Notes
   
 
1 The interim report does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The full accounts for the year ended 31 December 2004, which were prepared under UK GAAP, received an unqualified report from the auditors and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985, have been filed with the Registrar of Companies.

These results and the comparative figures for the six months ended 30 June 2004 are unaudited but have been reviewed by the auditors Deloitte & Touche LLP. The scope of this review was substantially less than an audit in accordance with Auditing Standards.

The comparative figures for the six months ended 30 June 2004 and for the year ended 31 December 2004 have been restated for the adoption of International Financial Reporting Standards (‘IFRS’). This does not include restatement for IAS39 which is effective from 1 January 2005. The Group has adopted accounting policies that it believes will be compliant with IFRS in so far as they are likely to be codified and endorsed by EU member states for the full year (including the IAS19 amendment allowing companies to recognise actuarial gains and losses in full in the statement of changes in equity in the year in which they occurred).

A reconciliation of the 30 June 2004 results as published under UK GAAP to the restated IFRS results is included on pages 28 to 31.

With respect to the accounting for service concession arrangements, the Group has adopted accounting policies that are consistent with the principles embodied within IFRS. During this evolutionary period of development of IFRS, guidance on interpretation of IFRS relating to service concession arrangements has been drafted by the International Financial Reporting Interpretations Committee (‘IFRIC’) on which comments have been invited. The Directors believe that the policies adopted in relation to service concession arrangements comply with both current IFRS and the guidance that IFRIC are likely to formalise.
   
 
   
2 ACCOUNTING POLICIES
  The consolidated accounts for the year ending 31 December 2005 will comply with IFRS as adopted for use in the EU and the interim financial report has been prepared in accordance with IFRS, including IAS34, ‘Interim Financial Reporting’.

The same accounting policies and methods of computation are followed in the interim financial report as were published by the Group on 19 April 2005 in a separate publication to shareholders, ‘Preliminary Information on the Implementation of International Financial Reporting Standards’. That publication is available on the Group’s website www.laing.com.

In addition to the accounting policies set out in the separate publication, the Group has adopted IAS32 and IAS39 with effect from 1 January 2005. The Group has also adopted accounting policies relating to the accounting for service concession arrangements that it believes are likely to comply with IFRS for the full year.

The accounting policies adopted in relation to IAS32, ‘Financial Instruments: Presentation and Disclosure’ and IAS39, ‘Financial Instruments: Recognition and Measurement’ and service concession arrangements are set out below:
   
 
a) Financial instruments
Derivative financial instruments and hedge accounting (with effect from 1 January 2005)
   
 
i) Group and recourse subsidiaries
The Group operates a central treasury operation for John Laing plc and its recourse subsidiaries, and has a Board approved policy for hedging its foreign exchange and interest rate risks. There are currently no derivatives outstanding for John Laing plc or its recourse subsidiaries.
   
ii)

Non-recourse subsidiaries
Due to the nature of PFI/PPP projects, all financial risks are hedged at the inception of the project. Therefore each PFI/PPP project fixes the interest rate on its debt. In a minority of cases, this is achieved by issuing a fixed rate bond. In the majority of cases, this is achieved by funding the project with variable rate bank debt which is fully swapped into fixed rate at the inception of the project. In addition, and where appropriate, inflation risk is hedged by the use of RPI swaps and the risk of rising fuel prices is hedged by the use of commodity swaps.

These swaps, or other derivatives, are tested both retrospectively and prospectively for effectiveness and if both results are within the range of 80% to 125% then hedge accounting is applied, and they are treated as cash flow hedges. These derivatives are marked to market and differences are taken directly to equity if judged to be fully effective.

Where ineffectiveness is judged to have occurred, either a proportion or the full amount of the ineffectiveness is taken to the income statement depending on the level of ineffectiveness experienced.

Hedge accounting is discontinued when the hedging instrument expires or is terminated, for example when a project is refinanced. At that time, the net cumulative gain or loss on the hedging instrument recognised in equity is transferred to the income statement.

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value, with unrealised gains or losses reported in the income statement.
   
 
  Financial assets classified as available for sale

Financial assets classified as available for sale are included in the balance sheet at fair value. For this purpose, fair value is calculated by discounting the future cash flows at an appropriate discount rate.

