Note 25

25. Capital and Reserves

Share
Capital
£m		 Share
Premium
£m		 Translation
reserve
£m		 Capital
Redemption
reserve
£m		 Cash flow
hedging
reserve
£m		 Retained
earnings
£m		 Total
Equity
£m
At 1 January 2004 8.2 2.6 - 1.6   57.7 70.1
Total recognised income for the year     (4.0)     7.1 3.1
Dividends paid           (9.2) (9.2)
Equity-settled transactions, net of tax           0.1 0.1
Premium on new shares issued   0.1         0.1
At 31 December 2004 8.2  2.7  (4.0)  1.6    55.7  64.2 
Adjustment in respect of adoption of IAS 32
and IAS 39 on 1 January 2005		         0.8 0.4 1.2
               
At 1 January 2005 8.2  2.7  (4.0)  1.6  0.8  56.1  65.4 
Total recognised income for the year     2.2   (1.5) 10.3 11.0
Dividends paid           (6.1) (6.1)
Equity-settled transactions, net of tax           0.3 0.3
At 31 December 2005 8.2  2.7  (1.8)  1.6  (0.7)  60.6  70.6 

The Group adopted IAS 32 & IAS 39 on 1 January 2005. On adoption, the Group recognised an additional £1.2 million of derivatives on the balance sheet. Of this amount, £0.8 million related to derivatives in cash flow hedging relationships and £0.4 million related to the time value of options recorded in retained earnings.

During the year, the £0.8 million related to derivatives in cash flow hedging relationships was released to the income statement in ‘Cost of sales’. Also, further derivatives were acquired for cash flow hedging relationships which were valued at (£0.7) million at the end of the year. The total movement in the cash flow hedging reserve during the year was therefore (£1.5) million.

Translation reserve

The translation reserve comprises all currency translation differences arising from the translation of the financial statements of foreign operations, as well as from the translation of monetary items designated as foreign net investments.

Cash flow hedging reserve

The cash flow hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Capital redemption reserve

This reserve was created in 1999 when the Company purchased, and subsequently cancelled, 885,000 ordinary shares.

Dividends

After the balance sheet date the following dividend was recommended by the directors. The dividend has not been provided for at the year end and there are no tax consequences.

2005
£m		 2004
£m
9.4p per share (2004: 8.9p) 3.9 3.7

Share capital and share premium

The authorised share capital at 31 December 2005 consisted of 65,000,000 (2004: 65,000,000) shares of 20p each, of which 41,086,719 were allotted and fully paid. The movement during the year was:

Shares Issued
share
capital
£m
At 1 January 2005 41,081,105 8.2
Exercise of share options 5,614 -
At 31 December 2005 41,086,719 8.2

At 31 December 2005 the following options had been granted and remained outstanding under the Company’s share option schemes:

Number of
shares		 Exercise
prices		 Dates
normally
exercisable
United Kingdom SAYE schemes 270,962 231p-595p 2006-2012
International SAYE plans 262,615 231p-439p 2006-2010
Executive schemes 1,416,590 257.5p-653p 2006-2015
  1,416,590    

On 2 June 2005, awards over an aggregate of 557,090 shares in the Company were made to 67 senior Group executives under the Company’s Long Term Incentive Plan. The total number of shares outstanding at 31 December 2005 under the Company’s Long Term Incentive Plan was 914,279 (2004: 476,283). The terms of the awards and the related performance conditions are described in the Remuneration Report.

On 30 June 2005, awards over an aggregate of 93,441 shares in the Company were made to nine senior Group executives under the Company’s Deferred Bonus Plan. The total number of shares outstanding at 31 December 2005 under the Company’s Deferred Bonus Plan was 140,161 (2004: 47,295). The terms of the awards and the related performance conditions are described in the Remuneration Report.

Information correct at 03/05/2006