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| All figures in £ millions | Treasury shares |
Special reserve |
Retained earnings |
Total |
|---|---|---|---|---|
| Balance at 1 January 2003 | (39) | 447 | 1,050 | 1,458 |
| Net exchange adjustments net of tax | - | - | (23) | (23) |
| Loss for the financial year | - | - | (10) | (10) |
| Dividends paid | - | - | (188) | (188) |
| Treasury shares purchased less Group contribution |
6 | - | - | 6 |
| Balance at 31 December 2003 | (33) | 447 | 829 | 1,243 |
| Net exchange adjustments net of tax | - | - | (20) | (20) |
| Profit for the financial year | - | - | 946 | 946 |
| Dividends paid | - | - | (195) | (195) |
| Treasury shares purchased less Group contribution |
9 | - | - | 9 |
| Balance at 31 December 2004 | (24) | 447 | 1,560 | 1,983 |
| Loss for the financial year | - | - | (362) | (362) |
| Dividends paid | - | - | (205) | (205) |
| Treasury shares purchased less Group contribution |
5 | - | - | 5 |
| Transition adjustment on adoption of IAS 39 (note 11) |
- | - | (3) | (3) |
| Balance at 31 December 2005 | (19) | 447 | 990 | 1,418 |
The special reserve represents the cumulative effect of cancellation of the Company's share premium account. Included in the profit for the financial year 2004 are dividends received from subsidiaries. During 2005, a dividend of £407m was repaid to a subsidiary as it was subsequently found that the subsidiary did not have adequate distributable reserves as defined under the Companies Act and the guidance set out in the Institute of Chartered Accountants in England and Wales - Technical Release 7/03 ('Guidance on the determination of realised profits and losses in the context of distributions under the Companies Act 1985').
