Note 14
Intangible Assets
|
Total
£m |
Acquired
intangible
assets(1)
£m |
Goodwill |
Capitalised
software and
development
costs
£m |
| Cost |
|
|
|
|
| At 1 January 2004 |
20.0 |
- |
15.7 |
4.3 |
| Currency translation adjustments |
(0.7) |
- |
(0.7) |
- |
| Additions |
2.3 |
- |
1.0 |
1.3 |
| At 31 December 2004 |
21.6 |
- |
16.0 |
5.6 |
| |
|
|
|
|
| At 1 January 2005 |
21.6 |
- |
16.0 |
5.6 |
| Currency translation adjustments |
1.4 |
- |
1.3 |
0.1 |
| Additions |
0.6 |
- |
- |
0.6 |
| Acquisitions |
6.8 |
1.4(1) |
5.2(2) |
- |
| At 31 December 2005 |
30.4 |
1.4 |
22.7 |
6.3 |
| |
|
|
|
|
| Amortisation and impairment losses |
|
|
|
|
| At 1 January 2004 |
7.6 |
- |
6.0 |
1.6 |
| Currency translation adjustment |
(0.3) |
- |
(0.3) |
- |
| Impairment charge |
0.7 |
|
0.7(3) |
|
| Amortisation for the year |
0.8 |
- |
- |
0.8 |
| At 31 December 2004 |
8.8 |
- |
6.4 |
2.4 |
| |
|
|
|
|
| At 1 January 2005 |
8.8 |
- |
6.4 |
2.4 |
| Currency translation adjustment |
0.5 |
- |
0.5 |
- |
| Impairment charge |
- |
- |
- |
- |
| Amortisation for the year |
1.2 |
0.2 |
- |
1.0 |
| At 31 December 2005 |
10.5 |
0.2 |
6.9 |
3.4 |
| |
|
|
|
|
| Carrying Amounts |
|
|
|
|
| At 1 January 2004 |
12.4 |
- |
9.7 |
2.7 |
| At 31 December 2004 |
12.8 |
- |
9.6 |
3.2 |
| |
|
|
|
|
| At 1 January 2005 |
12.8 |
- |
9.6 |
3.2 |
| At 31 December 2005 |
19.9 |
1.2 |
15.8 |
2.9 |
(1) Acquired intangible assets comprise sales order backlog, brand name, and customer relationships arising on the acquisition of Kata. These are amortised using the
straight line method over their estimated useful life of five years.
(2) £5.4 million represents goodwill arising on the acquisition of the business and assets of Kata International Limited and Kata Professional (Kimchi and Tishler)
Limited (Kata), the designer and manufacturer of premium protective carrying bags for cameras and accessories in the photographic and broadcast markets, on 31
May 2005.
The results of Kata have been included in the Photographic division (see Note 26).
(3) The impairment charge in 2004 of £0.7 million is in respect of goodwill that arose on the acquisition of Drake Elecronics Limited in 1998 (£0.4 million), and
Vega Holdings Inc in 1999 (£0.3 million).
Impairment tests for cash-generating assets containing goodwill
Goodwill is analysed as follows:
| Unit |
2005
£m |
2006
£m |
| Photographic (excluding Kata) |
2.8 |
2.8 |
| Kata |
5.4 |
- |
| Broadcast Services |
3.3 |
2.9 |
| Broadcast Systems |
4.1 |
3.9 |
| Total |
15.6 |
9.6 |
Impairment tests for all the above units have been carried out based on value in use calculations. Except for Broadcast Services,
these calculations use cash flow projections based on actual operating results and five year projections. Cash flows thereafter are
extrapolated using a one to two percent growth rate which is considered appropriate because these businesses are long term in nature.
These growth rates are consistent with the long term average growth rates for these industries. In the case of Broadcast Services, the
calculation has used cash flow projections for 20 years in order to take into account the highly cyclical nature of this business. A pretax
discount rate of 14 to 16 per cent has been used in discounting the project cash flows for all the above units.
The key assumption and the approach to determining the calculated values is revenue and price growth which is determined by
statistical analysis of long-term market price trends adjusted annually for actual experience.
The calculations demonstrated that no impairment had arisen in respect of goodwill.
Information correct at 02/05/2006