87
Annual Report and Accounts 2014
For the year ended 31 December 2014
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Capital
Total
Non-
Share
premium redemption
Hedging Translation
Retained
parent
controlling
Total
capital
account
reserve
reserve
reserve
earnings
equity
interests
equity
£m
£m
£m
£m
£m
£m
£m
£m
£m
As at 1 January 2013
85.2
170.3
7.9
5.1
32.6
334.4
635.5
48.0
683.5
Profit for the year
223.9
223.9
3.1
227.0
Other comprehensive income/(expense)
13.9
(15.9)
19.8
17.8
17.8
Total comprehensive income/(expense)
13.9
(15.9)
243.7
241.7
3.1
244.8
Issue of share capital
0.1
1.5
1.6
1.6
Dividends paid
(106.2)
(106.2)
(0.1)
(106.3)
Share-based payments (net of tax)
16.8
16.8
16.8
Shares acquired for:
employee share scheme trust
(24.2)
(24.2)
(24.2)
share buyback programme
(164.3)
(164.3)
(164.3)
Income earned by partnership
(4.4)
(4.4)
As at 31 December 2013
85.3
171.8
7.9
19.0
16.7
300.2
600.9
46.6
647.5
Changes in equity in 2014
Profit for the year
668.5
668.5
2.8
671.3
Other comprehensive income/(expense)
(8.3)
(17.1)
8.5
(16.9)
(16.9)
Total comprehensive income/(expense)
(8.3)
(17.1)
677.0
651.6
2.8
654.4
Issue of share capital
0.1
1.8
1.9
1.9
Issue of ‘B’ shares - capital option
151.9
(151.9)
-
-
Issue of ‘C’ shares - income option
10.9
(10.9)
-
-
Redemption of ‘B’ and ‘C’ shares
(162.8)
162.8
(162.8)
(162.8)
(162.8)
Cancellation of treasury shares
(3.7)
3.7
-
-
Dividends paid on ‘C’ shares
(457.5)
(457.5)
(457.5)
Dividends paid
(97.3)
(97.3)
(0.2)
(97.5)
Share-based payments (net of tax)
3.2
3.2
3.2
Shares acquired for:
employee share scheme trust
(30.7)
(30.7)
(30.7)
Income earned by partnership
(4.4)
(4.4)
As at 31 December 2014
81.7
10.8
174.4
10.7
(0.4)
232.1
509.3
44.8
554.1
Movements in available-for-sale assets, which are principally used to fund defined
benefit obligations in the US, are also recorded in other comprehensive income
and amounted to a gain of £1m (2013: nil) including the related taxation effect.
Actuarial movements in the Group’s defined benefit pension obligations are also
recorded in other comprehensive income. These movements are explained in
detail in section 4.5 on page 123. Together with the taxation effect, the gain
in the year was £14m (2013: gain of £20m). A deferred taxation asset of £7m
was reversed in relation to the Group’s restructure of the UK Pension Fund.
Items recognised directly in equity
Movements in reserves which represent transactions with the shareholders of the
Group are recognised directly in equity rather than in the income statement or
through other comprehensive income.
0.4m (2013: 0.3m) shares were issued during the year, realising £2m (2013: £2m)
in the share capital and share premium account.
The 2013 final dividend of 22.5p (2013: 20.7p) per share and the 2014 interim
dividend of 13.6p (2013: 12.8p) per share were paid during the year, which
reduced equity by £97m (2013: £106m).
Effect of the return of cash on shareholders’ equity
The B and C Share Scheme was accompanied by a share consolidation, which
is a commonly used arrangement to ensure that the Group’s share price after
the return of capital is broadly equivalent to the share price prior to the return of
capital, which ensures that targets and prices in the Group’s various share-based
remuneration schemes remain appropriate. The costs of the interim dividend,
final dividend and dividend cover have therefore been calculated on the number
of shares held on the record date, on a post-consolidation basis. The return of
cash resulted in a reduction in retained earnings of £620m.
The credit for share-based payments, which reverses the amount charged
through the income statement in the year, thereby deferring the reduction in
reserves until such time as the options are exercised, is also recognised here,
which together with its tax credit, amounted to £3m (2013: £17m).
The charge to reserves relating to the purchase of shares by the employee trust
to satisfy share options, net of amounts received from employees representing
the price on exercise for those options was £31m (2013: £24m), refer to section
4.6 for more information.
