Financial Statements

The Directors are responsible for preparing the Annual Report and Form 20-F Information and the Group and Parent Company Financial Statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare Group and Parent Company Financial Statements for each financial year. Under that law they are required to prepare the Group Financial Statements in accordance with IFRSs as adopted by the EU and applicable law and have elected to prepare the Parent Company Financial Statements in accordance with UK Accounting Standards and applicable law (UK Generally Accepted Accounting Practice).

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Parent Company and of their profit or loss for that period. In preparing each of the Group and Parent Company Financial Statements, the Directors are required to:

• Select suitable accounting policies and then apply them consistently.
• Make judgements and estimates that are reasonable and prudent.
• For the Group Financial Statements, state whether they have been prepared in accordance with IFRSs as adopted by the EU.
• For the Parent Company Financial Statements, state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Parent Company Financial Statements.
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the Parent Company will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Parent Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

Under applicable law and regulations, the Directors are also responsible for preparing a Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement pursuant to DTR 4

The Directors confirm that to the best of our knowledge:

• The Financial Statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole.
• The Directors' Report includes a fair review of the development and performance of the business and the position of the issuer and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.

On behalf of the Board of Directors on 28 January 2010:

David R Brennan
Director

The Directors are responsible for establishing and maintaining adequate internal control over financial reporting. AstraZeneca's internal control over financial reporting is designed to provide reasonable assurance over the reliability of financial reporting and the preparation of consolidated financial statements in accordance with generally accepted accounting principles.

Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

The Directors assessed the effectiveness of AstraZeneca's internal control over financial reporting as at 31 December 2009 based on the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Based on this assessment, the Directors believe that, as at 31 December 2009, the internal control over financial reporting is effective based on those criteria.

KPMG Audit Plc, an independent registered public accounting firm, has audited the effectiveness of internal control over financial reporting as at 31 December 2009 and, as explained below, has issued an unqualified report thereon.

The report set out below is provided in compliance with International Standards on Auditing (UK and Ireland). KPMG Audit Plc has also issued reports in accordance with auditing standards of the Public Company Accounting Oversight Board in the US, which will be included in the Annual Report on Form 20-F to be filed with the US Securities and Exchange Commission. Those reports are unqualified and include opinions on the Group Financial Statements and on the effectiveness of internal control over financial reporting as at 31 December 2009 (Sarbanes-Oxley Act Section 404). The Directors' Responsibilities for, and Report on, Internal Control over Financial Reporting are set out above.

KPMG Audit Plc has also reported separately on the Company Financial Statements of AstraZeneca PLC and on the information in the Directors' Remuneration Report that is described as having been audited. This audit report is set out below.

We have audited the Group Financial Statements of AstraZeneca PLC for the year ended 31 December 2009 set out below. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU.

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Preparation of the Financial Statements and Directors' Responsibilities section, the Directors are responsible for the preparation of the Group Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Group Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website, frc.org.uk/apb/scope/UKP.

Opinion on financial statements

In our opinion, the Group Financial Statements:

• Give a true and fair view of the state of the Group's affairs as at 31 December 2009 and of its profit for the year then ended.
• Have been properly prepared in accordance with IFRSs as adopted by the EU.
• Have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.

Separate opinion in relation to IFRSs as issued by the IASB

As explained in the Accounting Policies section to the Group Financial Statements set out below, the Group, in addition to complying with its legal obligation to apply IFRSs as adopted by the European Union, has also applied IFRSs as issued by the International Accounting Standards Board (IASB).

In our opinion, the Group Financial Statements comply with IFRSs as issued by the IASB.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the Group Financial Statements are prepared is consistent with the Group Financial Statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• Certain disclosures of Directors' Remuneration specified by law are not made.
• We have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

• The Directors' Statement in relation to going concern.
• The part of the corporate governance statement relating to the Company's compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Other matters

We have reported separately on the Parent Company Financial Statements of AstraZeneca PLC for the year ended 31 December 2009 and on the information in the Directors' Remuneration Report that is described as having been audited.

Jimmy Daboo
Senior Statutory Auditor

For and on behalf of KPMG Audit Plc
Statutory Auditor
Chartered Accountants
8 Salisbury Square, London, EC4Y 8BB

