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8 Other reserves and retained earnings
| All figures in £ millions | Special reserve |
Retained earnings |
Total |
|---|---|---|---|
| At 1 January 2005 | 447 | 1,596 | 2,043 |
| Loss for the financial year | – | (362) | (362) |
| Dividends paid | – | (205) | (205) |
| Transition adjustment on adoption of IAS 39 | – | (3) | (3) |
| Balance at 31 December 2005 | 447 | 1,026 | 1,473 |
| Profit for the financial year | – | 78 | 78 |
| Dividends paid | – | (220) | (220) |
| At 31 December 2006 | 447 | 884 | 1,331 |
The special reserve represents the cumulative effect of cancellation of the Company's share premium account.
Included within retained earnings in 2006 is an amount of £99m (2005: £nil) relating to profit on intra-group disposals that is not distributable.
During 2005, a dividend of £407m was repaid to a subsidiary as it was subsequently found that the subsidiary did not have adequate distributable reserves as defined under the Companies Act and the guidance set out in the Institute of Chartered Accountants in England and Wales - Technical Release 7/03 ('Guidance on the determination of realised profits and losses in the context of distributions under the Companies Act 1985').