The discount rates used to fair value financial assets available for sale are calculated by adding an appropriate premium to the relevant gilt yield for each PFI/PPP project. The gilt yield reflects the unexpired term of the project agreement and the premium reflects market spread that would be required by investors in bonds issued by PFI/PPP project companies with similar risk profiles, plus the market wrapping fee that would normally be charged to enhance the project cash flows to investment grade. As at 1 January 2005 and 30 June 2005 this premium, including the wrapping fee, was 100 basis points. In addition, a further premium is added to reflect the risk to the cash flows where they are related to usage. The further premium is 50 basis points for cash flows that are exposed to shadow toll risk and 100 basis points for real toll or total usage risk.

The amount by which the fair value element of financial assets classified as available for sale changes, as a result of changes to the discount rate during any accounting period, is taken directly to equity. The net cumulative gain or loss that has been taken directly to equity is transferred to the income statement when the financial asset is either sold or derecognised.
   
b) PFI/PPP project companies
  The Group has interpreted the provisions of IFRS in determining the appropriate treatment of the principal assets of, and income streams from, PFI and similar contracts. Where it can be demonstrated that the balance of risks and rewards derived from the underlying asset are not borne by the Group, the asset created and/or provided under the contract is accounted for as a financial asset and is classified as available for sale, otherwise it is accounted for as a fixed asset.

The Group restates, where applicable, the results of PFI/PPP project companies to reflect consistent accounting policies across the Group. Results of all PFI/PPP project companies therefore conform to
the following policies:
   
 
• Financial assets
Where risks and rewards derived from the underlying asset do not reside with the Group, these assets are accordingly disclosed in the balance sheet as financial assets. In this case income is allocated to interest receivable and turnover, using a constant margin on service costs, and the remainder allocated to the amortisation of the financial asset.

Results on long-term contracts are calculated in accordance with IAS11, ‘Construction Contracts’ and do not therefore relate directly to turnover. Profit on current contracts is only taken at a stage near enough to completion for that profit to be reasonably certain. Provision is made for all losses incurred to the accounting date together with any further losses that are foreseen in bringing contracts to completion.

During construction the financial assets are carried at fair value which is assumed to be equivalent to cost, plus attributable profit to the extent that this is reasonably certain after making provision for contingencies, less any losses incurred or foreseen in bringing contracts to completion, and less amounts received as progress payments. Costs for this purpose include valuation of all work done by subcontractors, whether certified or not, and all overheads other than those relating to the general administration of the relevant companies. For any contracts where receipts exceed the book value of work done, the excess is included in creditors as payments on account.
   
•

PFI fixed asset
Where the benefits and risks associated with the asset reside with the PFI project company these assets are accordingly disclosed in the balance sheet as fixed assets at cost less depreciation. Depreciation is charged over the life of the concession or specific asset life if shorter.
   
• Major maintenance
For financial asset accounted projects, the cost of major maintenance is recorded in cost of sales and an appropriate amount of revenue that would otherwise have been available to amortise the financial asset is transferred to turnover. This has the effect of increasing the financial asset by the cost of major maintenance. No profit margin is likely to be recognised on major maintenance since the principal profit recognition on PFI/PPP projects is derived from provision of routine services.

For fixed asset accounted projects, the capital element of major maintenance is capitalised and depreciated over the shorter of the remaining concession or asset’s useful life.
   
• PFI bid costs
PFI bid costs are charged to the income statement until such time as the Group is virtually certain that it will enter into contracts for the relevant PFI project. Virtual certainty is generally achieved at the time the Group is selected as preferred bidder. From the point of virtual certainty, bid costs are held in the Group balance sheet as a debtor prior to achieving financial close. On finalisation of PFI project and financing agreements (financial close), the Group recovers bid costs by charging a fee to the relevant project company. If the fee exceeds the amount held by the Group in debtors, the excess is credited to the balance sheet as deferred income.
   
  Deferred income is released to the income statement on one of two bases:
   
 
i) in respect of projects using financial asset accounting, over the period of construction during which the financial asset is established; or
   
ii)

in respect of projects using fixed asset accounting, over the period of the concession/project agreement.
   
 
• Finance costs
Project specific finance costs are expensed as incurred.
   
• Debt
Debt is initially stated at the amount of the net proceeds after deduction of issue costs. The carrying amount is increased by the finance cost in respect of the accounting period and reduced by payments made in the period.
   
