RBS 2006 Annual Report Download - page 178
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RBS Group • Annual Report and Accounts 2006 177
Financial statements
Group Company
2006 2005 2004 2006 2005 2004
£m £m £m £m £m £m
Retained earnings
At 1 January 11,346 9,408 7,269 4,794 4,675 3,646
Implementation of IAS 32 and IAS 39 on 1 January 2005 — (1,078) — —81 —
Currency translation adjustments and other movements — —(8)——(1)
Profit attributable to ordinary and equity preference shareholders 6,393 5,501 5,112 3,499 2,074 2,874
Ordinary dividends paid (2,470) (1,927) (1,588) (2,470) (1,927) (1,588)
Equity preference dividends paid (191) (109) — (191) (109) —
Preference dividends – non-equity — — (256) —— (256)
Shares repurchased during the year (624) ——(624) ——
Redemption of preference shares classified as debt (271) ——(271) ——
Actuarial gains/(losses) recognised in retirement benefit
schemes, net of tax 1,262 (561) (1,136) ———
Net cost of shares bought and used to satisfy share-based payments (38) —————
Share-based payments, net of tax 80 112 15 ———
At 31 December 15,487 11,346 9,408 4,737 4,794 4,675
Own shares held
At 1 January (7) (7) — (7) (7) —
Shares purchased during the year (254) —(7)——(7)
Shares issued under employee share schemes 146 —— 7——
At 31 December (115) (7) (7) —(7) (7)
Shareholders’ equity at 31 December 40,227 35,435 33,905 18,197 17,538 18,611
The merger reserve comprises the premium on shares issued
to acquire NatWest less goodwill amortisation charged under
previous GAAP. No share premium was recorded in the
company financial statements through the operation of the
merger relief provisions of the Companies Act 1985.
UK law prescribes that only reserves of the company are taken
into account for the purpose of making distributions and the
permissible applications of the share premium account.
The Group optimises capital efficiency by maintaining reserves
in subsidiaries, including regulated entities. Certain preference
shares and subordinated debt are also included within
regulatory capital. The remittance of reserves to the parent or
the redemption of shares or subordinated capital by regulated
entities may be subject to maintaining the capital resources
required by the relevant regulator.
At 31 December 2006, 6,497,502 (2005 – 772,917) ordinary
shares of 25p each of the company were held by Employee
Share Trusts in respect of share awards and options granted
to employees.