Helical Annual Report 2014

Plain-text annual report

4 1 0 2 s t n u o c c A & t r o p e R c l p R A B L A C I L E H heLICaL BaR Report & Accounts 2014 4 1 0 2 s t n u o c c A & t r o p e R c l p R A B L A C I L E H v CONTENTS 01 introduction What we do Financial highlights review of the year chairman’s statement chief Executive’s statement 02 StratEgic rEport objectives, strategy and business model Key performance indicators investment portfolio overview investment portfolio statistics principal investment properties development programme Financial review principal risks report corporate responsibility 1 4 6 15 16 20 22 24 26 28 32 38 42 45 03 govErnancE directors of the company corporate governance review report of the nominations committee directors’ remuneration report report of the audit committee report of the directors Statement of directors’ responsibilities report of independent auditor 50 51 54 55 68 69 71 72 04 Financial StatEmEntS consolidated income statement consolidated statement of comprehensive income consolidated and company balance sheets consolidated and company cash flow statements consolidated and company statements of changes in equity notes to the financial statements 05 invEStor inFormation Five year review See through analysis property portfolio Shareholder information glossary of terms Financial calendar advisors 76 76 77 78 79 80 105 107 109 112 113 114 114 We combine our investment and development activity to seek maximum returns through Well selected and carefully managed schemes. We invest in london for capital groWth and the regions for income. What We do 1 Helical Bar plc is a property investment and development company which operates across many sectors of the property industry. We aim to deliver market-leading returns by acquiring high-yielding investment properties, applying a rigorous approach to asset management and deploying limited equity into development situations which have the potential to be highly profitable. the group’s principal areas of business include high-yielding retail investments, central london office investments, central london office refurbishment and development projects, regional pre-let food store developments and retirement villages. We invest in london for capital growth and the regions for income. the group’s property portfolio had a fair value of £802m at 31 march 2014 (31 march 2013: £626m) with investment properties accounting for 75% and developments 25%. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION2 INvESTmENT/DEvELOPmENT BARTS SQUARE LONDON EC1 225,500 SQ FT OFFICES 215 RESIDENTIAL APARTMENTS 21,800 SQ FT RETAIL/LEISURE london is a core part of our groWth strategy heLICaL BaR PLC report & accounts 2014 What we do Financial highlights review of the year chairman’s statement chief Executive’s statement 1 4 6 15 16 3 INtRodUCtIoN heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION4 FINaNCIaL hIghLIghts TOTAl PROPERTY RETURn PROFiT BEFORE TAx PORTFOliO RETURn £140.1m £101.7m 2014 2013 £35.9m 2012 £27.5m £140.1m 2014 2013 £5.0m 2012 £7.4m £101.7m 23.8% 2014 2013 2012 8.6% 5.6% 23.8% DilUTED EPRA EARningS PER SHARE TOTAl DiVi DEnD PAiD PER SHARE TOTAl SHAREHOlDER RETURn 32.5p 2014 2013 2.4p 2012 3.4p 5.70p 61.1% 32.5p 2014 2013 2012 5.70p 5.25p 4.90p 2014 2013 2012 -28.4% 61.1% 28.4% SEE-THROUgH PORTFOliO VAlUE iFRS nET ASSETS £802m £341m DilUTED EPRA nET ASSET VAlUE PER SHARE 313p 2014 2013 2012 £802m £626m £573m 2014 2013 2012 £341m £254m £254m 2014 2013 2012 313p 264p 250p SEE-THROUgH lOAn TO VAlUE SEE-THROUgH gEARing nET inTEREST COVER RATiO 46% 2014 2013 2012 109% 8.3x 46% 46% 49% 2014 2013 2012 109% 113% 110% 2014 2013 2012 2.7x 2.8x 8.3x Note: The see-through figures are reconciled to statutory figures on pages 109-110. HELICAL BAR PLC REPORT & ACCOUNTS 2014 5 the PoRtFoLIo OVERAll PORTFOliO SPliT OVERAll PORTFOliO SPliT INVESTMENT DEVELOPMENT 75% 25% inVESTmEnT PORTFOliO 43.1% LONDON OFFICES PROVINCIAL OFFICES 12.7% 2.1% INDUSTRIAL 40.9% RETAIL RETIREMENT VILLAGE 1.2% TRADing AnD DEVElOPmEnT PORTFOliO (H EliCAl’S SHARE) Project type LONDON OFFICE RETAIL INDUSTRIAL MIxED USE ChANGE OF USE RETIREMENT VILLAGES POLAND ToTal Book value £m Fair value £m Surplus £m % of development portfolio (fair value) 15.4 25.1 0.3 2.9 4.9 64.6 60.3 173.5 21.4 27.2 0.4 2.9 8.3 80.5 60.3 201.0 6.0 2.1 0.1 - 3.4 15.9 - 27.5 10.7 13.5 0.2 1.4 4.1 40.1 30.0 100.0 Note: the table above includes the Group’s share of development properties held in joint ventures. heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION6 RevIeW oF the yeaR mAPlE HOUSE nEW lOOm HOUSE Investment propertIes Maple House, london eC1 Acquired in June 2013, Maple house is an existing four storey 50,000 sq ft office building with an extensive refurbishment planned, including an additional floor. new looM House, london e1 The Group acquired this 112,000 sq ft multi-let, listed Victorian ‘warehouse’ style office building at a net initial yield of just under 5% in July 2013. helical will undertake a comprehensive, phased refurbishment which will greatly enhance and reposition the building. QuarTz porTfolio The Group acquired this portfolio of regional properties for circa £50m, representing a yield in excess of 8%. The portfolio comprises five retail and leisure assets, four office properties and one industrial asset. Huddersfield reTail park helical bought this 97,000 sq ft multi-let retail park in September 2013 at a net initial yield of 7.2%. The retail park is fully let to tenants including Matalan, Dunelm, Aldi and B&M. enTerprise House, paddingTon, london w2 In October 2013, the Group bought this 45,000 sq ft office building on a sale and lease back deal from Network Rail at a 5.7% yield. arTillery lane, london e1 In December 2013 helical acquired this 17,000 sq ft building off market. The Group plans to refurbish and relet the building. CHurCHgaTe House and lee House, ManCHesTer In March 2014, helical bought these two inter-linked multi-tenanted office buildings for £34m. Bought at a net initial yield of 5.9%, the buildings, comprising 250,000 sq ft, were 35% vacant offering the Group opportunities to increase income through letting space. 34,000 sq ft has been let since acquisition. ARTillERY lAnE EnTERPRiSE HOUSE DeveLopment propertIes mARCH 2014 leisure plaza, MilTon keynes helical and its joint venture partner Abbeygate agreed the forward funding with Aviva of this retail and leisure scheme at Leisure Plaza in Milton Keynes. The scheme comprises an 80,000 sq ft supermarket pre-let to Morrisons, 33,000 sq ft of retail and an ice rink. King STREET HAmmERSmiTH BriCkfields, wHiTe CiTy, london w12 In September 2013 Aviva, helical’s joint venture partner, sold this 10 acre site crystallising a substantial profit payment for the Group. 200 aldersgaTe, london eC1 Working with Deutsche Pfandbriefbank, helical led the refurbishment and letting of 200 Aldersgate, comprising 365,000 sq ft of offices and retail. Last summer, helical completed the final letting which enabled the building to be sold in September 2013, triggering a substantial development management profit share payment for the Group. parkgaTe, sHirley, wesT Midlands At Parkgate, Shirley, in joint venture with Coltham Developments, construction continued of an 80,000 sq ft Asda foodstore, and 78,000 sq ft of retail and leisure accommodation, 66% of which has been pre-let. king sTreeT, HaMMersMiTH, london w6 helical and its joint venture partner, Grainger, received planning consent in April 2014 for their regeneration scheme at King Street, hammersmith. The redevelopment will provide 196 high quality new homes, a three-screen cinema, new retail, restaurant and café space, replacement offices for the Council and a new public square. HELICAL BAR PLC REPORT & ACCOUNTS 2014rEviEW oF tHE yEar continued 7 200 AlDERSgATE retirement village development loan facilities During the year, helical agreed a £14m facility with Barclays and a £25m facility with hSBC to fund the development of the retirement village schemes at Millbrook Village, Exeter and Maudslay Park, Great Alne respectively. DURRAnTS VillAgE saLes Since March 2013 the Group sold over £72m of investment properties including Silverthorne Road, Battersea London SW8; Crownhill Business Centre, Milton Keynes; the TK Maxx unit in the Morgan Quarter, Cardiff and the Asda unit at Clyde Shopping Centre, Clydebank. The Group sold £16m of development properties including retirement village units at our developments at Bramshott Place, Liphook, hampshire and Durrants Village, Faygate, horsham; some of the residential land at Parkgate, Shirley and part of the Ropemaker Park, hailsham. post year enD transactIons In April 2014, the Group acquired a portfolio of ten properties for a total consideration of £40.15 million, reflecting an 8.35% net initial yield. The portfolio, with a total floor area of circa 633,000 sq ft, includes modern high bay logistics facilities in Burton on Trent, Daventry, Leicester, Rugby, Doncaster and Warrington all located close to major motorway networks. The logistics properties constitute in excess of 80% of the portfolio by value, with the remainder comprising regional and headquarter office space. On 10 June 2014 the Group announced the issuance of a £100m convertible bond carrying a coupon of 4.00% with an initial conversion price in June 2019 of £4.9694 per share. FInancIng retail bond issue The Group issued an £80m retail bond in June 2013 at a fixed rate of 6%, repayable in June 2020. Barclays - revolving Credit facility In June 2013, the Group agreed a £75m revolving credit facility with Barclays. aareal - gliwice, poland In December 2013 the £72m facility with Aareal Bank AG for the out of town retail scheme at Europa Centralna, Gliwice converted from a development facility to a four year investment facility. deutsche pfandbriefbank multi-asset investment facility In December 2013 helical agreed a new c.£100m five year facility with Deutsche Pfandbriefbank. deutsche Bank - old street, london eC1 Crosstree Real Estate Partners and helical agreed an £88m three year development facility with Deutsche Bank in January 2014 to fund phase one of the development of The Bower, Old Street. BRiCKFiElDS, WHiTE CiTY HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION 8 tRaNsFoRMINg shoRedItCh INvESTmENT 207-211 OlD STREET LONDON EC1 3.1 ACRE SITE 230,000 SQ FT OFFICES ACROSS 3 BUILDINGS 54,000 SQ FT OF RETAIL SPACE THE BOWER, OlD STREET LONDON EC1 PHASE On E ThE WAREhOUSE 127,746 SQ FT 22,346 SQ FT Th E STUDIO 16,006 SQ FT EMPIRE h OUSE PHASE TWO 207 OLD STREET 114,944 SQ FT 53,990 SQ FT RETAIL heLICaL BaR PLC report & accounts 2014 LoNdoN PoRtFoLIo 9 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTIONPINNER PINNER PINNER PINNER PINNER PINNER PINNER WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE KINGSBURY KINGSBURY KINGSBURY KINGSBURY KINGSBURY KINGSBURY KINGSBURY GREENHILL GREENHILL GREENHILL GREENHILL GREENHILL GREENHILL GREENHILL KENTON KENTON KENTON KENTON KENTON KENTON KENTON EASTCOTE EASTCOTE EASTCOTE EASTCOTE EASTCOTE EASTCOTE EASTCOTE HARROW HARROW HARROW HARROW HARROW HARROW HARROW HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL KENTON KENTON KENTON KENTON KENTON KENTON KENTON 10 LoNdoN PoRtFoLIo HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON HENDON HENDON HENDON HENDON HENDON HENDON HENDON SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW shepherds Building shepherds bush W14 NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY 151,000 sq ft office building. Major refurbishment of the common parts of the building completed SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL enterprise house W2 45,000 sq ft office building let to Network Rail NORTHOLT NORTHOLT NORTHOLT NORTHOLT NORTHOLT NORTHOLT NORTHOLT GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD PERIVALE PERIVALE PERIVALE PERIVALE PERIVALE PERIVALE PERIVALE GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK YEADING YEADING YEADING YEADING YEADING YEADING YEADING SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL WEST EALING WEST EALING WEST EALING WEST EALING WEST EALING WEST EALING WEST EALING HANWELL HANWELL HANWELL HANWELL HANWELL HANWELL HANWELL ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON enterprise house EALING EALING EALING EALING EALING EALING EALING ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH shepherds Building shepherds bush SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK HARLESDEN HARLESDEN HARLESDEN HARLESDEN HARLESDEN HARLESDEN HARLESDEN BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) the Bower, 207 old street ec1 3.12 acre site Since acquisition, plans have been developed to substantially increase the amount of space on site. Planning granted CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY DALSTON DALSTON DALSTON DALSTON DALSTON DALSTON DALSTON SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) MARYLAND MARYLAND MARYLAND MARYLAND MARYLAND MARYLAND MARYLAND STRATFORD STRATFORD STRATFORD STRATFORD STRATFORD STRATFORD STRATFORD HORNSEY HORNSEY HORNSEY HORNSEY HORNSEY HORNSEY HORNSEY TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD WOOD STREET WOOD STREET WOOD STREET WOOD STREET WOOD STREET WOOD STREET WOOD STREET SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY HARRINGAY HARRINGAY HARRINGAY HARRINGAY HARRINGAY HARRINGAY STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON LEYTON LEYTON LEYTON LEYTON LEYTON LEYTON LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON CLAPTON CLAPTON CLAPTON CLAPTON CLAPTON CLAPTON CLAPTON RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK ISLINGTON ISLINGTON ISLINGTON ISLINGTON ISLINGTON ISLINGTON ISLINGTON CANONBURY CANONBURY CANONBURY CANONBURY CANONBURY CANONBURY CANONBURY DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HOMERTON HOMERTON HOMERTON HOMERTON HOMERTON HOMERTON HOMERTON HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY HACKNEY HACKNEY HACKNEY HACKNEY HACKNEY HACKNEY FINSBURY FINSBURY FINSBURY FINSBURY FINSBURY FINSBURY FINSBURY KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN HOXTON HOXTON HOXTON HOXTON HOXTON HOXTON HOXTON CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH OLD STREET OLD STREET OLD STREET OLD STREET OLD STREET OLD STREET OLD STREET SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BOW BOW BOW BOW BOW BOW BOW WEST HAM WEST HAM WEST HAM WEST HAM WEST HAM WEST HAM WEST HAM FARRINGDON FARRINGDON FARRINGDON FARRINGDON FARRINGDON FARRINGDON FARRINGDON LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET MOORGATE MOORGATE MOORGATE MOORGATE MOORGATE MOORGATE MOORGATE WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL STEPNEY STEPNEY STEPNEY STEPNEY STEPNEY STEPNEY STEPNEY CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK HOLBORN HOLBORN HOLBORN HOLBORN HOLBORN HOLBORN HOLBORN CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS CANNON STREET CANNON STREET CANNON STREET CANNON STREET CANNON STREET CANNON STREET CANNON STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET SHADWELL SHADWELL SHADWELL SHADWELL SHADWELL SHADWELL SHADWELL LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS POPLAR POPLAR POPLAR POPLAR POPLAR POPLAR POPLAR WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE WATERLOO WATERLOO WATERLOO WATERLOO WATERLOO WATERLOO WATERLOO WAPPING WAPPING WAPPING WAPPING WAPPING WAPPING WAPPING ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE CANADA WATER CANADA WATER CANADA WATER CANADA WATER CANADA WATER CANADA WATER CANADA WATER BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY MAZE HILL MAZE HILL MAZE HILL MAZE HILL MAZE HILL MAZE HILL MAZE HILL DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD NEW CROSS NEW CROSS NEW CROSS NEW CROSS NEW CROSS NEW CROSS NEW CROSS GREENWICH GREENWICH GREENWICH GREENWICH GREENWICH GREENWICH GREENWICH IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD ST JOHNS ST JOHNS ST JOHNS ST JOHNS ST JOHNS ST JOHNS ST JOHNS BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH NUNHEAD NUNHEAD NUNHEAD NUNHEAD NUNHEAD NUNHEAD NUNHEAD LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BROCKLEY BROCKLEY BROCKLEY BROCKLEY BROCKLEY BROCKLEY BROCKLEY PUTNEY PUTNEY PUTNEY PUTNEY PUTNEY PUTNEY PUTNEY WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH one King street hammersmith W6 35,000 sq ft office and retail building adjacent to hammersmith Broadway WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD BALHAM BALHAM BALHAM BALHAM BALHAM BALHAM BALHAM TULSE HILL TULSE HILL TULSE HILL TULSE HILL TULSE HILL TULSE HILL TULSE HILL WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH DULWICH DULWICH DULWICH DULWICH DULWICH DULWICH DULWICH FOREST HILL FOREST HILL FOREST HILL FOREST HILL FOREST HILL FOREST HILL FOREST HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON HERNE HILL HERNE HILL HERNE HILL HERNE HILL HERNE HILL HERNE HILL HERNE HILL NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK LADYWELL LADYWELL LADYWELL LADYWELL LADYWELL LADYWELL LADYWELL HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD the Powerhouse chiswick one King street hammersmith King street hammersmith WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS LAMBETH LAMBETH LAMBETH LAMBETH LAMBETH LAMBETH LAMBETH NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE SYON LANE SYON LANE SYON LANE SYON LANE SYON LANE SYON LANE SYON LANE CHISWICK CHISWICK CHISWICK CHISWICK CHISWICK CHISWICK CHISWICK ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW KEW KEW KEW KEW KEW KEW CRANFORD CRANFORD CRANFORD CRANFORD CRANFORD CRANFORD CRANFORD HESTON HESTON HESTON HESTON HESTON HESTON HESTON HATTON HATTON HATTON HATTON HATTON HATTON HATTON HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN RICHMOND RICHMOND RICHMOND RICHMOND RICHMOND RICHMOND RICHMOND WHITTON WHITTON WHITTON WHITTON WHITTON WHITTON WHITTON TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) the Powerhouse chiswick W4 24,000 sq ft recording studio and office building FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL FULWELL FULWELL FULWELL FULWELL FULWELL FULWELL FULWELL HAM HAM HAM HAM HAM HAM HAM BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE MORTLAKE MORTLAKE MORTLAKE MORTLAKE MORTLAKE MORTLAKE MORTLAKE BARNES BARNES BARNES BARNES BARNES BARNES BARNES King street hammersmith W6 357,000 sq ft mixed use regeneration project for hammersmith and Fulham Borough Council HANWORTH HANWORTH HANWORTH HANWORTH HANWORTH HANWORTH HANWORTH KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON TOOTING TOOTING TOOTING TOOTING TOOTING TOOTING TOOTING STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE PENGE EAST PENGE EAST PENGE EAST PENGE EAST PENGE EAST PENGE EAST PENGE EAST CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE PENGE WEST PENGE WEST PENGE WEST PENGE WEST PENGE WEST PENGE WEST PENGE WEST NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM PENGE PENGE PENGE PENGE PENGE PENGE PENGE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE HELICAL BAR PLC REPORT & ACCOUNTS 2014DALSTON DALSTON DALSTON DALSTON DALSTON MARYLAND MARYLAND MARYLAND MARYLAND MARYLAND CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY CALEDONIAN ROAD & BARNSBURY HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK HACKNEY WICK STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL STRATFORD INTERNATIONAL CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD CRICKLEWOOD HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH HAMPSTEAD HEATH GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK GOSPEL OAK FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL FINCHLEY ROAD & FROGNAL KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST KENTISH TOWN WEST WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD THAMESLINK WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD WEST HAMPSTEAD BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY BRONDESBURY DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK DRAYTON PARK through judicious buying of under-rented buildings in groWth areas, securing lettings and undertaking refurbishments, helical aims to generate substantial capital groWth in its property values. ISLINGTON ISLINGTON ISLINGTON ISLINGTON ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON HIGHBURY & ISLINGTON DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND DALSTON KINGSLAND HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY CENTRAL HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS HACKNEY DOWNS CANONBURY CANONBURY CANONBURY CANONBURY CANONBURY HOMERTON HOMERTON HOMERTON HOMERTON HOMERTON HACKNEY HACKNEY HACKNEY HACKNEY HACKNEY STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK STONEBRIDGE PARK HARLESDEN HARLESDEN HARLESDEN HARLESDEN HARLESDEN BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK BRONDESBURY PARK KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KILBURN HIGH ROAD KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE KENSAL RISE QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) QUEENS PARK (LONDON) WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION WILLESDEN JUNCTION KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN KENSAL GREEN SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD SOUTH HAMPSTEAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD CAMDEN ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD ESSEX ROAD HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON HAGGERSTON LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS LONDON FIELDS FINSBURY FINSBURY FINSBURY FINSBURY FINSBURY KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS KINGS CROSS BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN HOXTON HOXTON HOXTON HOXTON HOXTON CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH CAMBRIDGE HEATH ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL ST PANCRAS INTERNATIONAL LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON LONDON EUSTON OLD STREET OLD STREET OLD STREET OLD STREET OLD STREET the Bower HORNSEY HORNSEY HORNSEY HORNSEY HORNSEY TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE TOTTENHAM HALE BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD BLACKHORSE ROAD WOOD STREET WOOD STREET WOOD STREET WOOD STREET WOOD STREET SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SEVEN SISTERS SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM SOUTH TOTTENHAM WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL WALTHAMSTOW CENTRAL ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET ST JAMES STREET WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD WALTHAMSTOW QUEEN'S ROAD HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY GREEN LANES HARRINGAY HARRINGAY HARRINGAY HARRINGAY HARRINGAY STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL STAMFORD HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL CROUCH HILL UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY UPPER HOLLOWAY FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK FINSBURY PARK STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON STOKE NEWINGTON CLAPTON CLAPTON CLAPTON CLAPTON CLAPTON RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD RECTORY ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD LEYTON MIDLAND ROAD 11 LEYTON LEYTON LEYTON LEYTON LEYTON LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD LEYTONSTONE HIGH ROAD EASTCOTE EASTCOTE EASTCOTE EASTCOTE EASTCOTE HENDON HENDON HENDON HENDON HENDON PINNER PINNER PINNER PINNER PINNER WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE HARROW & WEALDSTONE KINGSBURY KINGSBURY KINGSBURY KINGSBURY KINGSBURY GREENHILL GREENHILL GREENHILL GREENHILL GREENHILL KENTON KENTON KENTON KENTON KENTON KENTON KENTON KENTON KENTON KENTON HARROW HARROW HARROW HARROW HARROW HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW-ON-THE-HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL HARROW ON THE HILL SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH KENTON SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP SOUTH RUISLIP NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK NORTHOLT PARK SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW SUDBURY HILL HARROW NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY NORTH WEMBLEY SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD SUDBURY & HARROW ROAD WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY STADIUM WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL WEMBLEY CENTRAL NORTHOLT NORTHOLT NORTHOLT NORTHOLT NORTHOLT GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD SOUTH GREENFORD PERIVALE PERIVALE PERIVALE PERIVALE PERIVALE GREENFORD GREENFORD GREENFORD GREENFORD GREENFORD YEADING YEADING YEADING YEADING YEADING CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK CASTLE BAR PARK DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN DRAYTON GREEN EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY EALING BROADWAY SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL WEST EALING WEST EALING WEST EALING WEST EALING WEST EALING HANWELL HANWELL HANWELL HANWELL HANWELL EALING EALING EALING EALING EALING ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON CENTRAL ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE ACTON MAIN LINE LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON LONDON PADDINGTON enterprise house SOUTHALL SOUTHALL SOUTHALL SOUTHALL SOUTHALL SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH SHEPHERD'S BUSH NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN NORWOOD GREEN BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON SOUTH ACTON KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA KENSINGTON OLYMPIA CRANFORD CRANFORD CRANFORD CRANFORD CRANFORD HESTON HESTON HESTON HESTON HESTON GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY GUNNERSBURY KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE BRENTFORD BRENTFORD BRENTFORD BRENTFORD BRENTFORD KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE KEW BRIDGE SYON LANE SYON LANE SYON LANE SYON LANE SYON LANE CHISWICK CHISWICK CHISWICK CHISWICK CHISWICK ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW GARDENS KEW KEW KEW KEW KEW HATTON HATTON HATTON HATTON HATTON HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW HOUNSLOW ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH ISLEWORTH RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) RICHMOND (LONDON) NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN NORTH SHEEN RICHMOND RICHMOND RICHMOND RICHMOND RICHMOND PUTNEY PUTNEY PUTNEY PUTNEY PUTNEY WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN WANDSWORTH TOWN FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM FELTHAM ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) ST MARGARETS (LONDON) WHITTON WHITTON WHITTON WHITTON WHITTON TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM TWICKENHAM STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL STRAWBERRY HILL FULWELL FULWELL FULWELL FULWELL FULWELL HAM HAM HAM HAM HAM EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD EARLSFIELD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD HAYDONS ROAD CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK CITY THAMESLINK HOLBORN HOLBORN HOLBORN HOLBORN HOLBORN BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS BLACKFRIARS CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON CITY OF LONDON Creechurch Place CANNON STREET CANNON STREET CANNON STREET CANNON STREET CANNON STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET FENCHURCH STREET New Loom house SHADWELL SHADWELL SHADWELL SHADWELL SHADWELL LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LIMEHOUSE LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS LONDON CHARING CROSS POPLAR POPLAR POPLAR POPLAR POPLAR WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST WATERLOO EAST LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE LONDON BRIDGE WATERLOO WATERLOO WATERLOO WATERLOO WATERLOO WAPPING WAPPING WAPPING WAPPING WAPPING ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE ROTHERHITHE CANADA WATER CANADA WATER CANADA WATER CANADA WATER CANADA WATER BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY BERMONDSEY LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA LONDON VICTORIA ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE ELEPHANT & CASTLE SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS SURREY QUAYS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS ISLE OF DOGS LAMBETH LAMBETH LAMBETH LAMBETH LAMBETH SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY SOUTH BERMONDSEY WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON WEST BROMPTON VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) VAUXHALL (LONDON) MAZE HILL MAZE HILL MAZE HILL MAZE HILL MAZE HILL DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD NEW CROSS NEW CROSS NEW CROSS NEW CROSS NEW CROSS GREENWICH GREENWICH GREENWICH GREENWICH GREENWICH IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF IMPERIAL WHARF QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) QUEENSTOWN ROAD (BATTERSEA) BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK BATTERSEA PARK CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL CAMBERWELL QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) QUEENS ROAD (PECKHAM) NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE NEW CROSS GATE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE BARNES BRIDGE MORTLAKE MORTLAKE MORTLAKE MORTLAKE MORTLAKE BARNES BARNES BARNES BARNES BARNES WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD WANDSWORTH ROAD LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION LOUGHBOROUGH JUNCTION DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL DENMARK HILL CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET CLAPHAM HIGH STREET BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE PECKHAM RYE DEPTFORD DEPTFORD DEPTFORD DEPTFORD DEPTFORD ST JOHNS ST JOHNS ST JOHNS ST JOHNS ST JOHNS BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH NUNHEAD NUNHEAD NUNHEAD NUNHEAD NUNHEAD LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BLACKHEATH BROCKLEY BROCKLEY BROCKLEY BROCKLEY BROCKLEY CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION CLAPHAM JUNCTION EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH EAST DULWICH WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON WANDSWORTH COMMON Barts square ec1 225,500 sq ft of office space. 215 high quality residential apartments in 17 buildings. Retail space on ground floor BALHAM BALHAM BALHAM BALHAM BALHAM BRIXTON BRIXTON BRIXTON BRIXTON BRIXTON HERNE HILL HERNE HILL HERNE HILL HERNE HILL HERNE HILL NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH NORTH DULWICH Creechurch Place ec3 271,000 sq ft of offices. 2,000 sq ft of retail LEWISHAM LEWISHAM LEWISHAM LEWISHAM LEWISHAM CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK CROFTON PARK LADYWELL LADYWELL LADYWELL LADYWELL LADYWELL New Loom house e1 HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK HONOR OAK PARK 112,000 sq ft office building undergoing phased refurbishment CATFORD CATFORD CATFORD CATFORD CATFORD CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE CATFORD BRIDGE HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN HITHER GREEN TULSE HILL TULSE HILL TULSE HILL TULSE HILL TULSE HILL WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH WEST DULWICH DULWICH DULWICH DULWICH DULWICH DULWICH FOREST HILL FOREST HILL FOREST HILL FOREST HILL FOREST HILL CATFORD CATFORD CATFORD CATFORD CATFORD HANWORTH HANWORTH HANWORTH HANWORTH HANWORTH KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK KEMPTON PARK TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON TEDDINGTON KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES KINGSTON UPON THAMES WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON WIMBLEDON TOOTING TOOTING TOOTING TOOTING TOOTING STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM COMMON STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM HILL STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM HILL SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM SYDENHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM BELLINGHAM STREATHAM STREATHAM STREATHAM STREATHAM STREATHAM WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD WEST NORWOOD GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL GIPSY HILL LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM LOWER SYDENHAM BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL BECKENHAM HILL CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE PENGE EAST PENGE EAST PENGE EAST PENGE EAST PENGE EAST CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE CRYSTAL PALACE PENGE WEST PENGE WEST PENGE WEST PENGE WEST PENGE WEST NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM NEW BECKENHAM PENGE PENGE PENGE PENGE PENGE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE RAVENSBOURNE STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD (LONDON) STRATFORD STRATFORD STRATFORD STRATFORD STRATFORD WEST HAM WEST HAM WEST HAM WEST HAM WEST HAM MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) MARYLEBONE (LONDON) FARRINGDON FARRINGDON FARRINGDON FARRINGDON FARRINGDON Barts square MOORGATE MOORGATE MOORGATE MOORGATE MOORGATE artillery Lane WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL WHITECHAPEL STEPNEY STEPNEY STEPNEY STEPNEY STEPNEY BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BETHNAL GREEN BOW BOW BOW BOW BOW LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET LIVERPOOL STREET Clifton street SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH SHOREDITCH Maple house HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION12 RetaIL PoRtFoLIo huddersfield Retail Park huddersfield Fully let retail park with tenants including Matalan, Aldi and Dunelm Corby town Centre corby Comprising in excess of 750,000 sq ft of retail space including Willow Place Shopping Centre and the Oasis Retail Park. helical owns the majority of the town centre Clyde shopping Centre clydebank 120 unit, 625,000 sq ft shopping centre Clyde shopping Centre clydebank Penny street lancaster huddersfield Retail Park huddersfield Beckett street doncaster Upton Road birkenhead Parkgate shirley Unicorn hill redditch Leisure Plaza & Ca.1 milton keynes Idlewells shopping Centre sutton-in-ashfield Corby town Centre corby the guineas newmarket 78-104 town square basildon otford Retail Park sevenoaks tyglass Road & the Morgan Quarter cardiff Morgan Quarter cardiff Prime Cardiff retail with tenants including Urban Outfitters and Jack Wills HELICAL BAR PLC REPORT & ACCOUNTS 2014RegIoNaL PoRtFoLIo st vincent street glasgow 220,000 sq ft of pre-let office space 13 europa Centralna gliwice A c.720,000 sq ft retail park and shopping centre POlAnD the hub & st vincent street glasgow Park handlowy mlyn, Wroclaw europa Centralna gliwice the guineas newmarket Churchgate and Lee house manchester 250,000 sq ft multi-let city centre office Phoenix house oldham Churchgate and Lee house manchester Walkmill Lane cannock Maudslay Park great alne arleston telford Cawston rugby Winterhill Industrial estate milton keynes Bramshott Place liphook Millbrook village exeter Botleigh grange hedge end southampton durrants village faygate 171 unit retirement village development Fordham newmarket dales Manor Business Park cambridge Manor Park reading Manor Royal crawley durrants village faygate Ropemaker Park hailsham HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION14 DEvELOPm ENT St Vincent Street GLASGOW 220,000 sQ Ft OFFICE BUILDING PRE-LET TO SCOTTISh POWER heLICaL BaR PLC report & accounts 2014 ChaIRMaN’s stateMeNt 15 Your company has produced record results with pre-tax profits of £101.7m, being the highest since it became a property company in 1984, 30 years ago. The total unleveraged return of its property portfolio, as measured by iPD, was 23.8%, compared to the iPD Universe of march valued funds of 13.4%. Total property return increased by 290% to £140.1m (2013: £35.9m) and included continued growing rents of £29.8m (up 21.6% on 2013) and development profits of £65.0m (2013: £7.0m), a remarkable increase of 828%! Diluted EPRA net asset value per share increased by 18.6% to 313p (2013: 264p). Total Shareholder Return for the year to 31 March 2014 was 61.1%, compared to returns of companies in the FTSE 350 Real Estate Super Sector Return Index of 27.4% and for the wider UK Equity Market as a whole of 8.8%. These record results allow the Board to continue its progressive dividend policy and to recommend to shareholders a final dividend of 4.75p, an increase of 28% on 2013 (3.70p), taking the total for the year to 6.75p, an overall increase of 22% (2013: 5.55p). This year’s results reflect the culmination of many years’ work on two very profitable schemes on which helical acted as development manager. Details of the projects at White City, London W12 and 200 Aldersgate, London EC1 are set out later in this report but together they contributed £61.0m (2013: £1.0m) of the £65.0m development profit made by the Group during the year. Our decision to invest in the regions for income and in London for capital growth continues to create shareholder value with see-through net rents of £29.8m and gains on sale or revaluation of the investment portfolio of £45.0m, including an 18.6% valuation increase on our London assets. We now have an investment portfolio of over £600m of which 43% is in London and the remaining 57% in regional assets mainly, but not solely, held for income generation. 