• Non-recourse debt
Non-recourse loans are those which are secured solely on a specific asset and its future income (usually contained in a single entity). The terms of the finance agreements provide that the lender will not seek in any way to enforce repayment of either principal or interest from the rest of the Group and the Group is not obliged, nor does it intend, to support any losses.
   
• Refinancing
On refinancing of PFI project company debt, the Group recognises its share of debt issue costs written off. Where the terms of existing debt are amended, the derecognition criteria in IAS39 will be applied which would normally be expected to result in the existing issue costs being written off. Where new debt is arranged, the capitalised debt issue costs on retiring debt are written off and the debt issue costs of the new debt are capitalised and amortised over the term of the new debt. If any derivatives which were part of a hedging relationship are cancelled as part of a refinancing, these will be derecognised and any amounts charged to equity will be recycled to the income statement.
   
• Revenue
Revenue consists of:
   
 
- The value of construction work in progress on PFI projects where the principal asset is to be accounted for as a financial asset.
   
- Availability fees and usage fees on PFI projects where the principal asset is to be accounted for as a fixed asset.
   
- Third party revenues on PFI projects.
   
- Revenues for the provision of facilities management services to PFI project companies.
   
- Income generated in respect of ticket sales, Strategic Rail Authority subsidy, advertising and retail revenues from rail activities.
   
- The attributed share of season ticket income, which is deferred within creditors and released to the income statement over the life of the relevant season ticket.
   
   
   
  c)

Implementation of IAS39 – measurement of financial instruments
The impact of the adoption of the new accounting policies relating to IAS39 and service concession arrangements on the previously disclosed IFRS balance sheet as at 31 December 2004 (refer to the separate publication sent to shareholders on 19 April 2005) is set out below. The net increase of £93.6 million to net assets and total equity represents the marking to market of derivatives and fair value adjustment of financial assets, less associated deferred tax.
     
   
    Closing
balance
sheet at
31 December
2004
£ million		   Adoption of
IAS39 and
accounting
policy for
service
concession
arrangements
£ million		   Opening
balance
sheet at
1 January
2005
£ million
   
NON-CURRENT ASSETS            
Deferred tax assets   50.1   (2.3)   47.8
Total financial assets – available for sale   -   -   1,707.2
– at cost   154.8   -   154.8
– at amortised cost   1,308.5   -   1,308.5
– fair value adjustment   -   243.9   243.9
Trade and other receivables   63.8   -   63.8
Other non-current assets   121.3   -   121.3
   
    1,698.5   241.6   1,940.1
             
CURRENT ASSETS            
Financial assets – available for sale   35.9   -   35.9
Trade and other receivables   89.1   -   89.1
Other current assets   206.4   -   206.4
   
    331.4   -   331.4
Assets classified as held for sale or discontinued   18.3   -   18.3
CURRENT LIABILITIES   164.2   -   164.2
NON-CURRENT LIABILITIES            
Bank loans   1,468.5   -   1,468.5
Fair value of derivatives   -   110.2   110.2
Deferred tax liabilities   50.8   37.8   88.6
Other non-current liabilities   238.9   -   238.9
   
    1,758.2   148.0   1,906.2
Liabilities classified as held for sale or discontinued   38.7   -   38.7
   
NET ASSETS   87.1   93.6   180.7
   
             
EQUITY            
Share capital   85.1   -   85.1
Share premium account   87.4   -   87.4
Non-distributable reserve   2.3   -   2.3
Hedging, revaluation and translation reserves   0.9   93.6   94.5
Accumulated losses   (88.6)   -   (88.6)
– post retirement obligations   (135.5)   -   (135.5)
– other reserves   46.9   -   46.9
   
TOTAL EQUITY   87.1   93.6   180.7
   
   
 
 
   
3 SECTOR ANALYSIS
   
  For management purposes, the Group is currently organised into 5 operating sectors – accommodation, roads, rail, utilities and management services. These sectors are the basis on which the Group reports its primary segment information.

Sector information about the businesses is presented below:

Revenue
   
 
  First Half
2005
£ million		   First Half
2004
£ million		   Full Year
2004
£ million
 
Accommodation 108.1   168.7   261.3
Roads 25.3   30.2   57.0
Rail – normal operations 49.0   49.1   103.7
Rail – sale of development land -   5.3   5.3
Utilities 4.7   2.2   8.2
Management services 5.2   3.7   15.6
 
  192.3   259.2   451.1
 
   
 

Revenue (as per the accounting policy note on page 13) in the accommodation and roads sectors, is primarily generated from recognition of financial assets where the project infrastructure is in the course of construction.