28 January 2010

	Notes	2009 $m	2008 $m	2007 $m
Revenue	1	32,804	31,601	29,559
Cost of sales		(5,775)	(6,598)	(6,419)
Gross profit		27,029	25,003	23,140
Distribution costs		(298)	(291)	(248)
Research and development		(4,409)	(5,179)	(5,162)
Selling, general and administrative costs	2	(11,332)	(10,913)	(10,364)
Other operating income and expense	2	553	524	728
Operating profit	2	11,543	9,144	8,094
Finance income	3	462	854	959
Finance expense	3	(1,198)	(1,317)	(1,070)
Profit before tax		10,807	8,681	7,983
Taxation	4	(3,263)	(2,551)	(2,356)
Profit for the period		7,544	6,130	5,627
Other Comprehensive Income:
Foreign exchange arising on consolidation		388	(1,336)	492
Foreign exchange differences on borrowings forming net investment hedges		(68)	291	(40)
Gain/(loss) on cash flow hedge in connection with debt issue		1	1	(21)
Net available for sale gains/(losses) taken to equity		2	2	(9)
Actuarial loss for the period		(569)	(1,232)	(113)
Income tax relating to components of Other Comprehensive Income	4	192	368	33
Other Comprehensive Income for the period, net of tax		(54)	(1,906)	342
Total Comprehensive Income for the period		7,490	4,224	5,969
Profit attributable to:
Owners of the Parent		7,521	6,101	5,595
Non-controlling interests		23	29	32
Total Comprehensive Income attributable to:
Owners of the Parent		7,467	4,176	5,934
Non-controlling interests		23	48	35
Basic earnings per $0.25 Ordinary Share	5	$5.19	$4.20	$3.74
Diluted earnings per $0.25 Ordinary Share	5	$5.19	$4.20	$3.73
Weighted average number of Ordinary Shares in issue (millions)	5	1,448	1,453	1,495
Diluted weighted average number of Ordinary Shares in issue (millions)	5	1,450	1,453	1,498
Dividends declared and paid in the period	21	3,026	2,767	2,658

All activities were in respect of continuing operations.

$m means millions of US dollars.

	Notes	2009 $m	2008 $m	2007 $m
Assets
Non-current assets
Property, plant and equipment	7	7,307	7,043	8,298
Goodwill	8	9,889	9,874	9,884
Intangible assets	9	12,226	12,323	11,467
Derivative financial instruments	16	262	449	117
Other investments	10	184	156	182
Deferred tax assets	4	1,292	1,236	1,044
		31,160	31,081	30,992
Current assets
Inventories	11	1,750	1,636	2,119
Trade and other receivables	12	7,709	7,261	6,668
Other investments	10	1,484	105	91
Derivative financial instruments	16	24	-	-
Income tax receivable		2,875	2,581	2,251
Cash and cash equivalents	13	9,918	4,286	5,867
		23,760	15,869	16,996
Total assets		54,920	46,950	47,988
Liabilities
Current liabilities
Interest-bearing loans and borrowings	14	(1,926)	(993)	(4,280)
Trade and other payables	17	(8,687)	(7,178)	(6,968)
Derivative financial instruments	16	(90)	(95)	(31)
Provisions	18	(1,209)	(600)	(387)
Income tax payable		(5,728)	(4,549)	(3,552)
		(17,640)	(13,415)	(15,218)
Non-current liabilities
Interest-bearing loans and borrowings	14	(9,137)	(10,855)	(10,876)
Derivative financial instruments	16	-	(71)	-
Deferred tax liabilities	4	(3,247)	(3,126)	(4,119)
Retirement benefit obligations	23	(3,354)	(2,732)	(1,998)
Provisions	18	(477)	(542)	(633)
Other payables	17	(244)	(149)	(229)
		(16,459)	(17,475)	(17,855)
Total liabilities		(34,099)	(30,890)	(33,073)
Net assets		20,821	16,060	14,915
Equity
Capital and reserves attributable to equity holders of the Company
Share capital	20	363	362	364
Share premium account	19	2,180	2,046	1,888
Capital redemption reserve	19	94	94	91
Merger reserve	19	433	433	433
Other reserves	19	1,392	1,405	1,378
Retained earnings	19	16,198	11,572	10,624
		20,660	15,912	14,778
Non-controlling interests	19	161	148	137
Total equity	19	20,821	16,060	14,915

The Financial Statements on this page were approved by the Board of Directors on 28 January 2010 and were signed on its behalf by:

