Imperial Chemical Industries (ICI)

Continuing operations

In the first half of 2006 there was a loss from special items before taxation of £24m which primarily related to the new restructuring programme announced at the beginning of the second quarter.

In the first half of 2005 there was a profit before taxation from special items of £10m and for the full year a profit before taxation of £31m. The profit for the full year 2005 mainly comprised of a profit of £16m within operating profit and a profit on sale of continuing operations of £13m. The amount within operating profit related to charges of £17m for restructuring programmes, a profit of £26m from changes to the terms of post-retirement benefits in the Netherlands and a profit of £7m on the disposal of fixed assets. The profits on the sale of continuing operations included a profit of £6m on the sale of the Vinamul Polymers business. Taxation in respect of special items for the first half of 2006 amounted to income of £7m (first half 2005 income £5m, year 2005 income £12m).

Discontinued operations

In the first half of 2006 there was a loss after taxation from special items of £70m. The loss mainly comprised the fine of £63m imposed by the European Commission following an investigation into alleged cartel activity in the European methacrylates market.

In the first half of 2005 there was a profit after taxation from special items of £20m and for the full year a profit after taxation of £25m. The profit for the full year 2005 mainly comprised of a profit of £18m within operating profit and a profit on sale of discontinued operations of £7m. The amount within operating profit mainly related to a profit of £14m from changes to the terms of post-retirement benefits in the Netherlands and a release of restructuring provisions of £4m relating to the Uniqema business. The amount within sale of discontinued operations primarily related to a profit from changes to post-retirement healthcare plans in the USA of £23m, a release of provisions following a land transaction of £28m and increases in provisions relating to long-term residual activities of £37m. Overall, taxation on the above items amounted to £nil for the first half of 2006 (first half 2005 income £3m, year 2005 £nil).

The tax expense for the Group after special items for the first half 2006 includes a £39m expense (first half 2005 expense £37m, year 2005 expense £75m) relating to continuing operations and a £2m expense (first half 2005 £nil, year 2005 expense £5m) relating to discontinued operations. The tax expense for the Group for the first half of 2006 consists of UK taxation of £17m (first half 2005 expense £16m, year 2005 expense £28m) and an overseas tax expense of £24m (first half 2005 £21m, year 2005 £52m).

The deficiency of earnings to fixed charges for the years ended 31 December 2003, 2002 and 2000 was £73m, £47m and £422m respectively.