18.6% INCREASE IN DILUTED EPRA NET ASSET VALUE PER S hARE £600m INVESTMENT PORTFOLIO 46% LOAN TO VALUE £101.7m PRE - TAx PROFITS 61.1% TOTAL S hARE hOLDER RETURN 22% INCREASE IN TOTAL DIVIDEND The expansion of the Company’s activities by investing in London and the regions was financed by the proceeds of an £80m Retail Bond issued in June 2013, and bank facilities provided by our banking partners. Our business model is predicated on the basis that we are able to read and understand the real estate cycle. We use gearing on a tactical basis, being raised to accentuate property performance when property returns are judged to outperform materially the cost of debt. however, we remain nimble enough to reduce our exposure to the cycle at the appropriate time. Our medium to long term target for our loan to value, the ratio of net borrowings to the value of property, is 50% and at 31 March 2014 this ratio was 46% (2013: 46%). The Group is well positioned to face the future with a sound financial base, having increased its income stream by replacing low growth assets with higher yielding retail properties, refinancing maturing debt with longer term bank facilities and reducing its exposure to any future interest rate rises by entering into hedging instruments, taking advantage of low interest rates. In addition, and with the backing of the major property lending banks, the Group has access to a number of new bank facilities which, when added to its cash balances, provides a level of liquidity and resources that enable it to continue to rebalance its portfolio. We believe that there are further opportunities in today’s real estate market to add to the portfolio, boosting income returns and the potential for capital gains. In my statement in May 2013 I noted that I believed we were on the cusp of returning to delivering outperformance. These results are the vindication of that belief. Looking forward, our London development schemes at The Bower, Old Street, Barts Square, Maple house, Clifton Street, Creechurch Place and hammersmith Town hall provide comfort that, in the absence of a major economic downturn, and with an investment portfolio providing growing income and capital surpluses, the Company is well placed to continue to deliver outperformance and ongoing value for shareholders. nigel mcnair Scott Chairman 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION16 ChIeF exeCUtIve’s stateMeNt “Helical aims to deliver market leading returns by acquiring higher yielding investment properties, applying a rigorous approach to asset management and deploying limited equity through a variety of different structures into development situations which have the potential to be highly profitable.” The first half of the financial year was dominated by the outstanding success of the projects at White City, London W12 and at 200 Aldersgate, London EC1. It would be wrong not to reflect on these results as both schemes illustrate the ‘helical model’ of applying limited equity and hard work to create exceptional performance. To remind shareholders, these two projects resulted in a net cash receipt of £62m, an outstanding return on a total of £1.5m invested. We acquired the 10 acre site south of the A40 at White City in joint venture with Aviva and worked with them over a number of years helping to create the vision for the Mayor’s Opportunity Area, resulting in a resolution to grant planning permission for a 1.5m sq ft mixed use development. The site was sold to Imperial College in September 2013 crystallising the substantial profit payment. The second significant transaction involved us working with Deutsche Pfandbriefbank on the refurbishment and letting of the 367,000 sq ft office and retail building at 200 Aldersgate, EC1. Last summer we completed the final letting and oversaw the sale of the building for £228m and, as a result, helical received a substantial profit-share payment. My fellow directors Gerald Kaye and Matthew Bonning-Snook deserve recognition for these outstanding achievements. Shareholders will recall that at the time of the 2012 accounts we undertook to augment our investment portfolio to 75% of the Company’s assets, reducing the development/risk element of the business to 25%. I am pleased to report that we have achieved what we set out to do. We also undertook at that time to divide the investment portfolio between investments in the regions (shopping centres, retail parks and logistics) chosen for high yields and income, and assets in central London to provide capital growth. I am pleased to report that by recycling our capital and taking advantage of the successful issue of an £80m retail bond last summer, we have been able to increase the size of our share of the property portfolio to over £800m. We have maintained the high yields from our regional investments and achieved an 18.6% capital gain from our investment assets in central London. 18.6% CAPITAL GAIN ON L ONDON ASSETS 396,000 sQ Ft SI zE OF REFURBISh ED OFFICES AT Th E B OWER, EC1 94 aPaRtMeNts FIRST P hASE OF BARTS SQUARE £62m NET CAS h RECEIPTS ON Wh ITE C ITy, W12 AND 200 ALDERSGATE, EC1 75:25 RATIO OF I NVESTMENT TO DEVELOPMENT £80m RETAIL BOND ISSUE We are now turning our attention to our current development portfolio as it is these schemes, together with continuing capital gains in our investments that will drive the Company forward in the future. We are particularly pleased to have agreed a joint venture with hOOPP (healthcare of Ontario Pension Plan) to develop speculatively the 273,000 sq ft office scheme in EC3, now renamed Creechurch Place. We are beginning construction this summer for delivery in Q4 2016. We, in partnership with Crosstree Real Estate Partners, are now on site at our 396,000 sq ft office refurbishment at The Bower, Old Street, EC1. Further developments at Maple house, City Road, EC1 and Clifton Street, EC2 complete our programme in the burgeoning Shoreditch tech belt. At Barts Square, EC1, our scheme in partnership with Baupost, we are on track to start the first phase of 94 apartments in January 2015. Subsequent phases comprise two office buildings of 202,000 sq ft and 23,500 sq ft, a further 121 apartments and retail/A3. Working jointly with Grainger, we have received planning consent for a mixed use development adjoining hammersmith Town hall that comprises offices for the Council, 196 apartments, a cinema, retail, restaurant and café space. At the same time, work on our 220,000 sq ft pre-let and pre-sold development for Scottish Power in Glasgow proceeds to plan. We live in a time of short supply in most sectors yet the improving economy is giving rise to strong occupational demand. helical has been fortunate in timing its development acquisitions; all are well structured financially and we look forward to delivering and monetising these projects over the next few years. We have had an outstanding year and are exactly where we planned to be. No doubt there will be a few blips along the way, but we remain positive on the prospects for our market place. We continue to focus on London offices and high yielding regional property for the investment portfolio whilst building out the London development programme. We remain highly focused, highly incentivised and confident in our prospects over the next two to three years. It remains for me to thank all the members of the team for their outstanding efforts and also to express my thanks to the members of the Board, our bankers, the many professionals who have advised us so well and to you our shareholders. michael Slade Chief Executive 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INvESTmENT/DEvELOPmENT BARTS SQUARE LONDON EC1 17 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeINTRODUCTION 18 INvESTmENT CHURCHgATE & lEE HOUSE MANChESTER 250,000 sQ Ft OFFICES ACROSS 2 BUILDINGS OVER 8 FLOORS the 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. heLICaL BaR PLC report & accounts 2014 objectives, strategy and business model Key performance indicators investment portfolio overview investment portfolio statistics principal investment properties development programme Financial review principal risks report corporate responsibility 20 22 24 26 28 32 38 42 45 19 STRATEGIC REPORT heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report20 oBjeCtIves, stRategy aNd BUsINess ModeL The group’s objective is to deliver market leading returns by acquiring high yielding investment properties, applying a rigorous approach to asset management and deploying limited equity through a variety of different structures into development situations which have the potential to be highly profitable. The Company aims to make excellent returns for its shareholders (which include the management team who own 15% of the Company) through a variety of high margin activities. OUR BUSinESS mODEl AnD STRATEgY investment strategy The investment portfolio, which is mainly let and income producing, has two main purposes: • To provide a steady income stream to cover overheads, interest and dividends; • To produce above average capital growth in the Group’s net asset value. The Group seeks to achieve these aims through careful, disciplined selection of properties, including multi-let offices in London, shopping centres, industrial estates, regional offices and mixed-use portfolios. helical’s key aim, when undertaking this selection process, is to ensure that there is sustainable demand from potential occupiers for all of its assets. helical aims to have a blend of central London properties, where yields are lower but the potential for capital growth higher and properties outside London where surplus cashflow is greater. The Group frequently refurbishes and/or extends its properties to create value. helical also works closely with tenants with the aim of maintaining maximum occupancy in its properties. The Company’s relationship with tenants can lead to opportunities to increase value though re-gearing leases or moving tenants within a building as their respective businesses expand or contract. The Group acquires properties where good management can enhance value rather than relying simply on market improvements. development strategy The Group aims to limit the amount of equity that it deploys into development situations through a variety of different structures. The intention is to maximise the Group’s share of profits in a development by leveraging the capital employed by the Group and with a view to managing the risks inherent in the development process. The Group employs a wide variety of approaches to development activities including: • Participation in profit share situations where no equity investment is required, where helical will seek to minimise its ongoing development fee to maximise its profit share so that its interests are completely aligned with its partners. In this way, for minimal equity commitments, the Company can benefit from a significant profit share if it contributes to a project’s success by using its skills and experience through the entire development process. This participation method was used for the development at 200 Aldersgate, London EC1. • Reduce up-front equity required by entering into conditional contracts or options. helical uses this approach at Creechurch Place and for its foodstore led supermarket development programme, for example Shirley (where land is optioned or put under contract conditional on achieving planning permission and pre-let to a supermarket operator) thereby mitigating the risks of the developments. • Co-investment alongside a larger partner where we have a minority equity stake, receiving a “waterfall” payment whereby we obtain a greater profit share than our percentage investment depending upon the profitability of the project. This strategy is used for the developments at Barts Square, The Bower, Creechurch Place and White City. • Traditional forward funding, where the cost of the development overrun is borne by the developer for a commensurate profit participation. In such a case, the developer will have no equity invested but will underwrite a maximum build cost which bears the risk of costs being in excess of an agreed maximum construction price. HELICAL BAR PLC REPORT & ACCOUNTS 2014INvESTmENT Cli FTOn STREET LONDON EC2 21 43,000 sQ Ft OFFICE BUILDING CURRENTLy UNDER CONSTRUCTION. hELICAL hAS COMMITTED TO ACQUIRE T hIS ASSET UPON ITS COMPLETION, ExPECTED IN SUMMER 2015 heLICaL BaR PLC report & accounts 2014 i n t r o d u c t i o n S S T t R r A a T t E E G g I i C c R r E E p P o O r R t T g o v E r n a n c E F i n a n c i a l S t a t E m E n t S i n v E S t o r i n F o r m a t i o n 22 Key PeRFoRMaNCe IN dICatoRs The Group measures its performance using a number of financial and non-financial key performance indicators (KPIs). Management is incentivised to outperform the Group’s competitors by setting appropriate levels for performance indicators against which rewards are measured. The Company also designs its remuneration packages to align management’s interests with shareholders’ aspirations. Key to this is the monitoring and reporting against identifiable performance targets and benchmarks. 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 2014 was 23.8% (2013: 8.6%) compared to the IPD median benchmark of 13.4% (2013: 3.9%) and upper quartile benchmark of 15.4% (2013: 4.7%). helical Bar portfolio unleveraged returns to 31 March 2014 are as follows: helical IPD helical’s Percentile Rank Source: Investment Property Databank. 1 yr % p.a. 23.8 13.4 4 3 yrs % p.a. 12.4 7.8 4 5 yrs % p.a. 9.6 10.4 59 10 yrs % p.a. 11.6 6.2 2 20 yrs % p.a. 14.5 8.4 1 helical’s trading & development portfolio (22% of gross assets) is shown in IPD at the lower of book cost or fair value and uplifts are only included on the sale of an asset. EPRA nET ASSET VAlUE PER SHARE (PEnCE) A property company’s share price should reflect growth in net assets per share. The 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. 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 EPRA adjusted diluted net asset per share. The adjustments necessary to arrive at this figure are shown in note 33 to these accounts. Management is incentivised to exceed 15% p.a. growth in net asset value per share. The diluted net asset value per share, excluding trading stock surplus, at 31 March 2014 increased by 33% to 288p (2013: 217p). Including the surplus on valuation of trading and development stock, the diluted EPRA net asset value per share at 31 March 2014 increased by 18.6% to 313p (2013: 264p). Diluted EPRA triple net asset value per share increased by 20.1% to 311p (2013: 259p). 2014 2013 2012 0 50 100 150 200 264 250 250 313 300 350 TOTAl SHAREHOlDER RETURn Total shareholder return is a measure of the return on investment for shareholders. The table below demonstrates this return compared to various indices. helical Bar plc UK Equity Market Listed Real Estate Sector Index Direct Property - monthly data 1 2 3 4 1 year p.a. % 61.1 8.8 27.4 14.0 3 years p.a. % 14.0 8.8 14.4 7.6 Performance measured over 10 years p.a. % 15 years p.a. % 5 years p.a. % 20 years p.a. % 25 years p.a. % 7.5 16.4 21.5 9.9 9.8 8.6 4.8 5.8 12.2 4.7 6.3 7.5 13.0 7.7 6.7 8.1 12.0 8.8 5.2 7.5 1 Growth to 31/03/14 2 Growth in FTSE All-Share Return Index to 31/03/14 3 Growth in FTSE 350 Real Estate Super Sector Return Index over 1 year, 3 years, 5 years and 10 years to 31/03/14 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) to 31/03/14 HELICAL BAR PLC REPORT & ACCOUNTS 2014KEy pErFormancE indicatorS continued 23 inVESTmEnT/DEVElOPmEnT PROPERTY RATiO helical’s strategy is to hold approximately 75% of its real estate assets as investment property and 25% as development property. helical believes that at this point in the property cycle, this ratio provides us with sufficient investment return to provide a steady income stream for our investors but allows us to make ‘super-profits’ on our development schemes. 2014 2013 2012 Investment Development 75% 65% 69% 25% 25% 35% 27% 30% 31% AVERAgE lEngTH OF EmPlOYEE SERViCE (YEARS) high levels of staff retention remain a key feature of helical’s business. The Group retains a highly skilled and experienced team. Below is the average length of service of the Group’s UK employees: 2014 2013 2012 0 2 4 6 8 EnERgY USAgE AT OUR HEAD OFFiCE (KWH) The Group’s high-level corporate commitments to environmental issues are outlined in the Group’s Environmental Policy which can be found on helical’s website. Despite increases in our team the total energy usage at our head office has remained constant. 2014 2013 2012 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 Electricity Gas HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report24 INvestMeNt Po RtFoLIo oveRvIeW The group’s c.£600m investment portfolio provides income to cover all operational and finance costs and dividends. The group has a strong focus on asset management, maximising net operating income and working closely with its tenants. Helical’s goal (over recent years) has been to have 75% of its portfolio in investment properties and 25% in development properties, blending stable recurring income with exposure to potentially superior profitability in developments. The group now has 75% of its assets in investment properties and, having realised its stated goal, will look to retain this balance going forward. Helical’s income stream is diverse and secure with no tenant accounting for more than 5.4% of the rent roll. The group’s average weighted unexpired lease term is 7.2 years (2013: 6.4 years). The income stream has grown steadily since 2010 and is highly reversionary. The passing rent from the investment portfolio is £37.7m (2013: £28.7m) and the estimated rental value of the portfolio is £45.6m (2013: £32.4m) (Helical’s share). This reversionary income will be captured through letting vacant units and rent reviews. Through judicious buying of under-rented buildings in growth areas, securing lettings and undertaking refurbishments, Helical aims to generate substantial capital growth in our property values. ASSET mAnAgEmEnT During the year contracted income increased by £0.37m as a result of new lettings and rent reviews, net of any losses from breaks and expiries (2013: £0.38m). There was significant activity within the investment portfolio with a lease event on nearly 200 leases. The Group concluded £2.0m of new lettings and renewals (6.0% rent roll) and benefitted from uplifts at rent reviews of £0.12m, offsetting the loss of rent at lease end or break (3.7% rent roll) and a further £0.35m through tenant administrations (0.9% rent roll). Rent lost at break/expiry Rent lost to administrations Rent reviews Lease renewals and new lettings Total change (£1.4m) (£0.35m) £0.12m £2.0m £0.37m Overall the Group has seen good letting demand across the portfolio, reducing the vacancy rate from 5.7% (31 March 2013) to 4.6% (31 March 2014). The Group has seen strong take up and rental growth in its London office portfolio with estimated rental values increasing by 7.3% in the year for the London portfolio (excluding Barts Square and The Bower at Old Street which will be redeveloped). SAlES AnD ACQUiSiTiOnS There has been significant sales and purchase activity reflective of an increasingly buoyant property market. Since 31 March 2013 the Group has sold £156.7m (2013: £50.8m) (helical’s share) of property. Significant sales include Battersea Studios for £35.0m, TK Maxx in Cardiff for £14.8m and Asda in Clydebank for £12.1m (helical’s share £7.3m), as well as our successes at 200 Aldersgate and White City. helical completed £11.7m of sales of units from our retirement village portfolio (2013: £10.6m). The Group has been extremely active acquiring properties over the year, made possible through profits realised from 200 Aldersgate and White City and with funds raised from the retail bond. Reflecting the strategy of acquiring higher yielding assets outside London for cashflow and lower yielding assets in London for capital growth, significant acquisitions included Enterprise house, Paddington for £30.75m; New Loom house, Whitechapel for £34.2m; Maple house, City Road for £17.55m; Artillery Lane, City of London for £6.8m; huddersfield Retail Park for £17.0m; Churchgate and Lee house, Manchester for £34.0m and a mixed use office, industrial and retail portfolio known as the Quartz portfolio for £48.6m. Total acquisitions for the year were £199.9m, (2013: £60.8m). FUTURE inVESTmEnT ACQUiSiTiOnS The market is increasingly competitive both in and outside London although the Group continues to find good value in its core markets as demonstrated by purchases in Manchester (for £34m) and, post year end, the Constellation portfolio, comprising 10 industrial and office properties for £40m. HELICAL BAR PLC REPORT & ACCOUNTS 2014invEStmEnt portFolio ovErvi EW continued DEvELOPm ENT 25 mAP lE HOUSE 37-45 CITy R OAD, EC1 62,000 sQ Ft OFFICE SCh EME WIT h COMPLETION DUE SUMMER 2015 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report26 INvestMeNt PoRtFoLIo statIstICs The following refers to helical’s share of the investment portfolio. PORTFOliO YiElDS Initial yield % Reversionary % Yield on letting voids % Equivalent yield (AiA) % Industrial London offices Regional offices Retail Total 8.7 4.2 7.5 7.2 6.2 10.8 6.7 8.6 7.9 7.5 9.2 6.0 8.2 7.6 7.1 VAlUATiOn mOVEmEnTS, PORTFOliO WEigHTing AnD CHAngES TO REnTAl VAlUES Industrial London offices Regional offices Retail Other Total Weighting % Valuation increase % 1.8 44.2 11.8 40.9 1.3 100.0 5.3 18.6 1.2 0.4 21.9 8.1 9.0 6.1 8.1 7.5 7.1 ERV change since Mar 2013 % - 7.3 - -0.5 - 2.1 Note: includes sales, purchases and capex. CAPiTAl VAlUES, VACAnCY RATES AnD UnExPiRED lEASE TERmS Industrial London offices Regional offices Retail Total Note: Vacancy excludes properties held vacant for redevelopment (e.g. Maple house). Capital value psf £ Vacancy rate by area % Average unexpired lease term (years) 51 332 146 129 185 1.0 0.6 17.8 3.5 4.6 10.2 6.1 7.4 7.6 7.2 HELICAL BAR PLC REPORT & ACCOUNTS 2014invEStmEnt portFolio StatiSticS continued 27 lEASE ExPiRiES OR TEnAnT BREAK OPTiOnS % of rent roll Number of leases Average rate per lease (£) 2014 9.9 117 2015 9.6 91 2016 13.9 101 2017 11.8 71 2018 9.8 79 32,600 40,400 52,800 63,900 47,500 We have a strong rental income stream and a diverse tenant base, with no single tenant accounting for more than 5.4% of the rent roll. The top 10 tenants account for 25.2% of the total rent roll and the tenants come from diverse industries. Rank 1 2 3 4 5 6 7 8 9 10 Total Tenant Network Rail Endemol Barts and the London NhS Trust Nicholl Food Packaging Capita Curzon Estates Economic Solutions Thames Water homebase Somerfield The total rent roll has increased from £30.6m in March 2013 to £37.3m in March 2014. Tenant industry Infrastructure Media Government Manufacturing Professional Services Manufacturing Government Infrastructure Retail Retail Rent roll % 5.4 4.1 3.2 2.0 2.0 2.0 1.8 1.6 1.6 1.5 25.2 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report28 PRINCIPaL INvestMeNt PRoPeRtIes centraL LonDon oFFIces SHEPHERDS BUilDing ShEPhERDS BUSh, W14 This 151,000 sq ft multi-let office building close to Westfield shopping centre maintains an occupancy approaching 100%, as it has for seven consecutive years. The refurbishment of the common parts including new receptions and café/bar is almost complete, enhancing tenant amenities. Significant rental growth is beginning to be seen with ERV now between £35.00 psf and £37.50 psf compared to a current average rent of £25.00 psf. EnTERPRiSE HOUSE PADDINGTON W2 This freehold property adjacent to Paddington Rail Station was acquired on a sale and lease back agreement from Network Rail, which holds a 20 year lease without breaks. THE BOWER, 207 OlD STREET LONDON EC1 This 3.12 acre asset was acquired in November 2012 for £60.8m in joint venture with Crosstree Real Estate Partners LLP (helical interest 33.3%). The site is in the heart of the Shoreditch Tech Belt, an area of London which is a hub for technology, media and telecommunications companies and which is benefitting from substantial investment in infrastructure. Since acquisition, planning consent has been obtained to increase the floor space on the site by 106,000 sq ft, to refurbish existing areas and significantly upgrade the public realm with the creation of a new pedestrian street. Building work started on Phase 1 in January 2014 comprising The Warehouse, 127,746 sq ft and The Studio 22,346 sq ft, and is due for completion in April 2015. During this process rental income is still being received on the retail parade and the office building at 207 Old Street. The basement area under the retail parade has been let to Gym Box at a rent of £150,000 pa, who will be carrying out their own fit out work. Phase 2, comprising The Tower, 171,900 sq ft, is due to commence Q2 next year. Empire house has been pre let to z hotels at a rent of £650,000 p.a. and they are carrying out their own refurbishment and fit out works due for completion in April 2015. The remaining ground floor space in this building is under offer to a restaurant. 1 Shepherds Building 2 Barts Square 3 Enterprise house 4 New Loom house 5 Clifton Street 1 2 3 4 5 heLICaL BaR PLC report & accounts 2014 principal invEStmEnt propErti ES continued 29 BARTS SQUARE LONDON EC1 In joint venture with The Baupost Group LLC (Baupost 66.7%, helical 33.3%) helical owns the freehold interest in land and buildings at Bartholomew Close, Little Britain and Montague Street, a 3.2 acre site adjacent to the new Barts hospital and just south of Smithfield Market. The current buildings comprise 420,000 sq ft let to the NhS for circa £3.5m per annum on a number of short term leases that expire between 2014 and 2016. Planning consent has been obtained for a comprehensive redevelopment of 19 buildings to provide a total of 215 residential apartments, two office buildings of 202,000 sq ft and 23,500 sq ft, 21,800 sq ft of retail /A3 at ground floor as well as major public realm improvements, which will be incorporated into the wider Smithfield Area Strategy being worked up by the City. Phase 1, comprising 94 residential units, is due to commence in January 2015. nEW lOOm HOUSE WhITEChAPEL E1 This 112,000 sq ft listed building was acquired during the year. Plans are being developed for a refurbishment of the reception and common parts, including the provision of a café/bar. Strong rental growth is already being achieved from a starting point of average rents at £16 psf. Further increases in rents are anticipated, as the opening of Crossrail approaches. CliFTOn STREET ShOREDITCh EC2 The Group has exchanged contracts to acquire this 43,000 sq ft office building upon completion of its construction anticipated for summer 2015. The building is located in the heart of Shoreditch which is experiencing strong occupier demand from technology and media tenants. mAPlE HOUSE 37-45 CITy ROAD EC1 Maple house is an existing 50,000 sq ft office building in London acquired in June 2013. Planning permission was obtained during the year for a complete refurbishment of the building, which will comprise a new additional floor and extensions to the third floor, landscaped courtyard and entrance pavilion to the rear and changes to the façade to improve light to the lower floors. Works have commenced and are due to complete by Q2 2015. heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report30 principal invEStmEnt propErti ES continued retaIL Our strategy is to acquire multi-tenanted properties where there is significant opportunity to increase net operating income and capital values. We acquire properties with rents which are low compared to equivalent buildings, providing scope for rental growth. We spend a considerable amount of time talking to our tenants both prior to acquiring properties and during the course of our ownership to ensure that the space they occupy continues to be fit for purpose. CORBY TOWn CEnTRE CORBy THE mORgAn QUARTER CARDIFF This asset, compromising nearly 40 acres, is virtually the entirety of the commercial centre of Corby. It was acquired in 2011. Anchor tenants include Primark, TK Maxx, h&M, Argos and Wilkinsons. A number of projects are underway including extending units, conversion of vacant offices to residential and a new gym. Acquired empty in 2005 this asset was comprehensively refurbished and let to retailers including Urban Outfitters, TK Maxx and Molton Brown. Since the opening of St David’s 2 in 2009, The hayes has become one of Cardiff’s principal retailing pitches. During the year the Group sold the TK Maxx unit which formed part of the estate for £14.8m, a 5.75% net initial yield. helical concluded a number of rent reviews on The hayes with positive outcomes and let a number of units in the Arcades. Phase 1 of the conversion of the vacant upper parts of the centre to offices is complete and fully let and phase 2 is well underway further enhancing net operating income. ClYDE SHOPPing CEnTRE CLyDEBANK This asset, which comprises the majority of the town’s retail offer, was acquired in 2010 in joint venture with a private investor. The Group has a 60 percent economic interest in the centre and undertakes all of the asset management activities. During the year we sold the Asda unit for £12.1m, representing a 5.15% net initial yield. Work is close to completion on an extension for Pure Gym which will add to the leisure offer in the town. HUDDERSFiElD RETAil PARK This fully let retail park was acquired during the year. Tenants include Aldi, Matalan and Dunelm. heLICaL BaR PLC report & accounts 2014 principal invEStmEnt propErti ES continued 31 1 huddersfield Retail Park 2 Corby Town Centre 3 The hayes, Cardiff 4&5 Clyde Shopping Centre 3 4 1 2 5 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report 32 deveLoPMeNt PRogRaMMe heLICaL BaR PLC report & accounts 2014 dEvElopm Ent programm E continued 33 centraL LonDon West LonDon 200 AlDERSgATE EC1 King STREET hAMMERSMITh, W6 BRiCKFiElDS WhITE CITy, W12 King Street, hammersmith is a mixed use scheme, in joint venture with Grainger plc, for the regeneration of the west end of King Street. Following submission of revised plans the Group obtained a resolution to grant planning in November 2013 following which planning permission was granted when the section 106 Agreement was signed in April 2014. The redevelopment will provide 196 high quality new homes; a three screen cinema to be operated by Curzon new retail, restaurant and café space; replacement offices for the Council and a new public square. In joint venture with Aviva, the Group obtained a resolution to grant planning permission for a residential-led mixed use scheme on a 10 acre site immediately adjacent to White City underground station. The Eric Parry designed master plan comprises c. 1.25 million sq ft of residential, 210,000 sq ft of commercial and 60,000 sq ft of retail, leisure and community uses. In May 2013, contracts were exchanged for the sale of the site and completion of the sale took place in September 2013, triggering helical’s profit share. helical was appointed asset and development manager by Deutsche Pfandbriefbank in May 2010. The brief was to refurbish and let this office building, vacant since 2005 when the previous tenant, Clifford Chance, relocated to Canary Wharf. The reception areas and common parts were redesigned and the atrium re-clad, creating a “vertical village” for office users comprising a variety of floor-plates to suit a range of different occupiers, as well as exceptional tenant facilities, including a concierge, cycle store and changing facility service, an on-site gym and a café and business lounge. Refurbishment works were completed in January 2011 when the building was re-launched. The building comprises 348,000 sq ft of offices, 19,810 sq ft of retail and 39,317 sq ft of basement leisure space. By June 2013 we had let 338,000 sq ft of office space, 9,000 sq ft of retail and the whole of the basement space to Virgin Active, and the building was sold to clients of Ashby Capital in September 2013. This sale triggered the development management profit share. CREECHURCH PlACE (FORmERlY miTRE SQUARE) EC3 Creechurch Place, London EC3 (formerly Mitre Square) is a landmark City office scheme in the heart of the insurance sector in London. During the year the Group completed the purchase of 1 Mitre Square and extended the conditional purchase agreement with the City for the adjoining site. Demolition has been completed to facilitate the construction of a new building comprising 271,000 sq ft NIA of offices and 2,000 sq ft of retail. In May 2014, the Group signed a joint venture agreement with hOOPP (healthcare of Ontario Pension Plan) to redevelop the site. Under the terms of the joint venture, hOOPP and helical will jointly fund the project on a 90:10 split, with helical acting as development manager, for which it will receive a promote payment depending on the successful outcome of the scheme. It is anticipated the completed development will have a capital value of circa £250m. 1 Creechurch Place 2 hammersmith Town hall 3 200 Aldersgate 1 2 3 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report 34 dEvElopm Ent programm E continued dEvElopm Ent programm E continued out oF LonDon oFFIces ST VinCEnT STREET GLASGOW In partnership with local development partner, Dawn Developments Ltd, helical is the development manager for the construction of the new headquarters of Scottish Power at St Vincent Street, Glasgow. The completed building will comprise circa 220,000 sq ft of prime office space in the heart of the City’s commercial district. Funded by M&G Investments, the scheme is under construction and is due to be completed in July 2015. Scottish Power may also look to involve helical in delivering the fit out of their office spaces. As part of the overall deal, helical are taking on three existing Scottish Power sites which are surplus to requirements. retaIL PARKgATE ShIRLEy, WEST MIDLANDS lEiSURE PlAzA MILTON KEyNES The Shopping Centre at Parkgate, Shirley, where helical has a 50% interest has completed on site and the 80,000sq ft Asda together with a number of other retailers have opened successfully for trade. The space beyond the food-store is 66% pre-let to occupiers such as Peacocks, 99P Stores, Pizza Express, Wetherspoons, Prezzo and Shirley Library. Two residential sites have been sold off to provide 97 private and extra-care units and six apartments and eight townhouses are being built out directly with a final phase to follow later in the year. A second phase residential scheme is being put together on a site of 10 acres opposite the Parkgate scheme and a Planning Application is likely to be submitted later this year. Leisure Plaza is a 50:50 joint venture with Abbeygate Developments. The site has consent for an 80,000 sq ft supermarket, 33,000 sq ft of Open A1 retail and the refurbishment of the existing ice rink. The supermarket has been pre-let to Morrisons on a long lease and pre-sold to Aviva Investors’ Lime Property Fund for circa £40m, a headline yield of 4.25%. The joint venture has realised a profit of circa £1.6m on the sale of the land to the fund and should make a further profit over the course of the development, which is due to complete in Q4 2014. The Group has recognised £2.0m of development profit (helical’s share) during the year. TRURO In Truro the Group has entered into a Conditional Purchase Agreement on the six acre Truro City Football Club site and a Planning Application is being worked up for a 78,000 sq ft non-food retail park. There are a healthy number of requirements from retailers not currently represented in Truro. The scheme proposals will provide for the relocation of the football club. CORTOnWOOD Planning consent has been secured at Appeal and marketing is in hand for an 80,000 sq ft Open A1 non-food retail park. A start on site is anticipated in the first half of 2015. Strong interest has been received from high quality retailers. KingSWinFORD A conditional contract has been secured on a site owned by Ibstock and a Planning Application for a 60,000 sq ft non food scheme is to be submitted in the Autumn. The development will provide the function of a district centre to the large number of new homes being built in the locality. heLICaL BaR PLC report & accounts 2014 dEvElopm Ent programm E continued dEvElopm Ent programm E continued 35 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 Sports Direct, T K Maxx, Media Expert, Makro, Deichmann, Smyk, Komfort and others. EUROPA CEnTRAlnA GLIWICE This retail park and shopping centre was built in 50:50 joint venture with clients of Standard Life. The scheme is situated to the south of Gliwice at the intersection of the A4 and A1 motorways. This highly visible scheme has good accessibility and is becoming a major regional shopping destination. It comprises approximately 66,000 sq m (720,000 sq ft) of retail space, incorporating three distinct parts, being a foodstore, DIy and household goods and fashion. The scheme is now over 85% let to Tesco, Castorama, h & M, Media Saturn, Sports Direct, Jula and others. Construction completed in February 2013 and the scheme opened on 1 March 2013. The sale of 50% in 2011 includes a provision that we will sell the remaining ownership stake two years after the date of completion of the development to the same clients of Standard Life, which is expected to complete by March 2015. 1 2 3 4 6 5 1 St Vincent Street 2 Parkgate, Shirley 3 Leisure Plaza 4 Park handlowy Mlyn 5&6 Europa Centralina i n v E S t o r i n F o r m a t i o n heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTgOVeRNaNCeStrategic report 36 dEvElopm Ent programm E continued dEvElopm Ent programm E continued 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 which provides no maintenance or security issues. With access to a central clubhouse containing a bar and restaurant facilities, health and fitness rooms and surrounded by maintained grounds, this retirement option is proving increasingly popular. BRAmSHOTT PlACE LIPhOOK, hAMPShIRE The original Bramshott Place Village was an Elizabethan mansion built in 1580, although now only the original Grade II listed Tudor Gatehouse remains, which we have fully restored. The land and buildings were derelict when 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, has completed. To date, the Group has sold 138 units, with reservations on a further five units, with just nine units, mainly apartments, left to sell. DURRAnTS VillAgE FAyGATE, hORShAM, WEST SUSSEx Durrants Village, a 30 acre site, had operated as a sawmill with outside storage for many years. The Group was granted planning permission, at appeal, in May 2009 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. Following changes to the scheme the development will be for 171 units. The first phase (48 units) started in May 2012 for the construction of the retirement village and clubhouse and the Group has sold nine units, exchanged on one further sale and has reservations on 12 units with up-field reservations on a further 12 units in future phases. 3 4 1 2 1&2 Durrants Village 3 Maudslay Park 4 Millbrook Village heLICaL BaR PLC report & accounts 2014 dEvElopm Ent programm E continued dEvElopm Ent programm E continued 37 mAUDSlAY PARK, GREAT ALNE, WARWICKShIRE millBROOK VillAgE, ExETER This is a Green Belt site which has 320,000 sq ft of built footprint and benefits from Major Development Site planning policy. Covering 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 have completed and construction started in April 2014. The Group has reservations on five units. 