David R Brennan
Director

Simon Lowth
Director

	Share capital $m	Share premium account $m	Capital redemption reserve $m	Merger reserve $m	Other reserves $m	Retained earnings $m	Total $m	Non- controlling interests $m	Total equity $m
At 1 January 2007	383	1,671	71	433	1,398	11,348	15,304	112	15,416
Profit for the period	-	-	-	-	-	5,595	5,595	32	5,627
Other comprehensive income	-	-	-	-	-	339	339	3	342
Transfer to other reserves1	-	-	-	-	(20)	20	-	-	-
Transactions with owners
Dividends	-	-	-	-	-	(2,658)	(2,658)	-	(2,658)
Issue of Ordinary Shares	1	217	-	-	-	-	218	-	218
Re-purchase of Ordinary Shares	(20)	-	20	-	-	(4,170)	(4,170)	-	(4,170)
Share-based payments	-	-	-	-	-	150	150	-	150
Transfer from non-controlling interests to payables	-	-	-	-	-	-	-	(10)	(10)
Net movement	(19)	217	20	-	(20)	(724)	(526)	25	(501)
At 31 December 2007	364	1,888	91	433	1,378	10,624	14,778	137	14,915
Profit for the period	-	-	-	-	-	6,101	6,101	29	6,130
Other comprehensive income	-	-	-	-	-	(1,925)	(1,925)	19	(1,906)
Transfer to other reserves1	-	-	-	-	27	(27)	-	-	-
Transactions with owners
Dividends	-	-	-	-	-	(2,767)	(2,767)	-	(2,767)
Issue of Ordinary Shares	1	158	-	-	-	-	159	-	159
Re-purchase of Ordinary Shares	(3)	-	3	-	-	(610)	(610)	-	(610)
Share-based payments	-	-	-	-	-	176	176	-	176
Transfer from non-controlling interests to payables	-	-	-	-	-	-	-	(11)	(11)
Dividend paid by subsidiary to non-controlling interest	-	-	-	-	-	-	-	(26)	(26)
Net movement	(2)	158	3	-	27	948	1,134	11	1,145
At 31 December 2008	362	2,046	94	433	1,405	11,572	15,912	148	16,060
Profit for the period	-	-	-	-	-	7,521	7,521	23	7,544
Other comprehensive income	-	-	-	-	-	(54)	(54)	-	(54)
Transfer to other reserves1	-	-	-	-	(13)	13	-	-	-
Transactions with owners
Dividends	-	-	-	-	-	(3,026)	(3,026)	-	(3,026)
Issue of Ordinary Shares	1	134	-	-	-	-	135	-	135
Share-based payments	-	-	-	-	-	172	172	-	172
Transfer from non-controlling interests to payables	-	-	-	-	-	-	-	(9)	(9)
Dividend paid by subsidiary to non-controlling interest	-	-	-	-	-	-	-	(1)	(1)
Net movement	1	134	-	-	(13)	4,626	4,748	13	4,761
At 31 December 2009	363	2,180	94	433	1,392	16,198	20,660	161	20,821

¹

Amounts charged or credited to other reserves relate to exchange adjustments arising on goodwill.

	Notes	2009 $m	2008 $m	2007 $m
Cash flows from operating activities
Profit before tax		10,807	8,681	7,983
Finance income and expense	3	736	463	111
Depreciation, amortisation and impairment		2,087	2,620	1,856
Increase in trade and other receivables		(256)	(1,032)	(717)
Decrease in inventories		6	185	442
Increase/(decrease) in trade and other payables and provisions		1,579	637	(168)
Other non-cash movements		(200)	87	901
Cash generated from operations		14,759	11,641	10,408
Interest paid		(639)	(690)	(335)
Tax paid		(2,381)	(2,209)	(2,563)
Net cash inflow from operating activities		11,739	8,742	7,510
Cash flows from investing activities
Acquisitions of business operations	22	-	-	(14,891)
Movement in short term investments and fixed deposits		(1,371)	1	894
Purchase of property, plant and equipment		(962)	(1,095)	(1,130)
Disposal of property, plant and equipment		138	38	54
Purchase of intangible assets		(624)	(2,944)	(549)
Disposal of intangible assets		269	-	-
Purchase of non-current asset investments		(31)	(40)	(35)
Disposal of non-current asset investments		3	32	421
Interest received		113	149	358
Payments made by subsidiaries to non-controlling interests		(11)	(37)	(9)
Net cash outflow from investing activities		(2,476)	(3,896)	(14,887)
Net cash inflow/(outflow) before financing activities		9,263	4,846	(7,377)
Cash flows from financing activities
Proceeds from issue of share capital		135	159	218
Re-purchase of shares		-	(610)	(4,170)
Issue of loans		-	787	9,692
Repayment of loans		(650)	-	(1,165)
Dividends paid		(2,977)	(2,739)	(2,641)
Movement in short term borrowings		(137)	(3,959)	4,117
Net cash (outflow)/inflow from financing activities		(3,629)	(6,362)	6,051
Net increase/(decrease) in cash and cash equivalents in the period		5,634	(1,516)	(1,326)
Cash and cash equivalents at beginning of the period		4,123	5,727	6,989
Exchange rate effects		71	(88)	64
Cash and cash equivalents at the end of the period	13	9,828	4,123	5,727

Basis of accounting and preparation of financial information

The Consolidated Financial Statements have been prepared under the historical cost convention, modified to include revaluation to fair value of certain financial instruments as described below, in accordance with the Companies Act 2006 and International Financial Reporting Standards (IFRSs) as adopted by the European Union ('adopted IFRS') in response to the IAS regulation (EC 1606/2002). The Consolidated Financial Statements also comply fully with IFRSs as issued by the International Accounting Standards Board.

The Company has applied IAS 1 'Presentation of Financial Statements (revised 2007)' which has introduced a number of terminology changes (including titles for the financial statements) and has resulted in a number of changes in presentation and disclosure. The revised standard has had no impact on the Group's profit for the period, net assets or cash flows.

During the year the Company has adopted IFRS 8 'Operating Segments'. IFRS 8 requires an entity to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregations of operating segments that meet specified criteria. In addressing these criteria, it was determined that AstraZeneca is engaged in a single business activity of pharmaceuticals and that the Group does not have multiple operating segments. Our pharmaceuticals business consists of the discovery and development of new products, which are then manufactured, marketed and sold. All of these functional activities take place (and are managed) globally on a highly integrated basis. We do not manage these individual functional areas separately.

