Report & Accounts - JLT

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11. Dividends2005 2004£’000 £’000Final dividend in respect of 2004 of 12.0p per share (2003: 12.0p) 25,395 23,876Interim dividend in respect of 2005 of 8.5p per share (2004: 8.5p) 18,351 17,47443,746 41,350A final dividend in respect of 2005 of 12.0p per share (2004: 12.0p) amounting to a total of £25,636,000 (2004: £25,395,000) is proposedby the Board. The dividend proposed will not be accounted for until it has been approved at the Annual General Meeting.12. GoodwillNetGross Impairment carryingamount losses amount£'000 £'000 £'000At 1st January 2005Opening net book amount 161,235 (1,134) 160,101Exchange differences 10,042 (130) 9,912Acquisitions 32,334 - 32,334Impairment charge - (38) (38)At 31st December 2005 203,611 (1,302) 202,309At 1st January 2004Opening net book amount 114,123 (354) 113,769Exchange differences (4,783) 84 (4,699)Acquisitions 52,223 - 52,223Disposals (344) 344 -Impairment charge - (1,192) (1,192)161,235 (1,134) 160,101An impairment loss of £38,000 has been recognised during the year in respect of JLT Services Inc. which is included in the Employee Benefitbusiness unit.Impairment tests for goodwillGoodwill is allocated to the Group's cash generating units (CGUs) identified according to country of operation and business segment.A summary of the goodwill allocation is presented below.Risk & EmployeeInsurance Benefits Total£'000 £'000 £'000At 31st December 2005Australasia 9,880 - 9,880Asia 3,272 - 3,272UK and Europe 72,481 32,305 104,786Americas 84,371 - 84,371170,004 32,305 202,309At 31st December 2004Australasia 7,662 - 7,662Asia 2,879 - 2,879UK and Europe 41,369 32,270 73,639Americas 75,884 37 75,921127,794 32,307 160,101The recoverable amount of a CGU is determined based on value in use calculations. These calculations use cash flow projections based onbudgeted trading profit and budgeted interest income from insurance broking (IBA) funds. These financial budgets cover a five year periodand have been approved by management.Financial Statements Jardine Lloyd Thompson Group plc Annual Report & Accounts 200573
Financial StatementsNotes to the Financial Statementsfor the year ended 31st December 200512. Goodwill cont.Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below:Key assumptions used for value-in-use calculations:Risk & InsuranceEmployee BenefitsUK &UK &Australasia Asia Europe Americas Europe USAt 31st December 2005Growth rate (1) 5.90 6.27 4.10 6.22 4.10 6.10Discount rate (2) 15.71 12.39 11.20 12.02 17.01 14.4074At 31st December 2004Growth rate (1) 5.70 6.37 4.30 6.01 4.30 6.10Discount rate (2) 16.37 12.80 11.37 16.39 17.56 13.43(1) Average growth rate used to extrapolate cash flows beyond five years.(2) Pre-tax discount rate applied to the cash flow projections.The key assumptions used in value in use calculations were:The budgeted trading profit growth: management determines budgeted trading profit based on past experience and its expectation for themarket development.The budgeted IBA interest income growth: this is based on past experience and long-term interest rates projections.The discount rates used are pre-tax and reflect specific risks relating to the relevant segment and country of operation. The weightedaverage growth rates used are consistent with long-term economic forecasts in the countries of operation.Jardine Lloyd Thompson Group plc Annual Report & Accounts 2005Asset impairment:A total impairment loss of £761,000 has been recognised during the year in respect of JLT Services Inc. which is included in the EmployeeBenefits business segment. During the year a significant business portfolio was sold and a further part of the business is being restructuredto be managed and reported internally via a different CGU with effect from January 2006. The recoverable amount of the CGU containingthe related goodwill was determined based on value in use calculations using a discount rate of 14.4% (2004: 14.7%). During the previousyear an impairment loss of US$2,179,000 (£1,192,000 average exchange rates) was recognised in respect of JLT Re Solutions due to thesignificant loss of business.The allocation of the total impairment loss can be summarised as follows:2005 2004£'000 £'000Goodwill 38 1,192Intangible assets 56 -Property, plant and equipment 421 -Trade and other receivables 246 -Total impairment 761 1,192
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Jardine Lloyd Thompson Group plcAnn
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Chairman’s StatementChairman’s
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Chairman’s StatementChairman’s
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Financial ReviewFinancial Review16B
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Page 23 and 24: DirectorsDirectors221 2 34 5 6Jardi
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Page 115: Registered Office:6 Crutched Friars
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Report & Accounts - JLT

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