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. Demolition, site clearance and archaeological survey work have been completed. In 2011 we received planning consent for 63 open market housing units on part of the site and sold this part in summer 2012. Construction of a 164 unit retirement village and clubhouse in phases on the remainder of the site commenced in October 2013 and the Group has reservations on 17 units. heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report38 FINaNCIaL RevIeW REViEW OF THE YEAR These outstanding results, created by a combination of significant development profits, growing rental surpluses and revaluation gains on the investment portfolio, are reflected in shareholders’ funds which increased by 34% in the year to 31 March 2014. This growth in the Group’s balance sheet has enabled it to continue its rebalancing of the Group’s property portfolio towards its intended 75:25 target balance between an income producing portfolio and non-income producing development stock. The Group’s portfolio, including its share of property held in joint ventures, increased to £802m (2013: £626m), largely the result of investment property acquisitions during the year. This expansion of the Group’s activities has been undertaken without increasing its loan to value, which remained at 46% (2013: 46%) and with a reduction in gearing to 109% (2013: 113%). During the year the Group continued to lengthen and diversify its borrowings profile. New secured borrowings included a £75m revolving credit facility and a £100m investment facility, and these were supplemented by the issue of an unsecured retail bond, raising a further £80m. With the repayment of short term debt, these new sources of funding enabled the Group to extend its overall debt maturity profile to 3.9 years (2013: 2.6 years), albeit with an increased weighted average cost of debt of 4.5% (2013: 3.9%). At 31 March 2014, the Group had unutilised bank facilities of c. £106m and c. £80m of cash. These facilities are available to fund the Group’s retirement village programme, refurbishment works at Maple house, City Road EC1 and The Bower, Old Street EC1. EPRA EARningS Adjusted diluted EPRA Earnings per share, before performance related awards, increased by 478% to 47.4p per share (2013: 8.2p), reflecting increased development profits of £65.0m (2013: £7.0m) and the Group’s share of net rental income of £29.8m (2013: £24.5m). After taking into account performance related bonuses and share awards of £17.9m (2013: £6.8m), EPRA Earnings per share was 32.5p (2013: 2.4p). EPRA Earnings Earnings as per note 14 Add: performance related awards Add: adjustments as per note 14 Adjusted EPRA Earnings Less: performance related awards EPRA Earnings Adjusted diluted EPRA Earnings per share Diluted EPRA Earnings per share EPRA nET ASSET VAlUE 31.03.13 £m 31.03.14 £m 5,867 6,828 (3,023) 9,672 (6,828) 2,844 8.2p 2.4p 87,603 17,860 (48,669) 56,794 (17,860) 38,934 47.4p 32.5p Diluted EPRA net asset value per share increased by 18.6% to 313p per share (2013: 264p). This rise was principally due to a total comprehensive income of £86.7m (2013: £4.3m), less the reduction in the surplus on valuation of the trading and development stock of £27.5m (2013: £49.9m). EPRA net Asset Value Diluted net asset value EPRA Adjustments for: Fair value of trading and development stock, including in joint ventures Fair value of financial instruments Deferred tax Diluted EPRA net asset value 31.03.13 £m 31.03.13 per share p 31.03.14 £m 31.03.14 per share p 257,242 217 347,506 288 49,865 6,048 578 313,733 27,479 (243) 2,444 264 377,186 313 HELICAL BAR PLC REPORT & ACCOUNTS 2014 Financial rEviEW continued 39 inCOmE STATEmEnT The main focus of the year was on targeting and working towards the many development milestones that were set in 2012 and 2013 and which had a substantial impact on the income statement for the year under review. Apart from these milestones, we continued to dispose of investment properties which had reached their short to medium term potential. We added to our investment portfolio with the acquisition of c. £200m (£189m plus costs) of property compared to £72m of sales. REnTAl inCOmE AnD PROPERTY OVERHEADS Gross rental income receivable by the Group in respect of wholly owned properties increased by 16.2% to £30.0m (2013: £25.8m), mainly reflecting the acquisitions made throughout the year. The Group’s share of gross rents receivable in joint ventures increased by 6.5% to £6.6m (2013: £6.2m). The see-through gross rents totalled £36.6m, an increase of 14.3% on 2013. After taking account of head rents payable on those properties held on long leases, and the costs of managing the assets, void costs and the amortisation of annual letting costs, see-through net rents increased by 22.0% to £29.8m (2013: £24.5m). Bad debts from tenant administrations and failures fell to 0.4% of gross rents (2013: 2.4%). DEVElOPmEnT PROgRAmmE Turning to the development programme, the letting and sale of 200 Aldersgate, London EC1 by Deutsche Pfandbriefbank and the sale of a 10 acre site at White City, London W12 by our joint venture partner Aviva, realised total development profits of £62.0m, of which £1.0m had been recognised last year. The retail schemes at Leisure Plaza, Milton Keynes and Shirley, West Midlands, contributed £2.2m of profit whilst our retirement village development programme contributed profits of £1.5m from continued sales at Bramshott Place, Liphook and from the first completions at Durrants Village, Faygate. Development management fees from our schemes at Glasgow, Barts Square and Riverbank house contributed a further £0.6m and improving land values allowed us to write back provisions of £0.5m. Set against these profits were the costs of our Polish operation of £0.6m, resulting in the Group’s share of net development profits at £65.0m (2013: £7.0m). SHARE OF RESUlTS OF jOinT VEnTURES As mentioned above, helical has increasingly sought to acquire larger assets in joint ventures with property funds that provide the majority of the equity required to purchase the assets, whilst relying on the Group to provide the asset management or development expertise. These joint ventures include our share of the investment properties at Clyde Shopping Centre, Clydebank; Barts Square, London EC1 and The Bower 207 Old Street, London EC1, and our development schemes at Europa Centralna, Gliwice, Poland; Shirley Town Centre, West Midlands; Leisure Plaza, Milton Keynes and King Street, hammersmith. Detailed analysis of the financial position of our share of these joint ventures is provided in note 19 to this report and the see-through analysis on page 108. In the year under review, net rents of £5.4m (2013: £4.9m) were received, offset by net finance costs of £2.5m (2013: £2.2m). A gain on revaluation of the investment portfolio of £15.7m (2013: £3.1m), primarily arose in respect of Barts Square and Old Street. Net of taxes, our joint ventures contributed £16.4m (2013: £3.9m). ADminiSTRATiOn COSTS Administration costs, before performance related awards, increased by 9%, from £8.1m to £8.8m, mainly arising from costs incurred in connection with the proposed move of the Company’s head office. Performance related share awards and bonus payments increased to £15.7m (2013: £6.0m) for the year. Of this amount, the £6.3m (2013: £1.9m) charge for share awards under the Performance Share Plan is expensed through the Income Statement but added back to shareholders funds through the Statement of Changes in Equity. The £9.4m (2013: £4.1m) accrual for bonus payments comprises £5.1m (2013: £2.7m) which will be paid in June 2014, £2.9m (2013: £0.8m) which will be carried forward to next year in accordance with the terms of the Annual Bonus Scheme 2012 and £1.4m (2013: £0.6m) which will be paid in deferred shares to be held for a minimum of three years. In addition, National Insurance of £2.2m (2013: £0.8m) has been accrued for in the year. Administration costs Share awards Directors and senior executives bonuses NIC on share awards and bonuses Total 2013 £000 8,092 1,864 4,130 834 2014 £000 8,816 6,333 9,357 2,170 14,920 26,676 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report40 Financial rEviEW continued FinAnCE COSTS, FinAnCE inCOmE AnD DERiVATiVE FinAnCiAl inSTRUmEnTS Interest payable on bank loans including our share of loans on assets held in joint ventures but before capitalised interest increased to £17.3m (2013: £12.7m), reflecting the increased debt taken on to finance the expansion of the Group’s investment activities. Capitalised interest increased from £2.5m to £2.8m as development schemes progressed. Other interest payable increased from £1.7m to £2.5m. As a consequence of these movements, total finance costs increased by £5.2m from £11.8m to £17.0m. Finance income earned on cash deposits of £1.8m (2013: £0.9m) was boosted by the £2.9m profit realised on the purchase of a loan at fair value. Derivative financial instruments have been valued on a mark to market basis and a credit of £5.3m (2013: charge of £2.6m) has been recognised in the Income Statement. TAxATiOn The deferred tax asset is principally derived from tax losses which the Group believe will be utilised against profits in the foreseeable future. inVESTmEnT PORTFOliO The issue of the £80m Retail Bond and development receipts of £62m, together with sales of over £70m of investment assets, where our asset management initiatives were completed, provided funds, net of loan repayments, for £200m of acquisitions and value enhancing capital expenditure. The sales of the investment assets generated a profit of £8.6m (2013: loss of £2.4m). The £200m of additions to the investment portfolio, net of the £48m book value of sales together with a transfer of £9m from trading stock and added to the revaluation surplus of £21m, increased the value of the wholly owned investment properties from £312m to £493m. In joint venture the revaluation surpluses at Clydebank, Barts Square and The Bower at Old Street of £15.7m increased our share of the investment portfolio held in joint ventures to £107.5m. Together, the Group’s share of the total investment portfolio, on a see-through basis, increased from £407m to £601m. DEBT AnD FinAnCiAl RiSK In total, helical’s outstanding debt at 31 March 2014 of £454.4m had an average maturity of 3.9 years (2013: 2.6 years) and a weighted cost of 4.5% (2013: 3.9%). DEBT PROFilE AT 31 mARCH 2014 – ExClUDing THE EFFECT OF ARRAngEmEnT FEES Total Facility £000’s Total Utilised £000’s Investment facilities 308,431 256,444 Development and site holding facilities Retail Bond Short term working capital facilities 72,500 80,000 10,728 43,937 80,000 727 471,659 381,108 Joint venture bank facilities 89,528 73,282 Total see-through debt 561,187 454,390 The Group arranges its bank borrowings to suit its investment and development intentions as follows: inVESTmEnT FACiliTiES These are typically for four to five years, financing the Group’s investment portfolio and a fully let retail development at Wroclaw in Poland with loan to value and income covenants. The value of the Group’s properties secured on these facilities at 31 March 2014 was £486,280,000 (2013: £319,035,000) with a corresponding loan to value of 53% (2013: 63%). The average maturity of the Group’s investment facilities at 31 March 2014 was 3.7 years (2013: 3.6 years). 2015 £000’s 548 - - 727 1,275 12,453 13,728 2016 £000’s 10,404 3,666 - - 14,070 18,000 32,070 2017 £000’s 74,712 28,752 - - 2018 £000’s 101,900 - - - 2019+ £000’s 68,880 11,519 80,000 - 103,464 101,900 160,399 - 42,829 - 103,464 144,729 160,399 DEVElOPmEnT AnD SiTE HOlDing FACiliTiES These facilities finance the construction of the retirement villages at Durrants Village, horsham, Maudsley Park, Great Alne and Millbrook Village, Exeter. They also include site holding facilities at Telford and fund the holding of the completed developments at hedge End, Southampton and Ropemaker Park, hailsham. The average maturity of the Group’s development and site holding facilities at 31 March 2014 was 3.0 years (2013: 1.9 years). RETAil BOnD In June 2013, the Group raised £80m from the issue of an unsecured Retail Bond with a 6.00% coupon. This bond is repayable in June 2020. Initially, the net proceeds were used to repay secured bank borrowings which were subsequently re-drawn, under the terms of our revolving credit facilities, to fund additions to our investment portfolio. The Retail Bond is included within borrowings repayable within six to seven years in note 25 to the financial statements. SHORT TERm WORKing CAPiTAl FACiliTiES These facilities provide working capital for the Group. HELICAL BAR PLC REPORT & ACCOUNTS 2014Financial rEviEW continued 41 jOinT VEnTURE BAnK FACiliTiES As noted above we hold a number of investment and development properties in joint venture with third parties and include in the above table our share, in proportion to our economic interest, of the debt associated with each asset. Of the amount due to be repaid in the year to 31 March 2015, £11.7m is in respect of the investment holding facility for Barts Square, and timed for a potential redevelopment of the site in 2015. In April 2015, our investment facility on the Clyde Shopping Centre, Clydebank, is repayable. During the year we agreed a new three year facility to January 2017 providing finance for the first phase of the redevelopment of The Bower. We also converted our development facility at Europa Centralna, Gliwice, into an investment facility, repayable in September 2017. The average maturity of the Group’s share of bank facilities in joint ventures at 31 March 2014 was 2.5 years (2013: 2.4 years). CASH AnD CASH FlOW At 31 March 2014, the Group had over £186m (2013: £80m) of cash and agreed, undrawn, committed bank facilities including its share in joint ventures as well as £82m (2013: £27m) of uncharged property on which it could borrow funds. nET BORROWingS AnD gEARing Net borrowings held by the Group have increased during the year from £222.9m to £312.8m. Including the Group’s share of net debt of its joint ventures the Group’s share of total net debt has increased from £286.3m to £369.6m. net borrowings and gearing Net borrowings – Group Net borrowings – Including joint ventures Net assets Gearing – Group Gearing – Including joint ventures HEDging At 31 March 2014 the Group had £291.5m (2013: £135.6m) of fixed rate debt with an average effective interest rate of 4.77% (2013: 4.34%) and £84.6m (2013: £124.1m) of floating rate debt with an average effective interest rate of 3.48% (2013: 3.31%). In addition, the Group had £132.0m of interest rate caps at an average of 4.0% (2013: £82m at 4.00%). In the joint ventures, the Group’s share of fixed rate debt was £29.6m (2013: £27.5m) with an average effective interest rate of 6.03% (2013: 5.12%), and £43.6m (2013: £45.8m) of floating rate debt with an effective rate of 3.33% (2013: 3.76%). In addition, the joint ventures benefited from £49.0m (2013: £51.5m) of interest rate caps at an average of 5.01% (2013: 5.00%). 2012 2013 2014 £227.8m £280.0m £253.7m 90% 110% £222.9m £286.3m £253.8m 88% 113% £312.8m £369.6m £340.5m 92% 109% inTEREST COVER In assessing the results of the Group for each financial year, helical considers its interest cover as a measure of its performance and its ability to finance its annual interest payments from its net operating income, before revaluation gains or losses on the investment portfolio and net realisable provisions on the trading and development stock. In the year to 31 March 2014, this interest cover was 8.3 times (2013: 2.7 times). 2013 £000 29,686 10,893 2.7x 2014 £000 103,174 12,366 8.3x Net operating income See-through net finance costs Interest cover Tim murphy Finance Director 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report42 PRINCIPaL RIsK s Re PoRt Risk is an integral part of any Group’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. As well as seeing changes in our internal and external environment as potential risks, we also see them as being opportunities which can drive performance. Risk management starts at Board level where the Directors set the overall risk appetite of the Group and the risk management strategies. helical’s management runs the business within these guidelines and part of its role is to act within these strategies and to report to the Board on how they are being operated. The Group’s risk appetite and risk management strategies are continually assessed by the Board to ensure that they are appropriate and consistent with the Group’s overall strategy and with external market conditions. The effectiveness of the Group’s risk management strategy is reviewed every six months by the Audit Committee and by the full Board. The risks faced by the Group do not change significantly from year to year but their importance and the Group’s response to them vary in accordance with changes in the internal and external environment. The Board considers not only the current situation but also potential future scenarios and how these might impact our business. The Board has ultimate responsibility for risk within the business. however the small size of our team and our flat management structure allows the executive directors to have close contact with all aspects of the business and allows us to ensure that the identification and management of risks and opportunities is part of the mindset of all decision makers at helical. The principal risks faced by the Group, and the steps taken by the Group to mitigate these risks, are as follows: mARKET RiSK Market risks are risks specific to the economy as a whole and to the property sector. Risk description Mitigation/action Property values decline: Current uncertainties in the world economy mean that future performance is difficult to predict Reduced tenant demand for space helical management reviews external data helical has been active in disposing of non-performing assets and rebalancing its portfolio for the changing market helical keeps a diversified portfolio to prevent being over-exposed to one sector Our focus is on buying well let properties in good locations We continue to ensure that vacant space is kept to a minimum Appropriate timing of investment and divestment decisions Our management team is highly experienced Market conditions result in difficulties in divestment of properties at a time when the proceeds are required for new investments Management constantly reviews the market conditions STRATEgiC RiSK strategic risk includes the risk that the group’s business strategy or capital structure results in the group underperforming the rest of the property sector, or being unable to take advantage of opportunities that may arise. Risk description Mitigation/action Group’s strategy is inconsistent with market conditions, for example: - Asset concentration/lot size impacts on liquidity (e.g. if investments become difficult to sell, does this affect our liquidity?) - Asset concentration/mix creates excessive volatility in property revaluation movements Management constantly monitors and considers changes to the Group strategy in the light of any changes to market conditions. The management team is very experienced and has a good track record in the property market Due to the small size of the Group and the management team, changes to the strategy can be effected quickly HELICAL BAR PLC REPORT & ACCOUNTS 2014principal riSKS rEport continued 43 FinAnCiAl RiSK The group is subject to a number of financial risks due to the way in which it is funded. Risk description Accuracy of property valuations Inability to roll over loans Availability of bank lending Increase in cost of borrowing Breaching loan covenants Mitigation/action helical uses external independent valuers and/or members of executive management with extensive experience in the industry. Management maintains regular contact with valuers to understand movements in valuations Good relationship with several established lending institutions Borrowing is spread between a number of different institutions We arrange debt repayment dates to spread the maturity profile of bank loans over several years Funding requirements are regularly reviewed Interest rates on 100% loans are hedged hedging is regularly monitored to ensure that it remains at an appropriate level Use of interest rate swaps and caps where appropriate Adherence to loan covenants is closely monitored with reference to both current and forecast compliance Breaching covenants of the retail bond Adherence to the retail bond covenants is closely monitored Insufficient liquidity to take advantage of opportunities Maintaining income streams/tenant default Inappropriate capital structure (i.e. too highly geared) Loss of deposits due to banking counterparty failure The Group maintains a sufficient level of cash resources or undrawn committed bank facilities Management ensures that cash resources do not fall below current forecasts Tenant covenant strength is considered when making property decisions Management maintains dialogue with managing agents and tenants to reduce the risk of unexpected non-payment Management ensures there is no over reliance on individual tenants The Group’s capital structure and gearing is constantly monitored to ensure that they reflect investment/development intentions and the Board’s view on the property cycle Management ensures that all deposits remain at well capitalised institutions Regular monitoring of financial institutions PEOPlE RiSK The group’s continued success is reliant on our management and staff and successful relationships with our joint venture partners. Risk description Succession planning Lack of the right personnel to ensure the Group’s strategy is adhered to Retention and incentivisation of key personnel health & safety issues Bribery and corruption risk Mitigation/action The Nominations Committee and the Board review succession planning Senior management team is very experienced The Directors monitor staff resources to ensure they are appropriate to any changes in the business Remuneration is set to attract, motivate and retain high calibre staff Employee turnover is low The Group’s health and Safety policy is updated annually by the Board and reports are reviewed monthly by the Executive Committee and at every Board meeting Use of specialist professional advice Not involved in high risk activities No significant issues reported in the year Anti-bribery policy and procedures are in place which are distributed to all staff. The Board is firmly behind the Group’s anti-bribery stance Management identify and monitor projects with a greater exposure to bribery and corruption We avoid doing business in high risk territories HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report44 principal riSKS rEport continued DEVElOPmEnT RiSK The group derives a significant part of its results from development activity. development profits are more likely to be subject to fluctuation due to external factors as they are more opportunistic in nature. Risk description Mitigation/Action Inability to add to the current development pipeline Changes in legislation leading to delays in receiving planning permission Experienced development team with an excellent track record Good reputation in the property sector Good relationships with planning consultants and local authorities Management keeps up to date with planning legislation Use of specialist professional advisors Lack of demand for new property The Group’s strategy is to avoid doing speculative developments Inability to find suitable contractors/JV partners Counterparty risk (contractors, joint venture partners, contract parties) Well established network of contractors, joint venture partners and professional advisors As helical nears the construction of key projects this risk increases Management monitors counterparties to review their ability to meet their obligations and to monitor the likelihood that they will become insolvent HELICAL BAR PLC REPORT & ACCOUNTS 2014CoRPoRate ResP oNsIBILIty 45 inTRODUCTiOn helical Bar recognises that our business activities impact on the environment and the wider communities in which we operate. As our business involves working with joint venture 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. An endorsement of helical Bar’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 Bar, and informs our evolving approach to corporate responsibility. mAnAging CORPORATE RESPOnSiBiliTY Each year we review and update our environmental management system, which has been in place since 2003, and the updated environmental management system, available on the Company website, is embedded within the operations of helical Bar. Key elements of the system include: • ‘Environment’ and ‘Corporate Responsibility’ policies which set out helical Bar’s high-level commitment across a number of impact areas. These are reviewed at Board level annually and are implemented by our senior management team. • Annual (and rolling) performance targets to enable us to focus our efforts throughout the year on measurable, yet achievable performance goals. This year we have continued to report on energy and water consumption at our large managed multi-let assets and head office, and measured our performance against quantitive targets set in 2013. In addition, we have measured the proportion of waste at our managed assets as well as within our developments. • Key Performance Indicators (KPIs) to help us monitor progress towards these targets and to ensure that we are able to report in line with investor disclosure requirements, notably FTSE4Good. It should be acknowledged that our particular business model with regard to the buying and selling of assets means that absolute performance measures can be difficult to compare year on year. We are currently investigating reporting against selected intensity KPIs. • Checklists to assist us in applying minimum sustainability requirements 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, which was reviewed and updated in the reporting year. In addition we utilise a Contractor Checklist that is issued to individual contractors in order to address our corporate goals at the construction stage. • Effective use of internal audit and review through quarterly meetings of key helical Bar 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 Bar’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 developments/refurbishments or in the management of individual multi-let assets. REViEW OF PROgRESS in THE YEAR TO 31 mARCH 2014 The benefits of managing our environmental and social impacts include increased ability to secure planning consent, improved marketability of assets to prospective tenants, reduced operating costs of assets, mitigation of the risk of future legislation and regulation, and enhanced corporate reputation. 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 are outlined in the Company’s Environmental Policy which can be found on the Company website. The policy details our commitments across a range of impact areas and our development and property management activities. In 2013-14, helical Bar set itself 25 targets to guide the environmental element of 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, timber sourcing, tenant engagement, flood risk and sustainable design and construction. A full list of these targets can be found on the helical Bar website. The performance against the key targets is summarised below. • At our London head office, we aimed to maintain our current performance given the significant improvement achieved in previous years. Usage of gas and electricity showed a decrease of 20% and 2% respectively. • At our managed multi-let offices, we continue to improve energy and water efficiency through the implementation of low and no cost measures. The specific target for 2013 was to achieve a 5% improvement against the 2012 baseline. A review of the data in the table below shows that performance is variable across the portfolio complicated by the changing nature of the portfolio with three new properties purchased and Battersea Studios sold in February 2014. Of those that can be compared, the hub has shown an improved performance of an 11% decrease in electricity consumption and a 7% decrease in both gas and water consumption. Whereas the Shepherds Building has slightly increased its electricity consumption but decreased water consumption. The variation reflects increasing occupancy and ongoing changes to the portfolio structure. • At our managed shopping centres, comparative figures where available indicate a similar story that the performance is allied to overall occupancy and programmed refurbishment. An example is the significant reduction in electricity consumption at Corby Town Centre which is attributed to the demolition of service and walkway areas along with associated lighting. Nevertheless, engagement exercises have also reaped dividends this year. The appointment of an environmental champion within the security team at Clyde Shopping Centre has achieved a 6% reduction in electricity consumption through implementing a lighting switch off campaign. Clyde Shopping Centre also achieved two Green Apple Awards in 2013, UK Gold Winner and Scotland Gold Winner under the category of Retail Shopping Centres in recognition of environmental schemes undertaken. • Water consumption is generally comparable year on year across the shopping centre part of the portfolio. The larger differences at the Guineas, Idlewells and Clyde Shopping Centres are explained by meter and billing anomalies that are currently being resolved. • We continue to offer recycling facilities at all our managed assets. Farm Street, the Shepherds Building, New Loom house, Corby Town Centre, The Guineas and Clyde Shopping Centre are diverting nearly100% waste from landfill. At some of our other managed assets we comfortably exceeded our ongoing target of a recycling rate of at least 35%. In addition, Shepherds Building achieved a Silver Award from First Mile recycling for the amount recycled in 2013. • One ongoing target is to proactively engage with our tenants to encourage improvements in efficient use of the buildings. Individual property managers have engaged with tenants to try and see if there are ways in which efficiency initiatives can be introduced and to particularly encourage increased recycling within the portfolio. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report46 corporatE rESponSi Bility continued • There was increased activity throughout the year under review with regard to construction projects. There were a number of refurbishments throughout the portfolio which provided completed checklists confirming compliance with helical’s objectives. Three retirement village developments at Durrants Village, Faygate, Maudslay Park, Great Alne and Millbrook Village, Exeter were ongoing and demonstrated achievement of key corporate objectives including maximising waste recycling and addressing ecological considerations. In addition, the site manager at Durrants Village achieved the accolade of a Silver Award from the Considerate Constructors’ Scheme. The Company has maintained its registration with CRC. The confirmed purchased allowance for 1 April 2012 to 31 March 2013 was 5,972 tonnes. The projected allowance for the year to 31 March 2014 is of a similar figure based on the current reported emissions for the portfolio as a whole. We have also reported to the Carbon Disclosure Project in 2013 and in line with the mandatory requirement for reporting our greenhouse gas emissions, have provided a separate disclosure in this report. Below we present our utility consumption performance for multi-let buildings under management as well as our head office (where data availability permits). This year we have reviewed the data provision to ensure that it focuses on energy consumption that is the responsibility of the landlord to enable more robust reporting. HEAD OFFiCE AnD mUlTi-lET OFFiCES 11-15 Farm Street, London W1J Battersea Studios 1, London SW81 Shepherds Building, London W14 The hub, Glasgow 207 Old Street, London EC1 211 Old Street, London EC1 New Loom house, London EC1 Electricity 2012-13 kWh Electricity 2013-14 kWh Gas 2012-13 kWh Gas 2013-14 kWh Water 2012-13 m3 Water 2013-14 m3 120,242 281,756 413,490 185,917 - - - 117,512 53,633 1,940,181 1,744,969 451,612 164,375 1,253,605 204,552 220,8163 No gas2 740,839 - - No gas2 52,349 847,358 No gas2 691,714 104,463 55,349 No gas2 546 7,474 8,373 4,106 - - - 969 4,621 6,800 3,812 2,568 2,801 3,0803 Notes: 1 Battersea Studios sold in February 2014 2 No gas refers to assets where gas is not used on site 3 Data for only part of the year as not in helical Bar ownership for whole year ‘-’ refers to asset that was not in ownership SHOPPing CEnTRES Electricity 2012-13 kWh Electricity 2013 -14 kWh Gas 2012-13 kWh Gas 2013-14 kWh Water 2012 -13 m3 Water 2013 -14 m3 The Guineas Shopping Centre, Newmarket Idlewells Shopping Centre Corby Town Centre The Morgan Quarter, Cardiff Clyde Shopping Centre 133,986 309,597 1,006,492 352,817 156,823 332,404 739,433 329,056 1,223,360 1,143,382 No gas 16,453 2,920 No gas No gas No gas 33,429 2,097 No gas No gas 176 951 1,315 123 649 588 189 1,389 172 332 Notes: • No gas refers to assets where gas is not used on site within landlord control Going forward for 2014 -15, the suitability of the targets will be reviewed against the performance for 2013-14 and revised accordingly to remain challenging yet achievable. gREEnHOUSE gAS EmiSSiOnS REPORTing For the reporting year 1 April 2013 to 31 March 2014 we have followed the 2013 UK Government environmental reporting guidance and used 2013 UK Government’s Conversion Factors for Company Reporting. Greenhouse gas emissions are reported using the following parameters to determine what is included within the reporting boundaries in terms of helical Bar’s energy consumption. • Scope 1 - direct emissions include any gas data for landlord controlled parts and fuel use for Company owned vehicles. Fugitive emissions from air conditioning are included where it is helical Bar’s responsibility within the managed portfolio. • Scope 2 - indirect energy emissions includes purchased electricity throughout the Company operations within landlord controlled parts. Electricity used in refurbishment projects has not been recorded separately. In the majority of cases the electricity consumed is recorded for the individual properties as part of the data collection for the management of common parts, but going forward to 2014 it is a requirement for contractors to ensure project specific data is collected. Greenhouse gas emissions (tonnes CO2e) are set out below for the year. Scope 1: Direct emissions Scope 2: Indirect emissions Total All Scopes Intensity figure* 1 April 2013 to 31 March 2014 494 2,619 3,113 0.00117 per sq ft * Note: the intensity figure for 2013/14 has been calculated based on net floor areas. The specific target set by helical Bar is to reduce energy consumption by 5% per annum in the principal managed assets. As discussed earlier in this section of the report, year on year performance is variable across the portfolio complicated by the changing nature through acquisition and divestment, increasing occupancy and ongoing refurbishment of the component assets. HELICAL BAR PLC REPORT & ACCOUNTS 2014corporatE rESponSi Bility continued 47 EmPlOYEES As at 31 March 2014, we had 50 permanent employees, 28 of whom were based at our head office in London, 7 employed by a subsidiary, Asset Space Limited, and 15 in Poland. Gender diversity of the Board and the Company as at 31 March 2014 is set out below: Board Senior managers All employees Male 100% 86% 46% Female - 14% 54% We continue to enforce our equal opportunities, harassment and sexual discrimination policies. We also continue to monitor compliance with our anti-bribery and whistle blowing policies. There have been no incidents to report against these policies to date. A high level of staff retention remains a key feature of our business. We retain a highly skilled and experienced team and the table below shows a breakdown of our staff by length of service. Executive directors Senior managers All employees Total number of staff as at 31 March 2014 Average length of service (years) 6 7 50 18.11 15.61 6.40 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 by supporting employee training and development, by means of training courses, seminars and mentoring where appropriate. As in previous years, we continue to evaluate training needs in line with business objectives. There are no human rights issues of which the Board are aware that are considered relevant to the Group. COmmUniTiES helical Bar 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 work with over the past year. • Clyde Shopping Centre sponsored the Scottish youth Champions League for the second year running which is contested by Scotland’s top teams. League winning teams from Aberdeen, Oban, Perth, Lesmahagow, Paisley, Ayr and Fife took part at the tournament hosted at Parklea, Glasgow. The benefits of youth sport help to tackle social and health issues in Scotland. Clyde Shopping Centre also gave space in the malls to The Kirkintilloch high School young Enterprise Scheme for a weekend sales event. Competing teams set up individual RMUs to market and sell their developed products. The event helped to build pupils’ understanding of the retail environment while building confidence and leadership skills. • The Morgan Quarter in Cardiff ran an Apprentice-style initiative called Trading Places, partnering with the University of South Wales. Six local colleges worked with the shopping centre, to enable potential students to understand higher education opportunities on offer, whilst also putting their entrepreneurial skills into practice. The aim was to benefit the university by targeting and inviting in a number of 16-18 year olds who might not necessarily be looking at higher education. A one day event was organised, where students from the different colleges were mixed and put into teams to run stalls within a pop-up shop, using a vacant shop unit within the Morgan Quarter. • Idlewells Shopping Centre and major tenant Specsavers teamed up and sponsored a local authority community event known as the Ashfield Festival. The sponsorship played a major part in enabling the annual local event to continue to go ahead in spite of public sector cutbacks. The centre exhibited in a marquee at the event and invited all retailers to join the centre management team to promote their own goods and services. Tenant uptake was positive, with around 20% of retailers taking an exhibition space. The centre management team ran competitions to raise money for Teenage Cancer Trust at the same time as showcasing a brand new interactive mobile phone application being launched to communicate retailer offers and special promotions to customers. • Idlewells Shopping Centre also gave space on the malls to a local community group to place a food bank. In an area of the country hit hard by recession and consequential effects on unemployment levels, the demand for voluntary organisations to step in and offer help was growing. By having a food bank in the shopping centre, customers were able to place any excess food items directly into the food bank safe in the knowledge that their donations would be collected and passed on to those in need. • The centre manager at The Guineas Shopping Centre in Newmarket is actively involved with the Newmarket Retailers Association planning, events and parking sub-committees. The events committee recently entered a float at the Severalls Newmarket Carnival Day which was a well attended event by all in the local community and an opportunity to promote retailers at the shopping centre. In addition, the planning committee has been instrumental in securing £100,000 from Tesco and £100,000 from Morrisons, Section 106 money which will be delivered as and when building takes place on both supermarket developments. During the year to 31 March 2014 helical has donated £17,400 to charity, including LandAid, Walking With The Wounded, The haven (Breast Cancer Charity) and Schools Around The World. HEAlTH & SAFETY helical Bar’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 they ensure that health and safety considerations are always given priority in planning and in day-to-day activities. The Company’s health & Safety policy was reviewed and updated in February 2014 to reflect the latest legislative and regulatory developments. There have been no reportable RIDDOR incidents within the portfolio during the year ended 31 March 2014. The Company’s health & Safety policy can be found on the Company website. SUPPliERS Fair treatment of suppliers remains a key priority for helical Bar, 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. The Strategic Report, contained on pages 20 to 47, was approved by the Board on 19 June 2014. On behalf of the Board michael Slade Chief Executive HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeStrategic report 48 DEvELOPm ENT 200 AlDERSgATE LONDON EC1 REFURBIShED AND LET SOLD SEPTEMBER 2013 348,000 sQ Ft OFFICE BUILDING WITh ANCILLAR y RETAIL at helical We believe that robust corporate governance is of fundamental importance in delivering long-term success for shareholders heLICaL BaR PLC report & accounts 2014 directors of the company corporate governance review report of the nominations committee directors’ remuneration report report of the audit committee report of the directors Statement of directors’ responsibilities report of independent auditor 50 51 54 55 68 69 71 72 49 GOvERNANCE heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE50 dIReCtoRs oF the CoMPaNy CHAiRmAn 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 was appointed Chairman of the Company after the 2012 AGM. he is Chairman of Reaction Engines Limited, a former Chairman of Avocet Mining plc and a former director of Johnson Matthey plc and Govett Strategic Investment Trust. Nigel is Chairman of the Nominations Committee. 