We consider that the Senior Executive Team (SET) is AstraZeneca's chief operating decision-making body (as defined by IFRS 8). The operation of SET is principally driven by the management of the commercial operations, research and development, and manufacturing and supply. The SET also includes Finance, HR and General Counsel representation.

All significant operating decisions are taken by the SET. While members of the SET have responsibility for implementation of decisions in their respective areas, operating decision-making is at SET level as a whole. Where necessary these are implemented through cross-functional sub-committees that consider the group-wide impact of a new decision. For example, product launch decisions would be initially considered by the SET and, on approval, passed to an appropriate sub-team for implementation. The impacts of being able to develop, produce, deliver and commercialise a wide range of pharmaceutical products drive the SET decision-making process.

In assessing performance, the SET reviews financial information on an integrated basis for the Group as a whole, substantially in the form of, and on the same basis as, the Group's IFRS Financial Statements. The high upfront cost of discovering and developing new products coupled with the relatively insignificant and stable unit cost of production means that there is not the clear link that exists in many manufacturing businesses between the revenue generated on an individual product sale and the associated cost and hence margin generated on a product. Consequently the profitability of individual drugs or classes of drugs is not considered a key measure of performance for the business and is not monitored by the SET.

Resources are allocated on a group-wide basis according to need. In particular, capital expenditure, in-licensing, and research and development resources are allocated between activities on merit, based on overall therapeutic considerations and strategy under the aegis of the Group's Research & Development Executive Committee to facilitate a group-wide single combined discovery and development strategy. The Group's recent acquisitions in the biologics area, MedImmune and Cambridge Antibody Technology Group plc, have been integrated into the existing management structure of AstraZeneca both for allocation of resources and for assessment and monitoring of performance purposes. As such, although biologics is a relatively new technological area for the Group, it does not operate as a separate operating segment.

The amendments to IFRS 7 'Improving Disclosures about Financial Instruments' have been adopted and have resulted in additional disclosure.

IFRS 2 'Amendment regarding Vesting Conditions and Cancellations', IAS 23 'Borrowing Costs (revised 2007)', Amendments to IAS 36 'Impairment of Assets', Amendments to IAS 19 'Employee Benefits', Amendments to IAS 38 'Intangible Assets' and Amendments to IAS 32 'Financial Instruments: Presentation' and IAS 1 'Presentation of Financial Statements' have all been adopted, none of which have had a significant effect on the Group's profit for the period, net assets or cash flows.

IFRIC 13 'Customer loyalty programmes', IFRIC 15 'Agreements for the Construction of Real Estate' and IFRIC 16 'Hedges of a Net Investment in a Foreign Operation' have all been adopted but have had no impact on the overall reported results.

The Company has elected to prepare the Company Financial Statements comprising Company Balance Sheet - AstraZeneca PLC, the Accounting Policies (Company) and Notes to the Financial Statements (Company) in accordance with UK Accounting Standards.

The Consolidated Financial Statements are presented in US dollars, which is the Company's functional currency.

In preparing their individual financial statements, the accounting policies of some overseas subsidiaries do not conform with adopted IFRSs. Therefore, where appropriate, adjustments are made in order to present the Group Financial Statements on a consistent basis.

Basis for preparation of financial statements on a going concern basis

Information on the business environment AstraZeneca operates in, including the factors underpinning the industry's future growth prospects, are included in the Directors' Report. Details of the product portfolio of the Group, our approach to product development and our development pipeline are covered in detail with additional information by Therapy Area in the Directors' Report.

The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Financial Review. In addition, Notes 15 and 16 to the Financial Statements include the Group's objectives, policies and processes for managing its capital, its financial risk management objectives, details of its financial instruments and hedging activities and its exposures to credit, market and liquidity risk. Further details of the Group's cash balances and borrowings are included in Notes 13 and 14 of the Financial Statements.

The Group has considerable financial resources available. As at 31 December 2009, the Group has $12.3 billion in financial resources (cash balances of $9.9 billion and committed bank facilities of $4.25 billion, with $1.9 billion of debt due within one year). The Group's revenues are largely derived from sales of products which are covered by patents and for which, historically at least, demand has been relatively unaffected by changes in the general economy. In addition, the Group has a wide diversity of customers and suppliers across different geographic areas. As a consequence, the Directors believe that the Group is well placed to manage its business risks successfully despite the current uncertain economic outlook.

After making enquiries, the Directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the Annual Report and Financial Statements.

Estimates and judgements

The preparation of the Financial Statements in conformity with generally accepted accounting principles requires management to make estimates and judgements that affect the reported amounts of assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Judgements include classification of transactions between profit and the consolidated statement of financial position, whilst estimates focus on areas such as carrying values and estimated lives.

AstraZeneca's management considers the following to be the most important accounting policies in the context of the Group's operations.

The accounting policy descriptions set out the areas where judgement needs exercising, the most significant of which are revenue recognition, research and development, business combinations and goodwill, litigation and environmental liabilities, employee benefits, taxation and share-based payments.

