65)(cid:78)(cid:84)(cid:83)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:79)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:229)(cid:76)(cid:79)(cid:65)(cid:78)(cid:229)(cid:82)(cid:69)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)
(cid:115)(cid:229)(cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:84)(cid:69)(cid:68)(cid:229)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:68)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)
(cid:115)(cid:229)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:82)(cid:69)(cid:78)(cid:84)(cid:65)(cid:76)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:79)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:229)(cid:66)(cid:65)(cid:68)(cid:229)(cid:68)(cid:69)(cid:66)(cid:84)
(cid:115)(cid:229)(cid:82)(cid:69)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:84)(cid:73)(cid:77)(cid:73)(cid:78)(cid:71)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:82)(cid:65)(cid:68)(cid:69)(cid:229)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)
The forecast cashflows have been sensitised to eliminate those cash inflows which are less certain and to take account of a potential further deterioration
of property valuations. From their review the directors believe that the Group has adequate resources to continue to be operational as a going concern for
the foreseeable future.
Placing
On 8 December 2010 the Company placed 10,730,000 ordinary 1p shares (the “Placing Shares”) at a price of 270 pence per share, raising net proceeds
of £28.0m. These Placing shares represented 9.9% of the Company’s issued ordinary share capital prior to the Placing and were admitted to trading on
13 December 2010. The shares rank pari passu with existing ordinary shares.
Nigel McNair Scott
Finance Director
15 June 2011
Helical Bar plc 2011 page 39
corporate responsibility
Introduction
Helical recognises that our business activities impact on the environment
and the wider communities in which we operate. As our business involves
working with joint ventures partners and outsourcing partners, our direct
impacts as a business are relatively small. However, we are aware of
the influence we can exert through the implementation of responsible
environmental and social practices via our partners, contractors and
suppliers.
Review of progress in the year to
31st March 2011
We manage our environmental and social impacts because there are
business benefits in doing so. These benefits include increased ability to
secure planning consent, improved marketability of assets to prospective
tenants, reduced operating costs of assets, mitigating the risk of future
legislation and regulation, and enhanced corporate reputation.
An endorsement of Helical’s commitment to managing environment and
social impacts is our continued listing in the FTSE4Good Index. The
FTSE4Good Index measures the performance of companies that meet
globally recognised corporate responsibility standards and facilitates
investment in those companies. Maintaining listed status on this Index
remains a key priority for Helical, and informs our evolving approach to
Corporate Responsibility.
Managing Corporate Responsibility
In 2009 we revised and updated our environmental management system,
which has been in place since 2003 and the updated environmental
management system, available on the company website, has been
embedded within the operations for Helical through the course of
2010-11. Key elements of the system include:
(cid:115)(cid:229)(cid:229)(cid:64)(cid:37)(cid:78)(cid:86)(cid:73)(cid:82)(cid:79)(cid:78)(cid:77)(cid:69)(cid:78)(cid:84)(cid:7)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:64)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:229)(cid:50)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:73)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:7)(cid:229)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:73)(cid:69)(cid:83)(cid:229)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:229)(cid:83)(cid:69)(cid:84)(cid:229)(cid:79)(cid:85)(cid:84)(cid:229)
Helical’s high-level commitment across a number of impact areas.
(cid:115)(cid:229)(cid:229)(cid:33)(cid:78)(cid:78)(cid:85)(cid:65)(cid:76)(cid:229)(cid:8)(cid:65)(cid:78)(cid:68)(cid:229)(cid:82)(cid:79)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:9)(cid:229)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:69)(cid:78)(cid:65)(cid:66)(cid:76)(cid:69)(cid:229)(cid:85)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:70)(cid:79)(cid:67)(cid:85)(cid:83)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)
efforts throughout the year on measurable, yet achievable performance
goals. Improved environmental performance disclosure was also a key
piece of investor feedback. This year we have reported on energy and
water consumption at our large managed multi-let assets and head
office, which will now form the baseline for improvement targets going
forward for 2011-12.
(cid:115)(cid:229)(cid:229)(cid:43)(cid:69)(cid:89)(cid:229)(cid:48)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:41)(cid:78)(cid:68)(cid:73)(cid:67)(cid:65)(cid:84)(cid:79)(cid:82)(cid:83)(cid:229)(cid:8)(cid:43)(cid:48)(cid:41)(cid:83)(cid:9)(cid:229)(cid:84)(cid:79)(cid:229)(cid:72)(cid:69)(cid:76)(cid:80)(cid:229)(cid:85)(cid:83)(cid:229)(cid:77)(cid:79)(cid:78)(cid:73)(cid:84)(cid:79)(cid:82)(cid:229)(cid:80)(cid:82)(cid:79)(cid:71)(cid:82)(cid:69)(cid:83)(cid:83)(cid:229)(cid:84)(cid:79)(cid:87)(cid:65)(cid:82)(cid:68)(cid:83)(cid:229)
these targets and to ensure that we are able to report in line with
investor disclosure requirements, notably FTSE4Good.
(cid:115)(cid:229)(cid:229)(cid:33)(cid:229)(cid:67)(cid:72)(cid:69)(cid:67)(cid:75)(cid:76)(cid:73)(cid:83)(cid:84)(cid:229)(cid:84)(cid:79)(cid:229)(cid:65)(cid:83)(cid:83)(cid:73)(cid:83)(cid:84)(cid:229)(cid:85)(cid:83)(cid:229)(cid:73)(cid:78)(cid:229)(cid:65)(cid:80)(cid:80)(cid:76)(cid:89)(cid:73)(cid:78)(cid:71)(cid:229)(cid:77)(cid:73)(cid:78)(cid:73)(cid:77)(cid:85)(cid:77)(cid:229)(cid:83)(cid:85)(cid:83)(cid:84)(cid:65)(cid:73)(cid:78)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:229)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)
across our development activities. In collaboration with our consultants,
we developed a sustainability project management checklist to ensure
that sustainability issues are incorporated into all decisions throughout
the development lifecycle.
(cid:115)(cid:229)(cid:229)(cid:37)(cid:70)(cid:70)(cid:69)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:229)(cid:85)(cid:83)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:229)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:82)(cid:69)(cid:86)(cid:73)(cid:69)(cid:87)(cid:229)(cid:84)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:229)(cid:81)(cid:85)(cid:65)(cid:82)(cid:84)(cid:69)(cid:82)(cid:76)(cid:89)(cid:229)(cid:77)(cid:69)(cid:69)(cid:84)(cid:73)(cid:78)(cid:71)(cid:83)(cid:229)(cid:79)(cid:70)(cid:229)
key Helical personnel, their external corporate responsibility advisors
and principal managing agents to ensure effective delivery of the
objectives and targets.
The management system we have developed has been designed
specifically to reflect the flexibility of Helical’s business model. It also
reflects the key role that our partners play in delivering enhanced
sustainability outcomes in all our business ventures, be they large-scale
developments such as the ongoing Stockport Gateway project, or in the
management of individual multi-let assets such as at Shepherds Building
or Battersea Studios.
Below we outline our progress in relation to the each of our Corporate
Responsibility impact areas.
Environment
Our high-level corporate commitments to environmental issues is outlined
in the Group’s Environmental Policy which can be found on the Group
website. The Policy details our commitments across a range of impact
areas and our development and property management activities. In
2009-10, Helical set itself 18 targets to guide its Corporate Responsibility
programme over the following 12 months. These targets address a range
of impacts arising from our development and property management
activities, including resource use and waste production, pollution,
biodiversity, tenant engagement, flood risk and sustainable design and
construction. A full list of these targets can be found on the Helical website.
The performance against the key targets is summarised below.
(cid:115)(cid:229)(cid:229)(cid:33)(cid:84)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:40)(cid:69)(cid:65)(cid:68)(cid:229)(cid:79)(cid:70)(cid:108)(cid:67)(cid:69)(cid:229)(cid:65)(cid:84)(cid:229)(cid:38)(cid:65)(cid:82)(cid:77)(cid:229)(cid:51)(cid:84)(cid:12)(cid:229)(cid:87)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:70)(cid:79)(cid:82)(cid:84)(cid:65)(cid:66)(cid:76)(cid:89)(cid:229)(cid:65)(cid:67)(cid:72)(cid:73)(cid:69)(cid:86)(cid:69)(cid:68)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:83)(cid:229)
of a 5% reduction in water use and energy. This reflects an increased
efficiency and internal awareness of how we use and manage our offices.
(cid:115)(cid:229)(cid:229)(cid:33)(cid:84)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:68)(cid:229)(cid:77)(cid:85)(cid:76)(cid:84)(cid:73)(cid:13)(cid:76)(cid:69)(cid:84)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:73)(cid:69)(cid:83)(cid:12)(cid:229)(cid:87)(cid:69)(cid:229)(cid:67)(cid:79)(cid:78)(cid:84)(cid:73)(cid:78)(cid:85)(cid:69)(cid:229)(cid:84)(cid:79)(cid:229)(cid:73)(cid:77)(cid:80)(cid:82)(cid:79)(cid:86)(cid:69)(cid:229)(cid:69)(cid:78)(cid:69)(cid:82)(cid:71)(cid:89)(cid:229)
and water efficiency through the implementation of low and no cost
measures. The specific target for 2010-11 was to define the baseline
against which 5% improvement in efficiencies could be achieved.
A review of the data in the table below shows that 61 Southwark
St showed a reduction in use of gas and water and an increase in
use in electricity but given it was not fully tenanted throughout the
financial year it demonstrates the difficulties of assessing year on
year comparisons for managed multilet properties. Within the other
properties assessed, performance was variable but generally reflected
the level of occupancy.
(cid:115)(cid:229)(cid:229)(cid:47)(cid:78)(cid:69)(cid:229)(cid:75)(cid:69)(cid:89)(cid:229)(cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:18)(cid:16)(cid:17)(cid:16)(cid:13)(cid:17)(cid:17)(cid:12)(cid:229)(cid:87)(cid:65)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:80)(cid:82)(cid:79)(cid:65)(cid:67)(cid:84)(cid:73)(cid:86)(cid:69)(cid:76)(cid:89)(cid:229)(cid:69)(cid:78)(cid:71)(cid:65)(cid:71)(cid:69)(cid:229)(cid:87)(cid:73)(cid:84)(cid:72)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:84)(cid:69)(cid:78)(cid:65)(cid:78)(cid:84)(cid:83)(cid:229)
to encourage improvements in efficiency of use of the buildings. A
tenants’ engagement poster has been designed for use within each of
the principal managed assets and will be displayed in public areas to
help achieve this aim.
(cid:115)(cid:229)(cid:229)(cid:55)(cid:69)(cid:229)(cid:67)(cid:79)(cid:78)(cid:84)(cid:73)(cid:78)(cid:85)(cid:69)(cid:229)(cid:84)(cid:79)(cid:229)(cid:79)(cid:70)(cid:70)(cid:69)(cid:82)(cid:229)(cid:82)(cid:69)(cid:67)(cid:89)(cid:67)(cid:76)(cid:73)(cid:78)(cid:71)(cid:229)(cid:70)(cid:65)(cid:67)(cid:73)(cid:76)(cid:73)(cid:84)(cid:73)(cid:69)(cid:83)(cid:229)(cid:65)(cid:84)(cid:229)(cid:65)(cid:76)(cid:76)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:68)(cid:229)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:14)(cid:229)(cid:33)(cid:84)(cid:229)
Battersea, for instance, the provision of recycling facilities for tenants
ensured that on average 25% of the waste generated was recycled.
At Shepherds Building, following engagement with the tenants, a
number have taken up their own recycling contracts thereby being in
direct control of the management of their waste. As a result the waste
being disposed to landfill has reduced by approximately 30%. Similarly,
proactive engagement with tenants at the Hub has increased the
proportion of waste being recycled to approximately 40%.
In addition, the company is required to comply with the Carbon
Reduction Commitment and during 2010-11 has registered for the
scheme and undertaken its obligations to date.
page 40 Helical Bar plc 2011 corporate responsibility
Below we present our utility consumption performance for 4 multi-let buildings under management as well as our head office (where data availability permits).
Electricity
2008-09
kWh
Electricity
2009-10
kWh
Electricity
2010 -11
kWh
Gas
2008 -09
kWh
Gas
2009-10
kWh
Gas
2010-11
kWh
Water
2008-09
m3
Water
2009-10
m3
Water
2010 -11
m3
11-15 Farm Street, London W1
209,439
161,822
134,531
66,929
78,659
45,904
Battersea Studios, 1 & 2, London SW8
2,226,416
2,398,007
2,250,701
1,194,606
1,331,818
1,255,766
61 Southwark St, London SE1
900,553
906,531
992,777
567,217
567,370
525,614
Shepherds Building, London W14
3,376,730
3,367,740
3,397,545
No gas
No gas
No gas
3,857
5,366
3,772
9,092
2,800
4,703
6,706
6,989
2,479
5,017
4,506
8,494
The Hub
–
–
328,436
–
–
392,587
– Not available Not available
Notes:
(cid:115)(cid:229)(cid:47)(cid:78)(cid:76)(cid:89)(cid:229)(cid:49)(cid:19)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:20)(cid:229)(cid:71)(cid:65)(cid:83)(cid:229)(cid:82)(cid:69)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:83)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:40)(cid:85)(cid:66)(cid:229)(cid:66)(cid:69)(cid:67)(cid:65)(cid:85)(cid:83)(cid:69)(cid:229)(cid:83)(cid:85)(cid:80)(cid:80)(cid:76)(cid:73)(cid:69)(cid:82)(cid:229)(cid:85)(cid:78)(cid:73)(cid:68)(cid:69)(cid:78)(cid:84)(cid:73)(cid:108)(cid:69)(cid:68)(cid:229)(cid:85)(cid:78)(cid:84)(cid:73)(cid:76)(cid:229)(cid:84)(cid:72)(cid:65)(cid:84)(cid:229)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)
(cid:115)(cid:229)(cid:64)(cid:46)(cid:79)(cid:229)(cid:71)(cid:65)(cid:83)(cid:7)(cid:229)(cid:82)(cid:69)(cid:70)(cid:69)(cid:82)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:83)(cid:229)(cid:87)(cid:72)(cid:69)(cid:82)(cid:69)(cid:229)(cid:71)(cid:65)(cid:83)(cid:229)(cid:73)(cid:83)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)(cid:85)(cid:83)(cid:69)(cid:68)(cid:229)(cid:79)(cid:78)(cid:229)(cid:83)(cid:73)(cid:84)(cid:69)
(cid:115)(cid:229)(cid:64)(cid:13)(cid:7)(cid:229)(cid:82)(cid:69)(cid:70)(cid:69)(cid:82)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:65)(cid:83)(cid:83)(cid:69)(cid:84)(cid:229)(cid:84)(cid:72)(cid:65)(cid:84)(cid:229)(cid:87)(cid:65)(cid:83)(cid:229)(cid:85)(cid:78)(cid:68)(cid:69)(cid:82)(cid:229)(cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:65)(cid:84)(cid:229)(cid:84)(cid:73)(cid:77)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:68)(cid:65)(cid:84)(cid:65)(cid:229)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:78)(cid:71)
(cid:115)(cid:229)(cid:64)(cid:46)(cid:79)(cid:84)(cid:229)(cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:76)(cid:69)(cid:7)(cid:229)(cid:82)(cid:69)(cid:70)(cid:69)(cid:82)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:68)(cid:65)(cid:84)(cid:65)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)(cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:76)(cid:69)(cid:229)(cid:65)(cid:84)(cid:229)(cid:84)(cid:73)(cid:77)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)(cid:69)(cid:14)(cid:71)(cid:14)(cid:229)(cid:73)(cid:78)(cid:65)(cid:67)(cid:67)(cid:69)(cid:83)(cid:83)(cid:73)(cid:66)(cid:76)(cid:69)(cid:229)(cid:87)(cid:65)(cid:84)(cid:69)(cid:82)(cid:229)(cid:77)(cid:69)(cid:84)(cid:69)(cid:82)(cid:83)
Going forward for 2011 -12, the suitability of the targets will be reviewed against the performance for 2010-11 and revised accordingly to remain challenging yet achievable.
Employees
As at 31st March 2011, in the UK, we employed a team of 26 people, 38%
of whom are women. We continue to enforce our equal opportunities,
harassment and sexual discrimination policies. We also continue to
monitor compliance with our whistle blowing policy. There have been no
incidents to report against this policy to date.
High levels of staff retention remains a key feature of our business.
Consequently, we retain a highly skilled and experienced team. The table
below shows a breakdown of our UK staff by length of service.
Directors and management
Finance
Administration
Total number Average length of
of service (years)
of staff
10
7
9
13
9
6
Our staff retention levels not only reflect competitive remuneration
and benefits packages but also our commitment to enhancing the
professional and personal skills of our team. During 2010-11 we provided
an average of 9.33 hours of training per employee, including funding
for one staff member to complete a Master’s degree in Real Estate. As
in previous years, we continue to evaluate training needs in line with
business objectives.
Communities
Helical takes a strong interest in community issues. Community
engagement is an on-going concern throughout the development
process, from planning until development completion and operation.
The following examples demonstrate how community engagement has
benefited the communities that we have worked with over the past year.
(cid:115)(cid:229)(cid:229)(cid:55)(cid:69)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:77)(cid:65)(cid:68)(cid:69)(cid:229)(cid:65)(cid:229)(cid:78)(cid:85)(cid:77)(cid:66)(cid:69)(cid:82)(cid:229)(cid:79)(cid:70)(cid:229)(cid:73)(cid:78)(cid:13)(cid:75)(cid:73)(cid:78)(cid:68)(cid:229)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:73)(cid:66)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:229)(cid:84)(cid:72)(cid:82)(cid:79)(cid:85)(cid:71)(cid:72)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:35)(cid:76)(cid:89)(cid:68)(cid:69)(cid:229)
Shopping Centre in Clydebank alongside our joint venture partner Prime
Commercial Properties. The Shopping Centre had a week of fundraising
events on the week leading up to Comic Relief with Funky Hair Day,
Dress Down Day, Guess the Birthday and a Glasgow to London cycle
ride involving all staff, stores and the general public to raise cash for
Comic Relief. Along with Rymans, Comic Relief pen sales raised £9,500
in the centre. Other initiatives include facilitating public collections for
charities such as Guide Dogs for the Blind, the Rotary Club, Marie Curie
Daffodil Appeal, Nazareth House and Yorkhill Childrens Foundation.
(cid:115)(cid:229)(cid:229)(cid:33)(cid:84)(cid:229)(cid:79)(cid:85)(cid:82)(cid:229)(cid:46)(cid:69)(cid:87)(cid:77)(cid:65)(cid:82)(cid:75)(cid:69)(cid:84)(cid:229)(cid:83)(cid:72)(cid:79)(cid:80)(cid:80)(cid:73)(cid:78)(cid:71)(cid:229)(cid:67)(cid:69)(cid:78)(cid:84)(cid:82)(cid:69)(cid:229)(cid:87)(cid:69)(cid:229)(cid:74)(cid:79)(cid:73)(cid:78)(cid:84)(cid:76)(cid:89)(cid:229)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:79)(cid:82)(cid:69)(cid:68)(cid:229)(cid:64)(cid:40)(cid:79)(cid:82)(cid:83)(cid:69)(cid:229)(cid:65)(cid:66)(cid:79)(cid:85)(cid:84)(cid:229)
Newmarket’, a community art event, featuring life size acrylic horses,
which are creatively designed and painted by local artists, companies
and schools. Once completed, the equine works of art will be displayed
to the general public at various locations throughout the town.
Each horse will have a plaque with the artist and sponsor names.
The horses will be displayed from July till autumn, and then they will
be auctioned. All profits will be shared between Racing Welfare and
St Nicholas Hospice. We allowed a number of the horses to be stored
and decorated within the centre. We have also facilitated charitable
collections for the RSPB.
(cid:115)(cid:229)(cid:229)(cid:41)(cid:68)(cid:76)(cid:69)(cid:87)(cid:69)(cid:76)(cid:76)(cid:83)(cid:229)(cid:51)(cid:72)(cid:79)(cid:80)(cid:80)(cid:73)(cid:78)(cid:71)(cid:229)(cid:35)(cid:69)(cid:78)(cid:84)(cid:82)(cid:69)(cid:12)(cid:229)(cid:51)(cid:85)(cid:84)(cid:84)(cid:79)(cid:78)(cid:13)(cid:73)(cid:78)(cid:13)(cid:33)(cid:83)(cid:72)(cid:108)(cid:69)(cid:76)(cid:68)(cid:229)(cid:72)(cid:65)(cid:83)(cid:229)(cid:67)(cid:79)(cid:78)(cid:86)(cid:69)(cid:82)(cid:84)(cid:69)(cid:68)(cid:229)(cid:65)(cid:229)(cid:76)(cid:79)(cid:78)(cid:71)(cid:13)(cid:84)(cid:69)(cid:82)(cid:77)(cid:229)
void unit into an Art Gallery for the local Sutton Centre Community College.
They are using it for the exhibition of art work created by their students,
and as a base for members of their staff to promote the services offered
by the college to the local community. A grand opening was organised, to
which the local media were invited. A competition was launched among
the student population to suggest a name for the gallery, with the winning
name decided as ‘S.C.C.Cribble’ – a play on the college’s initials. Other
intiatives include facilitating events for the Ashplorers RSPB Wildlife Explorer
group and the Ashfield Fair Share Trust.
We continue to make corporate donations to charity. We contributed
£12,987 to charitable causes last year, including donations to King Sturge
Charitable Trust, Land Aid and the sponsorship of an Under 13 football team.
Health & Safety
Helical’s Health & Safety policy aims to develop a corporate culture that
is committed to the prevention of injuries and ill health to its employees or
others that may be affected by its activities. The Board of Directors and
senior staff are responsible for implementing this policy and ensure that
health and safety considerations are always given priority in planning and
in day-to-day activities. In 2009, we updated our Health & Safety Policy
to reflect the latest legislative and regulatory developments and there
have been no reportable incidents within the portfolio during 2010 -11.
All employees are expected to co-operate with the Company to achieve
the objectives of this policy and must ensure that their own work, so far
as is reasonably practicable, is carried out without risk to themselves or
others. The Company is committed to providing relevant information and
necessary ongoing training to employees in respect of risks to health and
safety, which may arise out of their activities or at their workplace. Our
Health & Safety policy can be found on the company website at www.
helical.co.uk.
Suppliers
Fair treatment of suppliers remains a key priority for Helical, particularly in
challenging market conditions where smaller suppliers in particular may
rely on our payments for balanced cash flow. The company’s policy is
to settle all agreed liabilities within the terms established with suppliers.
During the past year, our average payment period to suppliers was 14 days.
the board of directors and
senior management
Helical Bar plc 2011 page 41
The Board of Helical Bar plc is collectively responsible for
providing the entrepreneurial leadership of the Group within a
framework of controls and reporting structures which assist the
Group in pursuing its strategic aims and business objectives.
The Board of Helical Bar plc comprises five executive directors and four
non-executive directors.