Profit before tax
 
  First Half
2005
£ million		   First Half
2004
£ million		   Full Year
2004
£ million
 
Accommodation 8.9   6.7   13.7
Roads – normal operations 3.4   3.8   6.9
Roads – purchase and sale of 50% interest in the M40 road project -   -   6.4
Rail – normal operations 4.8   5.2   9.5
Rail – bid costs on new franchise (0.7)   -   (0.7)
Rail – sale of development land -   2.9   2.9
Utilities 0.4   (1.1)   (1.4)
Management services, overheads and bid costs (3.0)   (7.1)   (12.7)
Rail – bid costs 1.2   (0.7)   (0.9)
Rail – overheads (4.2)   (6.4)   (11.8)
Corporate finance income 0.6   2.0   0.1
Non-core business (0.6)   0.5   0.3
 
  13.8   12.9   25.0
 
   
  The profit before tax disclosed in relation to the core sectors is shown after adding or deducting interest received and paid on project specific funds. Corporate finance income excludes interest on project funds and includes interest on funds available for general corporate purposes.
   
 
4 INVESTMENT INCOME AND FINANCE COSTS
 
  Note First Half
2005
£ million		 First Half
2004
£ million		 Full Year
2004
£ million
   
Investment income        
Interest on bank deposits – Group funds   1.4 2.6 8.2
Interest on bank deposits – Group non-recourse funds   1.0 0.7 2.0
Interest on bank deposits – Joint venture non-recourse funds   3.0 1.8 15.0
Financial asset interest – Group non-recourse funds   15.0 10.4 21.0
Financial asset interest – Joint venture non-recourse funds   39.0 24.3 43.0
Pension finance income   1.0 0.6 1.2
   
TOTAL INVESTMENT INCOME   60.4 40.4 90.4
   
Finance costs        
Interest on bank overdrafts and loans – Group funds   (0.6) (1.0) (2.5)
Interest on bank overdrafts and loans - Group non-recourse funds   (14.2) (11.9) (25.7)
Interest on bank overdrafts and loans – Joint venture non-recourse funds   (41.9) (24.3) (82.8)
Amortisation of debt issue costs – Group funds   (0.1) (0.3) (0.5)
Amortisation of debt issue costs – Group non-recourse funds   (0.2) (0.4) (0.7)
Amortisation of debt issue costs – Joint venture non-recourse funds   (0.8) - (1.0)
Refinancing – Group funds   - - (1.1)
Refinancing – Group non-recourse funds   (0.2) - (0.1)
Interest capitalised – Group non-recourse funds   0.7 2.7 6.3
Interest capitalised – Joint venture non-recourse funds   1.3 - 21.6
Change in fair value of ineffective derivatives 11 (0.2) - -
   
TOTAL FINANCE COSTS   (56.2) (35.2) (86.5)
   
         
NET FINANCE INCOME   4.2 5.2 3.9
   
 
   
5 TAX
   
 

The Group’s tax charge for the first six months of 2005 was £5.2 million (2004 – £3.6 million) of which £5.0 million related to continuing operations resulting in an effective rate of 36% (2004 – £3.6 million with an effective tax rate of 28%).

Under IAS12, ‘Income Taxes’, the Group is obliged to account for deferred tax by reference to the tax written down values and book values of assets and liabilities at the balance sheet date. This gives rise to a lower effective tax rate in the early years of operation of certain PFI/PPP project companies because the rate of disallowed expenditure increases towards the latter years of the project’s life. The estimated whole life effective tax rate on the Group’s 18 PFI/PPP projects attracting capital allowances is 45% but, for reasons explained above, the effective rate for 2005 is anticipated to be 33%. It follows that the effective rate of tax on the total PFI/PPP portfolio of 47 projects is likely to increase in future years. This effect will be mitigated because new projects are generally taxed on the composite trade basis at an effective tax rate of about 30%.