Further information on critical judgements made in applying accounting policies, including details of significant methods and assumptions used, is included in Notes 6, 8, 9, 16, 22, 23, 24 and 25. The financial risk management policies are detailed in Note 15.

Revenue

Revenues comprise sales and income under co-promotion and co-development agreements.

Income under co-promotion and co-development agreements is recognised when it is earned as defined in the contract and can be reliably estimated. In general this is upon the sale of the co-promoted/developed product or upon the delivery of a promotional or developmental service.

Revenues exclude inter-company revenues and value-added taxes and represent net invoice value less estimated rebates, returns and settlement discounts. Revenues are recognised when the significant risks and rewards of ownership have been transferred to a third party. In general this is upon delivery of the products to wholesalers. In markets where returns are significant (currently only in the US), estimates of returns are accounted for at the point revenue is recognised. In markets where returns are not significant they are recorded when returned.

When a product faces generic competition particular attention is given to the possible levels of returns and, in cases where the circumstances are such that the level of returns (and, hence, revenue) cannot be measured reliably, revenues are only recognised when the right of return expires which is generally on ultimate prescription of the product to patients.

For the US market we estimate the quantity and value of goods which may ultimately be returned at the point of sale. Our returns accruals are based on actual experience over the preceding 12 months for established products together with market-related information such as estimated stock levels at wholesalers and competitor activity which we receive via third-party information services. For newly launched products, we use rates based on our experience with similar products or a pre-determined percentage.

Research and development

Research expenditure is recognised in profit in the year in which it is incurred.

Internal development expenditure is capitalised only if it meets the recognition criteria of IAS 38 'Intangible Assets'. Where regulatory and other uncertainties are such that the criteria are not met the expenditure is recognised in profit and this is almost invariably the case prior to approval of the drug by the relevant regulatory authority. Where, however, recognition criteria are met, intangible assets are capitalised and amortised on a straight-line basis over their useful economic lives from product launch. As at 31 December 2009, no amounts have met recognition criteria.

Payments to in-license products and compounds from external third parties, generally taking the form of up-front payments and milestones, are capitalised. Since these products and compounds will only generate sales and cash inflows following launch, if it is in AstraZeneca's control to do so, our policy is to minimise the period between final approval and launch. These assets are amortised, generally on a straight-line basis, over their useful economic lives from product launch. Under this policy, it is not possible to determine precise economic lives for individual classes of intangible assets. However, lives range from three years to 20 years. These assets are not used in the research and development activities of other products.

Intangible assets relating to products in development (both internally generated and externally acquired) are subject to impairment testing annually. All intangible assets are tested for impairment when there are indications that the carrying value may not be recoverable. Any impairment losses are recognised immediately in profit. Intangible assets relating to products which fail during development (or for which development ceases for other reasons) are tested for impairment at the point of termination and are written down to their fair value (which is usually zero).

Business combinations and goodwill

On the acquisition of a business, fair values are attributed to the identifiable assets and liabilities and contingent liabilities unless the fair value cannot be measured reliably in which case the value is subsumed into goodwill. Where fair values of acquired contingent liabilities cannot be measured reliably, the assumed contingent liability is not recognised but is disclosed in the same manner as other contingent liabilities. Goodwill is the difference between consideration paid and the fair value of net assets acquired.

Goodwill arising on acquisitions is capitalised and subject to an impairment review, both annually and when there is an indication that the carrying value may not be recoverable.Between 1 January 1998 and 31 December 2002, goodwill was amortised over its estimated useful life; such amortisation ceased on 31 December 2002.

The Group's policy up to and including 1997 was to eliminate goodwill arising upon acquisitions against reserves. Under IFRS 1 'First-time Adoption of International Financial Reporting Standards' and IFRS 3 'Business Combinations', such goodwill will remain eliminated against reserves.

Employee benefits

The Group accounts for pensions and other employee benefits (principally healthcare) under IAS 19 'Employee Benefits'. In respect of defined benefit plans, obligations are measured at discounted present value whilst plan assets are measured at fair value. The operating and financing costs of such plans are recognised separately in profit; current service costs are spread systematically over the lives of employees and financing costs are recognised in full in the periods in which they arise. Actuarial gains and losses are recognised immediately in other comprehensive income.

Where the calculation results in a benefit to the Group, the recognised asset is limited to the present value of any available future refunds from the plan or reductions in future contributions to the plan. Payments to defined contribution plans are recognised in profit as they fall due.

Taxation

The current tax payable is based on taxable profit for the year. Taxable profit differs from Reported profit because it excludes items that are never taxable or tax deductible. The Group's current tax assets and liabilities are calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the asset can be utilised. This requires judgements to be made in respect of the availability of future taxable income.

No deferred tax asset or liability is recognised in respect of temporary differences associated with investments in subsidiaries, branches and joint ventures where the Group is able to control the timing of reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

The Group's deferred tax assets and liabilities are calculated using tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax rates that have been enacted or substantively enacted by the reporting date.

