Taxation

Underlying profit before tax excluding joint ventures and associates for the year was £351m (2008: £304m). The effective tax rate on these profits is 28.0% (2008: 28.0%). Based on the current structure of the business and existing local taxation rates and legislation, it is expected that the underlying tax rate will reduce to a level of around 27%.

Statutory loss before tax for the year less the share of profit in joint ventures and associates was £61m (2008: loss of £279m). The tax credit on this loss was £42m (2008: £nil) representing an effective tax rate of 69% (2008: £nil). This rate differs from the underlying effective tax rate due to the tax effect of separately disclosed items, amortisation of business combination intangibles, goodwill impairment charges and the recognition for the first time in the current year of deferred tax assets for losses arising in prior periods in certain territories.

The cash tax rate is expected to be lower than the underlying income statement tax rate as we utilise our deferred tax assets generated from restructuring expenditure and tax losses. In the coming year, we envisage a cash tax rate of approximately 15% of underlying profit before tax.