Imperial Chemical Industries (ICI)

The revenue recognition policy for the treatment of certain co-operative allowances paid to customers has been revised to better reflect internal reporting where the allowances are now treated as a deduction from revenue rather than a promotional expense. This revision, which only impacts the Paints business, has been included in the results for 2006 and comparative information adjusted accordingly. As a consequence, total sales for the Group for the full year 2005 and 2004 have decreased by £25m and £32m respectively. There is no effect on operating profit.

During the year, the basis of presentation of the Group’s current and deferred tax balances at 31 December 2005 was reviewed in light of the offset requirements in IAS12 Income Taxes. As a result of this review, certain current taxation assets were offset with current taxation liabilities and certain deferred taxation liabilities were offset with deferred taxation assets. Prior year presentation of these amounts has been changed to conform to the revised presentation. Deferred taxation assets at 31 December 2005 originally stated at £507m have been revised to £254m and deferred taxation liabilities originally stated at £274m have been revised to £21m. Current taxation assets 31 December 2005 originally stated at £81m (£42m non-current and £39m current) have been revised to £18m (£15m current and £3m non-current) and current taxation liabilities stated at £423m have been revised to £360m.

During the year, the Group also reviewed the basis of presentation of current asset investments within the cash flow statement. As a result of this review, current asset investments are now presented as part of investing activities as opposed to their previous classification within financing activities. Their inclusion within the definition of net debt is unchanged. Prior year presentation of these amounts has been changed to conform to the revised presentation.