Accruals for tax contingencies require management to make judgements and estimates of ultimate exposures in relation to tax audit issues. Tax benefits are not recognised unless the tax positions will probably be sustained. Once considered to be probable, management reviews each material tax benefit to assess whether a provision should be taken against full recognition of that benefit on the basis of potential settlement through negotiation and/or litigation. All provisions are included in current liabilities. Any recorded exposure to interest on tax liabilities is provided for in the tax charge. See Note 25 for further details.

Share-based payments

All plans are assessed and have been classified as equity settled. The grant date fair value of employee share option awards is generally calculated using the Black-Scholes model. In accordance with IFRS 2 'Share-based Payment', the resulting cost is recognised in profit over the vesting period of the options, being the period in which the services are received. The value of the charge is adjusted to reflect expected and actual levels of awards vesting, except where the failure to vest is as a result of not meeting a market condition. Cancellations of equity instruments are treated as an acceleration of the vesting period and any outstanding charge is recognised in profit immediately.

Property, plant and equipment

The Group's policy is to write off the difference between the cost of each item of property, plant and equipment and its residual value systematically over its estimated useful life. Assets under construction are not depreciated.

Reviews are made annually of the estimated remaining lives and residual values of individual productive assets, taking account of commercial and technological obsolescence as well as normal wear and tear. Under this policy it becomes impractical to calculate average asset lives exactly. However, the total lives range from approximately 10 to 50 years for buildings, and three to 13 years for plant and equipment. All items of property, plant and equipment are tested for impairment when there are indications that the carrying value may not be recoverable. Any impairment losses are recognised immediately in profit.

Borrowing costs

The Group has no borrowing costs with respect to the acquisition or construction of qualifying assets. All other borrowing costs are recognised in profit as incurred and in accordance with the effective interest rate method.

Leases

Rentals under operating leases are charged to profit on a straight-line basis.

Subsidiaries

A subsidiary is an entity controlled, directly or indirectly, by AstraZeneca PLC. Control is regarded as the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

The financial results of subsidiaries are consolidated from the date control is obtained until the date that control ceases.

Inventories

Inventories are stated at the lower of cost and net realisable value. The first in, first out or an average method of valuation is used. For finished goods and work in progress, cost includes directly attributable costs and certain overhead expenses (including depreciation). Selling expenses and certain other overhead expenses (principally central administration costs) are excluded. Net realisable value is determined as estimated selling price less all estimated costs of completion and costs to be incurred in selling and distribution.

Write-downs of inventory occur in the general course of business and are recognised in cost of sales.

Trade and other receivables

Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest rate method, less any impairment losses.

Trade and other payables

Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest rate method.

Financial instruments

The Group's financial instruments include interests in leases and rights and obligations under employee benefit plans which are dealt with in specific accounting policies.

The Group's other financial instruments include:

• Cash and cash equivalents
• Fixed deposits
• Other investments
• Loans and borrowings
• Derivatives.

Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, current balances with banks and similar institutions and highly liquid investments with maturities of three months or less when acquired. They are readily convertible into known amounts of cash and are held at amortised cost.

Fixed deposits

Fixed deposits, comprising principally funds held with banks and other financial institutions, are initially measured at fair value (including direct transaction costs) and are subsequently remeasured to amortised cost using the effective interest rate method at each reporting date. Changes in carrying value are recognised in profit.

Other investments

Where investments have been classified as held for trading, they are measured initially at fair value and subsequently at fair value. Changes in fair value are recognised in profit.

In all other circumstances, the investments are initially measured at fair value (including direct transaction costs) and are subsequently remeasured to fair value at each reporting date. Changes in carrying value due to changes in exchange rates or impairments are recognised in profit. All other changes in fair value are recognised in other comprehensive income.

Impairments are recorded in profit when there is a decline in the value of an investment that is deemed to be other than temporary. On disposal of the investment, the cumulative amount recognised in other comprehensive income is recognised in profit as part of the gain or loss on disposal.

Bank and other borrowings

The Group uses derivatives, principally interest rate swaps, to hedge the interest rate exposure inherent in a portion of its fixed interest rate debt. In such cases the Group will either designate the debt as fair value through profit or loss when certain criteria are met or as the hedged item under a fair value hedge.

If the debt instrument is designated as fair value through profit, the debt is initially measured at fair value (with direct transaction costs being included in profit as an expense) and is remeasured to fair value at each reporting date with changes in carrying value being recognised in profit (along with changes in the fair value of the related derivative). Such a designation has been made where this significantly reduces an accounting mismatch which would result from recognising gains and losses on different bases.

If the debt is designated as the hedged item under a fair value hedge, the debt is initially measured at fair value (with direct transaction costs being amortised over the life of the bonds), and is remeasured for fair value changes in respect of the hedged risk at each reporting date with changes in carrying value being recognised in profit (along with changes in the fair value of the related derivative).

