Notes to the accounts

22 Reserves

	Share premium account £m	Merger reserve £m	Capital redemption reserve £m	Special reserve £m	Profit and loss account (restated) £m	Total £m
Group
As at 1 January 2004	227.1	3.1	0.3	-	(32.3)	198.2
Prior year adjustment (see Note below)	-	-	-	-	(15.0)	(15.0)
As at 1 January 2004 as adjusted	227.1	3.1	0.3	-	(47.3)	183.2
Exchange adjustment	-	-	-	-	0.9	0.9
Premium on issues of shares	0.7	-	-	-	-	0.7
Retained profit	-	-	-	-	7.2	7.2
Disposal of own shares	-	-	-	-	0.1	0.1
Actuarial loss arising on pension schemes	-	-	-	-	(3.4)	(3.4)
Tax attributable to actuarial loss	-	-	-	-	1.1	1.1
As at 31 December 2004	227.8	3.1	0.3	-	(41.4)	189.8
Company
As at 1 January 2004	227.1	3.1	0.3	34.1	16.7	281.3
Prior year adjustment (see Note below)	-	-	-	-	(15.0)	(15.0)
As at 1 January 2004 as adjusted	227.1	3.1	0.3	34.1	1.7	266.3
Premium on issues of shares	0.7	-	-	-	-	0.7
Disposal of own shares	-	-	-	-	0.1	0.1
Other	-	-	-	-	(0.4)	(0.4)
Retained profit	-	-	-	-	11.6	11.6
As at 31 December 2004	227.8	3.1	0.3	34.1	13.0	278.3

The cumulative amount of goodwill resulting from acquisitions (adjusted for disposals) prior to 1 January 1998 which has been written off to reserves is £283.1m (2003: £283.1m).

The profit and loss account includes a deficit of £14.0m (2003: deficit of £12.0m) net of a deferred tax asset of £6.7m (2003: asset of £5.7m) in respect of the group's pension schemes.

The adoption of UTIF 38, Accounting for ESOP trusts, in the year ended 31 December 2004 has had the effect of presenting the shares held by the Spectris plc Employee Benefit Trust within reserves rather than fixed asset investments. The comparative balance sheet has been restated and consequently fixed asset investments and the profit and loss account reserve have been adjusted by £15.0m as at 1 January 2004 (1 January 2003: £15.3m). There was no adjustment to the current or prior year results or statement of total recognised gains or losses as a result of adopting UITF 38.

The Spectris plc Employee Benefit Trust ("EBT") holds ordinary 5p shares in Spectris plc for the purpose of satisfying obligations under the 1996 Executive Share Option Plan for the benefit of the group's employees. The EBT held 3.2 million shares at 31 December 2004 (2003: 3.3 million) at a cost of £14.2m (2003: £14.3m). The market value of the EBT's shares at 31 December 2004 was £12.3m (2003: £13.9m).

The purchase of the shares on the open market is funded by loans directly from Spectris plc. Dividend income in excess of 0.01p per share on the shares held by the EBT has been waived by the Trust and is therefore not included in the group's profit and loss account. Interest and administration costs of the EBT are charged to the profit and loss account of the company for the year.

The net amount of exchange gains on foreign currency borrowings taken directly to reserves was £3.3m (2003: loss of £2.7m).

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