Report & Accounts - JLT

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8. Services provided by the Group’s auditor and network firmsDuring the year the Group obtained the following services from the Group's auditor at the costs detailed below:2005 2004£'000 £'000Audit services- statutory audits 1,097 942- audit related regulatory reporting 30 25Further assurance services 406 986Tax advisory services 80 881,613 2,041Statutory audits: Relates to the aggregate remuneration of the auditors of the combined operations currently constituted as the Group. Ofthe auditors remuneration £130,000 (2004: £122,000) arose in respect of the parent companyAudit – related regulatory reporting: Fees for audit-related regulatory reporting relate to services that are required to be carried out by theexternal auditor in relation to statutory and regulatory filings or engagements and can include the following:- Review of interim financial information.- Reports or letters required to be provided by the external auditors under the Listing Rules of the UK Listing Authority, e.g. compliance withthe Combined Code.- Reporting required to be undertaken by the external auditor pursuant to the requirements of other regulatory bodies e.g. FSA.Further Assurance Services: These are services that are provided by an independent accountant but unrelated to the statutory audit. Inthese cases the Group has (or, in the case of the Group pension scheme, the trustees have) discretion as to whether or not to appoint theexternal auditor, although in many instances the external auditor will be best placed to undertake the work due to its in-depth knowledge ofthe Group. The following are examples of services that would generally be regarded as falling under the heading- Audit of Group pension schemes.- Work in connection with Class I Circulars and Listing Particulars.- "Due diligence" work.- Non-regulatory reporting on internal controls or corporate governance matters, e.g. reports commissioned by the Audit and ComplianceCommittee.- Advice on accounting matters and reviews of Accounting Standards (where these are unrelated to the statutory audit).During 2004 an amount totalling £713,000 was paid to the Group auditor in connection with "due diligence" work relating to the acquisitionsmade in Latin America. These fees were included in the cost of investment.The Audit and Compliance Committee has a policy on the use of the external auditors for non-audit services to ensure that the auditor'sindependence is maintained and it is involved in the decision on all such appointments where the anticipated fee exceeds £50,000. Eachyear a limit is set on the total fees that can be paid to the external auditor in relation to other services not referred to above, For 2005, theAudit & Compliance Committee has set this limit at one third of the statutory audit fees (2004: one third).9. Income tax expense2005 2004£'000 £'000Current tax expenseCurrent year 23,366 27,051Under/(over) provided in prior years 105 (923)23,471 26,128Deferred tax expenseOrigination and reversal of temporary differences (737) (1,004)(Increase)/decrease in tax rate (9) 20Benefit of tax losses recognised 640 888Prior year losses now recognised (712) (117)(818) (213)Total income tax expense in income statement 22,653 25,915Financial Statements Jardine Lloyd Thompson Group plc Annual Report & Accounts 200571
Financial StatementsNotes to the Financial Statementsfor the year ended 31st December 2005729. Income tax expense cont.The tax on the Group's profit before tax differs from the theoretical amount that would arise using the tax rate of the home countryof the Company as follows:2005 2004£'000 £'000Profit before tax 73,806 84,957Tax calculated at UK Corporation Tax rate of 30% 22,142 25,487Non-deductible expenses (principally entertainment expenses) 1,294 3,961Book depreciation in excess of tax depreciation 1 (1)Increase in provisions not deductible in the period/decrease in provisions not deducted in prior periods 2 (3)Accrued income not taxable in the period/income accrued in prior periods now taxable (1) 2Pensions 151 (3)Share based payments (1,074) 1Other adjustments to taxable profit 4 1Adjustments to tax charge in respect of prior periods 413 (942)Effect of UK and non-UK tax rate differences 457 (1,920)Tax on associates (736) (668)Total income tax expense 22,653 25,91510. Earnings per shareBasic earnings per share are calculated by dividing the profit attributable to shareholders by the weighted average number ofordinary shares in issue during the year, excluding any unallocated shares held by the Trustees of the Employees' Share OwnershipPlan Trust.Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares in issue to take account ofthe potential dilutive effect of outstanding share options.Additional basic and diluted earnings per share are also calculated based on underlying earnings attributable to shareholders.A reconciliation of earnings is set out below.Jardine Lloyd Thompson Group plc Annual Report & Accounts 20052005 2004Number ofNumber ofsharessharesWeighted average number of ordinary shares in issue 211,713,303 201,134,818Effect of outstanding share options 581,606 1,093,122Adjusted weighted average number of ordinary shares in issue 212,294,909 202,227,9402005 2004Basic Diluted Basic Dilutedpence pence pence pence£'000 per share per share £'000 per share per shareEarnings reconciliationUnderlying profit 52,615 24.9 24.8 64,019 31.9 31.6Impairment charges (2,751) (1,192)Taxation thereon 856 -(1,895) (0.9) (0.9) (1,192) (0.6) (0.6)Exceptional items (252) (10,098)Taxation thereon 105 2,928(147) (0.1) (0.1) (7,170) (3.6) (3.5)Profit attributable to shareholders 50,573 23.9 23.8 55,657 27.7 27.5
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Report & Accounts - JLT

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