If certain criteria are met, non-US dollar denominated loans are designated as net investment hedges of foreign operations. Exchange differences arising on re-translation of net investments and of foreign currency loans which are designated in an effective net investment hedge relationship, are recognised in other comprehensive income. All other exchange differences giving rise to changes in the carrying value of foreign currency loans and overdrafts are recognised in profit.

Other interest-bearing loans are initially measured at fair value (including direct transaction costs) and are subsequently remeasured to amortised cost using the effective interest rate method at each reporting date. Changes in carrying value are recognised in profit.

Derivatives

Derivatives are initially measured at fair value (with direct transaction costs being included in profit as an expense) and are subsequently remeasured to fair value at each reporting date. Changes in carrying value are recognised in profit.

Foreign currencies

Foreign currency transactions, being transactions denominated in a currency other than an individual Group entity's functional currency, are translated into the relevant functional currencies of individual Group entities at average rates for the relevant monthly accounting periods, which approximate to actual rates.

Monetary assets, arising from foreign currency transactions, are retranslated at exchange rates prevailing at the reporting date. Exchange gains and losses on loans and on short-term foreign currency borrowings and deposits are included within finance expense. Exchange differences on all other foreign currency transactions are taken to operating profit in the individual Group entity's accounting records.

Non-monetary items arising from foreign currency transactions are not retranslated in the individual Group entity's accounting records.

In the Consolidated Financial Statements, income and expense items for Group entities with a functional currency other than US dollars, are translated into US dollars at average exchange rates, which approximate to actual rates, for the relevant accounting periods. Assets and liabilities are translated at the US exchange rates prevailing at the reporting date. Exchange differences arising on consolidation are taken in other comprehensive income.

Exchange differences arising on retranslation of net investments in subsidiaries and of foreign currency loans which are designated in an effective hedge relationship are taken in other comprehensive income in the Consolidated Financial Statements. Gains and losses accumulated in the translation reserve will be recycled to profit when the foreign operation is sold.

Litigation and environmental liabilities

Through the normal course of business, AstraZeneca is involved in legal disputes, the settlement of which may involve cost to the Group. Provision is made where an adverse outcome is probable and associated costs, including related legal costs, can be estimated reliably. In other cases, appropriate disclosures are included.

Where it is considered that the Group is more likely than not to prevail, legal costs involved in defending the claim are charged to profit as they are incurred.

Where it is considered that the Group has a valid contract which provides the right to reimbursement (from insurance or otherwise) of legal costs and/or all or part of any loss incurred or for which a provision has been established, the best estimate of the amount expected to be received is recognised as an asset.

AstraZeneca is exposed to environmental liabilities relating to its past operations, principally in respect of soil and groundwater remediation costs. Provisions for these costs are made when there is a present obligation and where it is probable that expenditure on remedial work will be required and a reliable estimate can be made of the cost. Provisions are discounted where the effect is material.

Impairment

The carrying value of non-financial assets, other than inventories and deferred tax assets, are reviewed at least annually to determine whether there is any indication of impairment. For goodwill, intangible assets under development and for any other assets where such indication exists, the asset's recoverable amount is estimated based on the greater of its value in use and its fair value less cost to sell. In assessing value in use, the estimated future cash flows, adjusted for the risks specific to each asset, are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the general risks affecting the pharmaceutical industry. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash flows of other assets. Impairment losses are recognised in profit.

International accounting transition

On transition to using adopted IFRS in the year ended 31 December 2005, the Company took advantage of several optional exemptions available in IFRS 1 'First-time Adoption of International Financial Reporting Standards'. The major impacts which are of continuing importance are detailed below:

• Business combinations - IFRS 3 'Business Combinations' has been applied from 1 January 2003, the date of transition, rather than being applied fully retrospectively. As a result, the combination of Astra and Zeneca is still accounted for as a merger, rather than through purchase accounting. If purchase accounting had been adopted, Zeneca would have been deemed to have acquired Astra.
• Cumulative exchange differences - the Group chose to set the cumulative exchange difference reserve at 1 January 2003 to zero.

Accounting standards and interpretations issued but not yet adopted

A revised IFRS 3 'Business Combinations' was issued in January 2008. The following changes will be relevant to the Group's operations:

• Contingent consideration will be measured at fair value, with subsequent changes to the fair value being recognised in profit.
• Transaction costs, other than share and debt issue costs, will be expensed as incurred.
• Any pre-existing interest in the acquiree will be measured at fair value with the gain or loss recognised in profit.
• Any non-controlling (minority) interest will be measured at either fair value, or at its proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis.

The revised Standard is effective for AstraZeneca business combinations on or after 1 January 2010 and will be applied prospectively from that date.

An amendment to IAS 27 'Consolidated and Separate Financial Statements (2008)' was issued in January 2008. The amendment requires changes in ownership interests in a subsidiary, while maintaining control, to be recognised as an equity transaction. If control of a subsidiary is lost, any retained interest is measured at fair value with the gain or loss recognised in profit. The amendment is effective for accounting periods beginning on or after 1 July 2009 and will not have a significant impact upon the net results, net assets or disclosures of AstraZeneca.