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, a Fellow of the College of Estate Management, Fellow of Wellington College, a trustee of Purley Park charity and Sherborne School Foundation and Vice Admiral of the Marie Rose Trust. finance director Tim murphy, BA (Hons) FCA, joined the Group in 1994 and became Finance Director of the Company in 2012. Prior to joining helical, he worked for accountants Grant Thornton and KPMG. he has responsibility for financial strategy and reporting, treasury and taxation. director gerald Kaye, BSc (Est man) FRiCS, was appointed to the Board as an executive director in 1994 and is jointly responsible for the Group’s development activities. he is a past President of the British Council for Offices and is 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. 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 was a Development Agent and Consultant at Richard Ellis (now CBRE). he is jointly responsible for the Group’s development activities. 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 jointly responsible for the Group’s investment portfolio and its retirement village portfolio. director Duncan Walker, mA (Hons) (Oxon), Pg Dip Surveying, joined the Group in 2007 and was appointed to the Board as an executive director in 2011. Prior to joining helical, Duncan led Edinburgh house Estate’s investment team. he is jointly responsible for the Group’s investment portfolio and has been responsible for acquiring the majority of helical’s retail portfolio. nOn-ExECUTiVE DiRECTORS Richard gillingwater, CBE, is the non-executive Chairman of henderson Group plc, Senior Independent Director of hiscox Ltd and SSE plc and non-executive director of Wm Morrison Supermarkets Plc. he was, until recently, Dean of Cass Business School. Prior to this he spent 10 years at Kleinwort Benson, before moving to BzW, and, in due course, becoming joint head of Corporate Finance and then latterly Chairman of European Investment Banking at Credit Suisse First Boston. he was Chief Executive and later Chairman of the Shareholder Executive and has also been a non-executive director of P&O, Debenhams, Tomkins, Qinetiq Group and Kidde plc. Richard is the Senior Independent Director of helical and is a member of the Nominations, Audit and Remuneration Committees. Richard grant, BA (Oxon), ACA is the Finance Director at Cadogan Estates Limited and former corporate finance partner at PricewaterhouseCoopers, whom he joined in 1975. Richard is the Chairman of the Audit Committee and a member of the Nominations and Remuneration Committees. Andrew gulliford, BSc (Est.man), FRiCS, was appointed to the Board as a non-executive director in 2006. A former Deputy Senior Partner of Cushman & Wakefield healey & Baker, he is a non-executive director of McKay Securities PLC, F&C UK Real Estate Investments Limited and various other companies. Andrew is the Chairman of the Remuneration Committee and a member of the Audit and Nominations Committees. michael O’Donnell was appointed to the Board in June 2011. he is a former Managing Director of LGV Capital, a private equity firm. Through his company, Ebbtide Partners, he acts as a consultant to, and investor in, private companies. he is chairman of Cygnet, a mental healthcare provider, and of the holding board of LA Fitness, the operator of health and fitness clubs and is a non-executive director of Park Resorts, a caravan parks operator. Michael is a member of the Nominations, Audit and Remuneration Committees. HELICAL BAR PLC REPORT & ACCOUNTS 2014CoRPoRate goveRNaNCe Rev IeW 51 At helical we believe that robust corporate governance is of fundamental importance in delivering for shareholders the long-term success of the Company through the effective, entrepreneurial and prudent management of the Company. The Board of helical is collectively responsible for providing the leadership of the Company within a framework of controls and reporting structures which assist in pursuing its strategic aims and business objectives. The uk Corporate governance Code (the “Code”) The Board is accountable to the Group’s shareholders for good corporate governance. We believe in applying the highest principles of corporate governance and have complied throughout the year with the principles as set out in the section of the Code headed “The Main Principles of the Code”. Except as stated below in relation to the appointment of Nigel McNair Scott as Chairman, we have complied with the provisions of the Code. The Group also takes into account the corporate governance guidelines of institutional shareholders and their representative bodies. lEADERSHiP Chairman Nigel McNair Scott, who was formerly the Group’s Finance Director, was appointed as Chairman of the Company in 2012. The Code requires that a new chairman should satisfy, on appointment, the independence criteria set out in provision B.1.1 and Nigel McNair Scott did not satisfy this Code provision on appointment. roles of Chairman and Chief executive The Chairman and the Chief Executive 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 and is set out in writing and is approved by the Board. Board responsibilities The main purpose of the Board is to create and deliver the long term success of the Group and returns for its shareholders. The Board 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 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 also 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. 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. In conjunction with the Nominations Committee, the Board considers succession planning of Board members and senior management. In addition to Boardroom discussions, the Chairman maintains contact with other non-executive directors by telephone and, if appropriate and at least annually, will hold meetings with the non-executive directors without the executive directors present. Richard Gillingwater (Senior Independent Director) holds meetings of the independent non-executive directors separately from the rest of the Board at least once a year to ensure that any issues may be discussed without the presence of a non-independent director. 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. An Executive Committee, comprising all the executive directors, meets regularly to discuss the development of strategy, to review and implement proposed transactions, to review policies and procedures (including health and safety), to monitor budget and financial performance and to assess risk. The full Board reviews all minutes of proceedings at Executive Committee meetings and receives reports from the Executive Committee Chairman (Michael Slade) at every Board meeting. 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 as a whole. A summary of the schedule of matters reserved for the Board is set out below: • Strategy and management - responsibility for the overall management of the Group; approval of the Group’s long-term strategic aims and objectives; approval of annual operating and capital expenditure budgets; oversight of the Group’s operations and review of performance; extension of the Group’s activities into new business areas; approval of major capital projects and projects outside the normal course of business; any decision to cease to operate all or any material part of the Group’s business. • Structure and capital - changes to the Group’s capital structure; major 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. • Financial reporting and controls - approval of half yearly report, approval of interim and final results announcements; approval of annual report and accounts, including the directors’ report, 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; approval of material unbudgeted capital or operating expenditures. • Internal controls - ensuring maintenance of a sound system of control and risk management. • Contracts - approval of major capital projects; approval of contracts above limits of authority delegated by the Board. • Communication - approval of resolutions and corresponding documentation to be put to shareholders in general meeting; approval of all circulars and listing particulars. • Board membership and other appointments to senior management; appointment and removal of the Company Secretary; membership of Board committees following recommendations from the Nominations Committee. • Corporate governance matters including directors’ performance evaluations and review of the Company’s corporate governance arrangements. • Remuneration - determine the remuneration policy for the Chairman, executive directors, Company Secretary and other senior executives following recommendation from the Remuneration Committee; determine the remuneration of the non-executive directors subject to the Articles of Association and shareholder approval as appropriate. • Approval of policies including anti-bribery policy; whistleblowing procedures; equal opportunities policy; diversity policy; share dealing code; health and safety policy; environmental and corporate social responsibility policy; charitable donations policy. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE52 corporatE govErnancE rEviEW continued Members of the Board The current members of the Board comprise a Chairman, six executive directors and four independent non-executive directors. The Chairman is Nigel McNair Scott. The executive directors are Michael Slade (Chief Executive), Tim Murphy (Finance Director), Gerald Kaye, Matthew Bonning- Snook, Jack Pitman and Duncan Walker. The non-executive directors are Richard Gillingwater (Senior Independent Director), Richard Grant, Andrew Gulliford and Michael O’Donnell. All the directors will be offering themselves for re-appointment at the 2014 AGM. Provision B.1.2 of the Code notes that companies such as helical, which are below the FTSE350, are required to have at least two independent non-executive directors. The Board has determined that in helical’s case a total of four independent non-executive directors is appropriate to balance the current executive team, to provide the experience and advice that the executive team seeks and to ensure the interests of shareholders and other stakeholders are adequately protected. The independent non-executive directors are Richard Gillingwater, Richard Grant, Andrew Gulliford and Michael O’Donnell. Biographies of all directors are on page 50 and details of their shareholdings in the Company are on page 67. attendance at Board and Committee meetings during the year Six scheduled meetings of the Board were held during the year ended 31 March 2014. In addition, several unscheduled meetings were arranged to discuss particular transactions and events. On occasions, directors who are not members of the Committees attend at the invitation of the Committee Chairman. The attendance record of the directors at these scheduled meetings and at meetings of the Board’s committees is shown in the table below: In the Board’s view, the composition of the Board has an appropriate balance of skills, experience, independence and knowledge of the Company as required by the Code. annual evaluation of the Board and its Committees The annual evaluation process, led by the Senior Independent Director, involves each director submitting an appraisal in respect of the performance of the main Board, its committees and directors, including the Chairman. Since the Company is outside the FTSE350 it does not currently make use of an external evaluation process as permitted by the Code. Full Board Audit Committee Remuneration Committee Nominations Committee Number of meetings held during the year under review Chairman Nigel McNair Scott 1 Executive directors Michael Slade Tim Murphy Gerald Kaye Matthew Bonning - Snook Jack Pitman Duncan Walker non-executive directors Richard Gillingwater 1 2 3 Andrew Gulliford 1 2 3 Michael O’Donnell 1 2 3 Richard Grant 1 2 3 6 6 6 6 6 5 5 6 5 6 6 6 3 - - - - - - - 2 3 3 3 5 - - - - - - - 4 5 5 5 1 1 - - - - - - 1 1 1 1 1 Member of the Nominations Committee (Chairman: Nigel McNair Scott) 2 Member of the Audit Committee (Chairman: Richard Grant) 3 Member of the Remuneration Committee (Chairman: Andrew Gulliford) EFFECTiVEnESS Composition of the Board The Code requires a Board to have an appropriate balance of skills, experience, independence and knowledge of the Company to enable it to discharge its duties and responsibilities effectively. helical operates with a strong management team of senior decision makers backed up by a finance team and other support staff. 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 includes six executive directors, which is more than those of other comparable listed real estate companies. During the year the Board undertook a formal evaluation of its own performance and that of its committees and the Senior Independent Director reported the results of that evaluation process to the Board. The process covered criteria including real estate matters, Board composition and Board and Committee processes. Individual evaluations of directors were conducted by the Chief Executive and Chairman. There were no significant areas of concern raised by the Directors and any points raised have been dealt with appropriately. 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 directors have access to the services of a professionally qualified and experienced Company Secretary who is responsible for advising the Board on all governance matters and ensuring compliance with Board procedures and applicable laws and regulations. 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 of new directors and assisting with professional development as required. The Board ensures that 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 all directors as necessary. nominations Committee The report of the Nominations Committee, which describes the work of the Committee, is on page 54. ACCOUnTABiliTY audit Committee The Audit Committee Chairman is Richard Grant, who is the Finance Director of Cadogan Estates Limited and a former partner of PricewaterhouseCoopers. As a result, the Board considers that he has recent and relevant financial experience. The report of the Chairman of the Audit Committee describing the issues considered by the Committee in the year under review is on page 68. HELICAL BAR PLC REPORT & ACCOUNTS 2014 corporatE govErnancE rEviEW continued 53 risk management and internal controls 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 matters. In the year under review the Audit Committee met with the Auditors on two occasions. • The Board is responsible for the management of the Group’s risk profile which is reviewed by the Audit Committee during the year. An analysis of the Group’s principal risks can be found on pages 42 to 44. internal audit The Board reviewed its position during the year to 31 March 2014 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. 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: • Timing and value of property sales. • Availability of loan finance and related cash flows. • Future property valuations and their impact on covenants and potential loan repayments. • Committed future expenditure. • Future rental income and bad debts. • Payment timings and the value of trade receivables. The forecast cash flows have been sensitised to reflect 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. REmUnERATiOn This information is contained in the Directors’ Remuneration Report on pages 55 to 67. RElATiOnS WiTH SHAREHOlDERS notice of annual general Meeting The Code recommends that the Notice of AGM and related papers be sent to shareholders at least 20 working days before the meeting. For the 2013 AGM the Notice and related papers were sent out 21 working days before the AGM. relations with shareholders The directors value the views of the Company’s shareholders and recognise their interest in the Group’s strategy and performance, Board membership and quality of management. They hold regular meetings with, and give presentations to, the Company’s institutional shareholders to discuss the Group’s results and objectives. The directors regularly meet, with the help of the Company’s brokers, institutions that do not currently hold shares in the Group to inform them of the Company’s objectives. Michael Slade, as Chief Executive, attends most of these meetings and is usually accompanied by one of the other executive directors. During the year under review, Andrew Gulliford, as Chairman of the Remuneration Committee, engaged with principal shareholders (holding more than 3% of the Company’s shares) and shareholder representative bodies, to seek their approval for the renewal of the Company’s Long Term Incentive Plan, to be proposed to shareholders at the 2014 AGM. The Senior Independent Director, Richard Gillingwater, was available to meet with shareholders throughout the year under review and will hold meetings with shareholders whenever requested in order to ensure sufficient understanding of any issues and concerns they may have. The AGM is used to communicate with investors and they are encouraged to participate. The Chairman, Senior Independent Director and members of the Audit, Remuneration and Nominations Committees will attend the AGM and will be available to answer questions. Separate resolutions are proposed on each issue in order that they can be given proper consideration and there is a separate resolution to consider the annual report and accounts. All proxy votes are counted and the level of proxies lodged on each resolution will be indicated after it has been dealt with by a show of hands. The directors receive regular reports from sector analysts and investor relations advisors on how the Group is viewed by its shareholders. The Group communicates with all shareholders through the issue of regular press releases and through its website at www.helical.co.uk. By order of the Board Heather Williams FCiS Company Secretary 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE54 RePoRt oF the NoMIN atIoNs CoMMI ttee In accordance with the UK Corporate Governance Code, the role of the Nominations Committee, and my primary responsibility as its Chairman, is to ensure that the Company is headed by an effective Board which is collectively responsible for the long-term success of the Company. This is best achieved through the provision of entrepreneurial leadership and a talented executive team, supported by committees with an appropriate balance of skills, experience, independence and knowledge of the Company to be able to constructively challenge and assist the executive team in achieving its objectives. Alongside me, the Committee comprises Richard Gillingwater, Richard Grant, Andrew Gulliford and Michael O’Donnell. BOARD APPOinTmEnTS Appointments to the Board and its Committees are made against objective criteria. Care is taken to ensure that appointees have enough time available to devote to the job. The Nominations Committee controls the process for Board appointments and makes recommendations to the Board. The Board is mindful of the Group’s diversity policy and the Committee will give full consideration to diversity, including gender diversity, when recommending to the Board any future Board appointments. All Board appointments will be based on experience and will be made on merit. THE WORK OF THE nOminATiOnS COmmiTTEE in THE YEAR The Committee met once during the year and all members attended this meeting. A record of attendance at all Board and Committee meetings is shown on page 52. The Committee reviews the structure, size and composition of the Board. The terms of reference of the Nominations Committee, which were reviewed and updated during the year, are available on request and are included on the Group’s website at www.helical.co.uk. DiRECTORS’ RE-ElECTiOn The Board believes that the requirements of Code Provision B.7.1 of the UK Corporate Governance Code should be fulfilled. This provision requires all directors of FTSE350 companies to be subject to annual re-election by shareholders. Whilst the Company is not 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. At the Annual General Meeting to be held on 25 July 2014, the following resolutions relating to the appointment of directors are being proposed: • The re-election of Nigel McNair Scott as non-executive Chairman; • The re-election, as executive directors, of Michael Slade, Tim Murphy, Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and Duncan Walker; and, • The re-election, as independent non-executive directors, of Richard Gillingwater, Richard Grant Andrew Gulliford and Michael O’Donnell. The Nominations Committee confirms to shareholders that, following the annual formal performance evaluation and taking into account their qualifications and experience, these directors continue to be effective and demonstrate commitment to their roles. Biographical details of the directors are given on page 50. I trust that shareholders will support the Committee and vote in favour of these resolutions. nigel mcnair Scott Chairman of the Nominations Committee 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014dIReCtoRs’ Re MUNeRatIoN Re PoRt aNNUaL stateMeN t 55 Dear Shareholder, I am pleased to present the Remuneration Committee’s Report on directors’ remuneration for the year to 31 March 2014. This report has been approved by the Board of helical Bar plc. The main duty of the Remuneration Committee (“Committee”) is to determine and agree with the Board, the framework or broad policy for the remuneration of the Chairman and the executive directors and, subject to proposals being submitted by the Chief Executive, recommend and monitor the level and structure of remuneration for such other members of the executive management who report directly to the Chief Executive. The remuneration of non-executive directors shall be a matter for the Chairman and Executive members of the Board. The Directors’ Remuneration Report has been prepared in accordance with the Directors’ Remuneration Reporting Regulations and Narrative Reporting Regulations issued by the Department for Business, Innovation and Skills in 2013. In particular, the report has been divided into the following two sections: • Remuneration Policy Report, which sets out the Group’s policy on the remuneration of executive and non-executive directors; and • Annual Report on Remuneration, which discloses how the remuneration policy has been implemented in the year ended 31 March 2014 and how the policy will be operated in the year ending 31 March 2015. A binding vote on the Directors’ Remuneration Policy Report and an advisory vote on this Annual Statement and the Annual Report on Remuneration will be tabled at the forthcoming 2014 AGM. REmUnERATiOn iSSUES DEAlT WiTH DURing THE YEAR The Committee considered a number of matters during the financial year under review and the following decisions were taken: • Basic salaries of executive directors were reviewed in July 2013 and inflationary increases of 3% were awarded with effect from 1 July 2013 to Michael Slade, Gerald Kaye, Matthew Bonning-Snook and Jack Pitman; • The basic salaries of Tim Murphy and Duncan Walker were increased by 10% from 1 July 2013 to move their salaries towards market norms; • The basic salary of Matthew Bonning-Snook was increased by a further 18% from 1 January 2014 and the basic salary of Duncan Walker is to be increased by 16% from 1 July 2014, both increases reflecting each individual’s significantly increased contribution to the business and to bring their remuneration more in alignment with their fellow directors; • The Committee reviewed the awards made in accordance with the terms of the Performance Share Plan 2004 (“2004 PSP”) in 2010 and considered the performance of the Company during the three year performance period to 31 March 2013. The performance conditions required for vesting of the shares were not met and no shares vested; • The Committee resolved in June 2013 to make a further award of shares under the terms of the 2004 PSP; • The Committee recommended that the Company’s Employee Share Ownership Plan Trust (“ESOP”) acquire a further 250,000 shares in the Company to enable it to satisfy the anticipated vesting of share awards in 2014/15; and • As a result of the 2004 PSP nearing the end of its ten year life, the Committee resolved that formal shareholder approval should be sought for a replacement scheme (the “Performance Share Plan 2014” or “2014 PSP”) at the 2014 AGM. The proposed replacement scheme introduces a third performance criteria of relative Total Shareholder Return (“TSR”) and provides for additional shareholder protections, including a two year post vesting holding period, clawback and increased minimum shareholding requirements for executive directors of 300% of basic salary in line with best practice. The implementation of these decisions is detailed in this report, together with additional information on the fixed and variable remuneration paid and payable to the directors of the Group. PERFORmAnCE AnD REWARD DURing 2013 As noted in the Strategic Report on pages 20 to 47, the Group has delivered an increase in EPRA net assets per share of 18.6% and a total portfolio return, as reported by IPD, of 23.8%. Pre-tax profits of the Group, before performance related awards, increased to £120m (2013: £12m). Subsequent to the year end, and in accordance with the rules of the helical Bar Annual Bonus Scheme 2012 and the Executive Bonus Plan 2011, cash bonuses have been approved for inclusion in the financial statements for the year to 31 March 2014. Details of the bonuses payable are disclosed in the Annual Report on Remuneration below. Awards made under the 2004 PSP in 2011 were subject to two performance conditions over the three years to 31 March 2014. Two thirds of the awards were based on absolute net asset value performance with a vesting threshold of 7.5% p.a. (24% over three years) growth and maximum vesting at 15.0% p.a. (52% over three years) growth. The remaining third of the awards were based on a comparison of the Group’s portfolio return to the IPD Total Return index with a vesting threshold of the median of the index and full vesting at the upper quartile of the index. The performance criteria were measured at the end of the three year period and 62% of the awards are expected to vest. The Committee believes that the provision for annual cash and deferred shares bonuses and the expected 2004 PSP vesting in respect of the performance periods ending 31 March 2014 accurately and fairly represents the performance of the Group over the respective performance periods. REmUnERATiOn POliCY FOR 2014 The Remuneration Committee of helical Bar plc is committed to ensuring that its remuneration policy remains aligned to the interests of shareholders, incentivising management to increase total returns and growing net asset value per share whilst ensuring that an appropriate balance is maintained between the targets set for management and the risk profile of the Group. The Committee believes that it has struck the right balance between fixed annual remuneration and an incentive structure with challenging targets which seeks to reward outperformance with a mixture of cash-based annual bonus payments and longer term share awards. Reviewing the current remuneration the Committee has determined that the basic salaries of the executive directors, excluding those salaries of Matthew Bonning-Snook and Duncan Walker, should be increased from 1 July 2014 by an amount reflecting current inflation levels and has determined that this should be 2% (2013: 3%), which is below the average 6% awarded to all other employees of the Group. As stated above, Duncan Walker’s base salary will be increased by 16% to move him towards market norms as his contribution increases. The two annual bonus schemes were approved by shareholders in 2011 and 2012 and will not be reviewed during the forthcoming year. however, as a result of the 2004 PSP reaching the end of its ten year life, major shareholders and representative bodies have been consulted on a replacement scheme, the helical Bar Performance Share Plan 2014, with increased shareholder protections. A resolution seeking approval of this replacement scheme will be put to shareholders at the 2014 AGM. The first grant under this plan will be made, subject to shareholder approval, following the 2014 AGM. AnnUAl gEnERAl mEETing At the Annual General Meeting to be held on 25 July 2014 the following resolutions relating to remuneration are being proposed: • The approval of the Directors’ Remuneration Policy Report; • The approval of the Annual Statement and Annual Report on Remuneration for the year ended 31 March 2014; and • The approval of the replacement long term incentive plan, the 2014 Performance Share Plan. I trust that shareholders will support the Committee and vote in favour of these resolutions. Andrew gulliford Chairman of the Remuneration Committee 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCEdIReCtoRs’ Re MUNeRatIoN Re PoRt 56 dirEctorS’ rEmunEration rEport continued ReMUNeR atIoN Po LICy RePo Rt The Report of the Remuneration Committee has been prepared in accordance with the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 (the “Act”). It has been approved by the Board and will be submitted to shareholders for approval at the Annual General Meeting to be held on 25 July 2014. If approved, the Remuneration Policy Report will have an effective date from that point and for a period of three years. The Company’s remuneration policy follows the principles and guidelines of the Listing Rules and the UK Corporate Governance Code 2012 as they relate to directors’ remuneration. REmUnERATiOn POliCY REPORT This section of the Remuneration Report sets out the remuneration policy of the Group from 1 April 2014 which will, subject to shareholder approval, become formally effective at the 2014 AGM. There have been no changes to this policy since 1 April 2013 and the Committee believes that the policy continues to support the Group’s strategy and is aligned with shareholders’ interests. REmUnERATiOn POliCY helical’s approach to the remuneration of its executive directors is to provide a basic remuneration package below the median level of its peers within the listed real estate sector combined with an incentive based bonus and share scheme structure aligned with the interests of its shareholders. Remuneration within the real estate sector is monitored and reviewed regularly to ensure that the Group’s positioning of its remuneration remains in line with these objectives. In addition to this external view, the Committee also monitors the remuneration levels of senior management below Board level and the remuneration of other employees to ensure that these are taken into account in determining the remuneration of executive directors and considers environmental, social, governance and risk issues. 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: • the total individual remuneration packages of each executive director including, where appropriate, basic salaries, bonuses, share awards, and other benefits; • targets for any performance related remuneration schemes; and • service agreements incorporating termination payments and compensation commitments. 