As the Group's principal assets and operations are in the US and the majority of its operations are conducted in US dollars, the Group changed its presentational currency from Pounds Sterling to US dollars with effect from 1 January 2006. The Company redenominated its share capital into US dollars on 23 January 2006 and will retain distributable reserves and declare dividends in US dollars. Consequently, its functional currency became the US dollar. This lowers the Group's exposure to currency translation risk on its revenue, profits and equity. Financial information for prior periods has been restated from Pounds Sterling into US dollars in accordance with IAS 21.

The prior year comparatives have been restated for the following items:

1. To correct the method of calculating the elimination of intra-group profit carried in inventory, the effect of which is to reduce the amount of overhead expense included in inventory valuation. The impact of correcting this error is to reduce inventory at 31 December 2005 by $53 million and trading profit for the year ended 31 December 2005 by $9 million. In addition, deferred tax assets at 31 December 2005 increased by $17 million and taxation for the year ended 31 December 2005 reduced by $3 million.
2. A change in accounting policy for the recognition of the death-in-service benefits liability in the UK pension plan. Under IFRS alternative treatments are permissible; however management believes that it is more appropriate to apply the projected unit credit method rather than the value at risk approach previously adopted as this better reflects the Group's obligations and costs. The effect of adopting this policy has been to increase the retirement benefit obligation under IFRS by $17 million at 31 December 2006 and $16 million at 31 December 2005 and decrease deferred tax liabilities by $5 million at 31 December 2006 and $5 million at 31 December 2005. There is an immaterial impact on trading profit and finance income in both years presented.

The 2006 first interim dividend of $39 million, being 4.10¢ per Ordinary Share, was paid on 10 November 2006. A second interim dividend for 2006 of 6.71¢ per Ordinary Share was declared by the Board on 8 February 2007 and will be paid on 11 May 2007 to shareholders on the Register of Members on 20 April 2007. All shareholders will receive the Sterling equivalent of 3.41 pence per Ordinary Share. Shareholders may participate in the dividend re-investment plan.

In 2006, $20 million of advisers fees were included in relation to the failed bid to purchase Biomet Inc.

In 2005 the Group incurred restructuring and rationalisation expenses comprising two items: $68 million related to the Group's decision to exit the tissue engineering operations within advanced wound management; and $16 million related to the closure of the Andover, Massachusetts endoscopy manufacturing facility, which will be completed in 2007.

On 23 February 2006 the Group sold its 50% interest in the BSN Medical joint venture for cash consideration of $562 million. The net profit of $351 million on the disposal of the joint venture is after a credit of $14 million for cumulative translation adjustments, $27 million of transaction and associated costs, indemnity provision of $3 million and release of taxation provisions of $23 million.

Taxation of $156 million (2005 – $126 million) for the year is at the full year effective tax rate before discontinued operations of 28.9% (2005 – 29.3%). The tax charge was reduced by $6 million in 2006 as a consequence of the bid related costs. The tax charge was reduced by $29 million in 2005 as a consequence of the costs relating to the restructuring and rationalisation costs incurred in the year.