Board of Directors and other officers
Executive directors
Chief Executive
Michael Slade, BSc (Est Man) FRICS FSVA, joined the Board as an
executive director in 1984 and was appointed Chief Executive in 1986.
He is President of Land Aid, the property industry charity, Chairman of the
Property Forum, a Fellow of the College of Estate Management, Fellow
of Wellington College, a Trustee of Purley Park and Sherborne School
Foundation and Vice Admiral of the Marie Rose Trust. Mike was given
the Property Personality of the Year award at the Property Awards 2011.
Aged 64.
Finance Director
Nigel McNair Scott, MA FCA FCT, joined the Board as a non-executive
director in 1985 and was subsequently appointed Finance Director in
1987. He is a former Chairman of Avocet Mining plc and former director
of Johnson Matthey plc. Aged 65.
Director
Gerald Kaye, BSc (Est Man) FRICS, was appointed to the Board as an
executive director in 1994 and is responsible for the Group’s development
activities. He has been responsible for completing over 4 million sq ft of
offices, retail, leisure and industrial developments. Gerald is the President
of the British Council for Offices, a member of the Investment Advisory
Committee of Rockspring Hanover Property Unit Trust and a trustee of
The Prince’s Regeneration Trust. He is a former director of London &
Edinburgh Trust Plc and former Chief Executive of SPP. LET.
EUROPE NV. Aged 53.
Director
Matthew Bonning-Snook, BSc (Urb Est Surveying) MRICS, was
appointed to the Board as an executive director in 2007. Prior to joining
Helical in 1995 he worked for Richard Ellis (now CB Richard Ellis), and
oversees many of Helical’s office and mixed use developments. Aged 43.
Director
Jack Pitman, MA (Cantab) MRICS, was appointed to the Board as an
executive director in 2007. Before joining the Group in 2001 he was
a director of Chester Properties Ltd. He is responsible for the Group’s
investment activities. Aged 42.
Non-executive directors
Chairman
Giles Weaver, FCA, was appointed to the Board as a non-executive
director in 1993 and was appointed Chairman following the 2005 AGM.
He is Chairman of the Nominations and Appointments Committee. A past
Chairman of Murray Johnstone Ltd, he is Chairman of Tamar European
Industrial Fund Limited and a director of Aberdeen Asset Management
plc and IRP Property Investments Limited as well as being Chairman or a
director of a number of investment companies. Aged 65.
Antony Beevor, MBE, BA, was appointed to the Board as a non-executive
director in 2000. He is the Senior Independent Director and Chairman
of the Audit Committee. He is also a member of the Remuneration and
Nominations and Appointments Committees. A former Head of Corporate
Finance at Hambros Bank and former Chairman of Croda International
Plc, he is a Deputy Chairman of the Takeover Panel. Aged 71.
Wilf Weeks, OBE, was appointed to the Board as a non-executive
director in 2005. He is a member of the Audit, Remuneration and
Nominations and Appointments Committees. Founder and Chairman of
GJW Government Relations, he is a former Chairman of European Public
Affairs at Weber Shandwick. Aged 63.
Andrew Gulliford, BSc (Est.Man), FRICS, was appointed to the Board as
a non-executive director in 2006. He is Chairman of the Remuneration
Committee and a member of the Audit and Nominations and
Appointments Committees. A former Deputy Senior Partner of Cushman
& Wakefield Healey & Baker, he is a non-executive director of McKay
Securities PLC, IRP Property Investments Limited and various other
companies. Aged 64.
Deputy Finance Director and Company Secretary
Tim Murphy, BA (Hons) FCA, joined the Group in 1994. Prior to joining
Helical, he worked for accountants Grant Thornton and KPMG. Aged 51.
Senior management
Duncan Walker, MA (Hons) (Oxon), PG Dip Surveying, joined the Group
in 2007 and oversees a portfolio of investments and developments.
In particular, he was responsible for the recent acquisition of Helical’s
shopping centres and a number of industrial properties. Prior to joining
Helical, Duncan led Edinburgh House Estate’s investment team. Aged 32.
John Inwood, BSc (Hons) MRICS, joined the Group from Cushman and
Wakefield in 1995 and is the Head of Asset Management. Aged 45.
Tom Anderson, BSc (Hons) MRICS, joined the Group in 2009 from
Allsops where he worked in the National Investment Team. Aged 32.
Oliver Rippier, BA (Hons) MSc Real Estate MRICS, formerly employed
by Jones Lang LaSalle and Lloyds Banking Group, joined as a property
analyst and development executive in 2010. Aged 29.
Alastair Oastler, BSc (Hons) ACA, joined the Group as Financial Controller
in 2007 having previously worked for Invensys plc and Compagnie
Financiere Richemont SA. Aged 34.
page 42 Helical Bar plc 2011 the board of directors and senior management
Directors and their interests
The directors, all of whom were in office during the year, and their
interests, all of which were beneficial, in the ordinary shares of the
Company are listed below. Other than in respect of the award of shares
under the terms of the Company’s Share Incentive Plan on 14 June 2011,
there have been no changes in the directors interests in the period from
31 March 2011 to 15 June 2011.
Ordinary
1p shares
31 March 2011
Ordinary
1p shares
31 March 2010
The directors are responsible for keeping adequate accounting records
that are sufficient to show and explain the Group’s transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and enable them to ensure that the financial statements comply
with the Companies Act 2006 and article 4 of the IAS Regulations. They
are also responsible for safeguarding the assets of the Group and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
In so far as the directors are aware:
– there is no relevant audit information of which the Group’s auditors are
Giles Weaver
Michael Slade
132,313
113,794
unaware; and,
13,623,760
13,669,498
– the directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that
the auditors are aware of that information.
We, the directors listed below, confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit and loss of the group and the
undertakings included in the consolidation taken as a whole; and,
– the management report includes a fair review of the development and
performance of the business and the position of the group and the
undertakings included in the consolidation taken as a whole, together
with a description of the principal risks and uncertainties that they face.
The directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Group’s website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
On behalf of the Board
Michael Slade
Chief Executive
Nigel McNair Scott
Finance Director
15 June 2011
Nigel McNair Scott
2,706,398
2,518,195
Gerald Kaye
1,526,855
1,449,764
Matthew Bonning-Snook
Jack Pitman
Antony Beevor
Wilf Weeks
Andrew Gulliford
276,533
441,319
19,569
7,213
255,004
401,263
14,013
3,509
14,328
8,772
Total directors’ interests
18,748,288
18,433,812
Issued share capital
118,137,522 107,407,522
Percentage of issued share capital
15.9%
17.2%
Principal activities
The principal activity of the Company is that of a holding company and
the principal activities of the subsidiaries are property investment, dealing
and development.
Statement of directors’ responsibilities
The directors are responsible for preparing the Annual Report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have to prepare
financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRSs).
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and Company and of the profit or loss of
the Group for that period.
In preparing these financial statements, the directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable and prudent;
– state whether applicable IFRSs have been followed, subject to any
material departures disclosed and explained in the financial statements;
– prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the Group will continue in business.
Helical Bar plc 2011 page 43
shareholder information
Dividends
Takeovers Directive
An interim dividend of 1.75p (2010: 1.75p) was paid on 23 December
2010 to shareholders on the shareholder register on 3 December 2010.
A final dividend of 3.15p (2010: second interim of 2.75p and final of 0.25p)
per share is recommended for approval at the Annual General Meeting on
26 July 2011. The total ordinary dividend paid in the year of 2.00p (2010:
7.25p) per share amounts to £2,122,000 (2010: £7,657,000).
Share Capital
At 1 April 2010 there were 107,407,522 ordinary 1p shares in issue.
On 8 December 2010 the Company issued 10,730,000 new ordinary
1p shares in a Placing to existing shareholders and other institutions.
At 31 March 2011 and 15 June 2011 there were 118,137,522 ordinary
shares in issue.
Substantial Shareholdings
At 9 June 2011, the shareholders listed below had notified the Company
of a disclosable interest of 3% or more in the nominal value of the
ordinary share capital of the Group:
Michael Slade – Chief Executive
Baillie Gifford & Co Ltd
Aberdeen Asset Managers
Threadneedle Asset Management
Number of
ordinary shares
at 9 June 2011
13,623,760
9,915,933
9,704,402
4,898,117
Legal & General Investment Management
4,356,872
Artemis Investment Management
BlackRock Inc.
PGGM Investments
Dimensional Fund Advisors
4,326,358
4,203,705
4,034,863
3,945,921
%
11.5
8.4
8.2
4.2
3.7
3.7
3.6
3.4
3.3
Where not provided elsewhere in this Directors’ report, the following
provides the additional information required for shareholders as a result
of the implementation of the Takeovers Directive into English law.
The Company’s share capital consists of both ordinary shares and
deferred shares. Each class of shares rank pari passu between
themselves. Details of the Company’s share capital can be found in note
29 to the financial statements. There are no restrictions on the transfer of
the ordinary shares in the Company other than certain restrictions which
may from time to time be imposed by laws and regulations (for example:
insider trading laws) and pursuant to the Listing Rules of the Financial
Services Authority whereby certain employees of the Group require the
approval of the Company to deal in the ordinary shares.
On a show of hands at a general meeting of the Company, every holder of
ordinary shares present in person and entitled to vote shall have one vote
and on a poll every member present in person or by proxy and entitled
to vote shall have one vote for every ordinary share held. The Notice of
the Annual General Meeting specifies deadlines for exercising voting
rights and appointing a proxy or proxies to vote in relation to resolutions
to be passed at the meeting. The rules governing the appointment and
replacement of Directors and changes to the articles of association
accord with usual English company law provisions.
Subject to the Company’s memorandum of association, the articles of
association, any statute or subordinate legislation for the time being in
force concerning companies and affecting the company, and directions
given by special resolution, the business of the Group shall be managed
by the Directors, who may exercise all the powers of the Group.
Annual general meeting
The Annual General Meeting of the Company will be held on 26 July 2011
at 11.30 a.m. at The Connaught, Carlos Place, Mayfair, London W1K 2AL.
The notice of meeting and the resolutions to be proposed at that meeting
are set out in the enclosed circular and can be found on the Group’s
website at www.helical.co.uk.
Amendment of articles of association
The Company’s articles of association can be amended only by a special
resolution of the members, requiring a majority of not less than 75% of
such members voting in person or by proxy.
Grant Thornton UK LLP have expressed their willingness to continue in
office. In accordance with section 489(4) of the Companies Act 2006 a
resolution to reappoint Grant Thornton UK LLP will be proposed at the
Annual General Meeting.
Auditors
page 44 Helical Bar plc 2011
corporate governance report
The Combined Code
The Group is committed to applying the highest principles of corporate
governance and, except where stated, has complied throughout the
year with the Code provisions set out in Section I of the Combined
Code (2008). The Group will look to implement the additional provisions
incorporated in the UK Corporate Governance Code, issued in June 2010,
during 2011 and has chosen to adopt at this year’s Annual General
Meeting, the requirement that all directors should be subject to annual
re-election by shareholders. The Group also takes into account the
corporate governance guidelines of institutional shareholders and their
representative bodies.
The Board is accountable to the Group’s shareholders for good corporate
governance. This report and the Directors’ Remuneration Report describe
how the Group complies with the provisions of the Combined Code
(2008) (the “Code”).
Board of Directors
Compliance
Helical has 26 employees in the UK, including five executive directors.
It operates with a strong management team of senior decision-makers
backed up by finance and other support staff. Given its size the Board do
not consider it appropriate to operate both a main board and a separate
executive committee, a structure commonly seen in larger companies.
However, despite its size, the Group is keen to promote exceptional
talent to Board level at the earliest opportunity to expose such individuals
to the broader issues facing the business, encourage their long term
commitment to the Group and to provide for future succession. It is for
these reasons that Helical’s Board of five executive directors’ is larger
than those of other comparable listed real estate companies.
Code provision A.3 requires a Board to have a balance of executive
and non-executive directors and A.3.2 stipulates that at least half the
Board, excluding the Chairman, should comprise independent non-
executive directors. In the Group’s view, this provision would, given the
number of executive directors as noted above, create an unnecessarily
large and unwieldy Board. Accordingly, it has long held the view that the
appointment of non-executive directors should reflect a desire to add
complementary skills and experience to the Board and not be driven by a
requirement to match the number of executive directors, provided always
that the interests of shareholders and other stakeholders are adequately
protected.
In the Board’s view, the current composition of the Board meets the
criteria that it is comprised of directors with the appropriate balance of
skills, experience, independence and knowledge of the Group to enable
it to discharge its duties and responsibilities effectively. However, given
the requirements of A.3.2, the Group is actively seeking to further
strengthen the Board and has appointed an independent search firm,
Hanson Green, to assist in the recruitment of a new non-executive
director.
Chairman and Chief Executive
The Chairman and the Chief Executive collectively are responsible for
the leadership of the Company. The Chairman’s primary responsibility
is for leading the Board and ensuring its effectiveness, whilst the Chief
Executive is responsible for running the Company’s business. The division
of responsibilities is clearly established at Helical, is set out in writing and
approved by the Board. The Chairman of Helical is Giles Weaver and the
Chief Executive is Michael Slade.
Board composition
The Board currently consists of a Chairman, five executive directors and
three independent non-executive directors.
The Chairman, Giles Weaver, has been a non-executive director of Helical
since 1993 and was appointed Chairman in July 2005. He is a Chartered
Accountant by training and has had a career in the financial services
sector, including as a current and former Chairman or director of several
listed companies in that sector. The experience he brings to the Group
and the skills of leadership and guidance shown in Board meetings,
together with his detachment from day-to-day issues within the Group,
provide the Board with the necessary comfort that despite his time as a
non-executive director, he provides an independent approach to the role
of Chairman of Helical. Giles Weaver is Chairman of the Nominations and
Appointments Committee.
The Senior Independent Director is Antony Beevor who was first
appointed to the Board in April 2000. He is a solicitor by training and
worked in the City throughout his career, most recently as Head of
Corporate Finance at Hambros Bank. A former Chairman of Croda
International Plc, he is currently a Deputy Chairman of the Takeover Panel.
He was awarded an MBE in January 2010 for services to Fairbridge
youth charity. Antony Beevor is Chairman of the Audit Committee and
a member of the Remuneration and Nominations and Appointments
Committees. He has served on the Board for more than nine years and
accordingly the company has considered whether there are any reasons
why he should not be regarded as independent. In the view of the Board,
Antony Beevor continues to provide a robustly independent approach
to his position as a non-executive director and to his roles as Senior
Independent Director and Chairman of the Audit Committee. For this
reason the Board continues to regard Antony Beevor as an independent
non-executive director.
Wilf Weeks has been a non-executive director of Helical since April 2005.
A former Chairman of European Public Affairs at Weber Shandwick
he provides the Board with an in-depth understanding of central and
local government and the Civil Service. He is a member of the Audit,
Remuneration and Nominations and Appointments Committees.
Andrew Gulliford has been a non-executive director of Helical since March
2006. A former Deputy Senior Partner of Healey & Baker (now Cushman
& Wakefield) he headed up their Investment Group. He is Chairman of the
Remuneration Committee and a member of the Audit and Nominations
and Appointments Committees.
corporate governance report Helical Bar plc 2011 page 45
Board responsibilities
The Group supports the concept of an effective Board leading and
controlling the Group. The Board provides entrepreneurial leadership of
the Group within a framework of prudent and effective controls which
enables risk to be assessed and managed.
The Board sets the Group’s strategic aims, ensures that the necessary
financial and human resources are in place for the Group to meet its
objectives and reviews management performance. The Board sets the
Group’s values and standards and ensures that the Group’s obligations
to its shareholders and others are understood and met.
The members of the Board, and the roles of each director are given in the
biographical details of the directors on pages 41 and 44.
All directors take decisions objectively in the interests of the Group.
As part of their roles as members of the Board, non-executive directors
constructively challenge and help develop proposals on strategy and
the risk appetite of the Group. Non-executive directors scrutinise the
performance of management in meeting agreed goals and objectives and
monitor the reporting of performance. They satisfy themselves on the
integrity of financial information and that financial controls and systems
of risk management are robust and defensible. They are responsible for
determining appropriate levels of remuneration of executive directors
and have a prime role in appointing and, where necessary, removing
executive directors, and in succession planning. In addition to Boardroom
discussions, the Chairman contacts other non-executive directors by
telephone and, if appropriate, will hold meetings with the non executive
directors without the executive directors present.
(cid:115)(cid:229) (cid:229)(cid:51)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:229)(cid:110)(cid:229)(cid:67)(cid:72)(cid:65)(cid:78)(cid:71)(cid:69)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:7)(cid:83)(cid:229)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:85)(cid:82)(cid:69)(cid:27)(cid:229)(cid:77)(cid:65)(cid:74)(cid:79)(cid:82)(cid:229)
changes to the Group’s corporate structure; changes to the Group’s
management and control structure; changes to the Group’s listing or
plc status.
(cid:115)(cid:229) (cid:229)(cid:38)(cid:73)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:83)(cid:229)(cid:110)(cid:229)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:86)(cid:65)(cid:76)(cid:229)(cid:79)(cid:70)(cid:229)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:73)(cid:77)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:82)(cid:69)(cid:76)(cid:73)(cid:77)(cid:73)(cid:78)(cid:65)(cid:82)(cid:89)(cid:229)
announcements; approval of annual report and accounts, including
the corporate governance statement and the directors’ remuneration
report; approval of dividend policy; approval of significant changes in
accounting policies or practices; approval of treasury policies.
(cid:115)(cid:229) (cid:229)(cid:41)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:229)(cid:67)(cid:79)(cid:78)(cid:84)(cid:82)(cid:79)(cid:76)(cid:83)(cid:229)(cid:110)(cid:229)(cid:69)(cid:78)(cid:83)(cid:85)(cid:82)(cid:73)(cid:78)(cid:71)(cid:229)(cid:77)(cid:65)(cid:73)(cid:78)(cid:84)(cid:69)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:65)(cid:229)(cid:83)(cid:79)(cid:85)(cid:78)(cid:68)(cid:229)(cid:83)(cid:89)(cid:83)(cid:84)(cid:69)(cid:77)(cid:229)(cid:79)(cid:70)(cid:229)(cid:73)(cid:78)(cid:84)(cid:69)(cid:82)(cid:78)(cid:65)(cid:76)(cid:229)
control and risk management.
(cid:115)(cid:229) (cid:229)(cid:35)(cid:79)(cid:77)(cid:77)(cid:85)(cid:78)(cid:73)(cid:67)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:110)(cid:229)(cid:65)(cid:80)(cid:80)(cid:82)(cid:79)(cid:86)(cid:65)(cid:76)(cid:229)(cid:79)(cid:70)(cid:229)(cid:82)(cid:69)(cid:83)(cid:79)(cid:76)(cid:85)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:68)(cid:79)(cid:67)(cid:85)(cid:77)(cid:69)(cid:78)(cid:84)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:84)(cid:79)(cid:229)(cid:66)(cid:69)(cid:229)
put to shareholders in general meeting; approval of press releases
concerning matters decided by the Board.
(cid:115)(cid:229) (cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:229)(cid:77)(cid:69)(cid:77)(cid:66)(cid:69)(cid:82)(cid:83)(cid:72)(cid:73)(cid:80)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:79)(cid:84)(cid:72)(cid:69)(cid:82)(cid:229)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:84)(cid:79)(cid:229)(cid:83)(cid:69)(cid:78)(cid:73)(cid:79)(cid:82)(cid:229)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:14)
(cid:115)(cid:229) (cid:34)(cid:79)(cid:84)(cid:72)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:65)(cid:80)(cid:80)(cid:79)(cid:73)(cid:78)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:82)(cid:69)(cid:77)(cid:79)(cid:86)(cid:65)(cid:76)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:35)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:229)(cid:51)(cid:69)(cid:67)(cid:82)(cid:69)(cid:84)(cid:65)(cid:82)(cid:89)(cid:14)
(cid:115)(cid:229) (cid:229)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:229)(cid:71)(cid:79)(cid:86)(cid:69)(cid:82)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:77)(cid:65)(cid:84)(cid:84)(cid:69)(cid:82)(cid:83)(cid:229)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:229)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:229)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)
evaluations.
(cid:115)(cid:229) (cid:229)(cid:33)(cid:80)(cid:80)(cid:82)(cid:79)(cid:86)(cid:65)(cid:76)(cid:229)(cid:79)(cid:70)(cid:229)(cid:80)(cid:79)(cid:76)(cid:73)(cid:67)(cid:73)(cid:69)(cid:83)(cid:229)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:73)(cid:78)(cid:71)(cid:229)(cid:67)(cid:79)(cid:68)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:67)(cid:79)(cid:78)(cid:68)(cid:85)(cid:67)(cid:84)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)
whistle-blowing procedures; share dealing code; health and safety
policy; environmental and corporate social responsibility policy;
implementation of procedures required by the Bribery Act 2010 and
equal opportunity policy.
In addition to ad hoc meetings arranged to discuss particular transactions
and events and the 2010 AGM, the full Board met on five occasions
during the year under review. The attendance record of the directors is
shown in the table below.
Directors – information and professional development
The Board is supplied in a timely manner with information in a form and of
a quality appropriate to enable it to discharge its duties and its directors
are free to seek any further information they consider necessary.
The Board has a schedule of matters specifically reserved to it for
decision. The Board controls the business but delegates day-to-day
responsibility to the executive management. However, there are a number
of matters which are required to be or, in the interests of the Group,
should only be decided by the Board of Directors as a whole. A summary
of the decisions reserved for the Board is set out below:
Under the direction of the Chairman, the Company Secretary’s
responsibilities include ensuring good information flows within the Board
and its Committees and between senior management and non-executive
directors, as well as facilitating induction and assisting with professional
development as required. The Company Secretary is responsible for
advising the Board through the Chairman on all governance matters.
Schedule of matters reserved for the Board:
(cid:115)(cid:229) (cid:229)(cid:51)(cid:84)(cid:82)(cid:65)(cid:84)(cid:69)(cid:71)(cid:89)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:110)(cid:229)(cid:82)(cid:69)(cid:83)(cid:80)(cid:79)(cid:78)(cid:83)(cid:73)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:79)(cid:86)(cid:69)(cid:82)(cid:65)(cid:76)(cid:76)(cid:229)(cid:77)(cid:65)(cid:78)(cid:65)(cid:71)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)
of the Group; approval of the Group’s long-term objectives and
commercial strategy; approval of annual administration budgets;
oversight of the Group’s operations; extension of the Group’s activities
into new business areas; any decision to cease to operate all or any
material part of the Group’s business.
The Board ensures that directors, especially non-executive directors,
have access to independent professional advice at the Group’s expense
where they judge it necessary to discharge their responsibilities as
directors. Training is available for new directors and other directors as
necessary.
All directors have access to the advice and services of the Company
Secretary, who is responsible to the Board for ensuring that board
procedures are complied with.
The Group has arranged appropriate insurance cover in case of legal
action against its directors.
