BT 2006 Annual Report Download - page 84

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6. TAXATION continued
Factors affecting taxation expense
The taxation expense on the profit for the year differs from the amount computed by applying the corporation tax rate to the profit
before taxation as a result of the following factors:
2006 2005
£m % £m %
Profit before tax 2,040 2,354
Notional taxation expense at UK rate of 30% (2005: 30%) 612 30.0 706 30.0
Effects of:
Non deductible depreciation and amortisation 8 0.4 6 0.2
Non deductible non-UK losses 29 1.4 38 1.6
Lower taxes on non-UK profits (1) – (14) (0.6)
Lower taxes on gain on disposal of non-current
investments and group undertakings ––(107) (4.5)
Other deferred tax assets not recognised (25) (1.2) ––
Associates and joint ventures (5) (0.2) ––
Adjustments in respect of prior periods (79) (3.9) 2 0.1
Other (47) (2.4) (106) (4.5)
Total taxation expense and effective tax rate 492 24.1 525 22.3
Specific items 41 0.4 16 3.7
Total taxation expense before specific items/effective tax rate 533 24.5 541 26.0
2006 2005
£m £m
Tax on items charged to equity
Current tax charge on exchange movements offset in reserves –7
Deferred tax credit relating to losses on cash flow hedges (45) –
Deferred tax charge relating to ineffective hedges 9–
Deferred tax charge on actuarial gain relating to retirement benefit obligations 629 72
Deferred tax credit relating to share based payments (5) –
Total taxation on items taken directly to equity 588 79
7. DIVIDENDS
2006 2005
pence
per share
pence
per share
2006
£m
2005
£m
Final paid in respect of the prior year 6.50 5.30 551 454
Interim paid in respect of the current year 4.30 3.90 361 332
10.80 9.20 912 786
The directors are proposing that a final dividend in respect of the year ended 31 March 2006 of 7.6 pence per share will be paid to
shareholders on 11 September 2006, taking the full year proposed dividend in respect of the 2006 financial year to 11.9 pence
(2005: 10.4 pence). This dividend is subject to approval by shareholders at the Annual General Meeting and therefore the liability
of £632 million (2005: £551 million) has not been included in these financial statements. The proposed dividend will be payable to
all shareholders on the Register of Members on 18 August 2006.
8. EARNINGS PER SHARE
The basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average
number of shares in issue after deducting the company’s shares held by employee share ownership trusts and treasury shares.
In calculating the diluted earnings per share, share options outstanding and other potential ordinary shares have been taken
into account where the impact of these is dilutive. Options over 52 million shares (2005: 207 million shares) were excluded from
the calculation of the total diluted number of shares as the impact of these is anti-dilutive.
The weighted average number of shares in the years were: 2006
millions of
shares
2005
millions of
shares
Basic 8,422 8,524
Dilutive ordinary shares from share options and shares held in trust 115 57
Total diluted 8,537 8,581
Profit attributable to equity shareholders of the parent (£m) 1,547 1,830
Basic earnings per share (pence) 18.4p 21.5p
Diluted earnings per share (pence) 18.1p 21.3p
BT Group plc Annual Report and Form 20-F 2006 Notes to the consolidated financial statements82