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. OPERATiOn OF PERFORmAnCE RElATED REmUnERATiOn The Committee operates the two annual bonus schemes and the 2004 PSP (to be replaced by the 2014 PSP) in accordance with their respective rules, as approved by shareholders, and the Listing Rules. In seeking shareholder approval to the performance related remuneration schemes the Committee has incorporated a number of shareholder protections and will apply these in the operation of the schemes. In particular, the Committee has: • Applied a profit sharing and net asset value model to ensure cash bonuses vest only on performance and with maximum limits; • Included clawback provisions in the Annual Bonus Scheme 2012 and the proposed 2014 PSP; • Retained absolute discretion with regard to the payment of cash bonuses or the vesting of shares in the determination of good/bad leavers, or change of control or if payment of bonuses is not deemed to be in the interests of shareholders; and • Included enhanced share retention guidelines. directors’ remuneration policy table The table below summarises the directors’ remuneration policy: Element Purpose and link to strategy Salary - Reflects the value of the individual and their role and responsibilities - Reflects delivery against key personal objectives and development - Provides an appropriate level of basic fixed income avoiding excessive risk arising from over reliance on variable income Annual bonus: CEO and Finance Director - Provides focus on delivering net asset value growth above sector benchmark - Rewards and helps retain key executives and is aligned to the Group’s risk profile - Maximum bonus only payable for achieving demanding targets Annual bonus: other directors - Provides focus on delivering returns from the Group’s property portfolio - Aligned with shareholders through a profit sharing model, with appropriate hurdles and shareholder protections - Rewards and helps retain key executives and is aligned to the Group’s risk profile - Maximum bonus only payable for achieving demanding targets Long term incentive awards - Aligned to main strategic objective of delivering long- term value creation - Aligns executive directors’ interests with those of shareholders - Rewards and helps retain key executives and is aligned to the Group’s risk profile Other benefits - Provide insured benefits to support the individual and their family during periods of ill health, accidents or death - Cars or car allowances to facilitate effective travel Share ownership guidelines - To provide alignment of interests between executive directors and shareholders Non-executive director fees - Reflects time commitments and responsibilities of each role and fees paid by similarly sized companies - The remuneration of the non-executive directors is determined by the Board. In addition to the above, executive directors may also participate in any all-employee share arrangement operated by the Company, up to prevailing hMRC limits. HELICAL BAR PLC REPORT & ACCOUNTS 2014dirEctorS’ rEmunEration rEport continued 57 directors’ remuneration policy table The table below summarises the directors’ remuneration policy: Operation Maximum Performance targets - Normally reviewed annually, effective 1 July - Paid in cash on a monthly basis; not pensionable - Takes periodic account against companies with similar characteristics and sector comparators - Targeted between lower quartile and median - Reviewed in context of the salary increases across the Group - Payable in cash and deferred shares - Non-pensionable - No maximum or maximum salary increase is - N/A operated - Salary increases will not normally exceed the average increase awarded to other employees - Increases may be above this level if there is an increase in the scale, scope or responsibility of the role or to allow the basic salary of newly appointed executives to move towards market norms as their experience and contribution increases - £2m p.a. in total, £1.5m p.a. per individual - Dividend equivalent payments (in cash or in shares) may be payable on deferred shares - Payable in cash and deferred shares - Non-pensionable - 300% of salary p.a. plus additional 300% in year five and year ten - Dividend equivalent payments (in cash or in shares) may be payable on deferred shares - Discretionary annual grant of conditional share awards under the 2014 PSP. The 2014 PSP will, subject to shareholder approval at the 2014 AGM, replace the 2004 PSP which will shortly reach the end of its 10 year life. - 300% of salary p.a. for all executive directors - Dividend equivalent payments (in cash or in shares) may be payable - Benefits provided through third party providers - Insured benefits include: private medical cover, life assurance, permanent health insurance and car or car allowances. Other benefits may be provided where appropriate - N/A - Executive directors are required to build and - N/A maintain a specified shareholding through the retention of the post-tax shares received on the vesting of awards - Participants in the 2004 PSP and 2014 PSP are required to retain shares acquired for at least two years after vesting - Cash fee paid monthly - Fees are reviewed on an annual basis - Fixed three year contracts with three month notice periods - No maximum or maximum fee increase is operated - Fee increases may be guided by the average - N/A increase awarded to Executive Directors and other employees and/or general movements in the market - Increases may be above this level if there is an increase in the scale, scope or responsibility of the role - Performance normally measured over one year Sliding scale targets based on: - The amount by which the increase in the Group’s net asset value exceeds an industry benchmark - Subject to achieving minimum relative performance levels - Details of actual targets are set out on page 63 - Performance normally measured over one year Sliding scale targets based on: - Profits/losses of the business plus growth in values of the investment, trading and development portfolio after charging for the Group’s finance, administration costs and the use of the Group’s equity - Clawback provisions apply - Details of profit sharing arrangements are set out on pages 63 and 64 - Performance normally measured over three years - 10% of an award vests at threshold performance - Performance targets linked to net asset value per share, total property return and total shareholder return (2014 PSP) - Details of actual targets for the awards to be granted in 2014 are set out on pages 60 and 61 - Clawback provisions apply to awards to be granted under the 2014 PSP - N/A - Aim to hold a shareholding to equal or exceed 200% of basic salary (increasing to 300% on the first vesting of awards granted under the 2014 PSP) HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE 58 dirEctorS’ rEmunEration rEport continued RECRUiTmEnT POliCY In considering the structure of the Board, the balance between executive directors and independent non-executive directors and the skills, knowledge and experience required to ensure the Board functions in accordance with the Group’s objectives, the Committee will seek to apply the following principles in relation to the remuneration of new directors, whether by internal promotion or external appointment: Element Salary Benefits Pension Annual bonus Policy The salary of newly appointed executive directors would reflect the individual’s experience and skills, and be targeted at between lower quartile and median of appropriate sector comparables, taking into account internal comparisons. On initial appointment, salaries would generally be set at a level lower than benchmarked for that role to allow for pay increases to market levels subject to satisfactory progress and contribution. Benefits would be as are currently provided and periodically reviewed, being car or car allowance, private medical cover, permanent health insurance and life assurance. There is no Company pension scheme for directors and no contributions are payable to directors’ own pension schemes. Annual bonus arrangements would be set in line with existing arrangements as approved by shareholders, with the Committee retaining the right to pro-rata any bonus payable in respect of the first year of employment. Long term incentives Annual awards under the terms of the 2014 PSP (subject to shareholder approval at the 2014 AGM) will be made in accordance with the terms of that Plan. Share Incentive Plan In line with that of existing executive directors. Buy-out awards Should it be deemed necessary to compensate a new director for loss of bonus or incentives from a previous employer, the Committee may structure the remuneration of such director to buy-out any such bonus or incentives on a like-for-like basis in respect of currency (i.e. cash versus shares), timing and performance targets. Where possible such buy-out will be structured within the Company’s existing incentive arrangements but the Committee has the discretion to implement the exemption under rule 9.4.2 of the Listing Rules. Non-executive directors Newly appointed non-executive directors will be paid fees at a level consistent with existing non-executive directors. Fees would be paid pro-rata in the year of appointment. HOW EmPlOYEE PAY iS TAKEn inTO ACCOUnT AnD HOW iT COmPARES TO THE REmUnERATiOn POliCY OF ExECUTiVE DiRECTORS All full-time employees of the Company, including executive directors, receive a basic remuneration package including base salary, private medical cover, permanent health insurance, life assurance and membership of the Share Incentive Plan. In addition, directors and senior management are entitled to the use of company cars or the payment of a car allowance. Whilst employees below Board level are not entitled to participate in the Executive Bonus Plan 2011 or Annual Bonus Scheme 2012, discretionary bonuses are paid to employees on an individual basis depending on their performance and contribution. The Performance Share Plan is available to all employees but is primarily utilised to incentivise executive directors and senior management. An Inland Revenue approved Company Share Option Plan is available for the Committee to grant options to those who do not receive awards under the Performance Share Plan. In determining executive remuneration, the Committee considers the overall remuneration of all the Company’s employees and, other than in exceptional circumstances, seeks to award increases in salaries at levels below those made to other staff and within its own guidelines. The remaining remuneration is weighted towards performance related awards. The Committee does not consult with its employees when drawing up the Company’s remuneration policy. PERFORmAnCE mETRiCS The performance metrics used in the two annual bonus schemes and the long term incentive plan are aligned with the Company’s Key Performance Indicators, discussed on pages 22 to 23. The Executive Bonus Plan 2011 compares the net asset value per share performance of the Company to an index of property performance as measured by the Investment Property Databank (“IPD”). The intention is to compare the Company’s overall financial performance to that of the real estate sector’s primary index. The scheme is open to the Chief Executive and the Finance Director. The Annual Bonus Scheme 2012 is a profit sharing model which takes the results of the Company, including valuation movements on its property portfolio, and, after charging all finance costs, non-performance related administration costs and a charge for the use of the Company’s equity, allocates the net results into a profit pool for payment to participants with maximum limits, deferral clawback and other shareholder protections. The scheme is open to executive directors, other than the Chief Executive and the Finance Director. Long term incentives, awarded in accordance with the rules of the 2004 PSP (to be replaced, subject to shareholder approval, with the 2014 PSP), are subject to an absolute net asset value growth test and a relative performance metric based on the performance of the Company’s property portfolio compared to an IPD index. In the 2014 PSP, these two criteria are to be joined by a third metric, based on relative Total Shareholder Return. SERViCE COnTRACTS The service contract of Michael Slade operates from 1 August 2007, those of Gerald Kaye, Matthew Bonning-Snook and Jack Pitman from 1 March 2010, that of Duncan Walker from 24 June 2011 and of Tim Murphy from 24 July 2012. No service contract provides for more than a one year notice period. All service contracts can be inspected at the registered offices of the Company. lEAVER POliCY On termination of employment each director may be entitled to a payment in lieu of notice of basic salary and other contractual entitlements i.e. provision of a car, health and life insurance. The Group may make payments in lieu of notice as one lump sum or in instalments, at its own discretion. If the Group chooses to pay in instalments the director is obliged to seek alternative income over the relevant period and to disclose the amount to the Group. Instalment payments will be reduced by any alternative income. Awards under the Executive Bonus Plan 2011 may be payable with respect to the period of the financial year served although amounts will be paid at the normal payout date and, normally, pro-rated for the period of the financial year worked. HELICAL BAR PLC REPORT & ACCOUNTS 2014dirEctorS’ rEmunEration rEport continued 59 REWARD SCEnARiOS The charts below show how the composition of the executive directors’ remuneration packages varies at three performance levels, namely, at minimum (i.e. fixed pay), target (assumed to be 50% of the maximum incentive levels) and maximum levels, under the policy set out in the table overleaf. Value of remuneration packages at different levels of performance 0 0 0 £ ’ 3,750 3,500 3,250 3,000 2,750 2,500 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 43% 42% 37% 36% 27% 15% PSP Bonus Basic salary & benefits 42% 42% 36% 36% 28% 16% 51% 31% 18% 43% 26% 30% Minimum Target Maximum Minimum Target Maximum Minimum Target Maximum Chief executive finance director other directors The charts are based on: • salary levels effective 1 April 2014. • an approximated annual value of benefits (no pension is provided). • a £1.5m maximum annual bonus for the Chief Executive, a £500,000 maximum annual bonus for the Finance Director and a 300% of salary maximum annual bonus for the other executive directors (based on Gerald Kaye’s package for simplicity) (with target assumed to be 50% of the maximum). • a 300% of salary award under the 2014 PSP in line with the normal maximum award (with target assumed to be 50% of the maximum). No share price appreciation in respect of the 2014 PSP awards has been assumed. REmUnERATiOn COmmiTTEE The Committee comprises Andrew Gulliford, as Chairman, Richard Gillingwater, Richard Grant and Michael O’Donnell, all of whom have served throughout the year. Each member of the Committee is an independent non-executive director. ADViSORS TO THE COmmiTTEE The Committee consults the Chief Executive and Finance Director about its proposals and has access to professional advice from independent remuneration consultants, New Bridge Street, to help it determine appropriate remuneration arrangements. Terms of reference for New Bridge Street, which provided no other services to the Company, are available from the Company Secretary on request. Their fees for the year to 31 March 2014 amounted to £46,167. Any share-based entitlements granted to an executive director under the Company’s share plans will be determined based on the relevant plan rules. Under the helical Bar Annual Bonus Scheme 2012, participants shall not normally be entitled to receive any distribution under the scheme following cessation and shall immediately cease to have any interests, benefits, rights and/or entitlements under the scheme howsoever arising on the date of such cessation except where good leaver status applies (i.e. death; injury, disability; redundancy; retirement; sale or transfer of employing company or business outside of the Group or any other reason permitted by the Committee). For good leavers, individuals would cease to accrue future amounts into future Bonus Award Pools although would continue to receive deferred share awards and any remaining amounts held in the Bonus Award Pools for a period of three years from cessation. For awards granted under the 2004 PSP, awards will normally lapse at cessation except where the good leaver status applies (e.g. death, redundancy, retirement due to injury, disability or retirement otherwise with the Committee’s agreement). For good leavers, awards will vest at cessation having regard to the satisfaction of the relevant performance conditions and the time elapsed since the date of the award (rounded up to the nearest whole year). For awards granted under the 2014 PSP, awards held by good leavers will vest on the normal vesting date subject to performance conditions and time pro-rating, unless the Committee determines that awards should vest at cessation and/or time pro-rating should not apply. nOn-ExECUTiVE DiRECTORS Non-executive directors are appointed by a Letter of Appointment and their remuneration is determined by the Board. The appointment of non-executive directors is terminable on three months’ notice. Non-executive directors are not eligible to participate in any new awards made under the terms of the Group’s bonus or share award schemes. In exceptional circumstances, where an executive director becomes a non-executive director e.g. Nigel McNair Scott became Chairman in 2012, ongoing participation in awards previously made in bonus and share schemes will be subject to the rules of those schemes and will be subject to the discretion of the Committee. SHARE OWnERSHiP gUiDElinES Senior executives will not normally be permitted to sell shares received through the 2004 PSP/2014 PSP, other than to meet taxation (and national insurance contributions) liabilities, for at least two years and until they own shares to the value of 200% of basic salary for executive directors and 100% of salary for other executives. This is to be increased for executive directors to 300% on the first vesting of share awards in respect of the 2014 PSP. To date, all shares received by the executive directors under the terms of the group’s 2004 PSP and Share Incentive Plan have been retained, net of taxes paid, thereby increasing the management’s shareholding in helical. AlignmEnT WiTH SHAREHOlDER inTERESTS The Remuneration Committee has analysed the potential gains that may be made by executives (directors and those below Board level) through the 2004 PSP/2014 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 over the term of the plans 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 each three year period. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE60 dirEctorS’ rEmunEration rEport continued aNNUaL RePo Rt oN ReMUNeR atIoN imPlEmEnTATiOn OF THE REmUnERATiOn POliCY FOR THE YEAR TO 31 mARCH 2015 ExECUTiVE DiRECTORS’ BASiC AnnUAl SAlARY AnD BEnEFiTS-in-KinD The basic package of salary and benefits is designed to match the experience and responsibilities of each director and is reviewed annually to ensure that it is consistent and appropriate to their responsibilities and expectations. The Group does not provide any separate pension provision for executive directors and expects individuals to provide for their retirement through their basic salaries and incentive payments. Executive directors’ current basic annual salaries, together with salaries for the prior year, are as follows: Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker At 1 April 2013 £ Changes in year £ At 1 April 2014 £ Increases wef 1 July 2014 £ At 1 July 2014 £ 500,000 250,000 386,250 309,000 309,000 250,000 15,000 25,000 11,587 66,000 9,270 25,000 515,000 275,000 397,837 375,000 318,270 275,000 10,300 5,500 7,963 - 6,380 43,270 525,300 280,500 405,800 375,000 324,650 318,270 In 2012, the Committee resolved that the basic salaries of executive directors should be reviewed annually and increased to reflect an appropriate level of salary inflation or greater to reflect increases in the scale, scope or responsibility of their roles or to allow recently appointed executives to move to market norms as their experience and contribution increase. On 1 July 2013, increases in basic salaries of 10% were awarded to Tim Murphy and Duncan Walker to move their salaries towards market norms. On 1 January 2014, Matthew Bonning-Snook’s salary was increased by 18% and from 1 July 2014 Duncan Walker’s salary will be increased by 16%. These increases reflect their significantly increased contribution to the business and to bring their remuneration more in alignment with their fellow directors. Neither Matthew Bonning-Snook nor Duncan Walker will receive inflationary increases in July 2014. The Committee has determined that the remaining executive directors, Michael Slade, Tim Murphy, Gerald Kaye and Jack Pitman, will receive inflationary increases of 2% from 1 July 2014. Benefits-in-kind provided to executive directors comprise the provision of a company car or car allowance, private medical cover, permanent health insurance and life insurance. ExECUTiVE BOnUS PlAn 2011 Michael Slade and Tim Murphy will continue to be eligible to participate in the Executive Bonus Plan 2011 (the “2011 Plan”) for the year ending 31 March 2015 following shareholder approval in 2011 to operate it for a further five years. Therefore, the Committee may, at its discretion, award bonuses in respect of the year ending 31 March 2015 subject to performance conditions based on absolute net asset value, un-geared total property return and relative net asset value per share versus the IPD, the aim of which is to link the size of bonuses paid to the financial growth of the Group over that financial year. The total amount payable under the 2011 Plan in any one year will continue to be limited to £2m. An individual employee’s participation in the 2011 Plan is 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. Following feedback received during the investor consultation in respect of the codification of the bonus arrangement set out below, the Committee agreed that future participants in this scheme who do not have a minimum shareholding in the Company of 200% of basic salary should receive up to one third of any bonus in deferred shares for three years. The main features of the 2011 Plan and details of how it operated for the year ended 31 March 2014, which will be consistent with how it will operate for the year ending 31 March 2015, are set out on page 63. HEliCAl BAR AnnUAl BOnUS SCHEmE 2012 Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and Duncan Walker will continue to participate in the helical Bar Annual Bonus Scheme 2012 which was approved by Shareholders at the 2012 AGM. Neither the Chief Executive nor the Finance Director participate in the Scheme given their participation in the 2011 Plan. This scheme provides annual cash bonuses based on the performance of the Group’s property portfolio and is aligned with shareholders through a profit sharing model, with appropriate hurdles and shareholder protections (including deferral and clawback). The distribution of the Bonus Award Pools to participants will continue to be restricted for 2014/15 to the lower of 70% of the balance of the Bonus Award Pool and 300% of salary. Any excess will be deferred and carried forward to the subsequent year to form part of the Bonus Award Pool for the subsequent year(s). The main features of the 2012 Bonus Scheme and details of how it operated for the year ended 31 March 2014, which will be consistent with how it will operate for the year ending 31 March 2015, are set out on pages 63 to 64. PERFORmAnCE SHARE PlAn As a result of the Performance Share Plan 2004 (“2004 PSP”), the Company’s primary long-term incentive arrangement, reaching the end of its ten year life, shareholder approval for a replacement plan, the Performance Share Plan 2014 (“2014 PSP”), will be sought at the forthcoming AGM. The main features of the 2014 PSP are as follows: • Awards will normally vest no earlier than the third anniversary of their 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 remain capable of exercise for a period of normally no more than six months. • No award may be granted to an individual in any financial year over shares worth more than three times salary. • There are three performance conditions, one based on absolute growth in the Group’s net asset value per share, one based on the gross (ungeared) total property return per share relative to other property funds as determined by IPD and one based on relative total shareholder return. • Performance conditions for the awards to be granted in 2014 will, subject to shareholder approval, be measured over the three years following grant as follows: - 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): HELICAL BAR PLC REPORT & ACCOUNTS 2014 dirEctorS’ rEmunEration rEport continued 61 Annual compound increase after three years 15% p.a. or more Between 7.5% p.a. and 15% p.a. 7.5% p.a. Below 7.5% p.a. % of award vesting 33.3 Pro rata between 3.3 and 33.3 3.3 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. - For the total property return v IPD property funds condition: Ranking after three years Upper quartile or above Between median and upper quartile Median Less than median - For the relative TSR condition: Ranking after three years Upper quartile or above Between median and upper quartile Median Less than median % of award vesting 33.3 Pro rata between 3.3 and 33.3 3.3 zero % of award vesting 33.3 Pro rata between 3.3 and 33.3 3.3 zero The comparator group for the awards to be granted in 2014 will be the companies included in the FTSE 350 Super Sector Real Estate Index, excluding storage companies and agencies. Share awards will lapse in full where: - net value per share (having added back dividends) does not increase over the three year performance period; or - the gross return falls below the IPD median, the growth in triple net asset value is below 7.5% per annum and relative TSR is below median over the three year period. Further details of this new scheme can be found in the Notice of the Annual General Meeting. VESTing OF PSP AWARDS Awards to executive directors which have vested in accordance with the terms of the 2004 PSP in the last five years are as follows: Year 2014 2013 2012 2011 2010 Value £ 5,623,000 nil nil nil nil nOn-ExECUTiVE DiRECTORS’ FEES In 2012, the Board resolved that with effect from 1 July 2012, the fees payable to non-executive directors will comprise a basic £40,000 plus an additional £10,000 for the Chairman of the Audit and Remuneration Committees and the Senior Independent Director. On his appointment as Chairman, Nigel McNair Scott’s annual fee was agreed at £150,000. In line with executive directors, the non-executive directors will receive an inflationary increase of 2% with effect from 1 July 2014. Non-executive directors’ current annual fees, together with fees for the prior year, are as follows: Nigel McNair Scott - Chairman Richard Gillingwater - Senior Independent Director Richard Grant - Chairman of the Audit Committee Andrew Gulliford - Chairman of the Remuneration Committee Michael O’Donnell 1 April 2013 £ 1 April 2014 £ 1 July 2014 £ 150,000 50,000 50,000 50,000 40,000 150,000 50,000 50,000 50,000 40,000 153,000 51,000 51,000 51,000 40,800 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE 62 dirEctorS’ rEmunEration rEport continued 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 2014, 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 Bonus Scheme 2012 Executive Bonus Plan 2011 Performance Share Plan shares vested Actual £ 2,674,000 4,099,000 2,000,000 5,623,000 14,396,000 Share of total % 19 28 14 39 100 Maximum £ 2,674,000 4,099,000 2,000,000 9,092,000 17,865,000 Share of total % 15 23 11 51 100 Note: Performance Share Plan shares vested reflect the market value of shares that are expected to vest (actual) or could vest (maximum) in respect of the three year performance period to 31 March 2014 in accordance with the terms of the Group’s Performance Share Plan. DiRECTORS’ REmUnERATiOn (AUDiTED inFORmATiOn) Remuneration in respect of the directors was as follows: Basic salary/ fees £000 Benefits £000 Sub-total £000 Annual cash bonus £000 Deferred bonus shares £000 Sub-total £000 Total £000 Executive directors Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker non-executive directors Nigel McNair Scott Andrew Gulliford Richard Gillingwater Richard Grant Michael O’Donnell Former directors Giles Weaver Nigel McNair Scott Anthony Beevor Wilf Weeks Total 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2013-14 2012-13 2012-13 2012-13 2012-13 2012-13 2013-14 2012-13 511 500 269 1712 395 383 330 307 316 307 269 250 150 1031 50 50 50 342 50 342 40 39 28 741 16 11 2,430 2,307 45 50 21 14 48 39 49 21 22 21 17 17 42 - - - - - - - - - - 40 - - 244 202 556 550 290 185 443 422 379 328 338 328 286 267 192 103 50 50 50 34 50 34 40 39 28 114 16 11 2,674 2,509 1,500 973 468 33 796 440 750 440 637 145 550 145 - - - - - - - - - - - 275 - - 4,701 2,451 1 Executive Director until 24 July 2012; Non Executive Chairman since that date 2 Pro-rated figure - appointed as a director on 24 July 2012 3 Deferral of bonus into shares to meet 200% shareholding guideline based on 31 March 2014 share price of 373.75p Share awards £000 1,287 - 515 - 965 - 772 - 772 - 450 - - - - - - - - - - - - - - - - 323 16 398 220 375 220 318 72 275 72 - - - - - - - - - - - - - - 1,398 600 5,623 - 2,787 973 1,015 49 2,159 660 1,897 660 1,727 217 1,275 217 - - - - - - - - - - 275 - - 11,722 3,051 3,343 1,523 1,305 234 2,602 1,082 2,276 988 2,065 545 1,561 484 1,054 103 50 50 50 34 50 34 40 39 28 389 16 11 14,396 5,560 862 862 HELICAL BAR PLC REPORT & ACCOUNTS 2014dirEctorS’ rEmunEration rEport continued 63 AUDiTED inFORmATiOn ExECUTiVE BOnUS PlAn 2011 In 2011, shareholders approved the renewal of the Executive Bonus Plan (the “2011 Plan”) for a further five years. Michael Slade and Tim Murphy were eligible for 2011 Plan bonuses during the year. Total 2011 Plan bonuses for the year to 31 March 2014 of £2,000,000 (2013: £1,297,000) have been accrued in the financial statements for the year to 31 March 2014 and are payable in June 2014. The performance conditions which applied for the year ended 31 March 2014 were as follows: • 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; • Absolute performance of the portfolio - un-geared 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 • 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 total amount of bonus payable in the year ended 31 March 2014 was 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. In the year to 31 March 2014, the application of the bonus calculation to the results of the Group resulted in a potential total bonus payment of £4,486,000. This was reduced to the maximum amount payable of £2,000,000. Bonuses paid under the terms of this 2011 Plan in the last five years are as follows: Year 2014 2013 2012 2011 2010 Amount Paid £ 2,000,000 1,297,000 nil nil nil HEliCAl BAR AnnUAl BOnUS SCHEmE 2012 The helical Bar Annual Bonus Scheme 2012 was approved by shareholders at the 2012 AGM. This scheme provides annual cash bonuses based on the performance of the Group’s property portfolio and is aligned with shareholders through a profit sharing model, with appropriate hurdles and shareholder protections (including deferral and clawback). Total 2012 Bonus Scheme Bonuses have been accrued in the financial statements for the year to 31 March 2014 and the cash element will be payable in June 2014. The main features of the 2012 Bonus Scheme as applied to the year to 31 March 2014 are as follows: • The scheme participants were Gerald Kaye, Matthew Bonning-Snook, Jack Pitman and Duncan Walker. Neither the Chief Executive nor the Finance Director participate in the Scheme given their participation in the 2011 Plan; • All property assets held during the year were allocated to one of two pools namely the “Investment Pool” or the “Development Pool” (“Profit Pools”); • Investment assets are included at valuation as at 31 March 2013 with subsequent valuation movements increasing or decreasing the size of the relevant Profit Pool. Development assets were also included at valuation as at 31 March 2013 with subsequent valuation movements increasing or decreasing the size of the Profit Pool. Any opening surpluses or deficits in the value of the trading and development assets as at the introduction of the scheme on 1 April 2012 were only included in the Profit Pools if they were realised; • Development profits, development management fees, net rents, other income and profits/losses on the sale of property assets were allocated to the relevant Profit Pools; and • Profits in the two Profit Pools were eligible for the award of bonuses once they were sufficient to exceed the recovery of all related finance costs, a charge for the use of the Company’s equity at a rate equivalent to the Company’s weighted average cost of debt plus a margin (reviewed regularly to reflect any changes in the cost of debt and the risk profile of the Company’s activities), the Group’s total administrative costs (excluding performance related remuneration) and any unallocated losses from the previous three financial years. shareholder protections • No more than 10% of profits are available to participants for distribution (“Bonus Award Pool”) at the end of the relevant financial year. Pool allocations between participants are based on a set formula agreed at the start of the financial year; • The distribution of the Bonus Award Pools to participants are restricted in any financial year to the lower of 70% of the balance of the Bonus Award Pool and 300% of salary (except in years five and ten as noted below). Any excess is deferred and carried forward to the subsequent year to form part of the Bonus Award Pool for the subsequent year(s); • Two thirds of any payment is made in cash after the relevant financial year end and one third is deferred for three years into helical Bar plc shares; • In addition to any annual payments, at the end of the fifth and tenth years of operating the scheme, any Bonus Award Pool not paid out will be distributed to participants in the form of deferred shares for three years, subject to an additional individual limit of 300% of salary each time; • No payments will be made where the Company has not generated a profit (amounts will be deferred until a profit is generated). In addition, the Remuneration Committee will retain discretion to increase the deferred share amount (up to 100% of the payment) or not to make a payment at all (with any amounts reverting back to the Company rather than remaining in the Bonus Award Pool) where it is considered appropriate to do so; • Net losses will be carried forward in Profit Pools for offset against future net profits. Carry forward of losses will be for a minimum of three years, subject to extension at the request of the Remuneration Committee; HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE64 dirEctorS’ rEmunEration rEport continued AUDiTED inFORmATiOn • The scheme will operate a clawback provision whereby amounts deferred, amounts held in Bonus Award Pools or the net of tax amounts paid may be recovered in the event of a misstatement of results, an error being made in assessing the calculation of Bonus Award Pools or in the event of gross misconduct; and • The share of any increase in value of the Company (measured as the increase in net asset value plus cash returned as dividends) that could accrue to all executives through the Group’s long and short-term incentive and bonus plans at maximum vesting/payouts during the lifetime of the plans will continue to be no more than 20%. Bonus scheme pools - year to 31 March 2014 The amount transferred to the Bonus Pool based on the results of the Group for the year to 31 March 2014 and its allocation to cash and deferred share awards is as follows: Amount transferred to Bonus Pool based on the results for the year Bonus Pool brought forward Bonus Pool available for distribution Amount paid as cash bonuses Amount paid as deferred shares Bonus Pool carried forward 2014 £ 10,641,000 752,000 11,393,000 2,732,000 1,366,000 7,295,000 11,393,000 2013 £ 2,507,000 - 2,507,000 1,170,000 585,000 752,000 2,507,000 other matters • Shareholder approval for the Plan was obtained for ten years from 1 April 2012, although the Remuneration Committee will review the operation of the Plan after five years; • Awards may be satisfied through shares purchased in the market or by new issue or treasury shares. Where new issue or treasury shares are used, the ABI’s 5% in ten year dilution limit will apply; and • On a change of control of the Company, any amounts accrued over the financial year up to the relevant date, and any amounts held within the Bonus Award Pools, and any deferred shares would be distributed. 2004 PSP AWARDS VESTing in 2014 The 2004 PSP award, granted on 5 July 2011, will vest on 7 July 2014. The expected vesting percentage is as follows: Metric Performance Condition NAV (fully diluted triple net) Total property return v IPD property 10% of this part of an award vests for compound NAV growth of 7.5% p.a. increasing pro-rata to 100% of this part of an award vesting for compound NAV growth of 15% p.a. TPR Total Total property return v IPD property 10% of this part of an award vests for median ranking increasing pro-rata to 100% of this part of an award vesting for upper quartile or above performance Threshold Target Stretch Target Actual % Vesting 7.5% 15% 10.33% 28.51% Median 7.2% Upper quartile 8.3% 12.9% 33.33% 61.84% Based on the above and given that net value per share (having added back dividends) increased over the three year performance period, details of the shares under award and the expected value at vesting is as follows: Number of shares at grant Number of shares expected to lapse Number of shares expected to vest Estimated value at vesting1 (£'000) Executive directors Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker 578,592 231,436 433,944 347,155 347,155 202,507 220,791 88,316 165,594 132,475 132,475 77,277 357,801 143,120 268,350 214,680 214,680 125,230 Non-executive director (NB Awards were origionally granted when Nigel McNair Scott was an executive director) Nigel McNair Scott 387,656 147,930 239,726 1. The share price used to calculated the expected value at vesting was 359.60p, based on the average share price over the three months to 31 March 2014. 1,287 515 965 772 772 450 862 HELICAL BAR PLC REPORT & ACCOUNTS 2014dirEctorS’ rEmunEration rEport continued 65 AUDiTED inFORmATiOn The 2004 PSP numbers presented for the comparatives in the remuneration table above are based on the 2004 PSP awards granted on 13 July 2010 which lapsed in full as a result of performance targets not being met. The three year performance period to 31 March 2013 showed that the net asset value per share, calculated in accordance with the terms of the 2004 PSP, had increased by 1.6% p.a. During this three year period the total return of helical’s property portfolio, as determined by IPD, was 5.6% compared to the median of the IPD Benchmark which showed a return of 6.2%. Therefore, no shares could vest as the performance of the property portfolio was below that of the IPD median benchmark. 2004 PSP AWARDS gRAnTED in THE YEAR* The following awards under the terms of the 2004 PSP were made in the year: Individual Michael Slade Tim Murphy Gerald Kaye Date of Grant Basis of Award 24 June 2013 300% of salary 24 June 2013 300% of salary 24 June 2013 300% of salary Matthew Bonning-Snook 24 June 2013 300% of salary Jack Pitman Duncan Walker 24 June 2013 300% of salary 24 June 2013 300% of salary * structured as conditional awards Face Value £000 Vesting at threshold Vesting at Maximum 1,500 750 1,159 927 927 750 10% 10% 10% 10% 10% 10% 100% 100% 100% 100% 100% 100% Performance Period 3 years to 31 March 2016 3 years to 31 March 2016 3 years to 31 March 2016 3 years to 31 March 2016 3 years to 31 March 2016 3 years to 31 March 2016 The total number of awards made to directors under the terms of the 2004 PSP which have not yet vested are as follows: Director Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker Nigel McNair Scott Shares awarded 5.7.11 at 259.25p Shares awarded 31.5.12 at 167.50p Shares awarded 24.06.13 at 243.75p Total shares awarded 578,592 231,436 433,944 347,155 347,155 202,507 387,656 895,522 376,119 671,641 537,313 537,313 447,761 420,895 615,384 2,089,498 307,692 915,247 475,384 1,580,969 380,307 380,307 307,692 - 1,264,775 1,264,775 957,960 808,551 It is currently expected that 62% of the shares awarded on 5 July 2011, 85% of the shares awarded on 31 May 2012 and 94% of the shares awarded on 24 June 2013 will vest. HEliCAl BAR 2002 APPROVED SHARE inCEnTiVE PlAn Under the terms of this Plan employees of the Group have previously been given up to £3,000 of free shares in any tax year. Participants in the Plan have been able to purchase additional shares up to a value of £1,500 which are 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. In line with changes to the legislation governing such schemes the Committee has agreed to increase future annual awards of free shares to £3,600 and to allow participants to purchase additional shares up to a value of £1,800, to be matched in a ratio of 2:1 by the Company. Shares allocated to, or purchased on behalf of, the directors under the rules of the Plan were as follows: Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker Shares held by the Trustees of the Plan at 31 March 2014 were 443,588 (2013: 474,624). 