Meetings
Full Board
Audit Committee
Remuneration Committee
Nominations and Appointments Committee
Giles
Weaver
Michael
Slade
Nigel
McNair
Scott
Matthew
Bonning-
Snook
Gerald
Kaye
Jack
Pitman
Antony
Beevor
Wilf
Weeks
Andrew
Gulliford
5
n/a
n/a
1
5
n/a
n/a
n/a
4
n/a
n/a
n/a
5
n/a
n/a
n/a
5
n/a
n/a
n/a
5
n/a
n/a
n/a
5
2
3
1
5
2
3
1
5
2
3
1
page 46 Helical Bar plc 2011 corporate governance report
Directors – performance evaluation
The Chairman is responsible for the annual evaluation process, and will
act on its outcome. This process involves each director submitting an
appraisal to the Chairman in respect of the performance of the main
Board, of each member of the Board and in respect of each Board
Committee of which they are a member.
The non-executive directors, led by the Senior Independent Director,
are responsible for the performance evaluation of the Chairman, taking
into account views of executive directors. Each director completes an
evaluation of the Chairman’s performance and provides this evaluation to
the senior independent non-executive director.
During the year the Board undertook a formal evaluation of its own
performance and that of its Committees and individual directors in the
period and the Chairman reported the results of that evaluation process
to the Board. There were no significant matters arising out of the annual
evaluation process which required action by the Board.
The Senior Independent Director reported that there were no matters
arising from the evaluation of the Chairman that necessitated any action
or required a meeting to be held without the Chairman present.
Relations with shareholders
The Group values the views of its shareholders and recognises their
interest in the Group’s strategy and performance, Board membership
and quality of management. It therefore holds regular meetings with, and
presentations to, its institutional shareholders to discuss its objectives.
The Group also regularly meets, with the help of its brokers, institutions
that do not currently hold shares in the Group to inform them of its
objectives.
During the year Antony Beevor and Andrew Gulliford met with
shareholders to discuss certain matters relating to the Group.
The AGM is used to communicate with private investors and they are
encouraged to participate. The members of the Audit, Remuneration
and Nominations and Appointments Committees are available to answer
questions. Separate resolutions are proposed on each issue so that they
can be given proper consideration and there is a resolution to consider
the annual report and accounts. The Group counts all proxy votes and
will indicate the level of proxies lodged on each resolution, after it has
been dealt with by a show of hands.
The Group communicates with all shareholders through the issue of
regular press releases and through its website at www.helical.co.uk.
The Group receives regular reports from sector analysts and its investor
relations advisors on how it is viewed by its shareholders.
Nominations and Appointments Committee
The terms of reference of the Nominations and Appointments Committee
are available by request and are included on the Group’s website at www.
helical.co.uk.
The membership of the Committee is as follows:
Giles Weaver (Chairman)
Antony Beevor
Wilf Weeks
Andrew Gulliford
Directors – appointments to the Board
Appointments are made on merit and against objective criteria. Care is
taken to ensure that appointees have enough time available to devote
to the job.
The Nominations and Appointments Committee controls the process
for Board appointments and makes recommendations to the Board.
Directors’ re-election
The Board has decided to fulfil the requirement of Code Provision B.7.I of
the UK Corporate Governance Code, issued in June 2010 and applicable
in full for all accounting periods beginning on or after 29 June 2010. This
provision requires all directors of FTSE350 companies to be subject to
annual re-election by shareholders. Whilst the Company is no longer in
the FTSE350 the Board has chosen to comply with this provision as it
accepts that shareholders should annually have the right to vote on each
director’s re-election to the board. The Nominations and Appointments
Committee confirms to shareholders that, following the annual formal
performance evaluation, these directors continue to be effective and
demonstrate commitment to their roles.
Biographical details of the directors are given on pages 41 and 44.
The work of the Nominations and Appointments Committee in the year
The Committee met once during the period and a record of attendance at
this meeting is shown above. During this meeting the Committee resolved
that Giles Weaver, Antony Beevor, and Gerald Kaye be recommended to
shareholders for re-appointment as directors at the 2010 AGM.
corporate governance report Helical Bar plc 2011 page 47
Accountability and audit
Financial reporting
The Board presents a balanced and understandable assessment of
the Group’s position and prospects. It seeks to do so in all published
information and in particular in interim and preliminary announcements
and other price-sensitive reports and reports to regulators as well as in
the information required to be presented by statutory requirements.
Going concern
The directors have reviewed the current and projected financial position
of the Group making reasonable assumptions about future trading
performance.
The key areas of sensitivity are:
(cid:115)(cid:229) (cid:84)(cid:73)(cid:77)(cid:73)(cid:78)(cid:71)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:229)(cid:83)(cid:65)(cid:76)(cid:69)(cid:83)
(cid:115)(cid:229) (cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:73)(cid:76)(cid:73)(cid:84)(cid:89)(cid:229)(cid:79)(cid:70)(cid:229)(cid:76)(cid:79)(cid:65)(cid:78)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:229)(cid:67)(cid:65)(cid:83)(cid:72)(cid:229)(cid:109)(cid:79)(cid:87)(cid:83)
(cid:115)(cid:229) (cid:229)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:89)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:73)(cid:84)(cid:83)(cid:229)(cid:73)(cid:77)(cid:80)(cid:65)(cid:67)(cid:84)(cid:229)(cid:79)(cid:78)(cid:229)(cid:67)(cid:79)(cid:86)(cid:69)(cid:78)(cid:65)(cid:78)(cid:84)(cid:83)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:79)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:229)
loan repayments
(cid:115)(cid:229) (cid:67)(cid:79)(cid:77)(cid:77)(cid:73)(cid:84)(cid:84)(cid:69)(cid:68)(cid:229)(cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:69)(cid:88)(cid:80)(cid:69)(cid:78)(cid:68)(cid:73)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)
(cid:115)(cid:229) (cid:70)(cid:85)(cid:84)(cid:85)(cid:82)(cid:69)(cid:229)(cid:82)(cid:69)(cid:78)(cid:84)(cid:65)(cid:76)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:79)(cid:84)(cid:69)(cid:78)(cid:84)(cid:73)(cid:65)(cid:76)(cid:229)(cid:66)(cid:65)(cid:68)(cid:229)(cid:68)(cid:69)(cid:66)(cid:84)(cid:83)
(cid:115)(cid:229) (cid:82)(cid:69)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:84)(cid:73)(cid:77)(cid:73)(cid:78)(cid:71)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:86)(cid:65)(cid:76)(cid:85)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:82)(cid:65)(cid:68)(cid:69)(cid:229)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:65)(cid:66)(cid:76)(cid:69)(cid:83)
The forecast cashflows have been sensitised to eliminate those
cash inflows which are less certain and to take account of a further
deterioration of property valuations. From their review the directors believe
that the Group has adequate resources to continue to be operational as a
going concern for the foreseeable future.
Audit Committee and auditors
The terms of reference of the Audit Committee are available by request
and are included on the Group’s website at www.helical.co.uk.
It is common practice at Helical for Audit Committee meetings to be
attended by all Board members who are available, whether or not they
are members of the Audit Committee so that their input may be obtained.
Internal control
The Board is responsible for maintaining a sound system of internal
control to safeguard shareholders’ investment and the Group’s assets.
Such a system is designed to manage, but cannot eliminate, the risk of
failure to achieve business objectives. There are inherent limitations in
any control system and, accordingly, even the most effective system can
provide only reasonable, and not absolute, assurance against material
misstatement or loss.
The key features of the Group’s system of internal control are as follows:
– clearly defined organisational responsibilities and limits of authority. The
day-to-day involvement of the executive directors in the running of the
business ensures that these responsibilities and limits are adhered to;
– financial controls and review procedures;
– financial information systems including cash flow, profit and capital
expenditure forecasts. The Board receives regular and comprehensive
reports on the day-to-day running of the business;
– an Audit Committee which meets with the auditors and deals with
any significant internal control matter. In the year under review the
Committee met with the Auditors on two occasions.
Internal audit
The Board reviewed its position during the year to 31 March 2011 and
reaffirmed its stance that in view of the relatively small size of the Group
it does not consider that an Internal Audit function would provide any
significant additional assistance in maintaining a system of internal controls.
The membership of the Committee is as follows:
Audit independence
A policy of reviewing audit independence has been adopted whereby
non-audit services undertaken by the auditors are approved prior to
work being carried out. During the year under review non-audit services
comprised a review of financial performance as required by the Group’s
Performance Share Plan. The audit committee considers the external
auditors to be independent and has satisfied itself of the effectiveness of
the external auditors.
The Group’s policy on awarding non-audit work to its auditors is designed
to ensure that the Group receives the most appropriate advice without
compromising the independence of the auditors. Whilst no fee caps or
limits have been set by the Committee, the level of fees would be a factor
in considering whether the auditors’ independence could be affected by
the award of non-audit work.
Giles Weaver
Chairman, on behalf of the Board
Antony Beevor (Chairman)
Wilf Weeks
Andrew Gulliford
The Committee endorses the principles set out in the FRC Guidance on
Audit Committees.
The Board has formal and transparent arrangements for considering how
it applies the Group’s financial reporting and internal control principles and
for maintaining an appropriate relationship with its auditors.
Whilst all directors have a duty to act in the interests of the Group, the
Audit Committee has a particular role, acting independently from the
executive, to ensure that the interests of shareholders are properly
protected in relation to financial reporting and internal control.
Appointments to the Audit Committee are made by the Board on the
recommendation of the Nominations and Appointments Committee in
consultation with the Audit Committee Chairman.
The work of the Audit Committee in the year
The Audit Committee met twice during the year. A record of attendance
at these meetings is shown on page 45. The Audit Committee met the
external auditors on both occasions to discuss matters arising from the
annual and interim audits, and with the executive board members and
Chairman, reviewed and approved:
– the financial statements of the Group and the Preliminary
Announcement of the annual results to 31 March 2010 and the Interim
Statement on the half year results to 30 September 2010;
– the re-appointment of the Group’s external auditors; and,
– the external auditors independence and the provision of non-audit
services by the external auditors.
page 48 Helical Bar plc 2011
directors’ remuneration report
The Board recognises that directors’ remuneration is of legitimate
concern to shareholders and is committed to following current best
practice. This report has been prepared in accordance with the
Companies Act 2006 and Schedule 8 of the Large and Medium Sized
Companies and Groups (Accounts and Reports) Regulations 2008. It
has been approved by the Board and will be submitted to shareholders
for approval at the Group’s Annual General Meeting to be held on 26
July 2011. Grant Thornton LLP has audited the disclosures of directors’
remuneration and share awards on pages 50 to 53.
Remuneration Committee
The terms of reference of the Remuneration Committee are available on
request and are included on the Group’s website at www.helical.co.uk.
Remuneration Committee responsibilities
The Remuneration Committee (“Committee”) has responsibility for
determining and agreeing with the Board the framework or broad policy
for the remuneration of the Chairman, Chief Executive and the Executive
Directors and, subject to proposals submitted by the Chief Executive,
shall recommend and monitor the level and structure of remuneration for
such other members of the senior management as report directly to the
Board. The remuneration of Non-Executive Directors shall be a matter for
the Chairman and the Executive Directors to be decided at a meeting of
the Board.
In determining such policy, the Committee shall take into account all
factors which it deems necessary. The objective of the remuneration
policy shall be to ensure that Executive Directors and senior management
are provided with appropriate incentives to encourage enhanced
performance and are, in a fair and responsible manner, rewarded for their
individual contributions to the success of the Group. Within the terms
of the agreed policy, the Committee shall determine, for the Executive
Directors:
(cid:115)(cid:229) (cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:84)(cid:79)(cid:84)(cid:65)(cid:76)(cid:229)(cid:73)(cid:78)(cid:68)(cid:73)(cid:86)(cid:73)(cid:68)(cid:85)(cid:65)(cid:76)(cid:229)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:80)(cid:65)(cid:67)(cid:75)(cid:65)(cid:71)(cid:69)(cid:83)(cid:229)(cid:79)(cid:70)(cid:229)(cid:69)(cid:65)(cid:67)(cid:72)(cid:229)(cid:37)(cid:88)(cid:69)(cid:67)(cid:85)(cid:84)(cid:73)(cid:86)(cid:69)(cid:229)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:229)
including, where appropriate, basic salaries, bonuses, share awards,
pensions and other benefits;
(cid:115)(cid:229) (cid:84)(cid:65)(cid:82)(cid:71)(cid:69)(cid:84)(cid:83)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:65)(cid:78)(cid:89)(cid:229)(cid:80)(cid:69)(cid:82)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:69)(cid:68)(cid:229)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:83)(cid:67)(cid:72)(cid:69)(cid:77)(cid:69)(cid:83)(cid:27)(cid:229)(cid:65)(cid:78)(cid:68)(cid:12)
(cid:115)(cid:229) (cid:229)(cid:83)(cid:69)(cid:82)(cid:86)(cid:73)(cid:67)(cid:69)(cid:229)(cid:65)(cid:71)(cid:82)(cid:69)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)(cid:84)(cid:69)(cid:82)(cid:77)(cid:73)(cid:78)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:80)(cid:65)(cid:89)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)
compensation commitments.
In determining such packages and arrangements the Committee gives
due regard to the recommendations of the Combined Code and the UK
Listing Authority’s Listing Rules.
Members of the Committee
The Committee is chaired by Andrew Gulliford. The remaining members
of the Committee are Antony Beevor and Wilf Weeks. All members
of the Committee are independent Non-Executive Directors. None of
the Committee has any personal financial interest in the matters to be
decided (other than as shareholders), potential conflicts of interests
arising from cross-directorships nor any day-to-day involvement in
running the business.
Advisors to the Committee
The Committee consults the Chief Executive and Finance Director about
its proposals and has access to professional advice from Hewitt New
Bridge Street to help it determine appropriate remuneration levels.
Remuneration Committee meetings during the year
During the year the Committee met on three occasions to consider and
approve the Directors’ Remuneration Report for the year to 31 March
2010, approve the terms of the Helical Bar 2010 Approved Share Option
Scheme, approve the making and vesting of share awards under the
terms of the Group’s Performance Share Plan and the annual review of
salaries and bonuses.
Remuneration policy
The Group operates within a competitive environment and its
performance depends on the individual contributions of the directors and
employees. Executive remuneration packages are designed to attract,
motivate and retain directors of the calibre necessary to maintain the
Group’s position as a market leader and to reward them for enhancing
shareholder value and returns. The performance measurement of the
Executive Directors and the determination of their annual remuneration
package is undertaken by the Committee. In determining remuneration
packages the Committee considers Group and individual performance
and responsibility levels and remuneration at comparable companies
within the property sector. It also takes into account the remuneration
structure below Board level.
The remuneration packages of individual directors are structured so that
the performance related elements form a significant proportion of the total
and are designed to align their interests with those of the shareholders.
A substantial proportion of the maximum level of total remuneration
available to the executive directors upon full vesting of all share awards
and payment of cash bonuses is dependent on corporate and individual
performance. In setting the remuneration of directors the Committee
seeks to agree basic salary levels below the median for the listed real
estate sector. This policy helps to limit fixed costs, including associated
employment costs such as national insurance.
In addition, the Group makes no pension payments in respect of its
directors, who are obliged to provide for their retirement through basic
salary and performance related payments.
Performance related cash bonus schemes operate for all Executive
Directors. The Chief Executive and Finance Director participate in the
Executive Bonus Plan from which bonuses are payable on the satisfaction
of corporate targets and hurdles. The remaining directors participate in a
cash bonus scheme which has specific hurdles to meet before bonuses
start to accrue. Bonuses are paid based on individual performance
during the year. These two schemes are designed to supplement the
annual salary of the Executive Directors by making cash payments when
performance criteria have been met.
Share incentives are designed so that they recognise the long-term growth
of the Group. The performance periods are longer term, being three to
five years, and participants receive shares in Helical if performance criteria
are met. Share incentive schemes are also designed to encourage long
term investment in Helical by the directors. Participants in the Group’s
Performance Share Plan are required to retain any shares which vest
until they own shares to the value of 2x salary for Directors. In addition,
and whilst it is not a condition of their award, Directors are encouraged
to retain the shares received on the vesting of share awards, net of any
requirements to pay personal taxes. To date, all shares received by the
Executive Directors under the terms of the group’s Performance Share Plan
and Share Incentive Plan have been retained, net of taxes paid, thereby
increasing the management’s shareholding in Helical.
Executive Directors’ remuneration packages
Performance related cash bonus payments
directors’ remuneration report Helical Bar plc 2011 page 49
The Committee establishes the objectives which must be met for
performance related cash bonuses to be paid. The calculations of the
performance related cash bonuses payable to each participant are
directly related to the profits generated by the participants. In each case
these profits are recognised in the accounts of the year in which the
bonus is accrued and these profits will have been received by the time
the bonuses are paid. Any losses on other projects are deducted from the
profits, as are all costs directly attributable to the generation of the profits,
including all finance costs and an apportionment of central overheads.
The net profits generated by each participant are available as a bonus
pool and bonus payments are made based on individual performance.
Bonuses are calculated in a range of 0 to 10% of the bonus pool with
appropriate percentages depending on the level of equity contributed to
each property and risks assumed. Gerald Kaye, Matthew Bonning-Snook
and Jack Pitman were eligible for performance related cash bonuses in
the period under review. The maximum amount payable in each year is a
total of £5m. Payment of these performance related cash bonuses is at
the discretion of the Committee. In the year under review a performance
related cash bonus was paid to only one director. Gerald Kaye received a
bonus of £542,000.
Executive Bonus Plan
During the year the Group operated an Executive Bonus Plan (“2006
Plan”) designed to align the motivations of the senior management team
with the interests of shareholders and to link their remuneration to the
performance of the Group’s property portfolio. The Plan operated over a
five year period from 1 April 2006 and cash bonuses were paid annually
subject to the achievement of challenging performance targets. Michael
Slade and Nigel McNair Scott were eligible for Executive Bonus Plan
bonuses. No Executive Plan Bonuses have been paid in respect of the
year to 31 March 2011 (2010: nil).
Included in the proposals to be put forward by the Company at the AGM
to be held on 26 July 2011, is a resolution to renew the Executive Bonus
Plan for a further five years with the same rules and criteria as used for
the 2006 Plan. The proposed Executive Bonus Plan (“2011 Plan”) is to
be adopted from 1 April 2011, if approved by shareholders, and Michael
Slade and Nigel McNair Scott will be eligible for bonuses under the 2011
Plan. The rules of the 2011 Plan will be as follows:
As explained earlier, there are three main elements to the Executive
Directors’ remuneration packages:
i basic annual salary and benefits-in-kind;
ii
cash bonus payments, both performance related payments and those
made in accordance with the terms of the Executive Bonus Plan; and,
iii share awards, being the Performance Share Plan and the all-employee
Share Incentive Plan.
Basic annual salary and benefits-in-kind
Basic annual salaries for Executive Directors reflect their responsibilities
and experience. They are set at a level below the median of other quoted
real estate companies. Basic salary levels were last increased on 1 July
2009 and the Committee agreed with all Executive and Non-Executive
Directors’ that there would be no increases in basic salary during the year
to 31 March 2011.
Executive Directors’ annual basic salaries in the year to 31 March 2011
were:
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
£
500,000
335,000
325,000
275,000
275,000
Benefits-in-kind provided to Executive Directors comprise the provision
of a company car and health insurance.
The Group makes no pension contributions in respect of the Executive
Directors.
Balance of fixed versus variable pay
In line with its policy, the Committee seeks to ensure that the balance of
remuneration provides a basic salary below the median, and performance
related bonuses and share awards that reward outperformance of
the Group’s peer group. In the year to 31 March 2011 the balance of
fixed versus variable pay on an actual basis for the Executive Directors
compared to the maximum payable was as follows:
Basic salaries and
benefits in-kind
Annual cash bonus
payments
Executive Bonus Plan
Share awards
Actual
£
Maximum
£
1,861,000
77%
1,861,000
17%
542,000
23%
5,000,000
46%
–
–
0%
2,000,000
18%
0%
2,134,000
19%
2,403,000
100% 10,995,000
100%
Note: Share awards reflect the market value of shares that vested during
the year in accordance with the terms of the Group’s Performance Share Plan.
page 50 Helical Bar plc 2011 directors’ remuneration report
Performance conditions The Committee may, at its discretion, award
bonuses in respect of a financial year subject to performance conditions,
the aim of which is to link the size of bonuses paid to the financial growth
of the Group over that financial year. No bonus will be payable unless the
following conditions are satisfied:
i Increase in net asset value; net asset value at the end of the financial
year exceeds net asset value at the beginning of the financial year;
ii Absolute performance of the portfolio – ungeared total return; the
percentage increase in the total return on property assets of the Group
over the financial year (the “Performance Period”) is greater than the
percentage increase achieved by the portfolio ranked nearest to three-
quarters up the performance table (taken in ascending order of return)
(the “Upper Quartile”) of the portfolios of all quarterly valued funds
measured by the Investment Property Databank at the beginning of
the relevant Performance Period and compounded monthly during the
Performance Period (the “IPD Total Return Benchmark”); and,
iii Performance of the net asset value per share; the percentage increase
in net asset value per share for the Performance Period must be
greater than the percentage increase achieved by the Upper Quartile of
the portfolios of all quarterly valued funds measured by the Investment
Property Databank at the beginning of the relevant Performance Period
and compounded monthly during the Performance Period (the “IPD
Capital Growth Benchmark”).
The Committee will recommend the size of the bonus payable by
reference to the same sliding scale based on the amount by which the
increase in net asset value per share exceeds the increase in the Upper
Quartile of the IPD Capital Growth Benchmark, subject to a £2m cap.
Calculation of amounts payable The total amount of the bonuses
payable in any one year shall be determined by:
– calculating the difference between the percentage increase in net
asset value per share for the Performance Period and the percentage
increase in the Upper Quartile of the IPD Capital Growth Benchmark
over the same period (the “Difference”); and,
– calculating the sum of the amounts payable in relation to each 1% of
the Difference on the following basis:
Amount of Difference
Less than 1%
1% to less than 2%
% of base net asset
value payable
0.01
0.02
And thereafter for every additional 1%
An increment of 0.01
For example: From 4% to less than 5%
0.05
If the net asset value at the end of a financial year is less than the net
asset value at the beginning of that year, the bonus payable for any
subsequent year will be calculated by reference to the highest net asset
value in the preceding year.
Financial accounts The audited financial accounts which record the
financial performance on which the Plan operates are those accounts
prepared in accordance with International Financial Reporting Standards.
2011 Plan and individual limits The total amount payable under
the 2011 Plan in any one year will be limited to £2m (2010: £2m). An
individual employee’s participation in the 2011 Plan will be limited so
that the bonus which may be paid to him under the 2011 Plan will not
exceed £1.5m per annum. There is a further limit that payments under
the 2011 Plan in any year may not exceed 20% of the Group’s pre-tax
profits plus any payments under the 2011 Plan. Among other constraints
the Committee could restrict the bonuses if payment would affect the
financial or trading position of the Group.