Taxation analysis

   
 
   
First Half 2005
First Half 2004
Full Year 2004
    Profit
before
tax
£ million		 Tax
£ million		 Tax
Rate
% 		Profit
before
tax
£ million		 Tax
£ million		 Tax
Rate
% 		Profit
before
tax
£ million

Tax
£ million

Tax
Rate
%

   
CONTINUING BUSINESSES                    
PFI/PPP project companies   15.0 (4.9) 33 12.7 (2.3) 18 24.3 (5.4) 22
Capital gains   - - - - - - 6.6 (2.0) 30
Holding companies, bid costs and overheads   (1.2) (0.1) (8) 0.2 (1.3) 650 (5.9) 0.1 2
   
 
 
 
    13.8 (5.0) 36 12.9 (3.6) 28 25.0 (7.3) 29
DISCONTINUED BUSINESSES   (0.4) (0.2) - (0.3) - - (0.2) (2.3) -
   
 
 
 
    13.4 (5.2) 39 12.6 (3.6) 29 24.8 (9.6) 39
   
 
 
 
   
 
    First Half
2005
£ million		 First Half
2004
£ million		 Full Year
2004
£ million
   
CURRENT TAX:        
UK corporation tax   (1.1) (1.9) (1.5)
Foreign tax   - (0.3) (0.7)
   
    (1.1) (2.2) (2.2)
DEFERRED TAX   (3.9) (1.4) (5.1)
   
TOTAL TAX   (5.0) (3.6) (7.3)
   
   
 
 
   
6 DISCONTINUED OPERATIONS
   
  In October 2001, the Group commenced the refocussing of the business through the sale of the Construction division. This was followed by the disposal of the Property division in April 2002 and the Homes division in October 2002. Within the respective sale agreements, a number of contracts and liabilities were identified and retained as a liability of the Group, hence provisions were made for the completion of these contracts. As a consequence of these disposals, Woodcroft Insurance Company Limited, the captive insurance company, ceased writing any new business, such that its remaining activity relates to the run off of claims. These disposals are all part of the single disposal plan that the Group had and has substantially implemented. The major disposals were completed in 2001 and 2002 although it is taking some time for the remaining contracts and liabilities to be completed.

The results of the discontinued operations, which have been included in the Group income statement, were as follows:
   
 
    First Half
2005
£ million		 First Half
2004
£ million		 Full Year
2004
£ million
   
Revenue   0.3 0.5 0.8
Expenses   (0.7) (0.8) (1.0)
   
Loss before tax   (0.4) (0.3) (0.2)
Attributable tax charge   (0.2) - (2.3)
   
NET LOSS ATTRIBUTABLE TO DISCONTINUED OPERATIONS   (0.6) (0.3) (2.5)
   
   
  The tax charge in 2004 arose on the profits of the Group’s captive insurance company. Those profits were balanced by additional provisions for construction contract losses which may not qualify for tax deduction.

The major classes of assets and liabilities comprising the operations classified as held for sale and discontinued are as follows:
   
 
   

At
30 June
2005
£ million

 At
30 June
2004
£ million		 At
31 December
2004
£ million
   
Short-term investment   - 19.7* -
Trade and other receivables   1.6 1.0 0.8
Cash and cash equivalents   13.0 22.0 17.5
   
TOTAL ASSETS CLASSIFIED AS HELD FOR SALE OR DISCONTINUED   14.6 42.7 18.3
         
Trade and other payables   (5.9) (2.6) (3.2)
Provisions   (24.5) (40.6) (35.5)
   
TOTAL LIABILITIES CLASSIFIED AS HELD FOR SALE OR DISCONTINUED   (30.4) (43.2) (38.7)
   
NET LIABILITIES   (15.8) (0.5) (20.4)
   
   
  During the six months ended 30 June 2005, net cash outflow from operating activities included £11.5 million (2004 – £5.0 million) in respect of discontinued operations. In addition, the discontinued operations received £0.5 million (2004 – £nil) in respect of investing activities and paid £5.0 million to the Group in respect of financing activities.

The reduction to the provisions relating to the discontinued businesses principally reflects an interim settlement of damages on the Great Eastern Hotel construction management contract pending completion of a court process that will decide the final quantum of the award for damages, costs and interest. Refer to note 18.

* On 29 June 2004, M40 Limited Partnership, for which Laing Roads Limited is the Limited Partner, acquired 50% of the share capital in UK Highways M40 (Holdings) Limited for £19.7 million. On 14 October 2004, Laing Roads Limited disposed of its interest in M40 Limited Partnership with a profit on disposal of £6.4 million.
   