18 June 2013 £ 7 January 2014 £ 2,255 2,256 2,255 2,252 2,256 2,138 1,434 1,434 1,433 1,426 1,434 1,136 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE66 dirEctorS’ rEmunEration rEport continued TOTAl SHAREHOlDER RETURn The total shareholder return for a holding in the Group’s shares in the five years to 31 March 2014 compared to a holding in the FTSE 350 Super-sector Real Estate Index is shown below. This index has been chosen because it includes the majority of listed real estate companies. Total shareholder return Source: Thompson Reuters 300 250 200 150 100 50 ) d e s a b e R ( n r u t e R l r e d o h e r a h S l a t o T 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 helical Bar FTSE 350 Super-sector Real Estate Index This graph shows the value, by 31 March 2014, of £100 invested in helical Bar on 31 March 2009, compared with the value of £100 invested in the FTSE 350 Supersector Real Estate Index. remuneration of the Chief executive The table below presents single figure remuneration for the Chief Executive over the past five years, together with past annual bonus payouts and relevant 2004 PSP and Share Option vestings. Year ended 31 March 2014 31 March 2013 31 March 2012 31 March 2011 31 March 2010 Name Michael Slade Michael Slade Michael Slade Michael Slade Michael Slade Total Remuneration £000 Annual Bonus £000 (% of max payout) 2004 PSP £000 (% of max vesting) 3,343 1,523 541 538 527 1,500 (100%) 1,287 (62%) 973 (65%) - (-%) - (-%) - (-%) - (-%) - (-%) - (-%) - (-%) Percentage increases in Chief Executive remuneration 2013 £000’s 2014 £000’s Changes % Chief Executive Salary Benefits Bonus Average employee Salary Benefits Bonuses Relative importance of the spend on pay Staff costs Distributions to shareholders Net asset value of the Group 500 50 973 63 3 13 2013 £000’s 10,163 6,134 253,768 511 45 1,500 66 3 25 2014 £000’s 17,424 6,660 340,527 2 (10) 54 5 - 92 Changes % 71.4 8.6 34.2 HELICAL BAR PLC REPORT & ACCOUNTS 2014 dirEctorS’ rEmunEration rEport continued 67 AUDiTED inFORmATiOn STATEmEnT OF DiRECTORS’ SHAREHOlDingS Legally owned 31.3.13 Legally owned 31.3.14 PSP awards unvested Deferred shares All-employee restricted All-employee Unrestricted Total 31.3.14 Executive Directors Michael Slade Tim Murphy Gerald Kaye 12,999,738 12,849,738 2,089,498 95,520 95,520 915,247 1,502,871 1,252,871 1,580,969 Matthew Bonning-Snook 252,929 162,929 1,264,775 Jack Pitman Duncan Walker non-Executive Directors 407,707 132,707 1,264,775 - - 957,960 Nigel McNair Scott 2,691,375 2,722,556 808,551 Andrew Gulliford Richard Gillingwater Richard Grant Michael O’Donnell 14,328 - 15,000 62,000 14,328 11,500 15,000 62,000 - - - - - 6,731 90,282 90,282 29,738 29,738 - - - - - 17,714 17,715 17,712 17,673 17,715 16,131 - - - - - 18,595 12,886,047 18,595 138,561 18,557 1,379,422 18,189 18,595 3,074 289,073 198,755 48,943 - - - - - 2,722,556 14,328 11,500 15,000 62,000 There have been no changes in the interests of any Director between 31 March 2014 and the date of this report. shareholder voting at the last agM At the 2013 AGM the Directors’ Remuneration Report received the following votes from shareholders: For Against Total votes cast (for and against) Votes withheld Total votes cast (including withheld votes) Total number of votes 86,151,196 8,165,120 94,316,316 880,621 95,196,937 % of salary held under shareholding guideline (200% of salary) % >200 <200 >200 >200 >200 <200 - - - - - % of votes cast 91% 9% 100% - - 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. SHARE PRiCE The market price of the ordinary shares at 31 March 2014 was 373.75p (2013: 236.75p). This market price varied between 234.76p and 383.50p during the year. Andrew gulliford Chairman of the Remuneration Committee 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE68 RePoRt oF the aUdIt CoMMIttee THE AUDiT COmmiTTEE The Audit Committee is chaired by Richard Grant and the other members of the Committee are Richard Gillingwater, Andrew Gulliford and Michael O’Donnell. Further details of these directors may be found on page 50. None of the Committee members have any personal or financial interest in the matters to be decided (other than as shareholders), potential conflicts of interest arising from cross-directorships, or any day-to-day involvement in running the business. 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 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 Committee are made by the Board on the recommendation of the Nominations Committee in consultation with the Audit Committee Chairman. The terms of reference of the Audit Committee, which were reviewed and updated during the year, are available by request and are included on the Group’s website at www.helical.co.uk. The business model and strategy of the Group are discussed in the Strategic Report on pages 20 to 47. THE WORK OF THE AUDiT COmmiTTEE in THE YEAR The Committee met three times during the year and a record of attendance at these meetings is shown on page 52. 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 Committee so that their contribution to the matters discussed may be obtained. In conjunction with the Board, the Audit Committee reviewed the following matters during the year: • Review of risk and internal controls; • Recommendation to the Board for the payment of dividends; • The financial statements of the Group and the announcement of the annual results to 31 March 2013 and the interim statement on the half year results to 30 September 2013; • The re-appointment of the Group’s external auditor; and • The external auditors’ independence and the provision of non-audit services by the external auditor. The Audit Committee met the external auditor on two occasions to discuss matters arising from the annual and interim audits. Other matters formally reviewed and discussed by the Committee during the year included: • The Group’s compliance with the Bribery Act 2010 and a review of its anti-bribery policy and procedures; • Review of the Group’s whistleblowing policy, noting that no issues had been raised under these procedures by any member of staff during the year under review; • Review of the Group’s policies on equal opportunities and diversity; • Review of the Group’s share dealing policy; • Review of the Group’s signing authority policy; • Review of the Group’s charitable donations policy; • Review of the Group’s environmental management systems; • Review of the Group’s need for an internal audit function; • Review of IT risk and business continuity planning; and • Review of the Group’s health and Safety policy. Audit Committee requested that the external auditor assess whether complex transactions have been accounted for appropriately and report back to the Committee and that the external auditor meet with the Chair of the Remuneration Committee to talk through the Annual Bonus Scheme calculations once the calculation had been reviewed in light of the approved scheme rules. This was carried out satisfactorily. • The Audit Committee also discussed the significant accounting judgements and estimates as noted in Note 36 of the financial statements. This involved the circulation of the paper prepared by Management and a discussion amongst the Committee of any issues that required clarification, also consulting with the external auditor for their opinion. The Committee concluded that the judgements and estimates made by management were reasonable, based on the information available and in line with the Group’s accounting policies. • The Committee reviewed the investment property valuations as provided by the external valuer and discussed the reasonableness of the director’s stock surplus. The former utilises market knowledge of one of the Non-Executive directors who reviews the external valuations for reasonableness based on this knowledge. The latter is based on discussions with the Executive directors and a review of the stock surplus by the external valuer. The Audit Committee considers the property valuations to be reasonable. • The Audit Committee discussed the key sales and purchases during the year with the external auditor in order to assess key transactions that feature in the financial statements. The external auditor reported to the Committee in their management report and the highlights were discussed both at the half year and full year. EFFECTiVEnESS OF THE ExTERnAl AUDiTOR During the year, the Audit Committee reviewed Grant Thornton UK LLP’s fees, effectiveness and whether the agreed audit plan had been fulfilled and the reasons for any variation from the plan. The Audit Committee also considered its robustness and the degree to which Grant Thornton UK LLP was able to assess key accounting and audit judgements and the content of the management report issued by the external auditor. This was performed through meeting with the external auditor and discussing the issues they had addressed. The Audit Committee concluded that both the audit and the audit process were effective. AUDiT inDEPEnDEnCE A policy of reviewing audit independence has been adopted whereby non-audit services undertaken by the auditor are approved prior to work being carried out. The Audit Committee considers the external auditor to be independent and has satisfied itself of the effectiveness of the external auditor. The Group’s policy on awarding non-audit work to its auditor is designed to ensure that the Group receives the most appropriate advice without compromising the independence of the auditor. Whilst no fee caps or limits have been set by the Committee, the level of fees would be a factor in considering whether the auditor’s independence could be affected by the award of non-audit work. In the year to 31 March 2014, certain fees (as shown in note 7 on page 83) were paid to the auditors for non-audit work. AnnUAl gEnERAl mEETing At the Annual General Meeting to be held on 25 July 2014 the following resolutions relating to the auditor are being proposed: • The re-appointment of Grant Thornton UK LLP as Independent Auditor; and • To authorise the Directors to set the remuneration of the Independent Auditor. I hope that shareholders will support the Committee and vote in favour of these resolutions. The audit issues considered by the Audit Committee during the year include the following: • A discussion of the accounting treatment of complex transactions, including both investment and development properties, and the reasonableness of the Annual Bonus Scheme calculations. In order to address these issues, the Richard grant Chairman of the Audit Committee 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014RePoRt oF the dIReCtoRs 69 STRATEgiC REPORT A review of the Company’s business during the year, the principal risks and uncertainties facing the Group and future prospects and developments are included in the Chairman’s statement on page 15, the Chief Executive’s statement on page 16, the strategic report on pages 20 to 47 and the Principal Risks report on pages 42 to 44, which should be read in conjunction with this report. DiRECTORS’ inTERESTS The directors who held office during the year and up to the date of this report are listed below: RESUlTS AnD DiViDEnDS The results for the year are set out in the consolidated income statement on page 76 and consolidated statement of comprehensive income on page 76. An interim dividend of 2.00p (2013: 1.85p) was paid on 27 December 2013 to shareholders on the shareholder register on 6 December 2013. A final dividend of 4.75p (2013: 3.70p) per share is recommended for approval at the Annual General Meeting (“AGM”) to be held on 25 July 2014. The total ordinary dividend paid in the year of 5.70p (2013: 5.25p) per share amounts to £6,660,000 (2013: £6,134,000). Age Date of appointment Title Chairman Nigel McNair Scott Executive directors Michael Slade Tim Murphy Gerald Kaye Matthew Bonning-Snook Jack Pitman Duncan Walker non-executive directors Richard Gillingwater Richard Grant Andrew Gulliford Michael O’Donnell 68 67 54 56 46 45 35 57 60 67 47 December 1985 Chairman August 1984 July 2012 September 1994 August 2007 August 2007 June 2011 July 2012 July 2012 March 2006 June 2011 Chief Executive Finance director Executive director Executive director Executive director Executive director Non-executive director Non-executive director Non-executive director Non-executive director Details of the directors’ interests in the ordinary shares of the Company are shown on page 67. Biographical details of all directors are shown on page 50. All the directors currently serving will offer themselves for re-election at the AGM to be held on 25 July 2014. Details of directors’ remuneration and their interests in share awards are set out in the Directors’ Remuneration Report on pages 55 to 67. CORPORATE gOVERnAnCE The Group’s corporate governance policies, compliance with the UK Corporate Governance Code and Going Concern statement are set out on pages 51 to 53. DiRECTORS’ COnFliCT OF inTEREST Under the Companies Act 2006 (the “Act”), Directors are subject to a statutory duty to avoid a situation where they have, or can have, a direct or indirect interest that conflicts, or may possibly conflict, with the interests of the Company. As is permissible under the Act, the Company’s Articles of Association allow the Board to consider, and if it sees fit, to authorise situations where a Director has an interest that conflicts, or may possibly conflict, with the interests of the Company. Directors are required to notify the Company of any conflict or potential conflict of interest and the Board confirms that no such conflicts have been notified to the Company during the year under review. DiRECTORS’ liABiliTY inSURAnCE AnD inDEmniTY The Company maintains Directors and Officers Liability Insurance. To the extent permitted by UK Law, the Company also indemnifies the directors against claims made against them as a consequence of the execution of their duties as directors of the Company. CHARiTABlE AnD POliTiCAl DOnATiOnS The Company continues to support charitable causes and in the year to 31 March 2014, made charitable donations of £17,400. Further details are provided in the Corporate Responsibility Report on pages 45 to 47. The Company’s policy with regard to political donations is to ensure that shareholder approval is sought before making any such payments. No shareholder approval has been sought and, accordingly, the Company made no political donations in the year to 31 March 2014. FinAnCiAl inSTRUmEnTS The information required in respect of financial instruments, as required by Schedule 7 of the Large and Medium Sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013 is shown in note 35 on pages 98 to 101. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE70 rEport oF tHE dirEctorS continued CHAngE OF COnTROl Certain agreements between the Company or its subsidiaries and entities including lending banks, joint venture partners and development partners contain termination rights to take effect in the event of a change of control of the Group. Given the commercial sensitivity of these agreements, the directors do not intend to disclose specific details. The Company’s Employee Share Incentive Plan contains provisions relating to the vesting and exercise of options in the event of a change of control of the Company. Further to the issue on 24 June 2013 of £80 million 6.00% bonds due in 2020 (the “Bonds”), upon a change of control event as defined by the terms and conditions of the Bonds, the bondholders will have the option to require the Company to redeem or, at the Company’s option, purchase the Bonds at their nominal amount together with accrued interest. There are no agreements between the Company and Directors or employees providing for the compensation for loss of office of employment as a result of a takeover bid. EmPlOYmEnT AnD EnViROnmEnTAl mATTERS Information in respect of the Group’s employment and environmental matters and greenhouse gas reporting is contained in the Corporate Responsibility Report on pages 45 to 47. POST BAlAnCE SHEET EVEnTS Information relating to post balance sheet events can be found in note 36 to the Financial Statements on page 101. gROUP STRUCTURE Details of the Group’s principal subsidiary undertakings are disclosed in note 18 to the Financial Statements on pages 88 to 89. SHARE CAPiTAl Details of the Company’s issued share capital are shown in note 27 to the Financial Statements on page 95. The Company’s share capital consists of both ordinary shares and deferred shares. Each class of shares rank pari passu between themselves. There are no restrictions on the transfer of shares in the Company other than those specified by law or regulation (for example: insider trading laws) and pursuant to the Listing Rules of the Financial Conduct 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 2014 Annual General Meeting (AGM) specifies deadlines for exercising voting rights and appointing a proxy or proxies to vote in relation to resolutions to be passed at the meeting. There are no restrictions on voting rights other than as specified by the Company’s Articles of Association. SUBSTAnTiAl SHAREHOlDingS As at 30 May 2014, 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: Aberdeen Group Michael Slade Baillie Gifford & Co. JP Morgan Chase & Co Investec Group Black Rock Inc. Old Mutual Dimensional Fund Advisors Number of ordinary shares at 30 May 2014 14,478,848 12,886,047 8,399,901 7,328,625 5,626,517 4,926,869 4,536,120 4,288,853 % 12.26 10.91 7.11 6.20 4.76 4.17 3.84 3.63 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. AnnUAl gEnERAl mEETing The Annual General Meeting of the Company will be held on 25 July 2014 at 11.30 a.m. at The Connaught, Carlos Place, Mayfair, London W1K 2AL. The special business at the 2014 AGM will include resolutions dealing with the authority to issue shares, the disapplication of pre-emption rights, the authority for the Company to purchase its own shares, the authority to call general meetings on not less than 14 clear days’ notice and the approval of the 2014 PSP. The notice of meeting, containing explanations of all the resolutions to be proposed at that meeting, is enclosed with this Annual Report and can be found on the Group’s website at www.helical.co.uk. AUDiTORS The Group’s auditors, Grant Thornton UK LLP, have expressed their willingness to continue in office and resolutions to reappoint them and to authorise the directors to determine their remuneration will be proposed at the AGM. DiSClOSURE OF inFORmATiOn TO AUDiTORS The directors who held office at the date of approval of this Directors’ report confirm that, so far as they are aware, there is no relevant audit information of which the Company’s auditors are unaware, and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant information and to establish that the Company’s auditors are aware of that information. PURCHASE OF OWn SHARES The Company was granted authority at the 2013 Annual General Meeting to make market purchases of its own ordinary shares. No ordinary shares were purchased under this authority during the year and up to the date of this report. The authority will expire at the conclusion of the 2014 AGM, at which a resolution will be proposed to renew this authority. By order of the Board Heather Williams FCiS Company Secretary 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014stateMeNt oF dIReCtoRs’ ResP oNsIBILItIes 71 The directors are responsible for preparing the Annual Report, the Remuneration Report and the financial statements in accordance with applicable law and regulations. The directors consider that the annual report and the financial statements, taken as a whole, provide the information necessary to assess the Company’s performance, business model and strategy and is fair, balanced and understandable. 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 and Company for that period. We 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 or loss of the group and the undertakings included in the consolidation taken as a whole; and, • the annual report, including the strategic 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. In preparing these financial statements, the directors are required to: On behalf of the Board • 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 michael Slade Chief Executive Tim murphy Finance Director material departures disclosed and explained in the financial statements; 19 June 2014 • prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements and Remuneration Report comply with the Companies Act 2006 and article 4 of the IAS Regulations. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE 72 RePo Rt oF INdePeNdeN t aUdItoR inDEPEnDEnT AUDiTOR’S REPORT TO THE mEmBERS OF HEliCAl BAR PlC We have audited the financial statements of helical Bar plc (“the Group”) for the year ended 31 March 2014 which comprise the Consolidated Income Statement, Consolidated Statement of Comprehensive Income, Consolidated and Company Balance Sheets, the Consolidated and Company Cash Flow Statements, the Consolidated and Company Statements of Changes in Equity and the related notes 1 to 37. 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 AUDiTOR As explained more fully in the Statement of Directors’ Responsibilities set out on page 71, 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 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 Financial Reporting Council’s website at www.frc.org.uk/apb/scope/private.cfm. AUDiTOR COmmEnTARY an overview of the scope of our audit The Group is organised into two segments: investment and trading properties, and development properties. The Group financial statements are a consolidation of their reporting units which consist of its subsidiary undertakings and nine joint venture arrangements (significant subsidiary undertakings are listed in note 18 and joint ventures in note 19 of the financial statements) comprising the Group’s operating businesses within these segments. In establishing the overall approach to the Group audit, we determined the type of work that needed to be performed on the operating businesses by us, as the Group engagement team, or component auditors operating under our instruction. Our audit approach included a full audit of the financial statements of the parent company, helical Bar plc, and the financial information of its subsidiary undertakings incorporated in the United Kingdom and Channel Islands and seven of the joint venture arrangements, due to the size or risk characteristics of those entities. In addition, specific audit procedures were performed on certain balances and transactions of the Group’s subsidiary undertakings in Poland and two of the joint venture arrangements, based on our assessment of the risk of material misstatement of the Group financial statements. Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those operating businesses to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group financial statements as a whole. The subsidiary undertakings and joint venture arrangements subject to a full scope audit represent 96% of the Group’s net assets at the balance sheet date, 98% of the Group’s revenue for the year and 94% of the Group’s profit before tax for the year. We evaluated controls over key financial systems identified as part of our risk assessment, reviewed the accounts production and consolidation processes and addressed critical accounting matters. We undertook substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls over individual systems and the management of specific risks. our application of materiality We apply the concept of materiality in planning and performing our audit, in evaluating the effect of any identified misstatements and in forming our opinion. For the purpose of determining whether the financial statements are free from material misstatement we define materiality as the magnitude of a misstatement or an omission from the financial statements or related disclosures that would make it probable that the judgement of a reasonable person relying on the information would have been changed or influenced by the misstatement or omission. For the group audit, we established materiality for the financial statements as a whole to be £3,405,000, which is 1% of net assets. Net asset value and similar measures are used by investors and analysts to assess the performance of the Group and we therefore consider net assets to be most appropriate measure on which to base our materiality. For the financial information of the individual subsidiary undertakings and the joint venture arrangements, we set our materiality based on a proportion of group materiality appropriate to the relative scale of each of the operating businesses. We determined the threshold at which we would communicate misstatements to the Audit Committee to be £157,300. In addition, we communicated misstatements below that threshold that, in our view, warrant reporting on qualitative grounds. HELICAL BAR PLC REPORT & ACCOUNTS 2014rEport oF indEpEndEnt auditor continued 73 our assessment of risk Without modifying our opinion, we highlight the following matters that are, in our judgement, likely to be most important to users’ understanding of our audit. Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an opinion on individual transactions, account balances or disclosures. recognition of revenue The Group enters into development contracts under which the recognition of revenue often involves management judgement in applying IFRIC 15 or is determined by complex criteria, such as staged recognition of revenue upon completion of specified contractual obligations. In addition, auditing standards prescribe a presumed risk of fraud in revenue recognition in that revenue may be misstated through improper recognition. We have therefore identified revenue recognition as a significant risk requiring special audit consideration. Our audit work included, but was not restricted to, an evaluation of the Group’s revenue recognition policies and their application to key development contracts, agreeing property sales proceeds to completion statements and bank receipts, and analytically reviewing rental income. The revenue recognition policy of the Group is set out on page 102. Rental income is disclosed in note 3 and development property income in note 4 to the financial statements. Valuation of investment property The Group holds investment property for long-term rental income and capital appreciation which is required to be revalued annually to fair value in accordance with IAS 40 ‘Investment Property’. The fair values of significant investment properties are determined by professionally qualified external valuers. These valuations involve a number of estimates and assumptions, some of which derive from information provided by management and can be highly judgemental. We therefore identified the valuation of investment properties as an area requiring particular audit attention. Our audit work included, but was not restricted to, obtaining an understanding of the approach to, and controls over, the valuation of investment property; discussing and challenging the estimates, assumptions and valuation methodology with the external valuer; considering the accuracy of prior period valuations in the context of subsequent sales; and assessing the appropriate accounting treatment of complex transactions. We have assessed the independence and credentials of the external valuer and evaluated the adequacy of the valuer’s work in respect of our audit. employee remuneration – bonus and performance share plan The Group operates three directors’ remuneration bonus and performance share plans being the Executive Bonus Plan 2011, the helical Bar Annual Bonus Scheme 2012 and the Performance Share Plan. Determining the charge in respect of each scheme involves complex calculations and elements of management judgement and we have therefore identified this as an area requiring particular audit attention. Our audit work included, but was not restricted to, confirming that the calculation methodology accords with the scheme rules, that management judgements are reasonable and that matters requiring the approval of the Remuneration Committee have been approved. Our work focused on obtaining supporting documentation and challenging management’s assumptions related to the judgements for the surplus of the development stock above cost and assessing the forecasted net asset value growth of the Group over the three year vesting period of the Performance Share Plan options and future bonus cap based on our knowledge of the Group. Details of bonuses and Performance Share Plan charges in respect of the directors are shown in Note 8 to the financial statements. Management override of controls Under ISAs (UK & Ireland), we are required to consider the risk of management override of financial controls and, due to the unpredictable nature of this risk, we are required to assess it as a significant risk requiring special audit consideration. Our audit work included, but was not restricted to, specific procedures relating to this risk that are required by ISA 240 ‘The Auditors Responsibilities relating to Fraud in an Audit of Financial Statements’. This included tests of journal entries, the evaluation of judgements and assumptions in management’s estimates and tests of significant transactions outside the normal course of business. In particular, our work on revenue recognition, the valuation of investment properties and bonus and performance share plans address key aspects of ISA 240. OPiniOn On FinAnCiAl STATEmEnTS In our opinion: • the financial statements give a true and fair view of the state of the Group’s and of the Company’s affairs as at 31 March 2014 and of the Group’s profit for the year then ended; The Group’s accounting policy on investment properties is set out in note 37 and the disclosures in respect of investment properties are included in note 15. • the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; • the Company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeGOVERNANCE74 rEport oF indEpEndEnt auditor continued OTHER REPORTing RESPOnSiBiliTiES opinion on other matters prescribed by the Companies act 2006 In our opinion: • the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; • the information given in the Strategic Report and Directors’ Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and • the information given in the Corporate Governance Statement set out on pages 51 to 53 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 ISAs (UK and Ireland), we are required to report to you if, in our opinion, information in the annual report is: • materially inconsistent with the information in the audited financial statements; or • apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the course of performing our audit; or • otherwise misleading. In particular, we are required to consider whether we have identified any inconsistencies between our knowledge acquired during the audit and the directors’ statement that they consider the annual report is fair, balanced and understandable and whether the annual report appropriately discloses those matters that were communicated to the Audit Committee which we consider should have been disclosed. Under the Companies Act 2006 we are required to report to you if, in our opinion: • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or • the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in agreement with the accounting records and returns; or • certain disclosures of directors’ remuneration specified by law are not made; or • we have not received all the information and explanations we require for our audit ; or • a Corporate Governance Statement has not been prepared by the company. Under the Listing Rules, we are required to review: • the directors’ statement, set out on page 53, in relation to going concern; • the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the UK Corporate Governance Code specified for our review. Charles Hutton-Potts Senior Statutory Auditor for and on behalf of Grant Thornton UK LLP Statutory Auditor, Chartered Accountants London 19 June 2014 HELICAL BAR PLC REPORT & ACCOUNTS 2014 consolidated income statement consolidated statement of comprehensive income consolidated and company balance sheets consolidated and company cash flow statements consolidated and company statements of changes in equity notes to the financial statements 76 76 77 78 79 80 75 DEvELOPm ENT CREECHURCH PlACE LONDON EC1 273,000 sQ Ft CONSTRUCTION COMMENCED ON 273,000 SQ FT OFFICE DEVELOPMENT COMPLETION DUE SEPTEMBER 2016 FINANCIAL STATEmENTS heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements76 CoNsoLI dated INCoM e stateMeNt FoR the yeaR eNded 31 MaRCh 2014 Revenue Net rental income Development property profit Trading property gain/(loss) Share of results of joint ventures Other operating income/(expense) gross 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 profit Finance costs Finance income Change in fair value of derivative financial instruments Foreign exchange (losses)/gains Profit before tax Taxation on profit on ordinary activities Profit after tax - attributable to equity shareholders - attributable to non-controlling interests Profit for the year Basic earnings per share Diluted earnings per share Year ended 31.3.14 £000 123,637 24,402 62,825 252 16,448 230 104,157 29,325 (88) 133,394 (26,676) 106,718 (13,983) 4,135 5,312 (501) 101,681 (14,126) 87,555 87,603 (48) 87,555 75.0p 73.2p Year ended 31.3.13 £000 65,439 19,578 6,956 (1) 3,854 (547) 29,840 1,335 - 31,175 (14,920) 16,255 (9,577) 887 (2,573) 17 5,009 815 5,824 5,867 (43) 5,824 5.0p 5.0p Note 2 3 4 5 19 6 21 7 9 9 35 10 14 14 CoNsoLIdated stateMeNt oF CoMPRehe NsIve INCoMe FoR the yeaR eNded 31 MaRCh 2014 Profit for the year Other comprehensive income Impairment of available-for-sale investments Exchange difference on retranslation of net investments in foreign operations Total comprehensive income for the year - attributable to equity shareholders - attributable to non-controlling interests Total comprehensive income for the year Both of the items in ‘Other Comprehensive Income’ will be reclassified to the Income Statement in the future. Note 21 Year ended 31.3.14 £000 Year ended 31.3.13 £000 87,555 5,824 (936) 51 86,670 86,718 (48) 86,670 (1,304) (212) 4,308 4,351 (43) 4,308 HELICAL BAR PLC REPORT & ACCOUNTS 2014CoNsoLI dated aNd CoMPaNy BaLaNCe sheets as at 31 MaRCh 2014 77 non-current assets Investment properties Owner occupied property, plant and equipment Investment in subsidiaries Investment in joint ventures Derivative financial instruments Trade and other receivables Deferred tax asset Total non-current assets Current assets Land, developments and trading properties Available-for-sale investments Trade and other receivables Cash and cash equivalents Total assets Current liabilities Trade and other payables Corporate tax payable Borrowings non-current liabilities Trade and other payables Borrowings Derivative financial instruments Total liabilities net assets Equity Called-up share capital Share premium account Revaluation reserve Capital redemption reserve Other reserves Retained earnings Own shares held group 31.3.14 £000 Group 31.3.13 £000 Company 31.3.14 £000 Company 31.3.13 £000 Note 15 17 18 19 35 22 11 20 21 22 23 24 25 24 25 35 493,201 1,050 - 62,980 1,867 7,673 8,458 575,229 98,160 4,973 33,337 63,237 199,707 774,936 312,026 1,153 - 949 - 980 - 36,584 36,945 49,890 146 6,325 10,381 379,921 92,874 5,997 38,017 36,863 173,751 553,672 15 315 - 749 15 52 - 577 38,612 38,569 - - 491,437 30,376 521,813 560,425 - - 326,244 24,035 350,279 388,848 (49,230) (34,929) (235,578) (153,580) (5,370) (1,275) (55,875) (70) (39,295) (74,294) (2,908) - - (6,848) (238,486) (160,428) (2,150) - - (374,811) (220,446) (82,399) (1,573) (378,534) (434,409) (5,164) (225,610) (299,904) (192) (82,591) (321,077) - (4,457) (1,027) (5,484) (165,912) 2 340,527 253,768 239,348 222,936 27 1,447 98,678 33,106 7,478 291 1,447 98,678 10,593 7,478 291 1,447 98,678 - 7,478 1,987 1,447 98,678 - 7,478 1,987 200,455 135,211 129,758 113,346 (950) - - - Equity attributable to equity holders of the parent company 340,505 253,698 239,348 222,936 Non-controlling interests Total equity 22 70 - - 340,527 253,768 239,348 222,936 The financial statements were approved by the Board of Directors on 19 June 2014. michael Slade Director Tim murphy Director HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements 78 CoNsoLIdated aNd CoMPaNy Cash FLoW stateMeNts FoR the yeaR to 31 MaRCh 2014 Cash flows from operating activities Profit/(loss) before tax Depreciation Revaluation gain on investment properties (Gain)/loss on sales of investment properties Net financing costs/(income) Change in value of derivative financial instruments Share based payment charge Share of results of joint ventures Impairment of available for sale assets Foreign exchange movement Other non-cash items Cash inflow/(outflow) 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 (paid)/received Cash flows from operating activities Cash flows from investing activities Purchase of investment property Sale of investment property Purchase of own shares Cost of cancelling interest rate swap Investment in subsidiaries 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 Net cash (used in)/generated from investing activities Cash flows from financing activities Borrowings drawn down Borrowings repaid Equity dividends paid Net cash generated from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Exchange losses on cash and cash equivalents Cash and cash equivalents at 1 April Cash and cash equivalents at 31 march group 31.3.14 £000 Group 31.3.13 £000 Company 31.3.14 £000 Company 31.3.13 £000 101,681 719 (20,714) (8,611) 9,529 (5,312) 6,333 5,009 340 (3,723) 2,388 8,690 2,573 1,864 (16,448) (3,854) 88 109 (10) 67,364 3,680 (11,306) 16,096 75,834 (17,645) 1,236 (6,903) (23,312) 52,522 (199,944) 56,914 (950) 8 - (650) 2,668 1,350 34 (646) (141,216) 274,369 (152,636) (6,660) 115,073 26,379 (5) 36,863 62,237 - (211) - 13,076 (21,470) 9,520 10,637 11,763 (13,104) 887 732 (11,485) 278 (5,141) 21,910 - (1) - (6,622) 751 - - (242) 10,655 33,682 (37,001) (6,134) (9,453) 1,480 (28) 35,411 36,863 29,549 653 - - 1,121 (1,098) - - - - (10) 30,215 (165,193) - 87,763 (47,215) (6,087) 1,810 (6,903) (11,180) (58,395) - - - - (287) 290 - - (1,565) 478 - - - 32 - (1,052) (1,571) 101 7,715 5,193 (951) 3,217 (1,886) 380 5,573 - - - - (150) (6,622) - - - 34 (646) (762) 80,000 (7,842) (6,660) 65,498 6,341 - 24,035 30,376 - - - - (163) (6,785) 11,298 (6,240) (6,134) (1,076) (2,288) (32) 26,355 24,035 HELICAL BAR PLC REPORT & ACCOUNTS 2014CoNsoLIdated aNd CoMPaNy stateMeNts oF ChaNges IN eQUIty FoR the yeaR to 31 MaRCh 2014 group Share capital £000 Share premium £000 Revaluation reserve £000 Capital redemption reserve £000 Other reserves £000 Retained earnings £000 Own shares held Non- controlling interests £000 At 31 March 2012 1,447 98,678 2,612 7,478 291 143,111 Total comprehensive income/ (expense) Revaluation surplus Realised on disposals Performance share plan Dividends paid - - - - - - - - - - - 3,723 4,258 - - - - - - - - - - - - 4,351 (3,723) (4,258) 1,864 (6,134) At 31 March 2013 1,447 98,678 10,593 7,478 291 135,211 Total comprehensive income/(expense) Revaluation surplus Realised on disposals Performance share plan Share settled bonus Purchase of own shares Dividends paid - - - - - - - - - - - - - - - 20,714 1,799 - - - - - - - - - - - - - - - - - - 86,718 (20,714) (1,799) 6,333 1,366 - (950) (6,660) - - - - - - - - - - - - - 79 Total £000 253,730 4,308 - - 1,864 (6,134) 113 (43) - - - - 70 (48) 253,768 86,670 - - - - - - - - 6,333 1,366 (950) (6,660) At 31 march 2014 1,447 98,678 33,106 7,478 291 200,455 (950) 22 340,527 For a breakdown of Total comprehensive income/expense, see the Consolidated Statement of Comprehensive Income on page 76. Included within changes in equity are net transactions with owners of £89,000 (2013: £4,270,000) made up of: the performance share plan charge of £6,333,000 (2013: £1,864,000), dividends paid of £6,660,000 (2013: £6,134,000), the purchase of own shares of £950,000 (2013: £nil) and the share settled bonuses of £1,366,000 (2013: £nil). The adjustment to retained earnings of £6,333,000 adds back the performance share plan charge (2013: £1,864,000), in accordance with IFRS 2 Share- Based Payments. Share premium £000 Revaluation reserve £000 Capital redemption reserve £000 Other reserves £000 Retained earnings £000 Total £000 Company At 31 March 2012 Total comprehensive expense Dividends paid At 31 March 2013 Total comprehensive income Dividends paid At 31 march 2014 Share capital £000 1,447 - - 98,678 - - 1,447 98,678 - - - - 1,447 98,678 - - - - - - - 7,478 1,987 122,789 232,379 - - - - (3,309) (6,134) (3,309) (6,134) 7,478 1,987 113,346 222,936 - - - - 23,072 23,072 (6,660) (6,660) 7,478 1,987 129,758 239,348 Total comprehensive income is made up of the gain after tax of £23,072,000 (2013: loss £3,309,000). Included within changes in equity are net transactions with owners of £6,660,000 (2013: £6,134,000) made up of dividends paid of £6,660,000 (2013: £6,134,000). 