Timing of bonuses Bonuses will ordinarily be paid, subject to the
performance conditions being satisfied, and provided that the participant
remains a director or employee of the Group at the time of payment, on
a specified bonus date, which will fall within four months of the end of
the relevant Performance Period. Bonuses are not transferable, nor will
benefits obtained under the 2011 Plan be pensionable.
Termination of employment If a participant dies, the bonus that would
have been paid for the relevant financial year may, at the discretion of the
Committee, be paid to the participant’s personal representatives, but will
be scaled down pro rata to reflect the period elapsed since the start of
the Performance Period. If a participant’s employment ends in any other
circumstances prior to the payment of the bonus, no entitlement will
arise.
Change of control In the event of a change in control of the Group,
bonuses in respect of the financial year in which the change of control
falls may be paid to the extent that the relevant performance target(s)
have been satisfied over an adjusted Performance Period.
Information subject to audit: Remuneration of directors
Share awards
Share options
The Helical Bar 2010 Approved Share Option Scheme is an Inland
Revenue approved scheme. Under the terms of this scheme options
up to a maximum value of £30,000 per individual may be granted.
This scheme was approved by shareholders at the 2010 Annual
General Meeting and no options have yet been granted to employees.
Share price
The market price of the ordinary shares at 31 March 2011 was 270.8p
(2010: 337.9p). This market price varied between 262.0p and 358.8p
during the year.
directors’ remuneration report Helical Bar plc 2011 page 51
Performance share plan
At the 2004 AGM the Group received approval for the adoption of a Performance Share Plan (“PSP”).
General
The operation of the PSP is supervised by the Committee.
The PSP is capable of delivering shares to an executive after a period of not less than three years, other than in exceptional circumstances and with the
approval of the Committee, subject to meeting pre-specified performance targets.
Eligibility
All employees of the Group and its subsidiaries (including directors who are required to devote substantially the whole of their working time to the
business of the Group) who are not under notice nor within six months of any contractual retirement ages will be eligible to receive invitations to
participate in the PSP at the discretion of the Remuneration Committee.
Grant of awards
Awards may be made within the six weeks following approval at a general meeting, the announcement by the Group of its results for any period, or
the removal of any statutory or regulatory restriction which had previously prevented an award being granted or any other times considered by the
Remuneration Committee to be exceptional.
An award consists of the right to acquire shares in the Group for either no payment or payment of a nominal sum. Awards are neither transferable nor
pensionable.
Limit on individual participation
No awards may be granted over shares in any financial year whose value is greater than three times an employee’s annual rate of salary.
Exercise of awards
Other than in exceptional circumstances, an award will vest no earlier than the third anniversary of its grant to the extent that the applicable
performance conditions (see below) have been satisfied and the participant is still employed by the Group. Once exercisable, awards will then remain
capable of exercise for a period of normally no more than six months.
The Remuneration Committee has set demanding performance conditions for the vesting of shares. There are two performance conditions, one based
on absolute growth in the Group’s net asset value per share and the other based on the gross (ungeared) total property return per share relative to
other property funds as determined by IPD but excluding those funds worth less than £50m at the start of the three year period. Performance will be
measured over the three years following grant.
Participants will not normally be permitted to sell shares received through the PSP, other than to meet taxation (and national insurance contributions)
liabilities, until they own shares to the value of 2 x salary for directors and 1 x salary for other executives.
For the growth in net asset value, the “fully diluted triple net” net asset value as at the start of the financial year in which a grant takes place will be
compared to the value three years later (having added back dividends).
Applicable conditions
(a) Absolute net asset value per share (having added back dividends) condition
Annual compound increase after three years
% of award vesting
15% p.a. or more
66.7
Between 7.5% p.a. and 15% p.a.
Pro rata between 6.7 and 66.7
7.5% p.a.
Below 7.5% p.a.
6.7
Zero
If UK inflation (RPI) is higher than 3% per annum over the three year period then the required compound increases will be raised by the excess over the
3% per annum average.
page 52 Helical Bar plc 2011 directors’ remuneration report
(b) Total property return v IPD property funds condition
Ranking after three years
Upper quartile or above
% of award vesting
33.3
Between median and upper quartile
Pro rata between 3.3 and 33.3
Median
Less than median
3.3
Zero
Provided the net asset value per share (having added back dividends) increases over the three year period.
Share awards will lapse where the gross return falls below the IPD median and where the growth in triple net asset value is below 7.5% per annum over
the three year period.
Alignment with shareholders’ interests
The Remuneration Committee has analysed the potential gains that may be made by executives (directors and those below Board level) through the
PSP and other incentive arrangements currently in place. It has concluded that the share of the increase in the value of the Group (measured as the
increase in the net asset value plus cash returned as dividends to shareholders) that could accrue to all executives through the Group’s long and
short-term incentive and bonus plans at the point at which the maximum awards vest might be of the order of 20%. At this point, in absolute terms, the
Group will have increased its triple net asset value by at least 15% per annum with the Group’s relative performance placing it in the top quartile of IPD,
over the three year period.
Vesting of Awards
During the year the performance conditions relating to the fourth award, granted on 6 July 2007, were considered. The three year performance
period to 31 March 2010 showed that the net asset value per share, calculated in accordance with the terms of the PSP, had reduced by 4.6% p.a.
During this three year period the total return of Helical’s property portfolio, as determined by IPD, was 0.0% compared to the upper quartile of the
IPD Benchmark which had reduced by 5.3%. Therefore, although the IPD comparison performance criteria had been met, no shares could vest as the
net asset value per share had fallen.
Awards made to directors under the terms of the PSP which have not yet vested are as follows:
Director
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Shares
awarded
14.07.08
at 276.25p
Shares
awarded
09.07.09
at 300.25p
Shares
awarded
13.07.10
at 276.10p
Total
shares
awarded
Total
award
value
£
325,792
499,584
543,281
1,368,657
3,900,000
217,195
334,721
363,998
915,914
2,610,000
298,643
324,729
353,132
976,504
2,775,000
255,204
274,771
298,804
828,779
2,355,000
255,204
274,771
298,804
828,779
2,355,000
It is currently expected that no shares will vest in respect of the share awards made on 14 July 2008 and 9 July 2009 and that 33% of the shares
awarded on 13 July 2010 will vest.
Helical Bar 2002 Approved Share Incentive Plan
On 24 July 2002 the shareholders approved the Helical Bar 2002 Approved Share Incentive Plan (the “Plan”). Under the terms of this Plan employees
of the Group are given up to £3,000 of free shares in any tax year. Participants in the Plan may purchase additional shares up to a value of £1,500
which is matched in a ratio of 2:1 by the Group. Provided participants remain employed by the Group for a minimum of three years they will retain the
free and matching shares.
Shares allocated to, or purchased on behalf of, the directors under the rules of the Plan were as follows:
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Shares held by the Trustees of the Plan at 31 March 2011 were 315,624 (2010: 223,624).
1,919
1,919
1,919
1,915
1,919
1,099
1,099
1,098
1,096
1,099
1,917
1,917
1,917
1,917
1,917
8 June 2010 7 January 2011 14 June 2011
at 254.6p
at 282.0p
at 284.0p
Directors’ Remuneration
Remuneration in respect of the directors was as follows:
directors’ remuneration report Helical Bar plc 2011 page 53
Salary/ Benefits-
Cash
in-kind bonuses
£000
£000
2011
Total
£000
Salary/ Benefits-
fees
£000
Cash
in-kind bonuses
£000
£000
2010
2010
2011
Total Pensions Pensions
£000
£000
£000
Salaries and bonuses
Chairman
Giles Weaver
Non-executive directors
Antony Beevor
Wilf Weeks
Andrew Gulliford
Executive directors
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Former Director
Michael Brown
fees
£000
75
42
35
42
500
335
325
275
275
–
–
–
–
–
75
75
–
–
42
35
–
42
42
35
36
38
–
538 488
32
–
367
326
36
542
903
312
21 –
296 265
24
–
299
265
–
–
–
–
39
34
34
20
20
–
–
–
–
–
–
–
75
42
35
36
527
360
346
880
1,165
–
–
285
79
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
74
5
1,904
151
542
2,597
1,918
152
880
2,950
Gerald Kaye was the highest paid director during the year with a total remuneration of £903,000 (2010: Michael Slade £1,890,000 including gains on
share awards).
Directors Fees
Fees receivable by Nigel McNair Scott in his capacity as former Chairman of Avocet Mining Plc are shown in the financial statements of that Company.
Share awards
Executive directors
Michael Slade
Nigel McNair Scott
Gerald Kaye
Matthew Bonning-Snook
Jack Pitman
Former Director
Michael Brown
Vesting
of PSP
awards
£000
Gain on
exercise of
share options
£000
2011
Total gains
£000
Vesting of
PSP awards
£000
Gain on
exercise of
share options
£000
2010
Total gains
£000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
390
244
210
105
101
210
1,260
973
–
663
407
623
–
2,666
1,363
244
873
512
724
210
3,926
page 54 Helical Bar plc 2011 directors’ remuneration report
Information not subject to audit
Other Remuneration Matters
Service contracts The service contracts of Michael Slade and Nigel McNair Scott operate from 1 April 2007, and of Gerald Kaye, Matthew Bonning-
Snook and Jack Pitman from 1 March 2010. No service contract provides for more than a one year notice period. On termination of employment
each director is entitled to a payment in lieu of notice of basic salary and other contractual entitlements i.e. provision of car and health insurance. The
Company may make payments in lieu of notice as one lump sum or in instalments, at its own discretion. If the Company chooses to pay in instalments
the director is obliged to seek alternative income over the relevant period and to disclose the amount to the Company. Instalment payments will be
reduced by any alternative income.
Non-Executive Directors Non-Executive Directors are appointed by a Letter of Appointment. The remuneration of the Non-Executive Directors is
determined by the Board and was last increased in April 2007. The appointment of Non-Executive Directors is terminable on three months notice. Non-
Executive Directors do not participate in any of the Group’s bonus or share award schemes.
Total shareholder return The performance criteria of the Helical Bar 2010 Approved Share Option Scheme requires the Group to exceed certain
targets of total shareholder return. The total shareholder return for a holding in the Group’s shares in the five years to 31 March 2011 compared to a
holding in a broad equity index is shown in the graph below.
Total shareholder return
Source: Thomson Reuters
225
175
125
(cid:1)
100
75
25
31 Mar 06
123
(cid:1)
(cid:1)
110
97
(cid:1)
(cid:1)
83
91
(cid:1)
(cid:1)
51
75
(cid:1)
(cid:1)
33
73
58
(cid:1)
(cid:1)
31 Mar 07
31 Mar 08
31 Mar 09
31 Mar 10
31 Mar 11
This graph looks at the value, by 31 March 2011, of £100 invested in Helical Bar on 31 March 2006
compared with the value of £100 invested in the FTSE 350 Super-sector Real Estate Index.
The other points plotted are the values at intervening financial year-ends.
(cid:1)
Helical Bar FTSE 350 Super-sector Real Estate Index
(cid:1)
Andrew Gulliford
Chairman of the Remuneration Committee
15 June 2011
Helical Bar plc 2011 page 55
report of independent auditor
To the Members of Helical Bar plc
We have audited the financial statements of Helical Bar plc for the
year ended 31 March 2011 which comprise the consolidated income
statement, the consolidated statement of comprehensive income, the
group and company balance sheets, the group and company cash flow
statements and the group and company statement of changes in equity,
and the related notes. The financial reporting framework that has been
applied in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and,
as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our
audit work has been undertaken so that we might state to the company’s
members those matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Statement of Directors’ Responsibilities
set out on page 42, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view. Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require us to comply with
the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided
on the APB’s website at www.frc.org.uk/apb/scope/private.cfm.
Opinion on financial statements
In our opinion:
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:71)(cid:73)(cid:86)(cid:69)(cid:229)(cid:65)(cid:229)(cid:84)(cid:82)(cid:85)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:70)(cid:65)(cid:73)(cid:82)(cid:229)(cid:86)(cid:73)(cid:69)(cid:87)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)
group’s and of the company’s affairs as at 31 March 2011 and of the
group’s loss for the year then ended;
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:71)(cid:82)(cid:79)(cid:85)(cid:80)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:76)(cid:89)(cid:229)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:68)(cid:229)(cid:73)(cid:78)(cid:229)
accordance with IFRSs as adopted by the European Union;
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:76)(cid:89)(cid:229)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:68)(cid:229)(cid:73)(cid:78)(cid:229)
accordance with IFRSs as adopted by the European Union and as
applied in accordance with the provisions of the Companies Act 2006;
and,
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:68)(cid:229)(cid:73)(cid:78)(cid:229)(cid:65)(cid:67)(cid:67)(cid:79)(cid:82)(cid:68)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:87)(cid:73)(cid:84)(cid:72)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)
requirements of the Companies Act 2006 and, as regards the group
financial statements, Article 4 of the IAS Regulation.
Separate opinion in relation to IFRSs as issued by the IASB
As explained in Note 1 to the group financial statements, the group in
addition to complying with its legal obligation to apply IFRSs as adopted
by the European Union, has also applied IFRSs as issued by the
International Accounting Standards Board (IASB).
In our opinion the group financial statements comply with IFRSs as issued
by the IASB.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:80)(cid:65)(cid:82)(cid:84)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:229)(cid:50)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:84)(cid:79)(cid:229)(cid:66)(cid:69)(cid:229)(cid:65)(cid:85)(cid:68)(cid:73)(cid:84)(cid:69)(cid:68)(cid:229)(cid:72)(cid:65)(cid:83)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)
properly prepared in accordance with the Companies Act 2006;
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:71)(cid:73)(cid:86)(cid:69)(cid:78)(cid:229)(cid:73)(cid:78)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:89)(cid:69)(cid:65)(cid:82)(cid:229)
for which the financial statements are prepared is consistent with the
financial statements; and,
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:71)(cid:73)(cid:86)(cid:69)(cid:78)(cid:229)(cid:73)(cid:78)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:229)(cid:39)(cid:79)(cid:86)(cid:69)(cid:82)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:83)(cid:69)(cid:84)(cid:229)(cid:79)(cid:85)(cid:84)(cid:229)(cid:79)(cid:78)(cid:229)
pages 44 to 47 with respect to internal control and risk management
systems in relation to financial reporting processes and about share
capital structures is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the Companies Act 2006 we are required to report to you if, in our
opinion:
(cid:115)(cid:229)(cid:229)(cid:65)(cid:68)(cid:69)(cid:81)(cid:85)(cid:65)(cid:84)(cid:69)(cid:229)(cid:65)(cid:67)(cid:67)(cid:79)(cid:85)(cid:78)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)(cid:82)(cid:69)(cid:67)(cid:79)(cid:82)(cid:68)(cid:83)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)(cid:75)(cid:69)(cid:80)(cid:84)(cid:229)(cid:66)(cid:89)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:12)(cid:229)(cid:79)(cid:82)(cid:229)
returns adequate for our audit have not been received from branches
not visited by us; or
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:229)(cid:108)(cid:78)(cid:65)(cid:78)(cid:67)(cid:73)(cid:65)(cid:76)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:80)(cid:65)(cid:82)(cid:84)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:36)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:229)
Remuneration Report to be audited are not in agreement with the
accounting records and returns; or
(cid:115)(cid:229)(cid:229)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:229)(cid:68)(cid:73)(cid:83)(cid:67)(cid:76)(cid:79)(cid:83)(cid:85)(cid:82)(cid:69)(cid:83)(cid:229)(cid:79)(cid:70)(cid:229)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:229)(cid:82)(cid:69)(cid:77)(cid:85)(cid:78)(cid:69)(cid:82)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:83)(cid:80)(cid:69)(cid:67)(cid:73)(cid:108)(cid:69)(cid:68)(cid:229)(cid:66)(cid:89)(cid:229)(cid:76)(cid:65)(cid:87)(cid:229)(cid:65)(cid:82)(cid:69)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)
made; or
(cid:115)(cid:229)(cid:229)(cid:87)(cid:69)(cid:229)(cid:72)(cid:65)(cid:86)(cid:69)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)(cid:82)(cid:69)(cid:67)(cid:69)(cid:73)(cid:86)(cid:69)(cid:68)(cid:229)(cid:65)(cid:76)(cid:76)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:73)(cid:78)(cid:70)(cid:79)(cid:82)(cid:77)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:69)(cid:88)(cid:80)(cid:76)(cid:65)(cid:78)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:83)(cid:229)(cid:87)(cid:69)(cid:229)(cid:82)(cid:69)(cid:81)(cid:85)(cid:73)(cid:82)(cid:69)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)
our audit; or
(cid:115)(cid:229)(cid:229)(cid:65)(cid:229)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:229)(cid:39)(cid:79)(cid:86)(cid:69)(cid:82)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:72)(cid:65)(cid:83)(cid:229)(cid:78)(cid:79)(cid:84)(cid:229)(cid:66)(cid:69)(cid:69)(cid:78)(cid:229)(cid:80)(cid:82)(cid:69)(cid:80)(cid:65)(cid:82)(cid:69)(cid:68)(cid:229)(cid:66)(cid:89)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:14)
Under the Listing Rules, we are required to review:
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:68)(cid:73)(cid:82)(cid:69)(cid:67)(cid:84)(cid:79)(cid:82)(cid:83)(cid:7)(cid:229)(cid:83)(cid:84)(cid:65)(cid:84)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:12)(cid:229)(cid:83)(cid:69)(cid:84)(cid:229)(cid:79)(cid:85)(cid:84)(cid:229)(cid:79)(cid:78)(cid:229)(cid:80)(cid:65)(cid:71)(cid:69)(cid:229)(cid:20)(cid:23)(cid:12)(cid:229)(cid:73)(cid:78)(cid:229)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:229)(cid:84)(cid:79)(cid:229)(cid:71)(cid:79)(cid:73)(cid:78)(cid:71)(cid:229)(cid:67)(cid:79)(cid:78)(cid:67)(cid:69)(cid:82)(cid:78)(cid:27)(cid:229)
(cid:115)(cid:229)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:80)(cid:65)(cid:82)(cid:84)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:35)(cid:79)(cid:82)(cid:80)(cid:79)(cid:82)(cid:65)(cid:84)(cid:69)(cid:229)(cid:39)(cid:79)(cid:86)(cid:69)(cid:82)(cid:78)(cid:65)(cid:78)(cid:67)(cid:69)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:82)(cid:69)(cid:76)(cid:65)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)(cid:84)(cid:79)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:65)(cid:78)(cid:89)(cid:7)(cid:83)(cid:229)
compliance with the nine provisions of the June 2008 Combined Code
specified for our review; and,
(cid:115)(cid:229)(cid:229)(cid:67)(cid:69)(cid:82)(cid:84)(cid:65)(cid:73)(cid:78)(cid:229)(cid:69)(cid:76)(cid:69)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:82)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:84)(cid:79)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:83)(cid:72)(cid:65)(cid:82)(cid:69)(cid:72)(cid:79)(cid:76)(cid:68)(cid:69)(cid:82)(cid:83)(cid:229)(cid:66)(cid:89)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:34)(cid:79)(cid:65)(cid:82)(cid:68)(cid:229)(cid:79)(cid:78)(cid:229)
directors’ remuneration.
Charles Hutton-Potts B.Sc., FCA
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
London
15 June 2011
page 56 Helical Bar plc 2011
index to the financial statements
Helical Bar plc 2011 page 57
58 Consolidated income statement
59 Consolidated statement of comprehensive income
60 Group and company balance sheets
62 Group and company cash flow statements
63 Group and company statements of changes in equity
64 Notes to the financial statements
89 Ten year review
90 Investor information
91 Glossary of terms
92 Financial calendar
92 Advisors
page 58 Helical Bar plc 2011
consolidated income
statement
For the year ended 31 March 2011
Revenue
Net rental income
Development property loss
Trading property loss
Share of results of joint ventures
Other operating (expense)/income
Gross (loss)/profit before net gain on sale and revaluation of investment properties
Net gain on sale and revaluation of investment properties
Impairment of available-for-sale assets
Gross profit
Administrative expenses
Operating (loss)/profit
Finance costs
Finance income
Change in fair value of derivative financial instruments
Foreign exchange losses
(Loss)/profit before tax
Taxation on (loss)/profit on ordinary activities
(Loss)/profit after tax
– attributable to non-controlling interests
– attributable to equity shareholders
(Loss)/profit for the year
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
Year ended Year ended
31.3.10
£000
31.3.11
£000
Note
3
4
5
6
21
7
19
119,059
14,187
67,354
14,151
(16,642)
(1,293)
(367)
2,886
(358)
(294)
7,512
(1,817)
(10)
3,745
26
16,619
8,195
–
5,401
24,814
8
(7,050)
(8,680)
(1,649)
16,134
(6,992)
(9,328)
652
1,776
1,039
1,157
(67)
(1,127)
(6,280)
2,391
(3,889)
7,875
1,711
9,586
(2)
(33)
(3,887)
(3,889)
(3.6p)
(3.6p)
9,619
9,586
9.1p
9.1p
10
10
23
11
15
15
consolidated statement
of comprehensive income
For the year ended 31 March 2011
Helical Bar plc 2011 page 59
Year ended Year ended
31.3.10
£000
31.3.11
£000
Note
(Loss)/profit for the year
Other comprehensive (expense)/income
Fair value movements and impairment of available-for-sale investments
Associated deferred tax on impairment
Exchange difference on retranslation of net investments in foreign operations
Total comprehensive (expense)/income for the year
– attributable to equity shareholders
– attributable to non-controlling interests
19
19
(3,889)
9,586
(12,169)
2,962
3,222
(14)
(12,850)
(12,848)
(829)
(131)
11,588
11,621
(2)
(33)
(12,850)
11,588
page 60 Helical Bar plc 2011
group and company balance sheets
As at 31 March 2011
Group
31.3.11
£000
Group Company
31.3.11
£000
31.3.10
£000
Company
31.3.10
£000
Note
Non-current assets
Investment properties held for sale
Investment properties
Owner occupied property, plant and equipment
Available-for-sale investments
Investment in subsidiaries
Investment in joint ventures
Derivative financial instruments
Goodwill
Deferred tax asset
Total non-current assets
Current assets
Land, developments and trading properties
Available-for-sale investments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Non-current liabilities
Borrowings
Derivative financial instruments
Deferred tax provision
Total liabilities
Net assets
16
16
18
19
20
21
23
22
19
24
19,350
19,350
–
–
252,526
219,901
–
–
–
1,497
–
–
1,638
13,325
1,336
–
–
30,994
36,064
26,384
793
14
1,944
16
12
8,879
3,169
165
715
–
717
–
–
–
1,476
13,325
31,822
5,383
1,944
–
–
299,773
266,377
319,123
266,377
33,927
33,927
53,950
53,950
147,542
182,576
1,125
10,505
35,783
1,069
10,959
–
38,691
375,751
376,609
1,098
1,069
1,170
968
–
25
31,327
39,800
22,243
25,258
226,226
273,124
400,188
404,005
545,349
539,501
434,115
457,955
26
27
27
23
12
(45,224)
(43,651)
(168,911)
(189,394)
(37,500)
(72,459)
(4,500)
(20,163)
(82,724)
(116,110)
(173,411)
(209,557)
(199,917)
(170,299)
(7,311)
(10,485)
–
–
(9,910)
(3,373)
–
(7,354)
(3,299)
(3,282)
(207,228)
(180,784)
(13,283)
(13,935)
(289,952)
(296,894)
(186,694)
(223,492)
255,397
242,607
247,421
234,463
group and company balance sheets
As at 31 March 2011
Helical Bar plc 2011 page 61
Equity
Called-up share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Other reserves
Retained earnings
Group
31.3.11
£000
Group Company
31.3.11
£000
31.3.10
£000
Company
31.3.10
£000
1,447
1,339
1,447
1,339
98,678
70,828
98,678
70,828
3,495
7,478
291
–
7,478
291
–
7,478
1,987
–
7,478
1,987
143,886
162,547
137,831
152,831
Equity attributable to equity holders of the parent
255,275
242,483
247,421
234,463
Non-controlling interests
Total equity
122
124
–
–
255,397
242,607
247,421
234,463
The financial statements were approved by the Board of Directors on 15 June 2011.