 
   
 
7 EARNINGS PER SHARE
   
  From continuing and discontinued operations
The calculation of the basic and diluted earnings per share is based on the following data:
 
Earnings   First Half
2005
£ million		 First Half
2004
£ million		 Full Year
2004
£ million
   
Earnings for the purposes of basic earnings per share being net profit attributable to equity holders of the parent   6.8 7.7 12.8
   
Earnings for the purposes of diluted earnings per share   6.8 7.7 12.8
   
         
Number of shares   Number Number Number
   
Weighted average number of Ordinary Shares for the purposes of basic earnings per share   182,976,433 178,320,824 180,393,664
         
Earnings per share from continuing and discontinued operations   3.7p 4.3p 7.1p
         
         
From continuing operations   First Half
2005
£ million		 First Half
2004
£ million		 Full Year
2004
£ million
   
Net profit attributable to equity holders of the parent   6.8 7.7 12.8
Adjustments to exclude loss for the period from discontinued operations   0.6 0.3 2.5
   
Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations   7.4 8.0 15.3
   
         
Earnings per share from continuing operations   4.1p 4.5p 8.5p
         
   
  The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing and discontinued operations.
   
 
From discontinued operations   First Half
2005
 First Half
2004
 Full Year
2004
   
Basic   (0.3)p (0.2)p (1.4)p
Diluted   (0.3)p (0.2)p (1.4)p
   
 
   
8 DIVIDENDS
 
   

First Half
2005
£ million

First Half
2004
£ million

Full Year
2004
£ million
   
Amounts recognised as distributions to ordinary shareholders in the period:        
Final dividend for the year ended 31 December 2004 of 2.2p per share (31 December 2003 of 2.0p per share)   4.0 3.5 3.5
Interim dividend for the year ended 31 December 2004 of 1.1p per share   - - 2.0
   
    4.0 3.5 5.5
         
On 6.4% Convertible Cumulative Preference Shares   1.3 1.3 2.5
   
    5.3 4.8 8.0
   
   
  The interim dividend for the year ending 31 December 2005 is 1.2p per share amounting to £2.8 million. Since the Directors did not approve the interim dividend until after 30 June 2005, it has not been included as a liability in these financial statements. The interim dividend will be paid on 3 October 2005 to shareholders who are on the register on 9 September 2005. This will include shareholders of 50,049,585 Ordinary Shares that were issued following the rights issue of 19 July 2005.
   
 
   
 
9 DEFERRED TAX
   
  The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the period to 30 June 2005.
   
 
    Accelerated
tax
deduction
for PFI
projects
£ million		 Additional
temporary
differences
on business
combi-
nations
£ million		 PFI tax
losses
£ million		 Tax
reserves on
overseas
subsidiaries
£ million		 Other
taxable
temporary
differences
£ million		 Retirement
benefit
obligations
£ million		 IAS39 fair
value of
derivatives
and
financial
assets
£ million		 Other
deductible
temporary
differences
£ million		 Total
£ million
   
Balance at 1 January 2005                    
(as previously reported)   (109.3) (4.9) 64.3 (6.8) (3.4) 58.1 - 1.3 (0.7)
Adoption of IAS39   - - - - - - (40.1) - (40.1)
   
RESTATED BALANCE AT
1 JANUARY 2005		   (109.3) (4.9) 64.3 (6.8) (3.4) 58.1 (40.1) 1.3 (40.8)
Charge to income
– current year		   (0.9) - (2.1) - (0.1) (0.9) - (0.2) (4.2)
Credit to income
– prior year		   (0.5) - 0.8 - - - - - 0.3
Charge to equity   - - - - 0.4 3.1 4.3 - 7.8
   
AT 30 JUNE 2005   (110.7) (1) (4.9) 63.0 (2) (6.8) (3.1) 60.3 (35.8) 1.1 (36.9)
   
   
 

(1) This includes deferred tax in respect of joint ventures of £99.6 million.
(2) This includes deferred tax in respect of joint ventures of £53.7 million.

At the balance sheet date, the Group has unused tax losses of £43.0 million available to offset against future profits. A deferred tax asset has not been recognised in respect of these losses due to the unpredictability of future profit streams. These losses may be carried forward indefinitely.
   
 
   

At
30 June
2005
£ million

At
30 June
2004
£ million

At
31 December
2004
£ million
   
Deferred tax assets   55.0 27.5 50.1
Deferred tax liabilities   (91.9) (49.5) (50.8)