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/deficit 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements80 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. 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 in note 36. These accounting policies are consistent with those applied in the year to 31 March 2013, as amended to reflect any new Standards, Amendments to Standards and interpretations which are mandatory for the year ended 31 March 2014. IAS 1 (amended): Presentation of items of other comprehensive income (effective 1 July 2012); IAS 12 (amended): Deferred tax – Recovery of underlying assets (effective 1 January 2013); IFRS 7 (amended): Disclosures – transfer of financial assets (effective 1 January 2013); and IFRS 13: Fair value measurement (effective 1 January 2013); There has been no material impact as a result of adopting the above other than additional disclosure of fair value measurement of Investment Properties. 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 27 (revised): Separate financial statements (effective 1 January 2014); IAS 28 (revised): Associates and joint ventures (effective 1 January 2014); IFRS 9: Financial Instruments: Classification and measurement; IFRS 10: Consolidated financial statements (effective 1 January 2014); IFRS 11: Joint arrangements (effective 1 January 2014); IFRS 12: Disclosure of interests in other entities (effective 1 January 2014); Amendments to IAS 32 (Dec 2011) Offsetting Financial Assets and Financial Liabilities (effective 1 January 2014); Amendments to IAS 36 Recoverable Amounts Disclosures for Non-Financial Assets (effective 1 January 2014); and Annual improvements to IFRSs 2011-2013 cycle (effective 1 July 2014). 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. 2. 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: • Investment properties, which are owned or leased by the Group for long-term income and for capital appreciation, and Trading properties which are owned or leased with the intention to sell; and, • Developments, which include sites, developments in the course of construction, completed developments available for sale, pre-sold developments and interest in third party developments. Revenue Rental income Development property income Trading property sales Other revenue Total revenue investment and trading Year ended 31.3.14 £000 Developments Year ended 31.3.14 £000 Total Year ended 31.3.14 £000 27,994 - 8,230 2,956 39,180 2,000 82,457 - - 29,994 82,457 8,230 2,956 84,457 123,637 Investment and trading Year ended 31.3.13 £000 24,032 - 122 1,003 25,157 Developments Year ended 31.3.13 £000 Total Year ended 31.3.13 £000 1,784 38,498 - - 25,816 38,498 122 1,003 40,282 65,439 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 £nil (2013: £nil), revenue from the sale of goods of £62,965,000 (2013: £31,193,000), revenue from services of £30,678,000 (2013: £8,430,000), and rental income of £29,994,000 (2013: £25,816,000). All revenues are within the UK other than rental income from development properties in Poland of £1,065,000 (2013: £1,104,000) and £835,000 (2013: £671,000) of development income derived from the Group’s operations in Poland. HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 81 Profit before tax Net rental income Development property profit Trading property profit /(loss) Share of results of joint ventures Gain on sale and revaluation of investment properties Impairment of available for sale assets Other operating income/(expense) Gross profit Administrative expenses Finance costs Finance income Change in fair value of derivative financial instruments Foreign exchange (losses)/gains Profit before tax net assets Investment properties Land, development and trading properties Investment in joint ventures Owner occupied property, plant and equipment Derivative financial instruments Deferred tax assets Available-for-sale investments Trade and other receivables Cash and cash equivalents Total assets Liabilities Net assets investment and trading Year ended 31.3.14 £000 Developments Year ended 31.3.14 £000 Total Year ended 31.3.14 £000 22,764 - 252 18,882 29,325 71,223 1,638 62,825 - (2,434) - 24,402 62,825 252 16,448 29,325 62,029 133,252 Investment and trading Year ended 31.3.13 £000 18,232 – (1) 4,323 1,335 23,889 (88) 230 133,394 (26,676) (13,983) 4,135 5,312 (501) 101,681 At 31.3.14 £000 493,201 2,528 58,460 At 31.3.14 £000 At 31.3.14 £000 - 493,201 95,632 4,520 98,160 62,980 554,189 100,152 654,341 At 31.3.13 £000 312,026 2,528 41,687 356,241 1,050 1,867 8,458 4,973 41,010 63,237 774,936 (434,409) 340,527 Developments Year ended 31.3.13 £000 Total Year ended 31.3.13 £000 1,346 6,956 – (469) – 7,833 19,578 6,956 (1) 3,854 1,335 31,722 - (547) 31,175 (14,920) (9,577) 887 (2,573) 17 5,009 At 31.3.13 £000 At 31.3.13 £000 - 312,026 90,346 8,203 98,549 92,874 49,890 454,790 1,153 146 10,381 5,997 44,342 36,863 553,672 (299,904) 253,768 All non-current assets are derived from the Group’s UK operations except for helical’s share of a held for sale investment held at £nil (2013: £4,792,000) which is derived from the Group’s Polish operations. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements82 notES to tHE Financial StatEmEntS continued 3. 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 Year ended 31.3.14 £000 Year ended 31.3.13 £000 29,994 (476) (4,328) 25,190 (788) 24,402 25,816 (342) (5,186) 20,288 (710) 19,578 Property overheads include lettings costs, vacancy costs and bad debt provisions. The amounts above include gross rental income from investment properties of £27,994,000 (2013: £24,032,000) and net rental income of £22,764,000 (2013: £18,232,000). No contingent rental income was received in the year (2013: £nil). 4. DEVElOPmEnT PROPERTY PROFiT Development property income Cost of sales Sales expenses Provision against book values Development property profit 5. TRADing PROPERTY gAin/(lOSS) Trading property sales Cost of sales Sales expenses Trading property gain/(loss) 6. nET gAin On SAlE AnD REVAlUATiOn OF inVESTmEnT PROPERTiES Net proceeds from the sale of investment properties Book value (note 15) 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 Year ended 31.3.14 £000 Year ended 31.3.13 £000 82,457 (15,613) (4,751) 552 62,825 38,498 (30,420) (462) (660) 6,956 Year ended 31.3.14 £000 Year ended 31.3.13 £000 8,230 (7,945) (33) 252 122 (110) (13) (1) Year ended 31.3.14 £000 Year ended 31.3.13 £000 57,971 (48,303) (1,057) 8,611 20,714 29,325 21,910 (23,865) (433) (2,388) 3,723 1,335 HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 83 7. ADminiSTRATiVE ExPEnSES Administrative expenses Operating profit is stated after the following items that are contained within administrative expenses: Depreciation - owner occupied property, plant and equipment Share-based payments charge Auditors’ remuneration: Audit fees - audit of parent company and consolidated financial statements - audit of company’s subsidiaries - audit of interim consolidated financial statements - audit of Company’s subsidiaries by affiliate of Group Auditor 8. STAFF COSTS Staff costs during the year: - wages and salaries - social security costs - other pension costs Year ended 31.3.14 £000 Year ended 31.3.13 £000 (26,676) (14,920) 719 6,333 340 1,864 150 52 42 12 155 47 41 11 Year ended 31.3.14 £000 Year ended 31.3.13 £000 14,465 2,844 115 17,424 8,627 1,420 116 10,163 Details of the remuneration of Directors amounting to £14,396,000 (2013: £5,560,000) are included in the Directors’ Remuneration Report on pages 55 to 67. The amount of the share-based payments charge relating to share awards made to Directors is £5,799,000 (2013: £1,715,000). Included within wages and salaries are directors’ bonuses of £6,099,000 (2013: £3,051,000) as discussed in the Directors’ Remuneration Report on pages 55 to 67. 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 46 (2013: 40) of which 34 are UK staff and 12 are based in Poland. Of the staff costs of £17,424,000 (2013: £10,163,000), £16,369,000 is included within administrative expenses (2013: £9,713,000) £481,000 is included within development costs (2013: £331,000) and £574,000 is included in Other operating income/expense (2013: £119,000). Within administrative costs is the share based payment charge for the year of £6,333,000 (2013: £1,864,000) which is not included in the staff costs above. 9. FinAnCE COSTS AnD FinAnCE inCOmE Interest payable on bank loans and overdrafts Other interest payable and similar charges Interest capitalised Finance costs Interest receivable and similar income Gain on purchase of loan Finance income Year ended 31.3.14 £000 Year ended 31.3.13 £000 (14,298) (10,445) (2,520) 2,835 (13,983) 1,236 2,899 4,135 (1,658) 2,526 (9,577) 887 - 887 During the year to 31 March 2014, the Group purchased a loan from one of its lenders realising a gain of £2,899,000. On projects where specific third party loans have been arranged, interest has been capitalised in accordance with IAS 23 - Borrowing Costs, at the rate for the individual loan. The weighted average capitalised interest rate of such loans was 3.57% (2013: 2.87%). 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 4.60% (2013: 4.06%). HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements 84 notES to tHE Financial StatEmEntS continued 10. TAxATiOn On PROFiT On ORDinARY ACTiViTiES The tax (charge)/credit is based on the profit for the year and represents: United Kingdom corporation tax at 23%/24% - Group corporation tax - adjustment in respect of prior periods - overseas tax Current tax charge Deferred tax at 20%/21% - capital allowances - tax losses - other temporary differences Deferred tax (charge)/credit Tax (charge)/credit on profit on ordinary activities Factors affecting the tax charge for the period: The tax assessed for the period is lower than the standard rate of corporation tax in the UK (23%). The differences are explained below: Profit on ordinary activities before tax Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23% Effect of: - expenses not deductible for tax purposes - income not subject to UK corporation tax - adjustment to brought forward capital allowances - tax movements on share awards - additional tax losses recognised/(unavailable) - operating profit of joint ventures - prior year adjustment - revaluation surplus not recognised through deferred tax - chargeable gain lower than/(in excess of) profit or loss on investment property - overseas tax - other temporary differences Effect of change of rate of corporation tax Total tax (charge)/credit for the period Year ended 31.3.14 £000 Year ended 31.3.13 £000 (11,687) (403) (113) (12,203) 1,157 (1,746) (1,334) (1,923) (14,126) (435) - (84) (519) 46 163 1,125 1,334 815 Year ended 31.3.14 £000 Year ended 31.3.13 £000 101,681 (23,387) 5,009 (1,152) (1,422) (1,308) 164 493 1,135 (168) 3,783 (403) 3,971 1,980 (113) 971 (1,130) (14,126) 311 - 616 1,411 876 - 856 (510) (84) (201) - 815 Note: all deferred tax balances have been calculated at the substantively enacted future rate of corporation tax of 20% for the year to 31 March 2015. 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014 notES to tHE Financial StatEmEntS continued 85 11. DEFERRED TAx Deferred tax provided for in the financial statements is set out below: Capital allowances Tax losses Other temporary differences Deferred tax asset group 31.3.14 £000 (1,264) 8,988 734 8,458 Group 31.3.13 £000 (2,421) 10,734 2,068 10,381 Company 31.3.14 £000 Company 31.3.13 £000 99 363 287 749 (29) - 606 577 Other temporary differences represent deferred tax assets arising from the recognition of the fair value of derivative financial instruments, unrealised gains and future tax relief available to the Group from capital allowances and when share awards vest. The Group contains entities with tax losses for which no deferred tax asset is recognised. The total unrecognised losses amount to approximately £7.6m. A deferred tax asset has not been recognised because the entities in which the losses have been generated either do not have forecast taxable profits or the losses have restrictions whereby their utilisation is considered to be unlikely. If upon sale of the investment properties the Group retained all the capital allowances, the deferred tax provision in respect of capital allowances of £1.2m (2013: £2.4m) would be released and further capital allowances of £11.4m (2013: £9.5m) would be available to reduce future tax liabilities. 12. DiViDEnDS PAiD AnD PAYABlE Attributable to equity share capital Ordinary - interim paid of 2.00p (2013: 1.85p) per share - prior period final paid of 3.70p (2013: 3.40p) per share Total dividends paid and payable in year - 5.70p (2013: 5.25p) per share Year ended 31.3.14 £000 Year ended 31.3.13 £000 2,337 4,323 6,660 2,161 3,973 6,134 An interim dividend of 2.00p was paid on 27 December 2013 to shareholders on the register on 6 December 2013. The final dividend of 4.75p, if approved at the AGM on 25 July 2014, will be paid on 30 July 2014 to shareholders on the register on 4 July 2014. This final dividend, amounting to £5,540,000, has not been included as a liability as at 31 March 2014, in accordance with IFRS. 13. 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 profit for the year of the Company was £23,072,000 (2013: loss of £3,309,000). HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements 86 notES to tHE Financial StatEmEntS continued 14. 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 effect of all dilutive options and awards. The 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 earnings and weighted average number of shares used in the calculations are set out below. Ordinary shares in issue Weighting adjustment Weighted average ordinary shares in issue for calculation of basic earnings per share Weighted average ordinary shares issued on exercise of share options Weighted average ordinary shares to be issued on share settled bonuses Weighted average ordinary shares to be issued under performance share plan Weighted average ordinary shares in issue for calculation of diluted and diluted EPRA earnings per share Earnings used for calculation of basic and diluted earnings per share Basic earnings per share Diluted earnings per share 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 (gain)/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 Performance related awards Earnings used for calculation of adjusted diluted EPRA earnings per share Performance related awards Earnings used for calculation of diluted EPRA earnings per share Year ended 31.3.14 000 Year ended 31.3.13 000 118,138 118,138 (1,323) (1,292) 116,815 116,846 46 451 2,389 119,701 34 - 1,349 118,229 £000 87,603 £000 5,867 75.0p 73.2p £000 87,603 (29,325) (15,710) 1,981 (252) (5,312) (1,001) 88 862 17,860 56,794 (17,860) 38,934 5.0p 5.0p £000 5,867 (1,335) (3,109) (549) 1 2,573 (32) - (572) 6,828 9,672 (6,828) 2,844 Adjusted diluted EPRA earnings per share Diluted EPRA earnings per share 47.4p 32.5p 8.2p 2.4p The earnings used for calculation of diluted EPRA earnings per share includes net rental income and development property profits but excludes trading property losses. HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 87 15. inVESTmEnT PROPERTiES Group Fair value at 1 April Property acquisitions Transfers from land, developments and trading properties Disposals Revaluation surplus/(deficit) Revaluation surplus attributable to profit share partner Freehold 31.3.14 £000 leasehold 31.3.14 £000 Total 31.3.14 £000 Freehold 31.3.13 £000 Leasehold 31.3.13 £000 Total 31.3.13 £000 288,076 183,357 - (41,870) 20,493 220 23,950 16,587 8,600 (6,433) 221 - 312,026 199,944 8,600 (48,303) 20,714 220 292,276 4,299 - 34,600 326,876 842 - 5,141 - (13,069) (10,796) (23,865) 4,419 151 (696) - 3,723 151 Fair value at 31 March 450,276 42,925 493,201 288,076 23,950 312,026 Interest capitalised during the year in respect of the refurbishment of investment properties amounted to £nil (2013: £nil). Interest capitalised in respect of the refurbishment of investment properties is included in investment properties to the extent of £4,782,317 (2013: £5,767,000). Investment properties with a total fair value of £474,200,000 (2013: £312,025,000) were held as security against borrowings. All of the Group’s properties are level 3, as defined by IFRS 13 Fair Value Measurement, in the fair value hierarchy as at 31 March 2014 and there were no transfers between levels during the year. Level 3 inputs used in valuing the properties, are those which are unobservable, as opposed to level 1 (inputs from quoted prices) and level 2 (observable inputs either directly, i.e. as prices, or indirectly, i.e. derived from prices). Transfers into and transfers out of the fair value hierarchy levels are recognised on the date of the event or change in circumstances that caused the transfer. There were no transfers in or out of Level 3 for investment properties during the year. Valuation methodology The fair value of the Group’s investment property as at 31 March 2014 was determined by independent external valuers at that date. The valuations are in accordance with the Royal Institution of Chartered Surveyors (‘RICS’) Valuation – Professional Standards 2012 and were arrived at by reference to market transactions for similar properties. Fair values for investment properties are calculated using the present value income approach. The main assumptions underlying the valuations are in relation to rent profile and yields as discussed below. A key driver of the property valuations is the terms of the leases in place at the valuation date. These determine the cash flow profile of the property for a number of years. The valuation assumes adjustments from these rental values to current market rent at the time of the next rent review (where a typical lease allows only for upward adjustment) and as leases expire and are replaced by new leases. The current market level of rent is assessed based on evidence provided by the most recent relevant leasing transactions and negotiations. The nominal equivalent yield is applied as a discount rate to the rental cash flows which, after taking into account other input assumptions such as vacancies and costs, generates the market value of the property. The equivalent yield applied is assessed by reference to market transactions for similar properties and takes into account, amongst other things, any risks associated with the rent uplift assumptions. The net initial yield is calculated as the current net income over the gross market value of the asset and is used as a sense check and to compare against market transactions for similar properties. The valuation output, along with inputs and assumptions, are reviewed to ensure these are in line with what a market participant would use when pricing each asset. There are interrelationships between all the inputs as they are determined by market conditions. The existence of an increase in more than one input would be to magnify the input on the valuation. The impact on the valuation will be mitigated by the interrelationship of two inputs in opposite directions. Details of the investment portfolio yields can be found on page 26 of this report. The investment properties have been valued at 31 March 2014 as follows: Cushman & Wakefield LLP Directors’ valuation The historical cost of investment property is £457,780,930 (2013: £298,878,000). 31.3.14 £000 493,200 1 31.3.13 £000 312,025 1 493,201 312,026 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements88 notES to tHE Financial StatEmEntS continued 16. 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: 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 as lessor. 17. OWnER OCCUPiED PROPERTY, PlAnT AnD EQUiPmEnT - gROUP group 31.3.14 £000 29,065 81,237 104,240 214,542 Group 31.3.13 £000 24,281 64,729 57,966 146,976 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 Short leasehold improvements 31.3.14 £000 Plant and equipment 31.3.14 £000 2,071 302 - 2,373 1,283 528 - 1,811 562 825 344 (234) 935 460 187 (200) 447 488 Short leasehold improvements 31.3.13 £000 Plant and equipment 31.3.13 £000 2,071 - - 2,071 1,096 187 - 1,283 788 686 242 (103) 825 410 153 (103) 460 365 Total 31.3.14 £000 2,896 646 (234) 3,308 1,743 715 (200) 2,258 1,050 Total 31.3.13 £000 2,757 242 (103) 2,896 1,506 340 (103) 1,743 1,153 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 £101,000 as at 31 March 2014 (2013: £173,000). 18. inVESTmEnT in SUBSiDiARiES At 1 April Acquired during year Share capital repaid by subsidiary Investment impaired during the year At 31 March group 31.3.14 £000 Group 31.3.13 £000 - - - - - - - - - - Company 31.3.14 £000 36,945 150 - (511) Company 31.3.13 £000 31,173 6,772 (1,000) - 36,584 36,945 HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 89 The Company’s principal subsidiary undertakings, all of which have been consolidated, are: Name of undertaking Baylight Developments Ltd* Dencora (Docklands) Ltd Dencora (Fordham) Ltd Downtown Space Properties LLP harbour Developments (Bracknell) Ltd hB Sawston No. 3 Ltd helical Bar (Maple) Ltd helical Bar Developments (South East) Ltd helical Bar (Great Dover Street) Ltd helical Bar (Mitre Square) Ltd helical Bar Services Ltd helical Bar (Wales) Ltd* helical Bar (White City) Ltd helical (Artillery) Ltd helical (Basildon Retail) LP* helical (Battersea) Ltd helical (Bramshott Place) Ltd helical (Broadway) Ltd helical (Cardiff) Ltd helical (Corby) Ltd helical (Corby Investments) Ltd helical (Churchgate) Ltd helical (Crownhill) Ltd helical (Enterprise) Ltd helical (East Kilbride) Ltd helical (Exeter) Ltd helical (Faygate) Ltd helical (Glasgow) Ltd helical (hailsham) Ltd helical (hedge End) Ltd helical (huddersfield) Ltd helical (Liphook) Ltd helical (Porchester) Ltd helical (Quartz) Ltd helical Retail Ltd helical (Sevenoaks) Ltd helical (St Vincent) Ltd helical (Telford) Ltd helical (Winterhill) Ltd helical (Whitechapel) Ltd helical Wroclaw Sp. z.o.o.* Metropolis Property Ltd Newmarket LP* Sutton-in-Ashfield LP* Nature of business Percentage of ordinary share capital held Investment Investment Investment Investment Development Investment Investment Development Investment Development Management Services Investment Development Investment Investment Investment Development Investment Investment Investment Investment Investment Investment (Jersey) Investment Investment Development Development Investment/Trading Development Trading Investment Development (Jersey) Investment Investment Development Investment Development Development Investment Investment Development (Poland) Investment Investment Investment 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% *Ordinary capital is held by a subsidiary undertaking. All principal subsidiary undertakings operate in the United Kingdom other than 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. 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements90 notES to tHE Financial StatEmEntS continued 19. inVESTmEnT in jOinT VEnTURES investment & trading 31.3.14 £000 Development 31.3.14 £000 Total 31.3.14 £000 Investment & trading 31.3.13 £000 Development 31.3.13 £000 Total 31.3.13 £000 Summarised statements of consolidated income Revenue Gross rental income Rents payable Property overheads net rental income Development profit/(losses) Loss on sale of property 6,351 6,351 (625) (671) 5,055 - (31) Gain on revaluation of investment properties 15,710 Impairment of held for sale investment Other operating income/(expense) Administrative expenses Finance costs Finance income Change in fair value movement of derivative financial instruments Profit/(loss) before tax Tax Profit/(loss) after tax Summarised balance sheets non-current assets Investment properties Owner occupied property, plant and equipment Current assets Land, development and trading properties held for sale investments Trade and other receivables Cash and cash equivalents Current liabilities Trade and other payables Borrowings non-current liabilities Trade and other payables Borrowings Derivative financial instruments Deferred tax net assets 250 250 - 132 382 2,199 - - (4,792) 70 - (24) 170 - (1,995) (439) (2,434) 6,601 6,601 (625) (539) 5,437 2,199 (31) 15,710 (4,792) 372 (94) (3,051) 539 1,001 17,290 (842) 16,448 - - - 107,504 21 107,525 27,165 27,165 - 1,256 11,500 39,921 - 3,193 15,792 46,150 (39,077) (12,453) (51,530) (8,464) (30,389) (51) (261) (39,165) 62,980 5,629 5,629 (802) (437) 4,390 - - 3,109 - 58 (623) (2,189) 5 32 4,782 (505) 4,277 94,962 25 94,987 - - 1,088 4,713 5,801 564 564 - (73) 491 (659) - - - (157) (79) (80) 61 - (423) - (423) - - - 23,797 4,792 962 5,080 34,631 6,193 6,193 (802) (510) 4,881 (659) - 3,109 - (99) (702) (2,269) 66 32 4,359 (505) 3,854 94,962 25 94,987 23,797 4,792 2,050 9,793 40,432 (11,257) (24,928) (36,185) (720) - (720) (11,977) (24,928) (36,905) - (46,094) (1,030) - (47,124) 41,687 - (1,500) - - (1,500) 8,203 - (47,594) (1,030) - (48,624) 49,890 - 302 (94) (3,027) 369 1,001 19,285 (403) 18,882 107,504 21 107,525 - - 1,937 4,292 6,229 (3,649) (35,428) (12,453) (16,102) (8,464) (30,389) (51) (289) (39,193) 58,459 - (35,428) - - - 28 28 4,521 HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 91 The cost of the Company’s investment in joint ventures was £15,000 (2013: £15,000). The Directors’ valuation of the trading and development stock shows a surplus of £1,760,000 above book value (2013: £1,028,000). At 31 March 2014 the Group and the Company had interests in the following joint venture companies: Country of incorporation Class of share capital held Proportion held Group Proportion held Company hP Properties Ltd (BVI) Barts Two Investment Property Ltd 207 Old Street Unit Trust 211 Old Street Unit Trust Old Street Retail Unit Trust City Road (Jersey) Ltd Old Street holdings LP helical Sosnica Sp. zoo. Abbeygate helical (Leisure Plaza) Ltd Abbeygate helical (Winterhill) Ltd Abbeygate helical (C4.1) LLP Shirley Advance LLP British Virgin Islands Jersey Jersey Jersey Jersey Jersey Jersey Poland United Kingdom United Kingdom United Kingdom United Kingdom Ordinary Ordinary n/a n/a n/a Ordinary n/a Ordinary Ordinary Ordinary n/a n/a King Street Developments (hammersmith) Ltd United Kingdom Ordinary 60% 33% 33% 33% 33% 33% 33% 50% 50% 50% 50% 50% 50% Nature of business Investment Investment Investment Investment Investment Investment Investment Development - - - - - - - - 50% Development 50% Development 50% Development - - Development Development The Group’s investment in helical Sosnica Sp. zoo has been accounted for as an investment held for sale due to a commitment to sell the Group’s share within the next year. At 31 March 2014 helical Sosnica Sp. zoo held a development property the fair value of which the Director’s believe to be £96,406,000 (of which helical’s share is £48,203,000) and a bank loan of £59,490,000 of which helical’s share is £29,745,000) repayable in September 2017. 20. lAnD, DEVElOPmEnTS AnD TRADing PROPERTiES group At 1 April Construction costs Interest capitalised Transfer to investment properties Disposals Foreign exchange movements Provision At 31 March Company At 1 April Provision At 31 March Development properties 31.3.14 £000 90,346 32,863 2,835 (8,600) (22,109) (255) 552 Trading stock 31.3.14 £000 2,528 - - - - - - Total 31.3.14 £000 92,874 32,863 2,835 (8,600) (22,109) (255) 552 Development properties 31.3.13 £000 97,103 20,164 2,526 - Trading stock 31.3.13 £000 2,638 5 - - Total 31.3.13 £000 99,741 20,169 2,526 - (28,919) (110) (29,029) 127 (655) - (5) 127 (660) 95,632 2,528 98,160 90,346 2,528 92,874 Development properties 31.3.14 £000 Development properties 31.3.13 £000 - - - 101 (101) - The Directors’ valuation of trading and development stock shows a surplus of £25,719,000 above book value (2013: £48,837,000). Interest capitalised in respect of the development of sites is included in stock to the extent of £7,742,719 (2013: £7,010,000). Land, developments and trading properties with carrying values totalling £77,676,000 (2013: £82,144,000) were held as security against borrowings. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements92 notES to tHE Financial StatEmEntS continued 21. AVAilABlE-FOR-SAlE inVESTmEnTS At 1 April Additions Impairment in the year At 31 March 31.3.14 £000 5,997 - (1,024) 4,973 31.3.13 £000 7,003 298 (1,304) 5,997 Included within current available-for-sale investments is an amount lent to a company promoting a mainly residential mixed-use development and a holding of 20% of the equity of this company. The loan and the equity are classed as an available-for-sale investment and 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 expected consideration to be received including anticipated future costs of recovering this loan. This amount has been impaired in the year due to a revision in the expected receipt. 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. The Group does not consider that it has significant influence over this company despite having 20% of the equity as another party owns a majority shareholding and the Group does not have a representative on the board of the company. The decline in value of £1,024,000 (2013: £1,304,000) has been recognised in Other Comprehensive Income and, of this, £88,000 (2013: £nil) has been reclassified from Other Comprehensive Income and recognised in the Income Statement, being the amount impaired below historic cost of £5,061,000. 22. TRADE AnD OTHER RECEiVABlES Trade receivables Amounts owed by joint venture undertakings Amounts owed by subsidiary undertakings Other receivables Prepayments and accrued income group 31.3.14 £000 9,390 25,347 - 231 6,042 41,010 Group 31.3.13 £000 15,238 25,568 - 292 3,244 Company 31.3.14 £000 356 20,451 470,119 337 174 Company 31.3.13 £000 418 20,803 304,392 178 453 44,342 491,437 326,244 Included within Trade receivables of the Group at 31 March 2014 is £6,673,000 (2013: £6,325,000) due in 2015 and 2016 which is shown as a non-current asset in the Balance Sheet. Included within Prepayments and accrued income of the Group is a prepayment of £1,000,000 (2013: £nil) for the purchase of a property due to complete in 2015. 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 31.3.14 £000 35,272 414 194 35,880 5,130 41,010 Group 31.3.13 £000 42,195 311 458 42,964 1,378 44,342 Company 31.3.14 £000 Company 31.3.13 £000 490,966 325,665 - - - - 490,966 325,665 471 579 491,437 326,244 Past due receivables relate to a number of independent customers for whom there is no recent history of default. Against trade receivables, helical held £1,284,000 of rental deposits at 31 March 2014 (2013: £979,000). HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 93 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 31.3.14 £000 36,192 (312) 35,880 Group 31.3.13 £000 43,414 (450) Company 31.3.14 £000 Company 31.3.13 £000 490,966 325,665 - - 42,964 490,966 325,665 Receivables written off during the year as uncollectable 162 616 - - 23. CASH AnD CASH EQUiVAlEnTS Rent deposits and cash held at managing agents Restricted cash Cash deposits Restricted cash is made up of cash held by solicitors and cash in blocked accounts. 24. TRADE AnD OTHER PAYABlES Trade payables Social security costs and other taxation Amounts owed to subsidiary undertakings Other payables Accruals Deferred income group 31.3.14 £000 4,107 12,721 46,409 63,237 group 31.3.14 £000 11,074 4,615 - 3,699 24,302 7,690 51,380 Group 31.3.13 £000 2,788 7,327 26,748 36,863 Group 31.3.13 £000 7,599 2,988 Company 31.3.14 £000 Company 31.3.13 £000 - - 30,376 30,376 - - 24,035 24,035 Company 31.3.14 £000 Company 31.3.13 £000 323 - 233 - - 232,788 152,435 4,073 15,293 4,976 34,929 - 2,467 - 71 841 - 235,578 153,580 Included within deferred income is £2,150,000 (£2013: nil) which is due after more than one year. 25. BORROWingS Current borrowings Bank loans repayable within: - one to two years - two to three years - three to four years - four to five years - five to six years - six to seven years Non-current debt group 31.3.14 £000 1,275 13,904 102,403 100,562 79,083 - 78,859 374,811 Group 31.3.13 £000 39,295 10,811 63,009 99,301 47,325 - - 220,446 Company 31.3.14 £000 Company 31.3.13 £000 - 6,848 3,540 - - - - 78,859 82,399 - 4,457 - - - - 4,457 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 £551,876,000 (2013: £394,169,000). 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 £42,842,000 (2013: £48,314,000). HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements94 notES to tHE Financial StatEmEntS continued 26. FinAnCing AnD FinAnCiAl inSTRUmEnTS The policies for dealing with liquidity and interest rate risk are noted in the Principle Risks Report on pages 42 to 44. Bank overdraft and loans - maturity Due after more than one year Due within one year group 31.3.14 £000 374,811 1,275 376,086 Group 31.3.13 £000 220,446 39,295 259,741 The Group has various undrawn committed borrowing facilities. The facilities available at 31 March 2014 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 Expiring in more than two years but not more than three years Expiring in more than three years but not more than four years Expiring in more than four years but not more than five years 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 - Fixed rate retail bond Weighted average Floating rate borrowings Total borrowings % Expiry 3.958 5.957 4.020 5.645 - 4.015 4.525 4.240 4.160 6.000 4.766 3.476 jan 2015 jan 2015 may 2018 Oct 2014 - jan 2016 Feb 2019 nov 2017 may 2015 jun 2020 Dec 2016 mar 2017 31.3.14 £000 50,000 11,429 10,800 6,690 - 9,172 75,630 26,400 21,375 80,000 291,496 84,590 376,086 group 31.3.14 £000 10,000 6,335 37,735 Group 31.3.13 £000 1,877 1,694 6,074 - 25,811 36,481 90,551 % Expiry 3.958 4.500 - 5.645 6.240 3.972 - 4.240 4.117 - 4.340 3.312 Jan 2015 Jan 2015 - Oct 2014 Dec 2013 Jan 2016 - Nov 2017 May 2015 - Sep 2015 Oct 2016 - 35,456 31.3.13 £000 50,000 11,874 - 6,690 10,120 9,172 - 26,400 21,375 - 135,631 124,110 259,741 Changes in fixed borrowing rates are the result of stepped increases in interest rate swaps rates. Floating rate borrowings bear interest at rates based on LIBOR. As at 31 March 2014 and 31 March 2013 the Company’s borrowings consist of fixed rate borrowings of £6,690,000 at 5.645% (2013: £6,690,000 at 5.645%) expiring in October 2014 with the remainder being floating rate borrowings. In addition to the fixed rate borrowings above, the Group has a £75m interest rate swap at 2.0% starting in January 2015 and expiring in January 2020. HELICAL BAR PLC REPORT & ACCOUNTS 2014 notES to tHE Financial StatEmEntS continued 95 Economic hedging In addition to the fixed rates, borrowings are also hedged by the following financial instruments: Instrument Current: - cap - cap - cap - cap - cap - cap Value £000 50,000 25,000 50,000 25,000 - 75,000 7,200 11,037 - 10,613 Rate % 4.000 4.000 4.000 4.000 4.000 4.000 Start Expiry Apr 2011 Apr 2011 Jul 2013 Apr 2015 Apr 2016 Jul 2016 Apr 2015 Jan 2017 Jan 2012 Oct 2016 Jan 2015 Jan 2016 Where a range in capped values is shown, these reflect stepped increases/decreases over the life of the cap. gearing Total debt Cash Net debt group 31.3.14 £000 376,086 (63,237) 312,849 Net debt excludes the Group’s share of debt in joint ventures of £42,842,000 (2013: £48,314,000), and cash of £15,972,000 (2013: £9,793,000). Net assets Gearing 27. SHARE CAPiTAl Authorised 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 - 212,145,300 deferred shares of 1⁄8p each Ordinary shares At 1 April and 31 March Deferred shares At 1 April and 31 March 31.3.14 £000 31.3.13 £000 1,182 265 1,447 Shares in issue 31.3.13 Number 1,182 265 1,447 Share capital 31.3.13 £000 Shares in issue 31.3.14 number Share capital 31.3.14 £000 118,137,522 1,182 118,137,522 1,182 212,145,300 265 212,145,300 265 Group 31.3.13 £000 259,741 (36,863) 222,878 Group 31.3.13 £000 253,768 88% group 31.3.14 £000 340,527 92% 31.3.14 £000 39,577 39,577 31.3.13 £000 39,577 39,577 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements 96 notES to tHE Financial StatEmEntS continued 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, revaluation reserve and other reserves (2014: £333,977,000; 2013: £246,220,000). The Group continually monitors its gearing level to ensure that it is appropriate. Gearing increased from 88% to 92% in the year due to the Group selling some of its non-core properties. 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. 28. SHARE OPTiOnS At 31 March 2014 and 31 March 2013 there were 46,284 (2013: 46,284) unexercised options over new ordinary 1p shares in the Company. 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 2013: nil). The Company uses a stochastic valuation model to value the share options. Summary of share options At 1 April Options granted in prior years not previously recognised Options exercised Option expired/lapsed At 31 March Weighted average exercise Price 31.3.14 259.25 259.25 - - number 31.3.14 34,713 11,571 - - Weighted average exercise price 31.3.13 259.25 - - - Number 31.3.13 34,713 - - - 46,284 259.25 34,713 259.25 The share option awards outstanding at 31 March 2014 had a weighted average remaining contractual life of three months. The outstanding share options are all exercisable at 259.25p per share. 