Michael Slade
Director
Nigel McNair Scott
Director
page 62 Helical Bar plc 2011
group and company cash flow statements
For the year to 31 March 2011
Cash flows from operating activities
(Loss)/profit before tax
Depreciation
Revaluation gain on investment properties
(Gain)/loss on sales of investment properties
Net financing costs/(income)
Impairment of available-for-sale assets
Impairment of investments
Change in value of derivative financial instruments
Share based payment (credit)/charge
Share of results of joint ventures
Foreign exchange movement
Other non-cash items
Cash flows from operations before changes in working capital
Change in trade and other receivables
Change in land, developments and trading properties
Change in trade and other payables
Cash inflow/(outflow) generated from operations
Finance costs
Finance income
Tax received
Tax paid
Cash flows from operating activities
Cash flows from investing activities
Purchase of investment property
Sale of investment property
Proceeds from sale of derivative financial instruments
Cost of acquiring derivative financial instruments
Cost of cancelling interest rate swap
Investment in joint ventures
Return of investment in joint ventures
Dividends from joint ventures
Sale of plant and equipment
Purchase of leasehold improvements, plant and equipment
Cash flows from financing activities
Issue of shares
Borrowings drawn down
Borrowings repaid
Equity dividends paid
Net decrease in cash and cash equivalents
Cash and cash equivalents at 1 April
Cash and cash equivalents at 31 March
Group
31.3.11
£000
Group Company
31.3.11
£000
31.3.10
£000
Company
31.3.10
£000
(6,280)
328
(2,670)
(4,842)
6,340
1,817
–
(1,776)
(196)
(2,886)
131
2
(10,032)
2,822
38,867
5,079
36,736
(11,264)
465
–
(68)
(10,867)
25,869
(77,864)
32,810
568
(744)
(71)
(9,520)
1,970
756
2
(189)
(52,282)
27,958
56,536
(61,523)
(5,031)
17,940
(8,473)
39,800
31,327
7,875
334
(13,104)
4,909
8,289
–
–
(1,157)
1,151
(3,745)
(1,153)
2
3,401
358
30,707
(11,555)
22,911
(12,345)
1,231
834
(77)
(10,357)
12,554
(4,192)
36,704
–
(1,437)
(3,202)
(18,641)
–
3,926
28
(237)
12,949
453
13,739
(67,923)
(4,748)
(58,479)
(32,976)
72,776
39,800
17,627
284
–
–
(2,929)
1,817
5,295
1,287
–
–
–
–
23,381
(23,042)
(157)
(16,542)
(16,360)
(2,066)
5,237
–
(68)
3,103
(13,257)
–
–
568
(552)
–
–
–
756
2
(146)
628
27,958
6,850
(20,163)
(5,031)
9,614
(3,015)
25,258
22,243
3,736
296
–
–
(1,846)
–
1,100
16
–
–
–
(12)
3,290
(27,661)
(115)
(7,436)
(31,922)
(1,936)
4,189
808
(77)
2,984
(28,938)
–
–
–
(1,437)
–
–
–
3,926
28
(62)
2,455
453
10,000
(9,757)
(4,748)
(4,052)
(30,535)
55,793
25,258
group and company statements
of changes in equity
For the year to 31 March 2011
Helical Bar plc 2011 page 63
Share
capital premium
£000
Capital
Share Revaluation redemption
reserve
reserve
£000
£000
£000
Group
At 31 March 2009
Total comprehensive income
Revaluation surplus
Realised on disposals
Non-controlling interests
Performance share plan
Issue of shares
Dividends paid
Purchase of shares
Own shares held
At 31 March 2010
Total comprehensive expense
Revaluation surplus
Realised on disposals
Non-controlling interests
Performance share plan
Issue of shares
Dividends paid
1,336
–
–
–
–
–
3
–
–
–
1,339
–
–
–
–
–
108
–
70,378
–
–
–
–
–
450
–
–
–
70,828
–
–
–
–
–
27,850
–
529
–
13,104
(13,633)
–
–
–
–
–
–
–
–
2,670
825
–
–
–
–
At 31 March 2011
1,447
98,678
3,495
Other
reserves
£000
Retained
earnings
£000
291
–
–
–
–
–
–
–
–
–
291
–
–
–
–
–
–
–
291
158,494
11,588
(13,104)
13,633
33
1,151
–
(7,657)
–
(1,591)
162,547
(12,850)
(2,670)
(825)
2
(196)
(2,122)
143,886
Own
Non-
shares controlling
interests
£000
held
£000
(1,597)
–
–
–
–
–
–
–
6
1,591
–
–
–
–
–
–
–
–
–
157
–
–
–
(33)
–
–
–
–
–
124
–
–
–
(2)
–
–
–
122
Total
£000
237,066
11,588
–
–
–
1,151
453
(7,657)
6
–
242,607
(12,850)
–
–
–
(196)
27,958
(2,122)
255,397
7,478
–
–
–
–
–
–
–
–
–
7,478
–
–
–
–
–
–
–
7,478
For a breakdown of Total comprehensive income/expense see the Consolidated Statement of Comprehensive Income on page 59.
Included within changes in equity are net transactions with owners of £25,640,000 (2010: £6,047,000) made up of: the performance share plan credit of £196,000 (2010: charge of £1,151,000), issue of shares of
£27,958,000 (2010: £453,000), dividends paid of £2,122,000 (2010: £7,657,000) and purchase of shares of £nil (2010: £6,000).
The adjustment to retained earnings of £196,000 adds back the share-based payments credit (2010: charge of £1,151,000), in accordance with IFRS 2 Share-Based Payments.
Company
At 31 March 2009
Total comprehensive income
Issue of shares
Dividends
Purchase of shares
Own shares held
At 31 March 2010
Total comprehensive income
Issue of shares
Dividends
At 31 March 2011
Share
capital
£000
1,336
–
3
–
–
–
1,339
–
108
–
1,447
Capital
Share Revaluation redemption
reserve
reserve
£000
£000
premium
£000
Other
reserves
£000
Retained
earnings
£000
70,378
–
450
–
–
–
70,828
–
27,850
–
98,678
–
–
–
–
–
–
–
–
–
–
–
7,478
–
–
–
–
–
7,478
–
–
–
1,987
–
–
–
–
–
1,987
–
–
–
158,093
3,986
–
(7,657)
–
(1,591)
152,831
(12,878)
–
(2,122)
7,478
1,987
137,831
Own
shares
held
£000
(1,597)
–
–
–
6
1,591
–
–
–
–
–
Total
£000
237,675
3,986
453
(7,657)
6
–
234,463
(12,878)
27,958
(2,122)
247,421
Total comprehensive income includes the loss after tax of £4,592,000 (2010: profit of £3,975,000), the loss on fair value movements on available-far-sale investments of £11,508,000 (2010: gain of
£15,000), and the deferred tax credit on these fair value movements of £3,222,000 (2010: charge of £4,000).
Included within changes in equity are net transactions with owners of £25,836,000 (2010: £7,198,000) made up of: the issue of shares of £27,958,000 (2010: £453,000), dividends paid of £2,122,000
(2010: £7,657,000) and purchase of shares of £nil (2010: £6,000).
Notes:
Share capital – represents the nominal value of issued share capital.
Share premium – represents the excess of value of shares issued over their nominal value.
Revaluation reserve – represents the surplus of fair value of investment properties over their historic cost.
Capital redemption reserve – represents amounts paid to purchase issued shares for cancellation at their nominal value.
Retained earnings – represents the accumulated retained earnings of the Group.
Own shares held – relates to the shares purchased by the Helical Bar Employees’ Share Ownership Plan Trust.
page 64 Helical Bar plc 2011
notes to the financial statements
1. Basis of preparation
These financial statements have been prepared in accordance with applicable International Financial Reporting Standards (“IFRS”), including
International Financial Reporting Interpretations Committee (“IFRIC”) interpretations as adopted by the European Union and as issued by the
International Accounting Standards Board (“IASB”).
The directors have taken advantage of the exemption offered by Section 408 of the Companies Act 2006 not to present a separate income statement
for the parent company.
The financial statements have been prepared in Sterling (rounded to the nearest thousand) under the historical cost convention as modified by
the revaluation of investment properties, available-for-sale investments and derivative financial instruments. The measurement bases and principal
accounting policies of the Group are set out below. These accounting policies are consistent with those applied in the year to 31 March 2010, as
amended to reflect any new Standards, Amendments to Standards and interpretations which are mandatory for the year ended 31 March 2011.
Status of Adoption of Significant New or Amended IFRS Standards or Interpretations
IFRIC 17 Distributions of Non-cash Assets to Owners;
IFRIC 18 Transfer of Assets from Customers.
There has been no material impact as a result of adopting the above.
The following standards, interpretations and amendments have been issued but are not yet effective. They will be adopted at the point they are effective:
IAS 24 (revised) Related Party disclosures (effective 1 January 2013);
Disclosures - Transfer of Financial Assets - Amendments to IFRS 7; (effective 1 July 2011);
Deferred Tax: Recovery of Underlying Assets - Amendments to IAS 12;
Income Taxes (effective 1 January 2012)
IFRS 9 Financial Instruments: Classification and measurement (effective 1 January 2011); and,
Improvements to IFRSs issued May 2010 (effective 1 July 2010/1 January 2011).
The Directors do not expect that the adoption of these Standards and Interpretations in future periods will have a material impact on the financial
statements of the Group.
notes to the financial statements Helical Bar plc 2011 page 65
2. Principal accounting policies
Basis of consolidation
The Group financial statements consolidate those of Helical Bar plc (the “Company”) and all of its subsidiary undertakings (together the “Group”) drawn
up to 31 March 2011. Subsidiary undertakings are those entities over which the Group has the ability to govern the financial and operating policies
through the exercise of voting rights. Subsidiaries are accounted for under the purchase method and are held in the Company balance sheet at cost
and reviewed annually for impairment.
Joint Ventures are entities whose economic activities are controlled jointly by the Group and by other ventures independent of the Group and
are accounted for using the equity method of accounting, whereby the Group’s share of profit after tax in the Joint Venture is recognised in the
Consolidated Income Statement and the Group’s share of the Joint Venture’s net assets are incorporated in the Consolidated Balance Sheet.
The Company’s cost of investment in Joint Ventures less any provision for permanent impairment loss is shown in the Company Balance Sheet.
Associates are those entities over which the Group has significant influence but which are neither subsidiaries nor joint ventures.
Intra-group balances and any unrealised gains on transactions between the Company and its subsidiaries and between subsidiaries are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Going concern
The accounts have been prepared on a going concern basis as explained in the Financial Review on pages 36 to 38.
Revenue recognition
Rental income - rental income receivable is recognised in the Income Statement on a straight line basis over the lease term. Any incentive for lessees
to enter into a lease agreement and any costs associated with entering into the lease are spread over the same period.
Sale of goods - assets, such as trading properties, development sites and completed developments, are regarded as sold upon the transfer of the
significant risks and rewards of ownership to the purchaser, in accordance with IAS 18 Revenue. This occurs on exchange of unconditional contracts
for the sale of the site, on satisfaction of any and all conditions on a conditional contract for the sale of the site or on completion of the contract on a
conditional sale where those conditions are satisfied at completion. Measurements of revenue arising from the sale of such assets are derived from the
fair value of the consideration received in accordance with IAS 18 Revenue.
Construction contracts - where an asset is constructed under a specific contract with a purchaser (a “pre-sold development”) the initial sale of the
site to that purchaser is recognised as a sale of goods in accordance with IAS 18 Revenue. The construction element of the contract is treated, for the
purposes of revenue recognition, as a construction contract in accordance with IAS 11 Construction Contracts. Revenue is recognised by reference
to the stage of completion which is typically determined by reference to project appraisals, normally supported by independent valuation certificates
provided by quantity surveyors. The Company’s principal other responsibility on pre-sold developments is the identification of and agreement of terms
with potential tenants of the completed building(s). The revenue recognition of this additional component of the funding agreements is considered
separately to reflect the substance of the transaction as the rendering of services, in accordance with IAS 18 Revenue. The amount of revenue
recognised is determined by reference to the percentage of the building(s) that are let.
Investment income - revenue in respect of investment and other income represents investment income, fees and commissions earned on an
accruals basis and the fair value of the consideration received/receivable on investments held for the short-term. Dividends are recognised when the
shareholders’ right to receive payment has been established. Interest income is accrued on a time basis, by reference to the principal outstanding and
the effective interest rate.
Share-based payments
The Group provides share-based payments in the form of performance share plan awards and a share incentive plan. These payments are discussed
in greater detail in the Directors’ Remuneration Report on pages 48 to 54. The fair value of share-based payments related to employees’ service are
determined indirectly by reference to the fair value of the related instrument at the grant date. All share-based payment arrangements granted after 7
November 2002 that had not vested prior to 1 January 2005 are recognised in the financial statements. The Group uses the stochastic valuation model
and the resulting value is amortised through the Consolidated Income Statement (“Income Statement”) over the vesting period of the share-based
payments.
For the performance share plan and share incentive plan awards, where non-market conditions apply, the expense is allocated, over the vesting period,
to the Income Statement based on the best available estimate of the number of awards that are expected to vest. Estimates are subsequently revised if
there is any indication that the number of awards expected to vest differs from previous estimates.
Depreciation
In accordance with IAS 40 Investment Property, depreciation is not provided for on freehold investment properties or on leasehold investment
properties. The Group does not own the freehold land and buildings which it occupies. Costs incurred in respect of leasehold improvements to the
Group’s head office at 11-15 Farm Street, London W1J 5RS are capitalised and held as short-term leasehold improvements. Leasehold improvements,
plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Residual values are reassessed annually.
Depreciation is charged so as to write off the cost of assets less residual value, over their estimated useful lives, using the straight line method, on the
following basis:
Short leasehold improvements – 10% or length of lease, if shorter
Plant and equipment
– 25%
page 66 Helical Bar plc 2011 notes to the financial statements
Taxation
The taxation charge represents the sum of tax currently payable and deferred tax. The charge for current taxation is based on the results for the year
as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the
balance sheet date. Tax payable upon realisation of revaluation gains recognised in prior periods is recorded as a current tax charge with a release of
the associated deferred taxation.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. The measurement of deferred tax assets
and liabilities reflects the tax consequences of the manner in which Helical expects, at the balance sheet date, to recover or settle the carrying amount
of those assets and liabilities. Such assets and liabilities are not recognised if the temporary differences arise from the initial recognition of goodwill or
from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the tax profit nor the
accounting profit.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the assets to be recovered.
The deferred tax asset relating to share based payment awards reflects the estimated value of tax relief available on the vesting of the awards at the
balance sheet date.
Deferred tax is determined using tax rates that have been enacted or substantively enacted by the balance sheet date and are expected to apply when
the related deferred tax asset is realised or the deferred tax liability is settled. It is recognised in the Income Statement except when it relates to items
credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.
The Group recognises a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates and interests
in joint ventures, except to the extent that both of the following conditions are satisfied:
a) the Group is able to control the timing of the reversal of the temporary difference; and,
b) it is probable that the temporary difference will not reverse in the foreseeable future.
Dividends
Dividend distributions to the Company’s shareholders are recognised as a liability in the financial statements in the period in which dividends are approved.
Investment properties
Investment properties are properties owned or leased by the Group which are held for long-term rental income and for capital appreciation. Investment
properties are initially recognised at cost, including associated transaction costs, and revalued at the balance sheet date to fair value. These fair values
are based on market values as determined by professionally qualified external valuers or are determined by the directors of the Group based on their
knowledge of the property. In accordance with IAS 40, investment properties held under leases are stated gross of the recognised finance lease liability.
Gains or losses arising from changes in the fair value of investment properties are recognised as gains or losses on revaluation in the Income Statement
of the period in which they arise.
In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties including integral plant.
Property that is being constructed or developed for future use as an investment property is treated as investment property in accordance with IAS 40.
When the Group redevelops an existing investment property for continued future use as investment property, the property remains an investment
property measured at fair value and is not reclassified. Interest is capitalised before tax relief until the date of practical completion.
Details of the valuation of investment properties can be found in note 16.
Goodwill
Goodwill, representing the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired, is capitalised
and reviewed annually for impairment. Goodwill is carried at cost less accumulated impairment losses. Negative goodwill is recognised immediately
after acquisition in the Income Statement.
Land, developments and trading properties
Land, developments and trading properties held for sale are inventory and are included in the Balance Sheet at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less estimated costs to completion and estimated costs necessary to
make the sale.
Gross borrowing costs associated with expenditure on properties under development or undergoing major refurbishment are capitalised. The interest
capitalised is calculated using the Group’s weighted average cost of borrowings. Interest is capitalised from the date of commencement of the
development work until date of practical completion.
Investments
Available-for-sale investments are revalued to fair value at the balance sheet date. Gains or losses arising from changes in fair value are recognised
in the Statement of Comprehensive Income except to the extent that losses are attributable to impairment, in which case they are recognised in the
Income Statement. Upon disposal, accumulated fair value adjustments are included in the Income Statement.
notes to the financial statements Helical Bar plc 2011 page 67
Trade receivables
Trade receivables do not carry any interest and are stated initially at fair value and subsequently at amortised cost as reduced by appropriate
allowances for estimated irrecoverable amounts.
Cash and cash equivalents
Cash and cash equivalents are carried in the Balance Sheet at amortised cost. For the purposes of the cash flow statement, cash and cash equivalents
comprise cash in hand, deposits with banks, and other short-term, highly liquid investments with original maturities of three months or less.
Trade and other payables
Trade and other payables are not interest bearing and are initially recognised at fair value and subsequently at amortised cost.
Borrowing and borrowing costs
Interest bearing bank loans and overdrafts are initially recorded at fair value, net of finance and other costs yet to be amortised.
Borrowing costs directly attributable to the acquisition and construction of new developments and investment properties are added to the costs of
such properties until the date of completion of the development or investment. After initial recognition borrowings are carried at amortised cost. This
treatment has been adopted since transition to IFRS.
Derivative financial instruments
Derivative financial assets and financial liabilities are recognised on the Balance Sheet when the Group becomes a party to the contractual provisions of
the instrument.
The Group enters into derivative transactions such as interest rate caps and floors, and forward foreign currency contracts in order to manage the risks
arising from its activities. Derivatives are initially recorded at fair value and are subsequently remeasured to fair value based on market prices, estimated
future cash flows and forward rates as appropriate. Any change in the fair value of such derivatives is recognised immediately in the Income Statement.
Further information on the categorisation of financial instruments can be found in note 23.
Leases
Leases are classified according to the substance of the transaction. A lease that transfers substantially all the risks and rewards of ownership to the
lessee is classified as a finance lease. All other leases are classified as operating leases.
In accordance with IAS 40, finance leases of investment property are accounted for as finance leases and recognised as an asset and an obligation to
pay future minimum lease payments. The investment property asset is included in the balance sheet at fair value, gross of the recognised finance lease
liability. Lease payments are allocated between the liability and finance charges so as to achieve a constant financing rate.
Foreign currencies
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities in foreign
currencies are translated at the rates of exchange ruling at the balance sheet date. Non-monetary items that are measured at historical cost in a foreign
currency are translated at the exchange rate at the date of the transaction.
Any exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were
initially recorded are recognised in the Income Statement in the period in which they arise. Exchange differences on non-monetary items are recognised
in the Statement of Comprehensive Income to the extent that they relate to a gain or loss on that non-monetary item which is included in the Statement
of Comprehensive Income, otherwise such gains and losses are recognised in the Income Statement.
The assets and liabilities in the financial statements of foreign subsidiaries are translated at the rate of exchange ruling at the balance sheet date.
Income and expenses are translated at the average rate. The exchange differences arising from the retranslation of the opening net investment in
subsidiaries are taken directly to retained earnings in equity. On disposal of a foreign operation the cumulative translation differences (including, if
applicable, gains and losses on related hedges) are transferred to the Income Statement as part of the gain or loss on disposal.
Net asset values per share
Net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate Association (“EPRA”).
Earnings/(loss) per share
Earnings /(loss) per share have been calculated in accordance with IAS 33 and the best practice recommendations of EPRA.
Employee Share Ownership Plan Trust
Shares held in the Helical Bar Employee Share Ownership Plan Trust (“ESOP”) are shown as a deduction in arriving at equity funds. Assets, liabilities
and reserves of the ESOP are included in the statutory headings to which they relate. Purchases and sales of own shares increase or decrease the
book value of “Own shares held” in the Balance Sheet. At each period end the Group assesses and recognises the fair value of “Own shares held” and
accounts for movement between book value and fair value as a reserves transfer.
Use of estimates and judgements
To be able to prepare accounts according to the accounting principles, management must make estimates and assumptions that affect the asset and
liability items and revenue and expense amounts recorded in the financial accounts. These estimates are based on historical experience and various
other assumptions that management and the Board of Directors believe are reasonable under the circumstances. The results of these considerations
form the basis for making judgements about the carrying value of assets and liabilities that are not readily available from other sources.
page 68 Helical Bar plc 2011 notes to the financial statements
Areas requiring the use of estimates and critical judgement that may significantly impact on the Group’s earnings and financial position are:
– revenue on construction contracts where the valuation is spread over the construction period using estimates of the final outcome (note 3);
– valuation of investment properties, where external valuers are used to provide third party valuations (note 16);
– recognition of share-based payments which is dependent upon the estimated number of performance share plan awards that will vest at the end of
the performance periods (note 31);
– calculation and assessment of the recoverability of deferred tax assets, where it has been assumed that sufficient taxable profits will be available in
future periods to allow all of the assets to be recovered (note 12);
– valuation of the investment in Quotient Bioscience Group Limited, which is based on a valuation method (note 19);
– valuation of the investment in a property developer which is based on a valuation method (note 19); and,
– directors’ valuation of land, development and trading properties include subjective assumptions including the results of future planning decisions and
future sales values and timings (note 22).
3. Segmental information
IFRS 8 requires the identification of the Group’s operating segments which are defined as being discrete components of the Group’s operations whose
results are regularly reviewed by the Chief Operating Decision Maker (being the Chief Executive) to allocate resources to those segments and to assess
their performance. The Group divides its business into the following segments:
(cid:115)(cid:229) (cid:229)(cid:41)(cid:78)(cid:86)(cid:69)(cid:83)(cid:84)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:73)(cid:69)(cid:83)(cid:12)(cid:229)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:229)(cid:65)(cid:82)(cid:69)(cid:229)(cid:79)(cid:87)(cid:78)(cid:69)(cid:68)(cid:229)(cid:79)(cid:82)(cid:229)(cid:76)(cid:69)(cid:65)(cid:83)(cid:69)(cid:68)(cid:229)(cid:66)(cid:89)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:39)(cid:82)(cid:79)(cid:85)(cid:80)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:76)(cid:79)(cid:78)(cid:71)(cid:13)(cid:84)(cid:69)(cid:82)(cid:77)(cid:229)(cid:73)(cid:78)(cid:67)(cid:79)(cid:77)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:67)(cid:65)(cid:80)(cid:73)(cid:84)(cid:65)(cid:76)(cid:229)(cid:65)(cid:80)(cid:80)(cid:82)(cid:69)(cid:67)(cid:73)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:52)(cid:82)(cid:65)(cid:68)(cid:73)(cid:78)(cid:71)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:73)(cid:69)(cid:83)(cid:229)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:229)(cid:65)(cid:82)(cid:69)(cid:229)
owned or leased with the intention to sell; and,
(cid:115)(cid:229) (cid:229)(cid:36)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:84)(cid:73)(cid:69)(cid:83)(cid:12)(cid:229)(cid:87)(cid:72)(cid:73)(cid:67)(cid:72)(cid:229)(cid:73)(cid:78)(cid:67)(cid:76)(cid:85)(cid:68)(cid:69)(cid:229)(cid:83)(cid:73)(cid:84)(cid:69)(cid:83)(cid:12)(cid:229)(cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:73)(cid:78)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:85)(cid:82)(cid:83)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:67)(cid:79)(cid:78)(cid:83)(cid:84)(cid:82)(cid:85)(cid:67)(cid:84)(cid:73)(cid:79)(cid:78)(cid:12)(cid:229)(cid:67)(cid:79)(cid:77)(cid:80)(cid:76)(cid:69)(cid:84)(cid:69)(cid:68)(cid:229)(cid:68)(cid:69)(cid:86)(cid:69)(cid:76)(cid:79)(cid:80)(cid:77)(cid:69)(cid:78)(cid:84)(cid:83)(cid:229)(cid:65)(cid:86)(cid:65)(cid:73)(cid:76)(cid:65)(cid:66)(cid:76)(cid:69)(cid:229)(cid:70)(cid:79)(cid:82)(cid:229)(cid:83)(cid:65)(cid:76)(cid:69)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:80)(cid:82)(cid:69)(cid:13)(cid:83)(cid:79)(cid:76)(cid:68)(cid:229)
developments.
Revenue
Rental income
Development property income
Trading property sales
Other revenue
Total revenue
Investment
and trading Developments
Year ended
Year ended
31.3.11
31.3.11
£000
£000
16,988
–
15,915
32,903
1,602
84,311
–
Total
Year ended
31.3.11
£000
18,590
84,311
15,915
Investment
and trading Developments
Year ended
Year ended
31.3.10
31.3.10
£000
£000
Total
Year ended
31.3.10
£000
16,689
–
525
2,192
47,822
–
85,913
118,816
17,214
50,014
243
119,059
18,881
47,822
525
67,228
126
67,354
All revenue is from external sales and is attributable to continuing operations. There were no inter-segmental sales.
Revenue for the year comprises revenue from construction contracts of £22,978,000 (2010: £7,670,000), revenue from the sale of goods of
£75,824,000 (2010: £37,926,000), revenue from services of £1,667,000 (2010: £2,877,000), and rental income of £18,590,000 (2010: £18,881,000).
All revenues are within the UK other than £23,011,000 (2010: £19,482,000) of development income derived from the Group’s operations in Poland.
notes to the financial statements Helical Bar plc 2011 page 69
Investment
and trading Developments
Year ended
Year ended
31.3.11
31.3.11
£000
£000
Total
Year ended
31.3.11
£000
Investment
and trading Developments
Year ended
Year ended
31.3.10
31.3.10
£000
£000
Total
Year ended
31.3.10
£000
13,776
411
–
(16,642)
(367)
2,905
7,512
23,826
–
(19)
–
(16,250)
31.3.11
£000
19,350
252,526
10,289
31,401
313,566
31.3.11
£000
–
–
137,253
4,663
141,916
14,187
(16,642)
(367)
2,886
7,512
7,576
(1,817)
(358)
5,401
(7,050)
652
(5,216)
(67)
(6,280)
31.3.11
£000
19,350
252,526
147,542
36,064
455,482
89,867
545,349
(289,952)
255,397
12,904
–
(10)
3,158
8,195
24,247
1,247
(1,293)
–
587
–
541
31.3.10
£000
–
219,901
273
20,953
241,127
31.3.10
£000
–
–
182,303
5,431
187,734
14,151
(1,293)
(10)
3,745
8,195
24,788
–
26
24,814
(8,680)
1,039
(8,171)
(1,127)
7,875
31.3.10
£000
–
219,901
182,576
26,384
428,861
110,640
539,501
(296,894)
242,607
Loss before tax
Net rental income
Development property loss
Trading property loss
Share of results of joint ventures
Gain on sale and revaluation
of investment properties
Impairment of available-for-sale investments
Other operating (expense)/income
Gross profit
Administrative expenses
Finance income
Finance costs
Foreign exchange losses
(Loss)/profit before tax
Balance sheet
Investment properties held for sale
Investment properties
Land, development and
trading properties
Investment in joint ventures
Other assets
Total assets
Liabilities
Net assets
All non-current assets are derived from the Group’s UK operations.
4. Net rental income
Gross rental income
Rents payable
Property overheads
Net rental income
Net rental income attributable to profit share partner
Group share of net rental income
Property overheads include lettings costs, vacancy costs and bad debt provisions.
5. Development property loss
Development property income
Cost of sales
Sales expenses
Provision against book values
Development property loss
Year ended
31.3.11
£000
Year ended
31.3.10
£000
18,590
(24)
(3,662)
14,904
(717)
14,187
18,881
(12)
(3,732)
15,137
(986)
14,151
Year ended
31.3.11
£000
Year ended
31.3.10
£000
84,311
(85,041)
(999)
(14,913)
(16,642)
47,822
(38,638)
(436)
(10,041)
(1,293)
page 70 Helical Bar plc 2011 notes to the financial statements
6. Trading property loss
Trading property sales
Cost of sales
Sales expenses
Trading property loss
7. Net gain on sale and revaluation of investment properties
Net proceeds from the sale of investment properties
Book value (note 16)
Tenants incentives on sold investment properties
Gain/(loss) on sale of investment properties
Revaluation surplus on investment properties
Gain on sale and revaluation of investment properties
8. Administrative expenses
Administrative expenses
Operating loss/profit is stated after the following items
that are contained within administrative expenses:
Depreciation
– owner occupied property, plant and equipment
Share-based payments (credit)/charge
Auditors’ remuneration:
Audit fees
– audit of parent company and consolidated financial statements
– audit of company’s subsidiaries
– interim audit of consolidated financial statements
– financial accounts review
Non-audit fees
– PSP review
9. Staff costs
Staff costs during the year:
– salaries and other remuneration
– social security costs
– other pension costs
Year ended
31.3.11
£000
Year ended
31.3.10
£000
15,915
(16,181)
(101)
(367)
525
(525)
(10)
(10)
Year ended
31.3.11
£000
Year ended
31.3.10
£000
32,810
36,704
(27,902)
(40,438)
(66)
4,842
2,670
7,512
(1,175)
(4,909)
13,104
8,195
Year ended
31.3.11
£000
Year ended
31.3.10
£000
(7,050)
(8,680)
328
(196)
334
1,151
140
51
41
–
3
143
71
39
3
3
Year ended
31.3.11
£000
Year ended
31.3.10
£000
4,199
4,263
625
120
589
115
4,944
4,967
Details of the remuneration of Directors amounting to £2,597,000 (2010: £6,876,000) are included in the Directors’ Remuneration Report on pages 48 to 54. The amount of
the share-based payments credit relating to share awards made to Directors is £165,000 (2010: charge £921,000).
Other pension costs relate to payments to individual pension plans.
The average number of employees (management and administration) of the Group during the year was 34 (2010: 34) of which 25 are UK staff and 9 are based in Poland.
Of the staff costs of £4,944,000 (2010: £4,967,000), £4,544,000 is included within administrative expenses (2010: £4,597,000) and £400,000 is included within development
costs (2010: £370,000)
10. Finance costs and finance income
Interest payable on bank loans and overdrafts
Other interest payable and similar charges
Finance arrangement costs
Interest capitalised
Finance costs
Interest receivable and similar income
Finance income
notes to the financial statements Helical Bar plc 2011 page 71
Year ended
31.3.11
£000
Year ended
31.3.10
£000
(9,690)
(10,956)
(675)
(806)
4,179
(6,992)
652
652
(696)
(872)
3,196
(9,328)
1,039
1,039
All interest payable relates to interest on borrowings and all interest receivable relates to interest on cash and cash equivalents.
On projects where specific third party loans have been arranged, interest has been capitalised at the rate for the individual loan. The weighted average capitalised interest rate
of such loans was 2.43% (2010: 2.81%). Where general finance has been used to fund the acquisition and construction of properties the rate used was a weighted average
of the financing costs for the applicable borrowings of 4.93% (2010: 3.61%).
11. Taxation on loss on ordinary activities
The tax credit is based on the loss/profit for the year and represents:
United Kingdom corporation tax at 28%
– Group corporation tax
– adjustment in respect of prior periods
– overseas tax
Current tax (charge)/credit
Deferred tax at 26%
– capital allowances
– tax losses
– other temporary differences
Deferred tax credit
Tax credit on loss/profit on ordinary activities
Year ended
31.3.11
£000
Year ended
31.3.10
£000
–
–
(97)
(97)
442
1,823
223
2,488
2,391
–
1,152
–
1,152
(52)
2,121
(1,510)
559
1,711
Factors affecting the tax credit for the period: The tax assessed for the period is higher than the standard rate of corporation tax in the UK (28%). The differences are explained below:
(Loss)/profit on ordinary activities before tax
(Loss)/profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 26%/28%
Effect of:
– expenses not deductible for tax purposes
– income not subject to UK corporation tax
– capital allowances not reflected through deferred tax
– tax relief on share awards
– tax losses utilised
– operating profit of joint ventures
– prior year adjustment
– revaluation surplus not recognised through deferred tax
– chargeable gain in excess of loss on investment property
– overseas tax
– effect of change in rate of corporation tax
– other temporary differences
Total tax credit for the period
Year ended
31.3.11
£000
Year ended
31.3.10
£000
(6,280)
1,633
(1,281)
469
553
(123)
(212)
751
–
694
(538)
(97)
(568)
1,110
2,391
7,875
(2,205)
(532)
910
672
483
(146)
1,082
1,152
3,669
(3,308)
–
–
(66)
1,711
Note: all deferred tax balances have been calculated at the rate of corporation tax for the year to 31 March 2012 of 26%. Accordingly, the tax reconciliation also uses this rate of corporation tax.
page 72 Helical Bar plc 2011 notes to the financial statements
Factors that may affect future tax charges
The tax charge is expected to be less than the full rate in future years, primarily due to the Group continuing to claim allowances in respect of eligible
expenditure on investment properties and unrealised capital losses at 31 March 2011 of £12m.
12. Deferred tax
Deferred tax provided for in the financial statements is set out below:
Capital allowances
Available-for-sale assets
Tax losses
Other temporary differences
Deferred tax asset/(liability)
Group
31.3.11
£000
(2,815)
–
9,527
2,167
8,879
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
(3,257)
(4,782)
7,704
3,504
3,169
(29)
–
–
746
717
(228)
(3,222)
168
–
(3,282)
Other temporary differences represent deferred tax assets arising from the recognition of the fair value of derivative financial instruments and future tax
relief available to the Group from capital allowances and when share awards vest.
If upon sale of the investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of
£2.8m (2010: £3.3m) would be released and further capital allowances of £10.6m (2010: £12.2m) would be available to reduce future tax liabilities.
13. Dividends paid and payable
Attributable to equity share capital
Ordinary
– first interim paid of 1.75p (2010: 1.75p) per share
– second interim paid of nil (2010: 2.75p) per share
– prior period final paid of 0.25p (2010: 2.75p) per share
Total dividends paid and payable in year – 2.00p (2010: 7.25p) per share
Year ended
31.3.11
£000
Year ended
31.3.10
£000
1,857
–
265
2,122
1,851
2,909
2,897
7,657
An interim dividend of 1.75p was paid on 23 December 2010 to shareholders on the register on 3 December 2010. The final dividend, if approved at the
AGM on 26 July 2011, will be paid on 28 July 2011 to shareholders on the register on 1 July 2011. This final dividend, amounting to £3,213,000, has
not been included as a liability as at 31 March 2011, in accordance with IFRS.
14. Parent company
The Company has taken advantage of Section 408 of the Companies Act 2006 and has not included its own income statement in the financial
statements. The loss for the year of the Company was £4,592,000 (2010: profit of £3,975,000).
15. Earnings per share
The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number
of shares in issue during the year. This is a different basis to the net asset per share calculations which are based on the number of shares at the year
end. Shares held by the ESOP, which has waived its entitlement to receive dividends, are treated as cancelled for the purposes of this calculation.
The calculation of diluted earnings per share is based on the basic earnings per share, adjusted to allow for the issue of shares on the assumed
exercise of all dilutive options.
The (loss)/earnings per share are calculated in accordance with IAS 33, Earnings per Share and the best practice recommendations of the European
Public Real Estate Association (“EPRA”).
Reconciliations of the (loss)/earnings and weighted average number of shares used in the calculations are set out below.
notes to the financial statements Helical Bar plc 2011 page 73
Ordinary shares in issue
Weighting adjustment
Weighted average ordinary shares in issue for calculation of basic (loss)/earnings per share
Weighted average ordinary shares issued on exercise of share options
Weighted average ordinary shares to be issued under performance share plan
Year ended
31.3.11
000s
Year ended
31.3.10
000s
118,138
107,408
(8,700)
(1,852)
109,438
105,556
–
–
294
406
Weighted average ordinary shares in issue for calculation of diluted and diluted EPRA (loss)/earnings per share
109,438
106,256
(Loss)/earnings used for calculation of basic and diluted earnings per share
(3,887)
9,619
Basic (loss)/earnings per share
Diluted (loss)/earnings per share
(Loss)/earnings used for calculation of basic and diluted earnings per share
Net gain on sale and revaluation of investment properties
Share of net gain on revaluation of investment properties in the results of joint ventures
Tax on profit on disposal of investment properties
Trading property loss
Fair value movement on derivative financial instruments
Share of fair value movements on derivative financial instruments in the results of joint ventures
Impairment of available-for-sale investment
Deferred tax
Loss used for calculation of diluted EPRA earnings per share
Diluted EPRA loss per share
(3.6p)
9.1p
(3.6p)
9.1p
(3,887)
(7,512)
(583)
1,162
367
9,619
(8,195)
(2,015)
(1,374)
10
(1,776)
(1,157)
162
1,817
3,241
(7,009)
130
–
2,853
(129)
(6.4p)
(0.1p)
In accordance with IAS 33 no dilutive weighting adjustments have been made for share awards in existence during the year to 31 March 2011 as a loss
was made during that year making the adjustments anti-dilutive. Accordingly, the basic and diluted losses per share for that year are the same.
The loss used for calculation of diluted EPRA earnings per share includes net rental income and development property profits/losses but excludes
trading property losses.
16. Investment properties
Group
Fair value at 1 April
Property acquisitions
Disposals
Revaluation surplus/(deficit)
Revaluation surplus/(deficit) attributable to profit share partner
Freehold Leasehold
31.3.11
£000
31.3.11
£000
Total
31.3.11
£000
Freehold
31.3.10
£000
Leasehold
31.3.10
£000
Total
31.3.10
£000
198,801
21,100
219,901
182,812
58,475
241,287
41,583
36,281
77,864
3,853
339
4,192
(24,902)
(3,000)
(27,902)
(3,263)
(37,175)
(40,438)
6,861
(667)
(4,191)
2,670
13,756
10
(657)
1,643
(652)
113
13,104
1,756
Fair value at 31 March
221,676
50,200
271,876
198,801
21,100
219,901
Within Investment Properties is one property which is classified as being held for sale per IFRS 5. This property was being marketed for sale at 31
March 2011 and was sold on 17 May 2011. At 31 March 2011 the value of this property was £19,350,000.
A disposal of the investment property portfolio at its stated fair value would crystallise a net payment of £1,062,000 due to the Group’s joint venture
partners in respect of their share of the revaluation surplus (2010: £1,748,000).
Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2009: £nil).
Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £5,767,000 (2010: £5,767,000).
page 74 Helical Bar plc 2011 notes to the financial statements
Investment properties with a total fair value of £257,725,000 were held as security against borrowings.
Properties are stated at market value as at 31 March 2011, valued by professionally qualified external valuers except for investment properties valued
by the Directors. The valuations have been prepared in accordance with the Valuation Standards (6th edition) published by the Royal Institution of
Chartered Surveyors (“the Standards”). In their valuation reports, the valuers have noted, in accordance with Guidance Note 5 of the Standards, that the
primary source of evidence for valuations is recent, comparable market transactions on arms length terms. The Directors have valued £4,401,000 (2%)
of the investment portfolio on a discounted cashflow basis representing the present value of future income receivable upon the disposal by residents of
units in the Group’s retirement village portfolio.
The investment properties have been valued at 31 March 2011 as follows:
Cushman & Wakefield LLP
Drivers Jonas Deloitte
Directors’ valuation
£000
261,975
5,500
4,401
271,876
The historical cost of investment property is £264,947,000 (2010: £218,893,000).
17. Operating lease arrangements
The Group earns rental income by leasing its investment properties to tenants under non-cancellable operating leases. At the balance sheet date the
Group had contracted with tenants to receive the following future minimum lease payments:
Group
31.03.11
£000
Group
31.03.10
£000
17,881
47,581
54,615
120,077
14,908
38,063
38,983
91,954
Not later than one year
Later than one year but not more than five years
More than five years
The Company has no operating lease arrangements.
18. Owner occupied property, plant and equipment - Group
Short
leasehold Plant and
improvements equipment
31.3.11
£000
31.3.11
£000
Short
leasehold
Plant and
Total improvements equipment
31.3.10
£000
31.3.10
£000
31.3.11
£000
Cost at 1 April
Additions at cost
Disposals
Cost at 31 March
Depreciation at 1 April
Provision for the year
Eliminated on disposals
Depreciation at 31 March
Net book amount at 31 March
2,071
–
–
2,071
708
189
–
897
1,174
670
189
(132)
727
395
139
(130)
404
323
2,741
2,071
189
(132)
2,798
1,103
328
(130)
1,301
1,497
–
–
2,071
518
190
–
708
1,363
554
237
(121)
670
362
144
(111)
395
275
Plant and equipment include vehicles, fixtures and fittings and other office equipment.
All short leasehold improvements, plant and equipment relate to the Company except for plant and equipment with a net book value of £161,000 as at
31 March 2011 (2010: £162,000).
Total
31.3.10
£000
2,625
237
(121)
2,741
880
334
(111)
1,103
1,638
19. Available-for-sale investments
At 1 April 2010
Impairment in the year
Interest receivable
Fair value adjustments
At 31 March 2011
notes to the financial statements Helical Bar plc 2011 page 75
Non-Current Non-Current
Company
£000
Group
£000
Current
Group
£000
Current
Company
£000
13,325
13,325
10,959
(13,325)
(13,325)
–
–
–
–
–
–
–
207
(661)
10,505
–
–
–
–
–
Included in non-current available-for-sale investments is an investment of 18% in the ordinary shares of Quotient Biosciences Group Limited, a private
bioscience company.
At 31 March 2010 the valuation of the investment in Quotient was derived using a valuation technique as there was no active market for the shares.
During the year trading conditions and its financial position deteriorated and, accordingly, the investment has been assessed as having a fair value
of £nil (31 March 2010: £13.3m). Of the fall in value, £1,817,000, representing the cost of our investment, has been written off through the Income
Statement as Impairment of available-for-sale investments. The remaining £11,508,000 (£8,286,000 net of deferred tax), which represents prior period
fair-value increases from cost, was reversed in Other Comprehensive Income.
Included within current available-for-sale investments is an amount lent to a company promoting a mainly residential mixed-use development and an
investment of 20% of the equity of this company.
The loan and the equity are classed as available-for-sale investments and are held at fair value. The Group has determined its fair value by considering
both the loan and the equity element separately. The loan element is valued at the fair value of the consideration receivable. The equity element is given
a nil value with the Group valuing the underlying company on a break up basis at £nil as it is believed that this is the most probable outcome. This nil
valuation is derived because the Group believe that the value of the property and any other of the company’s assets, after the repayment of the loan
payable to the Group, would be required to repay the outstanding creditors leaving negligible value to the shareholders.
Of the movement in the fair value of the loan and equity and the associated deferred tax movement, loan interest, calculated using the effective interest
method, of £207,000 has been recognised in the Income Statement as interest receivable and £661,000 of other fair value movement has been
recognised in Other Comprehensive Income.