29. SHARE-BASED PAYmEnTS The Group provides share-based payments to employees in the form of performance share plan awards and a share incentive plan. 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 lapsed during the period Awards made during the period Outstanding at end of period 2014 Weighted average award value 211p 276p 244p 215p Awards 7,230,850 (2,133,222) 4,212,534 9,310,162 2013 Weighted average award value 277p 300p 167p 211p Awards 9,310,162 (2,368,701) 2,779,914 9,721,375 The performance share plan awards outstanding at 31 March 2014 had a weighted average remaining contractual life of one year three months. The fair value of the awards made in the year to 31 March 2014 was £6,533,000 (2013: £6,437,000). HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 97 The inputs into the stochastic model of valuation of the PSP awards made in the year to 31 March 2014 were as follows: Weighted average share price Weighted average exercise price Expected volatility Expected life Risk free rate Expected dividends 2014 303.2p - n/a 3 years n/a 2.20% 2013 203.4p - n/a 3 years n/a 3.07% 2012 215.2p - n/a 3 years n/a 1.88% The Group recognised a charge of £6,333,000 (2013: £1,864,000) during the year in relation to Share-based payments. At the balance sheet date there were no exercisable awards. 30. 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. For this purpose, 250,000 shares (2013: nil) in the Company were purchased during the year at a cost of £950,765 (2013: £nil). At 31 March 2014, unexercised options over nil (2013: nil) ordinary 1p shares in helical Bar plc had been granted over shares held by the Trust. At 31 March 2014, outstanding awards over 9,721,375 (2013: 9,310,162) ordinary 1p shares in helical Bar plc had been made under the terms of the Performance Share Plan over shares held by the Trust. At 31 March 2014, the Trust held 1,542,000 shares (2013: 1,292,000). 31. COnTingEnT liABiliTiES 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. Other than these contingent liabilities there were no contingent liabilities at 31 March 2014 for the Group or the Company (2013: £nil). 32. CAPiTAl COmmiTmEnTS The Group has a commitment to purchase a property for £19.8m in 2015. A prepayment of £1m is included in Trade and other receivables due after one year. 33. nET ASSETS PER SHARE Net asset value Less: own shares held by ESOP deferred shares Basic net asset value Add: share settled bonuses Add: unexercised share options Add: dilutive effect of the Performance Share Plan Diluted net asset value Adjustment for: - fair value of financial instruments - deferred tax 31.3.14 pence per share number of shares 000s 118,138 (1,542) 31.3.14 £000 340,527 (265) 31.3.13 £000 253,768 (265) 31.3.13 pence per share Number of shares 000s 118,138 (1,292) 340,262 116,596 292 253,503 116,846 217 451 46 3,578 120,671 288 - 120 7,124 347,506 (243) 2,444 - 90 3,649 257,242 6,048 578 - 34 1,824 118,704 217 Adjusted diluted net asset value 349,707 120,671 290 263,868 118,704 222 Adjustment for: - fair value of trading and development properties Diluted EPRA net asset value Adjustment for: - fair value of financial instruments - deferred tax Diluted EPRA triple net asset value 27,479 377,186 243 (2,444) 374,985 120,671 313 118,704 264 49,865 313,733 (6,048) (578) 120,671 311 307,107 118,704 259 The net asset values per share have been calculated in accordance with the best practice recommendations of the European Public Real Estate Association (“EPRA”). The adjustments to the net asset value comprise the amounts relating to the Group and its share in Joint Ventures. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements 98 notES to tHE Financial StatEmEntS continued 34. RElATED PARTY TRAnSACTiOnS At 31 March 2014 and 31 March 2013 the following amounts were due in respect of the Group’s joint ventures. At 31.3.14 £000 At 31.3.13 £000 Abbeygate helical (Leisure Plaza) Ltd Abbeygate helical (C4.1) LLP King Street Developments (hammersmith) Ltd Shirley Advance LLP hP Properties Ltd (BVI) Barts Two Investment Property Ltd helical Sosnica Sp. zoo 207 Old Street Unit Trust 211 Old Street Unit Trust Old St Retail Unit Trust City Road (Jersey) Ltd Old Street holdings LP Ltd All movements in joint venture balances related to loans repaid and loans advanced. At 31 March 2014 and 31 March 2013 there were the following balances between the Company and its subsidiaries. Amounts due from subsidiaries Amounts due to subsidiaries - - 3,050 4,723 - 146 11,900 1,792 1,701 719 710 100 31.3.14 £000 470,119 232,788 During the years to 31 March 2014 and 31 March 2013 there were the following transactions between the Company and its subsidiaries: Year ended 31.3.14 £000 Management charges receivable Management charges payable Interest receivable Interest payable 8,372 6,116 2,837 - 2,736 - 2,392 4,323 - 152 10,839 1,757 1,456 684 675 - 31.3.13 £000 304,392 152,435 Year ended 31.3.13 £000 3,480 83 1,574 - 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 22. Amounts owed to subsidiaries by the Company are identified in note 24. The Group considers that key management personnel are the directors. The compensation paid or payable to key management is: Salaries and other short term employee benefits Post employment benefits Other long-term benefits Share based payments Year ended 31.3.14 £000 Year ended 31.3.13 £000 8,429 - 3,330 8,154 19,913 5,644 - 856 2,634 9,135 The total dividends paid to directors of the Group in the year was £1,041,000 (2013: £973,322). During the year purchases of £60,000 (2013: £60,000) were made from a partnership in which Michael Slade, a director of the company, and his wife are partners. All transactions were carried out on an arm’s length basis. 35. FinAnCiAl inSTRUmEnTS Categories of financial instruments Financial assets in the Group include derivative financial assets which are designated as ‘Fair value through the Profit or Loss’. Financial assets also include trade and 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 classed as ‘Fair value through the Profit or Loss’ include derivatives and those liabilities designated as such. Financial liabilities also include secured bank loans and overdrafts, trade and other payables and provisions, all of which are classified as financial liabilities at amortised cost. HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 99 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 Profit or Loss Available-for-sale financial assets Total financial assets These financial assets are included in the balance sheet within the following headings: Available-for-sale investments Derivative financial instruments Trade and other receivables Cash and cash equivalents Total financial assets group 31.3.14 £000 99,117 1,867 4,973 105,957 group 31.3.14 £000 4,973 1,867 35,880 63,237 105,957 Group 31.3.13 £000 79,827 146 5,997 85,970 Group 31.3.13 £000 5,997 146 42,964 36,863 85,970 Company 31.3.14 £000 521,342 315 - Company 31.3.13 £000 349,700 52 - 521,657 349,752 Company 31.3.14 £000 - 315 490,966 30,376 521,657 Company 31.3.13 £000 - 52 325,665 24,035 349,752 Financial assets are stated in accordance with IAS 32 Financial Instruments: Presentation. For fair value of available-for-sale investments see note 21. 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 Profit or Loss Measured at amortised cost Other financial liabilities Total financial liabilities These financial liabilities are included in the balance sheet within the following headings: group 31.3.14 £000 (9,888) (78,859) Group 31.3.13 £000 (13,379) Company 31.3.14 £000 Company 31.3.13 £000 (192) (1,027) - (78,859) - (331,503) (278,491) (239,118) (164,886) (420,250) (291,870) (318,169) (165,913) Trade and other payables Borrowings - current Borrowings - non current Derivative financial instruments Total financial liabilities group 31.3.14 £000 (42,591) (1,275) Group 31.3.13 £000 (26,965) (39,295) Company 31.3.14 £000 Company 31.3.13 £000 (235,578) (153,581) - (374,811) (220,446) (82,399) (1,573) (5,164) (192) (420,250) (291,870) (318,169) (165,913) (6,848) (4,457) (1,027) 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, and those designated on initial recognition. 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 13 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 21, 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements100 notES to tHE Financial StatEmEntS continued Derivative financial instruments Derivative financial assets Interest rate caps Interest rate swaps Derivative financial liabilities Interest rate swaps group Year ended 31.3.14 £000 Group Year ended 31.3.13 £000 Company Year ended 31.3.14 £000 Company Year ended 31.3.13 £000 133 1,734 1,867 (1,573) (1,573) 146 - 146 (5,164) (5,164) 34 281 315 (192) (192) 52 - 52 (1,027) (1,027) The Group’s movement in the fair value of the derivative financial instruments in the year was a gain of £5,312,000 (2013: loss of £2,573,000); Company: gain of £1,098,000 (2013: loss of £478,000). 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 their financial position, past experience and other factors. As at 31 March 2014 helical has total credit risk exposure excluding cash of £40,853,000 of which £4,973,000 is available-for-sale assets and £35,880,000 is loans and receivables. Available-for-sale assets are analysed in note 21. Of the trade receivables held at 31 March 2014, £0.7m 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 22. 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. The Group 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 debt facilities, see notes 25 and 26. 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 31.3.14 £000 41,259 13,656 156,987 304,560 516,462 Group 31.3.13 £000 45,839 28,620 95,219 154,222 323,900 Company 31.3.14 £000 1,460 3,686 10,701 22,047 37,894 Company 31.3.13 £000 158,800 2,543 5,215 - 166,558 At 31 March 2014 helical had £91m of undrawn borrowing facilities, £39m of uncharged property assets and cash balances of £63m. 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 the Group can meet its contracted liabilities as they fall due. market risk The Group 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014notES to tHE Financial StatEmEntS continued 101 interest rate risk It is the Group’s policy and practice to minimise interest rate cash flow exposures on long-term financing. The Group 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 26. In the year to 31 March 2014, if interest rates had moved by 0.5%, this would have resulted in the following movement to net profits and equity due to movements in interest charges and mark-to-market valuations of derivatives. 0.5% increase - increase in net results and equity 0.5% decrease - decrease in net results and equity group 31 march 2014 Company 31 march 2014 impact on results £000 5,562 (4,362) Equity impact £000 5,562 (4,362) impact on results £000 1,123 (516) Equity impact £000 1,123 (516) Foreign currency exchange risk Due to its operations in Poland and its investment in a non-UK based property developer, the Group 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. In the year to 31 March 2014 the Group made foreign exchange losses of £501,000 (2013: gains of £17,000) resulting from movements in foreign exchange rates during the year affecting its assets and liabilities related to its overseas operations. The Group’s balance sheet translation exposure is summarised as follows: Gross currency assets Gross currency liabilities Net exposure 31 march 2014 31 March 2013 Euro (£000) 23,890 (8,398) 15,492 zloty (£000) 1,485 (1,187) 298 US dollars (£000) 4,960 - 4,960 Euro (£000) 28,135 (8,921) 19,214 Zloty (£000) 1,361 (1,112) 249 US dollars (£000) 5,984 - 5,984 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 2014 31 March 2013 Euro (£000) 11,921 - 11,921 zloty (£000) 4,627 - 4,627 Euro (£000) 10,853 - 10,853 Zloty (£000) 4,507 - 4,507 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: £1,549,000 (2013: £1,921,000), zloty: £30,000 (2013: £25,000), US dollar: £496,000 (2013: £598,000). 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: £1,192,000 (2013: £1,085,000), zloty: £463,000 (2013: £451,000). 36. POST BAlAnCE SHEET EVEnTS In April 2014, the Group acquired a portfolio of ten properties for a total consideration of £40.15m, reflecting an 8.35% net initial yield. On 10 June 2014, the Group announced the issuance of £100m of senior, unsecured guaranteed convertible bonds. The bonds will carry a coupon of 4.00% payable semi-annually in arrears and subject to certain conditions, will be convertible in June 2019 at the option of bondholders into preference shares of the issuer, helical Bar (Jersey) Limited, which will be automatically and mandatarily exchangeable into fully paid ordinary shares of the Company, unless a cash settlement option is exercised at the discretion of the Company. The initial conversion price has been set at £4.9694 per share. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements102 notES to tHE Financial StatEmEntS continued 37. 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 2014. 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 Corporate Governance review on page 51. 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, where the sale of the land is not conditional on the construction of the buildings and is not reversible in the event that the building is not constructed. 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. Property advisory/development management services - where the Group provides these services to the third party property site owner the Group recognises income over the period these services are provided and in accordance with the specific terms of the contract. If the amount of, and payment of, the consideration for these services are contingent upon a future event (such as sale of the property) and the Group recognises revenue when it has provided the services, it can reliably estimate the fair value of the consideration and upon occurrence of the relevant event, where amounts are receivable in future periods, the amount due is discounted for time and risk. 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. Deferred income - money received in advance of the provision of goods or services is held in the balance sheet until the income can be recognised in the Income Statement. 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 55 to 67. 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. The amount charged to the Income Statement is credited to the Retained Earnings reserve. On exercise of the performance share plan options, the total cumulative amount recognised in the Income Statement for the options is movement from Retained Earnings to the Share Capital and Share Premium accounts. On lapsing of the performance share plan options, the total cumulative amount recognised in the Income Statement is reversed in the Income Statement and Retained Earnings. 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 Plant and equipment - 10% or length of lease, if shorter - 25% HELICAL BAR PLC REPORT & ACCOUNTS 2014 notES to tHE Financial StatEmEntS continued 103 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 the Group 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) b) the Group is able to control the timing of the reversal of the temporary difference; and, 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 15. 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 either based on the interest paid (where a project has a specific loan) or calculated using the Group’s weighted average cost of borrowings (where there are no specific borrowings for the project). 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 below historic cost, in which case they are recognised in the Income Statement. Upon disposal, accumulated fair value adjustments are included in the Income Statement. Held for sale investments Investments are defined as held for sale when the Group intends to sell the investment and if sale is highly probable. Such held for sale investments are measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. 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, cash held at solicitors, cash in blocked accounts 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeFinancial statements104 notES to tHE Financial StatEmEntS continued Borrowing and borrowing costs Interest bearing bank loans and overdrafts and the Group’s retail bond are initially recorded at fair value, net of finance and other costs yet to be amortised in accordance with IAS39. Embedded derivatives contained within the borrowing agreements are treated in accordance with IAS39. 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. Gains or losses on extinguishing debt are recognised in the Income Statement in the period in which they occur. 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 35. 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. In accordance with IAS17, operating leases receipts are spread on a straight-line basis over the length of the lease. 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 recognised in Other Comprehensive Income. 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 per share Earnings 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 value of “Own shares held” with reference to the expected cash proceeds 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 statements. 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. Areas requiring the use of estimates and critical judgement that may significantly impact on the Group’s earnings and financial position are: - recognition of property management/development management service income includes subjective assumptions such as assessment of contingent events and time value of money for future payments (note 2); - valuation of investment properties, where external valuers are used to provide third party valuations (note 15); - 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 29); - 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 11); - the provision for future bonuses payable under the Annual Bonus scheme; - assessment of whether option and forward contracts entered into by the Group fall within the scope of IAS 39 (note 32). This involves assessing whether a contract can be settled net in cash or whether associated properties are readily convertible into cash; - assessment of whether forward sales meet the criteria for revenue recognition of IAS18 (note 2). In particular, whether the inflow of future economic benefits is probable or not; - valuation of the investment in a property developer which is based on a valuation method (note 21); 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 20). HELICAL BAR PLC REPORT & ACCOUNTS 2014FIve yeaR RevIeW CoNsoLI dated INCoM e stateMeNts 105 Revenue Net rental income Development profit/(loss) Provisions against stock Trading profit/(loss) Share of results of joint ventures Other income/(expense) 31.3.14 £000 123,637 24,402 62,273 552 252 16,448 230 gross profit/(loss) before gain/(loss) on investment properties 104,157 Gain/(loss) on sale of investment properties Revaluation surplus/(deficit) on investment properties Impairment of available-for-sale investments Administrative expenses excluding performance related awards Performance related awards Finance costs Finance income Movement in fair value of derivative financial instruments Foreign exchange (losses)/gains Profit/(loss) before tax Tax Profit/(loss) after tax 8,611 20,714 (88) (8,816) (17,860) (13,983) 4,135 5,312 (501) 101,681 (14,126) 87,555 31.3.13 £000 65,439 19,578 7,616 (660) (1) 3,854 (547) 29,840 (2,388) 3,723 - (8,092) (6,828) (9,577) 887 (2,573) 17 5,009 815 5,824 31.3.12 £000 52,968 17,876 5,166 (4,511) - 2,472 113 21,116 (376) 3,664 - (7,385) (415) (8,409) 583 (306) (1,064) 7,408 158 7,566 31.3.11 £000 119,059 14,187 (1,729) 31.3.10 £000 67,354 14,151 8,748 (14,913) (10,041) (367) 2,886 (358) (294) 4,842 2,670 (1,817) (7,312) 262 (6,992) 652 1,776 (67) (6,280) 2,391 (3,889) (10) 3,745 26 16,619 (4,909) 13,104 - (7,202) (1,478) (9,328) 1,039 1,157 (1,127) 7,875 1,711 9,586 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon106 FivE yEar rEvi EW continued See-through property portfolio at fair value See-through net borrowings Shareholders’ funds Dividend per ordinary share Special dividend per ordinary share Diluted EPRA earnings/(loss) per ordinary share Diluted adjusted EPRA net assets per share 31.3.14 £000 801,712 369,644 340,527 5.70p - 32.5p 313p 31.3.13 £000 626,425 286,314 253,768 5.25p - 2.4p 264p 31.3.12 £000 572,670 279,999 253,730 4.90p - 3.4p 250p 31.3.11 £000 532,158 241,988 255,397 2.00p - (6.4p) 253p 31.3.10 £000 495,114 228,682 242,607 7.25p - 2.9p 272p HELICAL BAR PLC REPORT & ACCOUNTS 2014see thRoUgh a NaLysIs 107 SEE-THROUgH nET REnTAl inCOmE AnD PROPERTY OVERHEADS helical’s share of the gross rental income, head rents payable and property overheads from property assets held in subsidiaries and in joint ventures are shown in the table below. Gross rental income Total gross rental income Rents payable Property overheads Net rental income attributable to profit share partner – subsidiaries – joint ventures – subsidiaries – joint ventures – subsidiaries – joint ventures 2010 £000 18,881 1,106 19,987 (12) (406) (3,732) - (986) 2011 £000 18,590 5,531 24,121 (24) (1,000) (3,662) (941) (717) 2012 £000 23,058 6,645 29,703 (418) (848) 2013 £000 25,816 6,193 32,009 (342) (802) (3,938) (5,186) (737) (826) (510) (710) See-through net rental income 14,851 17,777 22,936 24,459 SEE-THROUgH DEVElOPmEnT PROFiTS helical’s share of development profits from property assets held in subsidiaries and in joint ventures are shown in the table below. In parent and subsidiaries In joint ventures Total gross development profit Provision against stock See-through development profits 2010 £000 8,748 430 9,178 (10,041) (863) 2011 £000 (1,729) - (1,729) (14,913) (16,642) 2012 £000 5,166 - 5,166 (4,511) 655 SEE-THROUgH nET gAin On SAlE AnD REVAlUATiOn OF inVESTmEnT PROPERTiES 2010 £000 Revaluation surplus on investment properties – subsidiaries 13,104 – joint ventures - Total revaluation surplus Net (loss)/gain on sale of investment properties – subsidiaries – joint ventures Total net (loss)/gain on sale of investment properties See-through net gain on sale and revaluation of investment properties 13,104 (4,909) - (4,909) 8,195 2011 £000 2,670 798 3,468 4,842 - 4,842 8,310 2012 £000 3,664 581 4,245 (376) - (376) 3,869 2013 £000 7,616 - 7,616 (660) 6,956 2013 £000 3,723 3,109 6,832 (2,388) - (2,388) 4,444 2014 £000 29,994 6,601 36,595 (476) (625) (4,328) (539) (788) 29,839 2014 £000 62,273 2,199 64,472 552 65,024 2014 £000 20,714 15,710 36,424 8,611 (31) 8,580 45,004 HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon108 SEE tHrougH analySiS continued SEE-THROUgH nET FinAnCE COSTS helical’s share of the interest payable, finance charges, capitalised interest and interest receivable on bank borrowings and cash deposits in subsidiaries and in joint ventures are shown in the table below. 2010 £000 Interest payable on bank loans and overdrafts – subsidiaries 10,956 Total interest payable on bank loans and overdrafts Other interest payable and similar charges Interest capitalised Total finance costs Interest receivable and similar income See-through net finance costs – joint ventures – subsidiaries – subsidiaries – subsidiaries – joint ventures 492 11,448 1,568 (3,196) 9,820 (1,039) (2) 8,779 2011 £000 9,690 1,704 11,394 1,481 (4,179) 8,696 (652) (11) 8,033 2012 £000 10,808 2,223 13,031 901 (3,300) 10,632 (583) (12) 2013 £000 10,445 2,269 12,714 1,658 (2,526) 11,846 (887) (66) 10,037 10,893 SEE-THROUgH PROPERTY PORTFOliO helical’s share of the investment, trading and development property portfolio in subsidiaries and joint ventures are shown in the table below. 2010 £000 2011 £000 2012 £000 326,876 67,187 2013 £000 312,026 94,962 394,063 406,988 – subsidiaries 219,901 – joint ventures 45,300 265,201 182,576 Investment property Total investment property Trading and development stock – subsidiaries Total trading and development stock Trading and development stock surplus – subsidiaries 196,922 32,991 – joint ventures - – joint ventures 14,346 Total trading and development stock surpluses Total trading and development stock at fair value See-through property portfolio 32,991 229,913 495,114 271,876 65,870 337,746 147,542 14,434 161,976 32,436 - 32,436 194,412 532,158 99,741 44,324* 144,065 33,107 1,435 34,542 178,607 572,670 *Trading and development stock of joint ventures includes the Group’s share of development stock of helical Sosnica Sp. zoo (see note 19). SEE-THROUgH nET BORROWingS helical’s share of borrowings and cash deposits in parent and subsidiaries and joint ventures are shown in the table below. 2010 £000 In parent and subsidiaries – gross borrowings less than one year 72,459 – gross borrowings more than one year 170,229 In joint ventures – gross borrowings less than one year Total – gross borrowings more than one year Total 242,688 1,852 27,900 29,752 2011 £000 37,500 199,917 237,417 3,100 36,936 40,036 2012 £000 59,203 203,992 263,195 1,500 54,342* 55,842 In parent and subsidiaries Cash and cash equivalents (39,800) (31,327) (35,411) (36,863) In joint ventures Cash and cash equivalents (3,958) (4,138) (3,627) (9,793) See-through net borrowings 228,682 241,988 279,999 286,314 *Gross borrowings in joint ventures include the Group’s share of borrowings of helical Sosnica Sp. zoo (see note 19). 92,874 76,698* 169,572 48,837 1,028 49,865 219,437 626,425 2013 £000 39,295 220,446 259,741 720 72,509* 73,229 2014 £000 14,298 3,051 17,349 2,520 (2,835) 17,034 (4,135) (539) 12,360 2014 £000 493,201 107,504 600,705 98,160 75,368* 173,528 25,719 1,760 27,479 201,007 801,712 2014 £000 1,275 374,811 376,086 12,453 60,134* 72,587 (63,237) (15,792) 369,644 HELICAL BAR PLC REPORT & ACCOUNTS 2014PRoP eRty PoRtFoLIo 109 inVESTmEnT PORTFOliO london offices Address Description Area sq ft (NIA) Vacancy rate Shepherds Building, Shepherds Bush, London W14 Multi-let office building. Let to media companies Barts Square, London EC1 The Bower, 207 Old Street, London, EC1 New Loom house, London E1 Maple house, London EC1 Artillery Lane, London E1 Clifton Street, London EC2 NhS buildings with planning consent for 225,500 sq ft office, 215 residential apartments and 21,800 sq ft retail/leisure Office and retail buildings undergoing refurbishment and extension Multi-let office building soon to undergo refurbishment Office refurbishment scheme due for completion in June 2015 17,000 sq ft office building with refurbishment potential Contract to buy a newly constructed office building following completion in summer 2015 Enterprise house, London W2 Office building let to Network Rail for 20 years One King Street, London W6 Recently refurbished office and retail building adjacent to hammersmith Broadway The Powerhouse, Chiswick, London W4 Single let music recording/office building 151,000 420,000 284,000 112,000 50,000 17,000 43,000 45,000 35,000 24,000 1,181,000 regional offices Address Churchgate and Lee house, Manchester Description Multi-let city centre office building, Manchester with refurbishment and asset management potential Area sq ft (NIA) 250,000 Fordham, Newmarket Single let research and development facility The hub, Pacific Quay, Glasgow Multi-let office building Manor Royal, Crawley Manor Park, Reading Single let office building Office building let to Thames Water Phoenix house, Oldham Offices let to the Secretary of State Osprey house, Castle Donnington Offices let to National Grid Albert Edward house, The Pavillions, Preston St. Mary’s Court, 55 St. Mary’s Road, Sheffield Multi-let office building Single let office building industrial Address Dales Manor Business Park, Sawston Cambridge Winterhill Industrial Estate, Milton Keynes Description Industrial and office park Town centre industrial estate Walkmill Lane, Cannock Single let warehouse Unit 1, Centrum 100, Burton Upon Trent Unit 7 Badby Park, Newnham Drive, Daventry Aspect, Nottinghamshire Way, West Moor, Doncaster Single let distribution centre Single let distribution centre Single let distribution centre Sandal Stones Road, Doncaster Single let warehouse Meridian South, Leicester Unit B, Swift Park, Rugby Single let distribution centre Single let distribution centre Calver Quay, Calver Road, Warrington Two single let warehouse 70,000 60,000 48,000 36,000 60,000 25,000 39,000 15,000 603,000 Area sq ft (NIA) 19,000 25,000 147,000 93,000 45,000 123,000 154,000 66,000 45,000 71,000 788,000 1% 4% 56% 24% 100% 9% n/a 0% 0% 0% Vacancy rate 27% 0% 7% 0% 0% 0% 0% 30% 0% Vacancy rate 11% 0% 0% 0% 0% 0% 0% 0% 0% 0% HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon110 propErty portFolio continued retail Address Description Area sq ft (NIA) Vacancy rate The Morgan Quarter, Cardiff Prime retail parade and listed retail arcades with residential above 78-104 Town Square, Basildon high street retail parade with offices above The Guineas, Newmarket Town centre shopping centre Idlewells Shopping Centre, Sutton in Ashfield Corby Town Centre, Corby Covered town centre shopping centre Town centre including modern shopping centre, original high Street, retail park and residential Clyde Shopping Centre, Clydebank Town centre shopping centre huddersfield Retail Park, huddersfield Retail park Otford Retail Park, Sevenoaks Retail park Ty-glas Road, Cardiff Single-let DIy store Upton Road, Birkenhead Out of town supermarket Beckett Street, Doncaster Out of town supermarket Penny Street, Lancaster Town centre bank branch Unicorn hill, Redditch Pub let to JD Wetherspoons 226,000 54,000 142,000 143,000 781,000 625,000 97,000 42,000 42,000 16,000 7,000 14,000 12,000 2,201,000 5% 14% 5% 1% 4% 4% 0% 0% 0% 0% 0% 0% 0% DEVElOPmEnT PROgRAmmE offices Address Area sq ft (NIA) Fund/owner Helical interest Type of development Creechurch Place, London EC3 273,000 helical/hOOPP 100% St Vincent Street, Glasgow 220,000 M&G Investments Dev Man Existing building demolished. Starting on site in 2014 Creation of new office headquarters with local partner Botleigh Grange, hedge End Southampton industrial Address Ropemaker Park, hailsham retail Address 23,000 helical 100% New build regional hQ office 516,000 Area sq ft (NIA) Fund/owner Helical interest Type of development 3,217 3,217 helical 90% New build - completed Area sq ft (NIA) Helical interest Type of development Parkgate, Shirley, West Midlands 158,000 C4.1 Milton Keynes Leisure Plaza, Milton Keynes 33,000 161,000 352,000 50% 50% 50% Consented food store, retail and residential. Construction underway. Remaining retail and office units, part let Construction of an 80,000 sq ft supermarket, 33,000 retail and the refurbishment of an existing ice-rink HELICAL BAR PLC REPORT & ACCOUNTS 2014propErty portFolio continued 111 retirement villages Address Bramshott Place, Liphook, hampshire Durrants Village, Faygate, horsham Millbrook Village, Exeter Maudslay Park, Great Alne, Warwickshire Change of use potential Address Cawston, Rugby Arleston, Telford developments Address King Street, hammersmith, London W6 retail - poland Address Park handlowy Mlyn, Wroclaw Europa Centralna, Gliwice Units 151 171 164 150 636 Helical interest Type of development 100% 100% 100% 100% 138 units sold, 5 under offer. Construction of all phases completed 10 units exchanged or completed, 12 under offer. First phase under construction First phase under construction, 17 units reserved First phase under construction, 5 units reserved Area Helical interest Type of development 32 acres 19 acres 51 acres 100% 100% Site with planning consent to build 250 open market homes 19 acre greenfield site with residential potential Area sq ft (NIA) Helical interest Type of development 357,000 357,000 50% Planning permission received for residential, office, retail and leisure scheme Area sq ft (NIA) Fund/owner Helical interest Type of development 103,000 720,000 823,000 helical helical/ Standard Life 100% 50% Completed development, fully let Completed development HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon112 shaRehoLdeR 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 ‘Investors’ and ‘About us’ areas of our website www.helical.co.uk. DiViDEnDS Dividend payment dates on the Company’s Ordinary 1p shares in 2013 were as follows: REgiSTRAR All general enquiries concerning holdings of ordinary shares in helical Bar plc should be addressed to the Company’s Registrar: Capita Asset Services The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU Telephone: 0871 664 0300* Fax: 020 8639 2220 From outside the UK +44(0) 20 8639 3399 Website: www.capitaassetservices.com Email: shareholder.services@capita.co.uk * calls cost 10p per minute plus network extras. Lines are open between 9.00 a.m. and 5:30 p.m., Monday to Friday. E-COmmUniCATiOn Shareholders and all interested parties may choose to be alerted about updates to the Financial Reports, Results, Press Releases and Event Calendar sections of the Group’s website by subscribing to the Alert Service in the ‘News’ area of our website at www.helical.co.uk. 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 DRIP, key dates of forthcoming dividends can be found in the online financial calendar in the ‘Investors’ 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, PO Box 72253, London, SW1P 9LQ. Email: help@sharegift.org. Telephone: 020 7930 3737. Dividend Record date Payment date 2012/13 Final 5 July 2013 26 July 2013 2013/14 Interim 6 December 2013 27 December 2013 Dividend payment dates in 2014 will be as follows: Dividend Record date Payment date 2013/14 Final 4 July 2014 30 July 2014 2014/15 Interim December 2014 December 2014 Amount 3.70p 2.00p Amount 4.75p 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. It is not just the novice investor who 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: • Make sure you get the correct name of the person and organisation. • Check that they are properly authorised by the FCA (Financial Conduct Authority) before getting involved. you can check at www.fca.org.uk/consumers. • Report the matter to the FCA either by calling 0800 111 6768 or by completing an online form at: www.fca.org.uk/consumers/scams/investment-scams/share-fraud-and- boiler-room-scams/reporting-form. If you deal with an unauthorised firm, you would not be eligible to receive payment under the Financial Services Compensation Scheme. Also keep in mind that some fraudsters use the name of genuine firms or individuals on the FCA Register to suggest that they are legitimate. however, authorised firms are unlikely to contact you out of the blue offering to buy or sell shares. 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 REPORT & ACCOUNTS 2014 gLossaRy oF teRMs 113 Average unexpired lease term The average unexpired lease term expressed in years. Capital value (psf) Company or Helical Diluted EPRA earnings per share Diluted EPRA net assets per share The open market value of the property divided by the area of the property in square feet. helical Bar plc. 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 (EPS) 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 Group’s valuers at each balance sheet date. gearing group initial yield iPD The normal value of Group borrowings expressed as a percentage of net assets helical Bar plc and its subsidiaries. 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 value per share (nAV) Equity shareholders’ funds divided by the number of ordinary shares at the balance sheet date. net gearing Passing rent Reversionary See-through Total property return Total return 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. The income/yield from the full estimated rental value of the property on the market value of the property grossed up to include purchaser’s costs, capital expenditure and capitalised revenue expenditure. The net rental income, net finance cost, property portfolio and net borrowings of the Group and the Group’s share in its Joint Ventures. The total of net rental income, trading and development profits and net gain on sale and revaluation of investment properties on a See-through basis. Growth in EPRA NAV plus dividends paid. This can be expressed as a percentage of EPRA NAV per share at the beginning of the period. Total shareholder return (TSR) 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. True equivalent yield Unleveraged returns 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. HELICAL BAR PLC REPORT & ACCOUNTS 2014INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon114 FINaNCIaL CaLe NdaR Year ended 31 march 2014 Annual General Meeting to be held on 25 July 2014 Final ordinary dividend payable 30 July 2014 Half year ending 30 September 2014 Results and interim ordinary dividend announced November 2014 Interim ordinary dividend payable December 2014 Year ending 31 march 2015 Results and final dividend announced May 2015 Final ordinary dividend payable July 2015 advIsoRs Registrars Bankers joint stockbrokers Auditors merchant bankers Corporate solicitors Capita Asset Services Aareal Bank AG Barclays Bank PLC Deutsche Bank AG Deutsche hypothekenbank AG Deutsche Pfandbriefbank AG hSBC Bank plc The Royal Bank of Scotland plc J.P. Morgan Cazenove Oriel Securities Limited Grant Thornton UK LLP Lazard & Co., Limited Ashurst LLP heLICaL BaR PLC report & accounts 2014 heLICaL BaR PLC report & accounts 2014 115 heLICaL BaR PLC report & accounts 2014 INTRODUCTIONFINaNCIal sTaTemeNTssTRaTegIC RepORTINvesTOR INFORmaTIONgOveRNaNCeInvestor InformatIon116 design: sg design {sg-design.co.uk} Printed by Park Communication on FSC® certifi ed paper. Park is an EMAS certifi ed company and its Environmental Management System is certifi ed to ISO 14001. 100% of the inks used are vegetable oil based, 95% of press chemicals are recycled for further use and, on average 99% of any waste associated with this production will be recycled. This document is printed on Novatech Matt, a paper containing 100% virgin fi bre sourced from well managed, responsible, FSC® certifi ed forests. The pulp used in this product is bleached using an elemental chlorine free (ECF) process. heLICaL BaR PLC report & accounts 2014 4 1 0 2 s t n u o c c A & t r o p e R c l p R A B L A C I L E H Helical Bar plc Registered Office 11-15 Farm Street London, W1J 5RS Tel: 020 7629 0113 Fax: 020 7408 1666 email: info@helical.co.uk www.helical.co.uk

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