Movements in the Statement of Comprehensive Income comprise:
Fair value movements of available-for-sale investments
Impairment movements of available-for-sale investments
Deferred tax on fair value movements
Deferred tax on impairments
20. Investment in subsidiaries
At 1 April
Acquired during year
Impairment in the carrying value of investments
At 31 March
2011
£000
(661)
(11,508)
(12,169)
–
3,222
3,222
2010
£000
2,962
–
2,962
(829)
–
(829)
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
–
–
–
–
–
–
–
–
31,822
32,896
5
26
(833)
(1,100)
30,994
31,822
page 76 Helical Bar plc 2011 notes to the financial statements
The Company’s principal subsidiary undertakings, all of which have been consolidated, are:
Name of undertaking
Albion Land (Bushey Mill) Ltd
Baylight Developments Ltd*
Cranmer Investments (Whitstable) Ltd
Dencora (Docklands) Ltd
Dencora (Fordham) Ltd
Downtown Space Properties LLP
Harbour Developments (Bracknell) Ltd
HB Sawston No. 3 Ltd
Helical (Aldridge) Ltd
Helical (Ashford) Ltd
Helical Bar Developments (South East) Ltd
Helical Bar (East Grinstead) Ltd
Helical Bar (Great Dover Street) Ltd
Helical Bar (Hawtin Park No. 3) Ltd
Helical Bar Services Ltd
Helical Bar (Wales) Ltd*
Helical Bar (White City) Ltd
Helical (Battersea) Ltd
Helical (Bramshott Place) Ltd
Helical (Cardiff) Ltd
Helical (Colchester) Ltd
Helical (Cowley) Ltd
Helical (Crawley) Ltd
Helical (Crownhill) Ltd
Helical (Eastcheap) Ltd
Helical (East Kilbride) Ltd
Helical (Exeter) Ltd
Helical (Faygate) Ltd
Helical (Fleet) No. 2 Ltd*
Helical (Glasgow) Ltd
Helical (Hailsham) Ltd
Helical (Kidlington) Ltd
Helical (Liphook) Ltd
Helical (Merlin Park) Ltd
Helical (Milton) Ltd
Helical (Motherwell) Ltd
Helical (Paignton) Ltd
Helical Retail Ltd
Helical Retail (RBS) Ltd*
Helical (Sawston) Ltd
Helical (Sevenoaks) Ltd
Helical Sosnica Sp. z.o.o.*
Helical (Southall) Ltd
Helical (Southampton) Ltd
Helical (Stockport) Ltd
Helical (Telford) Ltd
Helical (West Drayton) Ltd
Helical (Winterhill) Ltd
Helical (Witham) Ltd
Helical (Woking) Ltd
Helical Wroclaw Sp. z.o.o.*
Newmarket LP*
Prescot Street Investments Ltd
14 Fieldgate Street Ltd
61 Southwark Street Ltd*
Sutton-in-Ashfield LP*
Wood Lane (Stadium) Ltd
Nature of business Percentage of ordinary share capital held
100%
100%
100%
100%
100%
70%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Development
Investment
Development
Investment
Investment
Development
Development
Investment
Investment
Investment
Development
Investment
Investment
Investment
Management Services
Investment
Development
Investment
Development
Investment
Trading
Development
Investment
Investment
Investment
Investment
Development
Development
Investment
Investment/Trading
Development
Development
Development (Jersey)
Investment
Development
Investment
Investment
Development
Development
Investment
Investment
Development (Poland)
Development
Development
Development
Development
Trading
Investment
Investment
Investment
Development (Poland)
Investment
Investment
Development
Investment
Investment
Trading
All principal subsidiary undertakings operate in the United Kingdom other than Helical Sosnica Sp. z.o.o. and Helical Wroclaw Sp. z.o.o. and, unless otherwise indicated, are
incorporated and registered in England and Wales. In line with s410(2) of the Companies Act 2006 a full list of all subsidiaries is lodged with the Annual Return at Companies House.
*Ordinary capital is held by a subsidiary undertaking.
Investments in subsidiaries have been impaired based on a review of their fair value at the balance sheet date. A review of the fair value of the investments is undertaken
periodically. The fair value of the investment in subsidiaries is based on the value of the subsidiaries underlying assets.
21. Investment in joint ventures
Summarised statements of consolidated income
Revenue
Operating profit
Sale of investment
Net finance costs
Profit before tax
Tax
Profit after tax
Summarised balance sheets
Non-current assets
Current assets
Current liabilities
Non-current liabilities
Net assets
notes to the financial statements Helical Bar plc 2011 page 77
Group
31.3.11
£000
Group
31.3.10
£000
5,754
4,460
–
(1,693)
2,767
119
2,886
1,835
3,207
1,147
(490)
3,864
(119)
3,745
65,875
24,713
45,305
27,507
(27,840)
(18,528)
(26,684)
(27,900)
36,064
26,384
The cost of the Company’s investment in joint ventures was £165,000 (2010: £165,000).
At 31 March 2011 the Group and the Company had interests in the following joint venture companies:
Country of Class of share
capital held
incorporation
Proportion
held Group
Proportion
held Company
Nature of
business
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (Winterhill) Ltd
Abbeygate Helical (C4.1) LLP
The Asset Factor Ltd
Shirley Advance LLP
United Kingdom
United Kingdom
United Kingdom
Ordinary
Ordinary
n/a
United Kingdom
Ordinary
United Kingdom
n/a
King Street Developments (Hammersmith) Ltd
United Kingdom
PH Properties Limited (BVI)
Barts Two Investment Property Limited
British Virgin Islands
Jersey
Ordinary
Ordinary
Ordinary
50%
50%
50%
50%
50%
50%
60%
33%
50%
Development
50% Development
50% Development
50%
Outsourcing
– Development
– Development
–
–
Investment
Investment
During the year the Group acquired a 33% economic interest in Barts Two Investment Property Limited, a jointly controlled entity which owns an
investment property in the UK. The results and financial position of Barts Two Investment Property Limited at the balance sheet date have been
accounted for as a joint venture.
Following the purchase of Barts in the year, the joint venture company has a contingent liability to pay up to a further £35m which will be dependent
upon the timing of vacant possession and the floor area of any future redevelopment scheme for which planning permission is received. The meeting
of the conditions in which an extra payment is required will almost certainly result in an increase in the valuation of the property equal to or above the
amount of the additional payment.
page 78 Helical Bar plc 2011 notes to the financial statements
22. Land, developments and trading properties
Group
At 1 April
Construction costs
Interest capitalised
Disposals
Foreign exchange movements
Provision
At 31 March
Company
At 1 April
Construction costs
Provision
At 31 March
Development
properties
31.3.11
£000
Trading
stock
31.3.11
£000
Development
properties
31.3.10
£000
Total
31.3.11
£000
Trading
stock
31.3.10
£000
Total
31.3.10
£000
182,303
273
182,576
209,537
878
210,415
25,026
26,196
51,222
14,958
4,179
–
4,179
3,196
–
–
14,958
3,196
(58,995)
(16,181)
(75,176)
(32,983)
(525)
(33,508)
(346)
(14,913)
–
–
(346)
(14,913)
(2,444)
(9,961)
137,254
10,288
147,542
182,303
–
(80)
273
(2,444)
(10,041)
182,576
Development Development
properties
properties
31.3.10
31.3.11
£000
£000
968
171
(14)
1,125
853
115
–
968
The directors’ valuation of trading and development stock shows a surplus of £32m above book value (2010: £33m).
Interest capitalised in respect of the development of sites is included in stock to the extent of £6,827,000 (2010: £8,482,000).
Land, developments and trading properties with carrying values totalling £102,299,000 (2010: £154,917,000) were held as security against borrowings.
23. Financial instruments
Categories of financial instruments
Financial assets in the Group include derivative financial assets which are designated as ‘Fair value through the Income Statement’. Financial assets
also include finance lease receivables, other receivables and cash and cash equivalents all of which are included within loans and receivables as well as
available-for-sale investments.
Financial liabilities in the Group comprise derivative financial liabilities which are categorised as fair value through the Income Statement (non hedge).
Financial liabilities also include secured bank loans, unsecured bond issues, unsecured loan notes, and bank loans and overdrafts, all of which are
categorised as debt at amortised cost, and trade and other payables, provisions and current tax liabilities, which are classified as other financial
liabilities.
Financial assets and liabilities by category
The financial instruments of the Group as classified in the financial statements can be analysed under the following IAS 39 Financial Instruments:
Recognition and Measurement, categories:
Financial assets
Loans and receivables
Fair value through the Income Statement
Available-for-sale financial assets
Total financial assets
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
67,325
79,440
397,932
402,788
793
1,944
10,505
24,284
715
–
1,944
13,325
78,623
105,668
398,647
418,057
These financial assets are included in the balance sheet within the following headings:
Available-for-sale investments
Derivative financial instruments
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total financial assets
notes to the financial statements Helical Bar plc 2011 page 79
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
10,505
24,284
793
1,944
–
715
13,325
1,944
34,929
38,542
374,620
376,360
1,069
1,098
1,069
1,170
31,327
39,800
22,243
25,258
78,623
105,668
398,647
418,057
Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation.
For fair value of available-for-sale investments see note 19. The carrying value of the trade and other receivables and cash and cash equivalents is
deemed not to be materially different from the fair value.
Financial liabilities
Fair value through the Income Statement
Other financial liabilities
Total financial liabilities
These financial liabilities are included in the balance sheet within the following headings:
Trade and other payables
Borrowings - current
Borrowings - non current
Derivative financial instruments
Total financial liabilities
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
(7,311)
(10,485)
(3,373)
(3,299)
(281,782)
(280,748)
(183,321)
(216,911)
(289,093)
(291,233)
(186,694)
(220,210)
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
(44,365)
(37,990)
(168,911)
(189,394)
(37,500)
(72,459)
(4,500)
(20,163)
(199,917)
(170,299)
(7,311)
(10,485)
(9,910)
(3,373)
(7,354)
(3,299)
(289,093)
(291,233)
(186,694)
(220,210)
The carrying value of trade and other payables and borrowings is not deemed to be materially different from the fair value. Financial liabilities are stated
in accordance with IAS 32.
The Group and Company financial instruments that are measured subsequent to initial recognition at fair value are available-for-sale assets, forward
exchange contracts and interest rate swaps, caps and floors.
Forward foreign exchange contracts are externally measured using quoted forward exchange rates and yield curves derived from quoted interest
rates matching maturities of the contracts. Interest rate swaps, caps and floors are measured at the present value of future cash flows estimated and
discounted based on the applicable yield curves derived from quoted interest rates.
IFRS 7 categorises financial assets and liabilities as being valued in 3 hierarchical levels:
– Level 1: values are unadjusted quoted prices in active markets for identical assets or liabilities
– Level 2: values are derived from observing market data
– Level 3: values cannot be derived from observable market data
The derivative financial instruments above have been valued using a Level 2 methodology and the available-for-sale investments, which are described
in note 19, are classified as Level 3 fair value measurements, being those not based on observable market data. There were no transfers between
categories in the current or prior year.
page 80 Helical Bar plc 2011 notes to the financial statements
Derivative financial instruments
Derivative financial assets
Interest rate caps
Foreign exchange contracts
Derivative financial liabilities
Interest rate swaps
Interest rate floors
Group
Year ended
31.3.11
£000
Group
Company
Year ended Year ended
31.3.11
£000
31.3.10
£000
629
164
793
94
1,850
1,944
551
164
715
(4,764)
(2,547)
(7,186)
(3,299)
(7,311)
(10,485)
(826)
(2,547)
(3,373)
Company
Year ended
31.3.10
£000
94
1,850
1,944
–
(3,299)
(3,299)
The group’s movement in the fair value of the derivative financial instruments in the year was a gain of £1,776,000 (2010: £1,157,000);
Company: loss of £1,287,000 (2010: £16,000).
Credit risk
Credit risks arise from the possibility that customers may not be able to settle their obligations as agreed. To manage this risk the Group periodically
assesses the financial reliability of customers, taking into account the financial position, past experience and other factors.
As at 31 March 2011 Helical has total credit risk excluding cash of £46.5m of which £10.5m is available-for-sale assets and £36.0m is loans and
receivables. Available-for-sale assets are analysed in note 19.
Of the trade receivables held at 31 March 2011, two amounts of £8.2m and £3.9m were due from the sale of investment properties and were both
received on 1 April 2011 and a further £1.6m related to rent due from tenants which was received post year-end.
All other debtors are deemed to be recoverable.
The Group is not reliant on any major customer for its ability to continue as a going concern.
For further information on trade and other receivables, see note 24.
Liquidity risk
Liquidity risk is defined as the risk that the Group would not be able to settle or meet its obligations on time or at a reasonable price.
Liquidity and funding risks, related processes and policies are overseen by management.
Helical manages its liquidity risk on a consolidated basis based on business needs, tax, capital or regulatory considerations, if applicable, and through
numerous sources of finance in order to maintain flexibility. Management monitors the Group’s net liquidity position through rolling forecasts on the basis
of expected cash flows. The Group’s cash and cash equivalents are held with major regulated financial institutions and the directors regularly monitor
the financial institutions that the group uses to ensure its exposure to liquidity risk is minimised.
For further information on borrowing facilities, see notes 27 and 28.
The maturity profile of the Group’s contracted financial liabilities is as follows:
Payable within 3 months
Payable between 3 months and 1 year
Payable between 1 and 3 years
Payable after 3 years
Total contracted liabilities
Group
31.3.11
£000
66,099
29,042
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
59,464
169,556
192,428
79,548
6,401
178,910
121,256
13,173
37,785
69,651
627
311,836
329,919
189,757
224,146
19,880
11,438
400
At 31 March 2011 Helical had £8.0m of undrawn borrowing facilities, £59.4m of uncharged property assets and cash balances of £31.3m. The above
contracted liabilities assume that no loans are extended beyond their current facility expiry date. The management believe that these facilities, together
with anticipated sales and the renewal of some of these loan facilities, mean that Helical can meet its contracted liabilities as they fall due.
Market risk
Helical is exposed to market risk, primarily related to interest rates, foreign currency exchange movements, the market value of the investments and
accrued development profits. The Group actively monitors these exposures.
notes to the financial statements Helical Bar plc 2011 page 81
Interest rate risk
It is the Group’s policy and practice to minimise interest rate cash flow exposures on long-term financing. Helical does this by using a number of
derivative financial instruments including interest rate swaps and interest rate caps. The purpose of these derivatives is to manage the interest rate risks
arising from the Group’s sources of finance. The Group does not use financial instruments for speculative purposes.
Details of financing and financial instruments can be found in note 28.
In the year to 31 March 2011, if interest rates had moved by 0.5%, this would have resulted in the following movement to pre-tax losses and equity due
to movements in interest charges and mark-to-market valuations of derivatives.
31 March 2011
0.5% increase – increase in net results and equity
0.5% decrease – decrease in net results and equity
Impact on
results
£000
1,868
Equity
impact
£000
1,868
(1,086)
(1,086)
There would have been no significant impact on the results or on the equity of the Company if interest rates had increased or decreased.
Foreign currency exchange risk
Due to its operations in Poland and its investment in a non-UK based property developer, Helical has exposure to exchange movements on foreign
currencies. Helical’s management monitors its exposure to risks associated with foreign currency exchange risk and reviews any requirements to act to
minimise these risks. Helical has entered into currency option contracts in order to reduce its exposure to these risks.
In the year to 31 March 2011 the Group made foreign exchange losses of £67,000 resulting from foreign exchange movements related to its Polish
operations.
The Group’s balance sheet translation exposure is summarised as follows:
Gross currency assets
Gross currency liabilities
Net exposure
31 March 2011
31 March 2010
Euro
(£000)
Zloty US dollars
(£000)
(£000)
Euro
(£000)
Zloty
(£000)
US dollars
(£000)
51,428
6,338
10,492
48,387
11,508
10,946
(22,339)
(5,411)
–
(25,399)
(3,826)
–
29,089
927
10,492
22,988
7,682
10,946
The group has entered into a fair-value hedge to reduce the effects of foreign exchange translation losses on stock. Any movement in the fair value of
this instrument is shown in the Income Statement as part of the change in fair value of derivative financial instruments.
The Company’s balance sheet translation exposure is almost exclusively due to intra-group loans and is summarised as follows:
Gross currency assets
Gross currency liabilities
Net exposure
31 March 2011 31 March 2010
Euro
(£000)
2,550
–
Zloty
(£000)
17,247
–
Euro
(£000)
4,025
–
Zloty
(£000)
14,955
–
2,550
17,247
4,025
14,955
The Group’s main currency exposure is to the euro. The sensitivity of the net assets and profit of the Group to a 10% change in the value of the foreign
currencies against sterling is Euro: £2,909,000 (March 2010: £2,299,000), Zloty: £93,000 (March 2010: £768,000), US dollar: net assets: £797,000
(March 2010: £788,000), profit: £797,000 (March 2010: £nil).
The sensitivity of the net assets and profit of the Company to a 10% change in the value of the foreign currencies against sterling is Euro: £255,000
(March 2010: £402,000), Zloty: £1,725,000 (March 2010: £1,496,000).
In addition to the above the Group has entered in to a number of currency option contracts to act as cashflow hedges against development contracts
in Poland and future expected profits on the development schemes. Whilst these contracts are designed to minimise foreign exchange risk on these
transactions, hedge accounting has not been applied and any movement to the fair value of the options is shown in the Income Statement as part of
the change in fair value of derivative financial instruments. The details of these options is summarised below:
Put euro – call sterling
Hedge against anticipated development profit
EUR 10m
1.14
£163,000
Reason for
hedging
Contract
value
Contract Fair value at
rate 31/03/2011
page 82 Helical Bar plc 2011 notes to the financial statements
24. Trade and other receivables
Trade receivables
Amounts owed by joint venture undertakings
Amounts owed by subsidiary undertakings
Other receivables
Prepayments and accrued income
Receivables
Fully performing
Past due < 3 months
Past due > 3 months
Total receivables being financial assets
Total receivables being non-financial assets
Total receivables
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
20,891
12,316
8,342
8,208
116
4,669
–
3,907
–
1,691
4,859
–
369,817
365,955
3,520
14,647
329
820
1,816
4,931
35,783
38,691
375,751
376,609
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
32,175
36,911
374,620
376,360
2,062
692
1,375
256
–
–
–
–
34,929
38,542
374,620
376,360
854
149
1,131
249
35,783
38,691
375,751
376,609
Past due receivables relate to a number of independent customers for whom there is no recent history of default. Against trade receivables, Helical held
£0.8m of rental deposits at 31 March 2011 (2010: £0.7m).
Movements in the provision for impairment of trade receivables are as follows:
Gross receivables being financial assets
Provisions for receivables impairment
Net receivables being financial assets
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
35,418
39,192
374,620
376,360
(489)
(650)
–
–
34,929
38,542
374,620
376,360
Receivables written off during the year as uncollectable
361
637
–
–
25. Cash and cash equivalents
Rent deposits and cash held at managing agents
Cash secured against debt and cash held at solicitors
Cash allocated to pay dividend
Cash deposits
Group
31.3.11
£000
3,313
–
–
28,014
31,327
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
1,274
1,295
2,909
34,322
39,800
–
–
–
22,243
22,243
–
–
2,909
22,349
25,258
26. Trade and other payables
Trade payables
Social security costs and other taxation
Amounts owed to joint venture undertakings
Amounts owed to subsidiary undertakings
Other payables
Accruals and deferred income
27. Borrowings
Current borrowings
Bank loans repayable within:
– one to two years
– two to three years
– three to four years
– four to five years
Deferred arrangement costs
Non-current borrowings
notes to the financial statements Helical Bar plc 2011 page 83
Group
31.3.11
£000
18,358
70
–
–
5,371
21,425
45,224
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
4,635
638
–
–
9,219
29,159
270
–
499
108
–
1,147
161,546
175,469
729
5,867
3,046
9,624
43,651
168,911
189,394
Group
31.3.11
£000
Group
31.3.10
£000
Company
31.3.11
£000
Company
31.3.10
£000
37,500
72,459
4,500
20,163
74,547
88,493
4,200
33,778
29,644
72,725
68,878
–
10,000
–
–
–
201,018
171,247
10,000
(1,101)
(948)
(90)
199,917
170,299
9,910
–
7,650
–
–
7,650
(296)
7,354
Bank overdrafts and term loans in creditors falling due within one year and after one year are secured against properties held in the normal course of
business by subsidiary undertakings to the value of £360,024,000 (2010: £370,917,000). These will be repayable when the underlying properties are
sold. Bank overdrafts and term loans exclude the Group’s share of borrowings in joint venture companies of £39,384,000 (2010: £29,752,000).
28. Financing and financial instruments
The policies for dealing with liquidity and interest rate risk are noted in the Performance and Risk Review on pages 32 to 35.
Bank overdraft and loans – maturity
Due after more than one year
Due within one year
Group
31.3.11
£000
Group
31.3.10
£000
201,018
171,247
37,500
72,459
238,518
243,706
The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2011 in respect of which all conditions precedent
had been met were as follows:
Expiring in one year or less
Expiring in more than one year but not more than two years
Group
31.3.11
£000
Group
31.3.10
£000
6,299
1,672
7,971
8,186
–
8,186
page 84 Helical Bar plc 2011 notes to the financial statements
Interest rates - Group
Fixed rate borrowings:
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
– swap rate plus bank margin
Weighted average
Floating rate borrowings
Total borrowings
Deferred arrangement costs
31.3.10
£000
4,316
5,200
–
4,200
3,570
9,912
%
Expiry
31.3.11
£000
%
Expiry
4.480
Jun 2011
4,236
5.330
Jun 2011
–
–
–
5.650
Nov 2010
3.406
Jan 2015
6.401
Oct 2012
5.645
Oct 2014
12,250
28,500
6,690
–
–
7.150
Oct 2012
28,500
8.295
Oct 2014
6,690
6.240
Dec 2013
10,120
6.240
Dec 2013
10,120
–
–
–
6.040
Jan 2011
5.290 Mar 2012
7.208
Aug 2013
–
–
–
–
3,570
9,912
–
–
5.290
Mar 2012
7.208
Aug 2013
6.270
Oct 2010
14,652
3.555
Jun 2011
5,400
5.769
Jun 2013
75,278
6.429
Jun 2012
92,560
2.974 May 2013
163,240
2.321
Jun 2012
151,146
238,518
(1,101)
237,417
243,706
(948)
242,758
Changes in fixed borrowing rates are the result of the repayment of bank loans where the interest rate swaps have not been cancelled. The movement
in the rate is due to the bank margin not being payable.
Floating rate borrowings bear interest at rates based on LIBOR. As at 31 March 2011 and 31 March 2010 the Company’s borrowings consist of fixed
rate borrowings of £6,690,000 at 5.645% (2010: 8.295%) expiring in October 2014 with the remainder being floating rate borrowings.
Hedging
In addition to the fixed rates, borrowings are also hedged by the following financial instruments:
Instrument
Current:
– cap
– cap
– cap
– floor
Gearing
Total borrowings
Cash
Net borrowings
Value
£000
Rate
%
Start
Expiry
30,000 – 40,950
6.000
May 2008
May 2013
50,000
4.000
Apr 2011
Apr 2015
10,613 – 11,037
4.000
Jan 2015
Jan 2016
30,000 – 40,950
4.500
May 2008
May 2013
Group
31.3.11
£000
Group
31.3.10
£000
237,417
242,758
(31,327)
(39,800)
206,090
202,958
Group
31.3.11
£000
Group
31.3.10
£000
255,397
242,607
81%
84%
Net borrowings exclude the Group’s share of borrowings in joint ventures of £39,384,000 (2010: £29,752,000).
Net assets
Gearing
29. Share capital
Authorised
notes to the financial statements Helical Bar plc 2011 page 85
31.3.11
£000
39,577
39,577
31.3.10
£000
39,577
39,577
The authorised share capital of the Company is £39,576,626.60 divided into ordinary shares of 1p each and deferred shares of 1⁄8p each.
Allotted, called up and fully paid
– 118,137,522 ordinary shares of 1p each (2010: 107,407,522)
– 212,145,300 deferred shares of 1⁄8p each
31.3.11
£000
31.3.10
£000
1,182
265
1,447
1,074
265
1,339
As at 1 April 2010 the Company had 107,407,522 ordinary 1p shares in issue. On 8 December 2010 the Company issued 10,730,000 new ordinary 1p
shares to shareholders as a part of the Placing referred to in the Financial Review on page 38. At 31 March 2011 there were 118,137,522 ordinary 1p
shares in issue.
Ordinary shares
At 1 April
New shares issued
At 31 March
Deferred shares
At 1 April
At 31 March
Shares
in issue
31.3.11
Number
Share
capital
31.3.11
£000
Shares
in issue
31.3.10
Number
Share
capital
31.3.10
£000
107,407,522
10,730,000
118,137,522
212,145,300
212,145,300
1,074
108
1,182
265
265
107,087,012
1,071
320,510
3
107,407,522
1,074
212,145,300
212,145,300
265
265
The Group’s capital management objectives are:
– to ensure the Group’s ability to continue as a going concern; and,
– to provide an adequate return to shareholders.
The Group sets the amount of capital in proportion to its overall financing structure. It manages the capital structure and makes adjustments to it in
the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt. Capital
is defined as being issued share capital, retained earnings and other reserves. (2011: 247,797,000; 2010: £235,005,000).
The deferred shares were issued on 23 December 2004 to those shareholders electing to receive a dividend, rather than a capital repayment or further
shares in the Company, as part of the Return of Cash approved by shareholders on 20 December 2004. The deferred shares carry no voting rights and
have no right to a dividend or capital payment in the event of a winding up of the Company.
The Company’s Articles of Association give the Company irrevocable authority to purchase all or any of the deferred shares for a maximum aggregate
total of 1 penny for all deferred shares in issue on the date of such purchase.
page 86 Helical Bar plc 2011 notes to the financial statements
30. Share options
At 31 March 2011 there were no unexercised options over new ordinary 1p shares in the Company (31 March 2010: nil) and no options over purchased
ordinary 1p shares held by the ESOP had been granted to directors and employees under the Company’s share option schemes (31 March 2010: nil).
During the period no new options were granted.
Summary of share options
At 1 April
Options granted
Options exercised
Option expired/lapsed
At 31 March
Weighted
average
exercise
Price
31.3.11
Number
31.3.11
–
–
–
–
–
–
–
–
–
–
Weighted
average
exercise
price
31.3.10
149p
–
34p
–
–
Number
31.3.10
1,377,605
–
(1,377,605)
–
–
31. Share-based payments
The Group provides share-based payments to employees in the form of performance share plan awards and a share incentive plan. All share-based
payment arrangements granted after 7 November 2002 that had not vested prior to 1 January 2005 are recognised in the financial statements. The
Company uses a stochastic valuation model and the resulting value is amortised through the Income Statement over the vesting period of the share-
based payments.
Performance share plan awards
Outstanding at beginning of period
Awards vested during the period
Awards lapsed during the period
Awards cancelled during the period
Awards made during the period
Outstanding at end of period
2011
Weighted
average
award
value
Awards
2010
Weighted
average
award
value
Awards
4,870,283
332p
4,738,900
–
–
(482,065)
(989,620)
473p
(964,130)
–
–
(555,644)
2,368,701
276p
2,133,222
6,249,364
284p
4,870,283
364p
377p
377p
359p
300p
332p
2009
276p
–
n/a
The performance share plan awards outstanding at 31 March 2011 had a weighted average remaining contractual life of one year eight months.
The inputs into the stochastic model of valuation of the PSP awards made in the year to 31 March 2011 were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends
The Group recognised a credit of £196,000 (2010: charge £1,151,000) in relation to Share-based payments.
At the balance sheet date there were no exercisable awards.
2011
2010
285.1p
297.5p
–
n/a
–
n/a
3 years
3 years
3 years
n/a
n/a
n/a
1.05%
1.51%
1.63%
notes to the financial statements Helical Bar plc 2011 page 87
32. Own shares held
Following approval at the 1997 Annual General Meeting the Company established the Helical Bar Employees’ Share Ownership Plan Trust (the “Trust”)
to be used as part of the remuneration arrangements for employees. The purpose of the Trust is to facilitate and encourage the ownership of shares by
or for the benefit of employees by the acquisition and distribution of shares in the Company.
The Trust purchases shares in the Company to satisfy the Company’s obligations under its Share Option Schemes and Performance Share Plan.
At 31 March 2011 unexercised options over nil (2010: nil) ordinary 1p shares in Helical Bar plc had been granted over shares held by the Trust.
At 31 March 2011 outstanding awards over 6,294,364 (2010: 4,870,283) ordinary 1p shares in Helical Bar plc had been made under the terms of the
Performance Share Plan over shares held by the Trust.
33. Contingent liabilities
The Group’s share of its Joint Ventures contingent liabilities is discussed in note 21. The Group has guaranteed this payment in the event of default of
the Joint Venture.
The Company has entered into cross guarantees in respect of the banking facilities of its subsidiaries. These are not considered to have a material value.
The Company has undertaken to provide support for some of its subsidiaries undertakings. However it does not believe that this support will be
required in the foreseeable future.
Other than these contingent liabilities there were no contingent liabilities at 31 March 2011 for the Group or the Company (2010: £nil).
34. Net assets per share
31.3.11
£000
Number
of shares
000s
31.3.11
pence
per share
31.3.10
£000
Number
of shares
000s
31.3.10
pence
per share
Net asset value
255,397
118,138
242,607
107,408
Less: own shares held by ESOP
–
(1,292)
–
(1,292)
deferred shares
(265)
(265)
Basic and diluted net asset value
255,132
116,846
218
242,342
106,116
228
Adjustment for:
– fair value of financial instruments
– deferred tax
7,071
717
9,978
3,257
Adjusted diluted net asset value
262,920
116,846
225
255,577
106,116
241
Adjustment for:
– fair value of trading and development properties
32,436
32,991
Diluted EPRA net asset value
295,356
116,846
253
288,568
106,116
272
Adjustment for:
– fair value of financial instruments
– deferred tax
(7,071)
(717)
(9,978)
(3,257)
Diluted EPRA triple net asset value
287,568
116,846
246
275,333
106,116
259
The net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate
Association (“EPRA”).
page 88 Helical Bar plc 2011 notes to the financial statements
35. Related party transactions
At 31 March 2011 and 31 March 2010 the following amounts were due from the Group’s joint ventures.
Abbeygate Helical (Leisure Plaza) Ltd
Abbeygate Helical (Winterhill) Ltd
Abbeygate Helical (C4.1) LLP
King Street Developments (Hammersmith) Ltd
Shirley Advance LLP
The Asset Factor Ltd
PH Properties Limited (BVI)
Barts Two Investment Property Limited
All movements in joint venture balances related to loans repaid and loans advanced.
At 31 March 2011 and 31 March 2010 there were the following balances between the Company and its subsidiaries.
Amounts due from subsidiaries
Amounts due to subsidiaries
At 31.3.11
£000
At 31.3.10
£000
2,040
2,212
–
6
2,000
4,296
596
–
–
(12)
(598)
1,634
4,372
600
–
–
At 31.3.11
£000
At 31.3.10
£000
369,817
365,955
161,546
175,469
During the years to 31 March 2011 and 31 March 2010 there were the following transactions between the Company and its subsidiaries:
Management charges receivable
Management charges payable
Interest receivable
Interest payable
Year ended
31.3.11
£000
Year ended
31.3.10
£000
3,422
250
4,725
–
3,202
271
3,109
–
Management charges relate to the performance of management services for the Company or its subsidiaries. Interest receivable relates to interest on
loans made by the Company to its subsidiaries. All of these transactions, and the year-end balance sheet amounts arising from these transactions
were conducted on an arm’s length basis and on normal commercial terms. Amounts owed by subsidiaries to the company are identified in note 24.
Amounts owed to subsidiaries by the company are identified in note 26.
The Group consider that the key management personnel are the directors and the detail of their remuneration is disclosed in the directors’ remuneration
report on pages 48 to 54. Share based payments for directors are disclosed in note 9.
NOTES TO THE FINANCIAL STATEMENT Helical Bar plc 2011 page 89
ten year review
IFRS
31.3.11
£000
IFRS
31.3.10
£000
IFRS
31.3.09
£000
IFRS
31.3.08
£000
IFRS
31.3.07
£000
IFRS
31.3.06
£000
IFRS UK GAAP UK GAAP UK GAAP
31.3.02
£000
31.3.03
£000
31.3.04
£000
31.3.05
£000
Revenue
119,059
67,354
81,770
65,623
123,176
119,274
101,469
54,566
135,192
136,632
Net rental income
14,187
14,151
17,682
16,400
14,771
16,524
20,440
22,980
25,619
27,827
Development
(loss)/profit
(16,642)
(1,293)
(7,704)
6,068
13,587
4,594
12,664
38
4,630
17,072
Trading (loss)/profit
(367)
(10)
(514)
(29)
2,094
13,441
5,771
1,031
349
154
Share of results of
joint ventures
2,886
3,745
Other (expense)/income
(358)
26
1,846
6,752
(98)
6,196
(315)
766
437
235
2,699
1,636
1,544
235
601
626
986
(67)
Gross (loss)/profit
before gain/(loss) on
investment properties
Gain/(loss) on sale
and revaluation of
investment properties
Gain on sale of
investments
(294)
16,619
18,062
22,026
37,414
35,231
41,809
26,286
32,768
45,972
7,512
8,195
(66,670)
(32,790)
40,637
43,551
44,204
2,035
2,126
2,463
Impairment of available-for-sale
investments
(1,817)
–
–
–
1,892
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Administrative
expenses
Loss on sale of
subsidiary
Negative goodwill
(7,050)
(8,680)
(8,090)
(13,659)
(17,544)
(16,582)
(15,757)
(8,037)
(6,391)
(10,888)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(59)
–
(195)
–
6,362
–
Net finance costs
(4,564)
(7,132)
(21,048)
(1,724)
(419)
(5,080)
(5,561)
(6,572)
(9,638)
(14,779)
Foreign exchange
(losses)/gains
(67)
(1,127)
3,999
1,862
–
–
–
–
–
–
(Loss)/profit before tax
(6,280)
7,875
(71,855)
(24,285)
60,088
57,120
64,695
13,653
25,227
22,573
Tax
2,391
1,711
18,359
11,971
(8,000)
(9,676)
844
(2,199)
(7,660)
(5,353)
(Loss)/profit after tax
(3,889)
9,586
(53,496)
(12,314)
52,088
47,444
65,539
11,454
17,567
17,220
Investment portfolio
271,876
219,901
241,287
306,778
316,025
294,583
271,315
334,932
342,484
439,911
Shareholders’ funds
255,397
242,607
237,066
268,659
282,186
230,097
186,165
234,917
226,870
227,653
Dividend per
ordinary share
Special dividend per
ordinary share
Diluted (loss)/earnings
per ordinary share
Diluted EPRA net
assets per share
2.00p
7.25p
4.50p
4.50p
4.05p
3.65p
3.32p
3.32p
3.00p
2.75p
–
–
–
–
–
–
80.0p
–
–
20.0p
(3.6p)
9.1p
(56.6p)
(13.5p)
53.7p
51.8p
53.7p
7.9p
11.8p
11.8p
253p
272p
286p
352p
374p
309p
238p
182p
155p
155p
The financial statements for the year to 31 March 2005 have been restated to reflect the adoption of International Financial Reporting Standards.
The financial statements for the years 31 March 2001 to 31 March 2005 have been restated to reflect the impact of the 5 for 1 share issue on
1 September 2005
page 90 Helical Bar plc 2011
investor information
The report and financial statements, share price information, company
presentations, the financial calendar, Corporate Governance, contact details
and other investor information on the Group are available in the Investor
Relations and Company Profile area of our website www.helical.co.uk.
Registrar
All general enquiries concerning holdings of ordinary shares in Helical Bar
plc should be addressed to:
Capita Registrars
The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU
Telephone: 0871 664 0300*
Fax: 020 8639 2342
Website: www.capitaregistrars.com
Email: shareholder.services@capitaregistrars.com
*calls cost 10p per minute plus network extras. Lines are open between
8:30am and 5:30pm, Mon-Fri.
e-communication
UK shareholders may choose to be alerted about updates to the Financial
Reports, Results, Press Releases and Events Calendar sections of the
Group’s website by subscribing to the Alerting Service at www.helical.
co.uk. Shareholders may also submit their proxy votes electronically. To
register for this service, shareholders should visit the Shareholders area of
www.capitaregistrars.com.
Payment of dividends
Shareholders whose dividends are not currently paid to mandated
accounts may wish to consider having their dividends paid directly into
their bank or building society account. This has a number of advantages,
including the crediting of cleared funds into the nominated account on the
dividend payment date. If shareholders would like their future dividends to
be paid in this way, they should complete a mandate instruction available
from the Registrars. Under this arrangement tax vouchers are sent to the
shareholder’s registered address.
Dividends for shareholders resident outside the UK
Instead of waiting for a sterling cheque to arrive by mail, you can ask us to
send your dividends direct to your bank account. For information contact
the Company’s Registrar.
Dividend reinvestment plan (DRIP)
The Company offers shareholders the option to participate in a DRIP. This
enables shareholders to reinvest their cash dividends in Helical Bar plc shares.
For further details, contact the Company’s Registrar.
For participants in the plan, key dates can be found in the online financial
calendar in the ‘Investor Relations’ area at www.helical.co.uk.
ShareGift
Shareholders with a small number of shares, the value of which makes it
uneconomic to sell them, may wish to consider donating them to a charity
ShareGift, (registered charity 1052686) which specialises in using such
holdings for charitable benefit.
Further information about ShareGift is available at www.sharegift.org or by
writing to: ShareGift,
17 Carlton House Terrace, London, SW1Y 5AH
Telephone: 020 7930 3737
Dividends
Dividend payment dates on the Company’s Ordinary 1p shares in 2010
were as follows:
Dividend
Record
Date
2009/10
2nd interim
12 March
2010
2009/10
Final
2010/11
Interim
25 June
2010
3 Dec
2010
Payment
Date
1 April
2010
23 July
2010
23 Dec
2010
Dividend payment dates in 2011 will be as follows:
Dividend
2010/11
Final
2011/12
Interim
Record
Date
1 July
2011
Dec
2011
Payment
Date
28 July
2011
Dec
2011
Amount
2.75p
0.25p
1.75p
Amount
3.15p
Unsolicited investment advice - warning to shareholders
Many companies have become aware that their shareholders have
received unsolicited phone calls or correspondence concerning investment
matters. These are typically from overseas-based ‘brokers’ who target UK
shareholders offering to sell them what often turn out to be worthless or
high risk shares in US or UK investments. They can be very persistent and
extremely persuasive. A 2006 survey by the Financial Services Authority
(FSA) reported that the average amount lost by investors was around
£20,000. It is not just the novice investor that has been duped in this way;
many of the victims had been successfully investing for several years.
Shareholders are advised to be very wary of any unsolicited advice, offers
to buy shares at a discount or offers of free reports into the company.
If you receive any unsolicited investment advice:
(cid:115)(cid:229)(cid:45)(cid:65)(cid:75)(cid:69)(cid:229)(cid:83)(cid:85)(cid:82)(cid:69)(cid:229)(cid:89)(cid:79)(cid:85)(cid:229)(cid:71)(cid:69)(cid:84)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:67)(cid:79)(cid:82)(cid:82)(cid:69)(cid:67)(cid:84)(cid:229)(cid:78)(cid:65)(cid:77)(cid:69)(cid:229)(cid:79)(cid:70)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:80)(cid:69)(cid:82)(cid:83)(cid:79)(cid:78)(cid:229)(cid:65)(cid:78)(cid:68)(cid:229)(cid:79)(cid:82)(cid:71)(cid:65)(cid:78)(cid:73)(cid:83)(cid:65)(cid:84)(cid:73)(cid:79)(cid:78)(cid:14)
(cid:115)(cid:229)(cid:229)(cid:35)(cid:72)(cid:69)(cid:67)(cid:75)(cid:229)(cid:84)(cid:72)(cid:65)(cid:84)(cid:229)(cid:84)(cid:72)(cid:69)(cid:89)(cid:229)(cid:65)(cid:82)(cid:69)(cid:229)(cid:80)(cid:82)(cid:79)(cid:80)(cid:69)(cid:82)(cid:76)(cid:89)(cid:229)(cid:65)(cid:85)(cid:84)(cid:72)(cid:79)(cid:82)(cid:73)(cid:83)(cid:69)(cid:68)(cid:229)(cid:66)(cid:89)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:38)(cid:51)(cid:33)(cid:229)(cid:66)(cid:69)(cid:70)(cid:79)(cid:82)(cid:69)(cid:229)(cid:71)(cid:69)(cid:84)(cid:84)(cid:73)(cid:78)(cid:71)(cid:229)
involved. You can check at www.fsa.gov.uk/register
(cid:115)(cid:229)(cid:229)(cid:52)(cid:72)(cid:69)(cid:229)(cid:38)(cid:51)(cid:33)(cid:229)(cid:65)(cid:76)(cid:83)(cid:79)(cid:229)(cid:77)(cid:65)(cid:73)(cid:78)(cid:84)(cid:65)(cid:73)(cid:78)(cid:83)(cid:229)(cid:79)(cid:78)(cid:229)(cid:73)(cid:84)(cid:83)(cid:229)(cid:87)(cid:69)(cid:66)(cid:83)(cid:73)(cid:84)(cid:69)(cid:229)(cid:65)(cid:229)(cid:76)(cid:73)(cid:83)(cid:84)(cid:229)(cid:79)(cid:70)(cid:229)(cid:85)(cid:78)(cid:65)(cid:85)(cid:84)(cid:72)(cid:79)(cid:82)(cid:73)(cid:83)(cid:69)(cid:68)(cid:229)(cid:79)(cid:86)(cid:69)(cid:82)(cid:83)(cid:69)(cid:65)(cid:83)(cid:229)
firms who are targeting, or have targeted, UK investors and any
approach from such organisations should be reported to the FSA so
that this list can be kept up to date and any other appropriate action
can be considered.
(cid:115)(cid:229)(cid:229)(cid:50)(cid:69)(cid:80)(cid:79)(cid:82)(cid:84)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:77)(cid:65)(cid:84)(cid:84)(cid:69)(cid:82)(cid:229)(cid:84)(cid:79)(cid:229)(cid:84)(cid:72)(cid:69)(cid:229)(cid:38)(cid:51)(cid:33)(cid:229)(cid:69)(cid:73)(cid:84)(cid:72)(cid:69)(cid:82)(cid:229)(cid:66)(cid:89)(cid:229)(cid:67)(cid:65)(cid:76)(cid:76)(cid:73)(cid:78)(cid:71)(cid:229)(cid:16)(cid:19)(cid:16)(cid:16)(cid:229)(cid:21)(cid:16)(cid:16)(cid:229)(cid:21)(cid:16)(cid:16)(cid:16)(cid:229)(cid:79)(cid:82)(cid:229)(cid:66)(cid:89)(cid:229)
completing an online form at:
http://www.moneymadeclear.org.uk/news/scams/share_scams.html
If you deal with an unauthorised firm, you would not be eligible to receive
payment under the Financial Services Compensation Scheme.
Share price information
The latest information on the Helical Bar plc share price is available on our
website www.helical.co.uk.
Registered office
11–15 Farm Street, London, W1J 5RS
Registered in England and Wales No. 156663.
Helical Bar plc 2011 page 91
glossary of terms
Average unexpired lease term
The average unexpired lease term expressed in years.
Capital value (psf)
The open market value of the property divided by the area of the property in square feet.
Diluted EPRA earnings per share
Diluted EPRA net assets per share
Earnings per share adjusted to exclude losses/gains on sale and revaluation of investment
properties and their deferred tax adjustments, the tax on loss/profit on disposal of investment
properties, trading property losses/profits, impairment of available-for-sale investments and fair
value movements on derivative financial instruments, on a diluted basis. Details of the method of
the calculation of the diluted EPRA earnings per share are available from EPRA.
Diluted net asset value per share adjusted to exclude fair value of financial instruments and
deferred tax on capital allowances and on investment properties revaluation, but including
the fair value of trading and development properties in accordance with the best practice
recommendations of EPRA.
Diluted EPRA triple net asset value per share
Diluted EPRA net asset value per share adjusted to include fair value of financial instruments and
deferred tax on capital allowances and on investment properties revaluation.
Diluted figures
Reported amounts adjusted to include the effects of potential shares issuable under the employee
share option schemes.
Earnings per share
Profit after tax divided by the weighted average number of ordinary shares in issue.
EPRA
Equivalent yield
European Public Real Estate Association.
The constant capitalisation rate which, if applied to all cash flows from an investment property,
including current rent, reversions to current market rent and such items as voids and expenditures,
equates to the market value. Assumes rent is received in arrears.
Estimated rental value (ERV)
The market rental value of lettable space as estimated by the Company’s valuers at each balance
sheet date.
Initial yield
IPD
Annualised net rents on investment properties as a percentage of the investment property
valuation.
The Investment Property Databank Limited (IPD) is a company that produces a number of
independent benchmarks of unleveraged commercial property returns.
Net assets per share or net asset value (NAV) Equity shareholders’ funds divided by the number of ordinary shares at the balance sheet date.
Net gearing
Passing rent
Total borrowings less short-term deposits and cash as a percentage of equity shareholders’ funds.
The annual gross rental income excluding the net effects of straightlining lease incentives.
Rack rental value %
The anticipated yield, which the initial yield will rise to once the rent reaches the ERV.
Total shareholder return (TSR)
True equivalent yield
Unleveraged returns
The growth in the ordinary share price as quoted on the London Stock Exchange plus dividends
per share received for the period expressed as a percentage of the share price at the beginning of
the period.
The constant capitalisation rate which, if applied to all cash flows from an investment property,
including current rent, reversions to current market rent and such items as voids and expenditures,
equates to the market value. Assumes rent is received quarterly in advance.
Total property gains and losses (both realised and unrealised) plus net rental income expressed as
a percentage of the total value of the properties.
page 92 Helical Bar plc 2011
financial calendar
Year ended 31 March 2011
Annual General Meeting to be held 26 July 2011
Final ordinary dividend payable
28 July 2011
Half year ending 30 September 2011
Year ending 31 March 2012
Results and interim ordinary dividend announced November 2011
Interim ordinary dividend payable December 2011
Results and final dividend announced May 2012
Final ordinary dividend payable July 2012
advisors
Registrars
Bankers
Stockbrokers
Auditors
Merchant bankers
Solicitors
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Aareal Bank AG
Allied Irish Bank
Barclays Bank plc
Clydesdale Bank
Eurohypo AG
HSBC plc
Nationwide
The Royal Bank of Scotland Group plc
JP Morgan Cazenove Limited
10 Aldermanbury
London EC2V 7RF
Grant Thornton UK LLP
Grant Thornton House
Melton Street
Euston Square
London NW1 2EP
Lazard Ltd
50 Stratton Street
London W1J 8LL
Ashurst
Clifford Chance
Lawrence Graham
Linklaters
Lovells
Mishcon de Reya
Nabarro
Norton Rose
Semple Fraser
Wragge & Co
FINANCIAL CALENDAR / ADVISORS Helical Bar Plc 2011 page 2
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Helical Bar plc
Registered Offi ce
11-15 Farm Street
London, W1J 5RS
Tel: 020 7629 0113
Fax: 020 7408 1666
email: info@helical.co.uk
www.helical.co.uk