A revised IFRS 1 'First-time Adoption of International Financial Reporting Standards' was issued in November 2008 and will have no impact on AstraZeneca.

IFRS 9 'Financial Instruments' was issued in November 2009. It is applicable to financial assets and requires classification and measurement in either the amortised cost or the fair value category. It is effective for accounting periods beginning on or after 1 January 2013. The adoption of IFRS 9 is not expected to have a significant impact upon the net results or net assets of AstraZeneca.

An amendment to IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' was issued in May 2008 and provides clarification that assets and liabilities of a subsidiary should be classified as held for sale if the Parent is committed to a plan involving loss of control of the subsidiary, regardless of whether the entity will retain a non-controlling interest after the sale. The amendment is effective for accounting periods beginning on or after 1 July 2009 and will not have a significant impact upon the net results, net assets or disclosures of AstraZeneca.

The amendment to IAS 39 'Financial Instruments: Recognition and Measurement - Eligible Hedged Items' deals with two situations where diversity in practice exists on the designation of inflation as a hedged risk and the treatment of 'one-sided' risks on hedged items. The amendment is effective for accounting periods beginning on or after 1 July 2009. The amendment is not expected to have a significant impact upon the net results, net assets or disclosures of AstraZeneca.

Revised IFRS 3 'Business Combinations' was endorsed by the EU during 2009. The amendments to IAS 27 'Consolidated and Separate Financial Statements (2008)', IAS 39 'Financial Instruments: Recognition and Measurement - Eligible Hedged Items' and IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations' were endorsed by the EU in 2009. IFRS 9 'Financial Instruments' has not yet been endorsed by the EU.

The following IFRIC interpretations have been issued but are not yet adopted by AstraZeneca:

• Amendments to IFRIC 14 'Prepayments of a Minimum Funding Requirement'.
• IFRIC 17 'Distributions of Non-cash Assets to Owners'.
• IFRIC 19 'Extinguishing Financial Liabilities with Equity Instruments'.

The interpretations are effective for accounting periods commencing on or after 1 January 2011, 1 July 2009 and 1 July 2010 respectively. IFRIC 17 is not expected to have a significant impact upon adoption.

There is no impact expected from any other standards that are available for early adoption but that have not been adopted.

At 31 December 2009	Country	Percentage of voting share capital held	Principal activity
UK
AstraZeneca UK Limited	England	100	Research and development, manufacturing, marketing
AstraZeneca Treasury Limited	England	100	Treasury
Continental Europe
NV AstraZeneca SA	Belgium	100	Marketing
AstraZeneca Dunkerque Production SCS	France	95	Manufacturing
AstraZeneca SAS	France	100	Research, manufacturing, marketing
AstraZeneca GmbH	Germany	100	Development, manufacturing, marketing
AstraZeneca Holding GmbH	Germany	100	Manufacturing, marketing
AstraZeneca SpA	Italy	100	Marketing
AstraZeneca Farmaceutica Spain SA	Spain	100	Marketing
AstraZeneca AB	Sweden	100	Research and development, manufacturing, marketing
AstraZeneca BV	The Netherlands	100	Marketing
The Americas
AstraZeneca Canada Inc.	Canada	100	Research, marketing
AZ Reinsurance Limited	Cayman Islands	100	Insurance and reinsurance underwriting
IPR Pharmaceuticals Inc.	Puerto Rico	100	Development, manufacturing, marketing
AstraZeneca LP	US	99	Research and development, manufacturing, marketing
AstraZeneca Pharmaceuticals LP	US	100	Research and development, manufacturing, marketing
Zeneca Holdings Inc.	US	100	Manufacturing, marketing
MedImmune, LLC	US	100	Research and development, manufacturing, marketing
Asia, Africa & Australasia
AstraZeneca Pty Limited	Australia	100	Development, manufacturing, marketing
AstraZeneca Pharmaceuticals Co., Limited	China	100	Research and development, manufacturing, marketing
AstraZeneca KK	Japan	80	Manufacturing, marketing

All shares are held indirectly.

The companies and other entities listed above are those whose results or financial position principally affected the figures shown in the Group Financial Statements. A full list of subsidiaries, joint ventures and associates will be annexed to the Company's next annual return filed with the Registrar of Companies. The country of registration or incorporation is stated alongside each company. The accounting year ends of subsidiaries and associates are 31 December, except for Aptium Oncology, Inc. which, owing to local conditions and to avoid undue delay in the preparation of the Financial Statements, is 30 November. AstraZeneca operates through 282 subsidiaries worldwide. Products are manufactured in 18 countries worldwide and are sold in over 100 countries. The Group Financial Statements consolidate the Financial Statements of the Company and its subsidiaries at 31 December 2009.

We have audited the Parent Company Financial Statements of AstraZeneca PLC for the year ended 31 December 2009 set out on this page. The financial reporting framework that has been applied in their preparation is applicable law and UK Accounting Standards (UK Generally Accepted Accounting Practice).

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully in the Preparation of the Financial Statements and Directors' Responsibilities section, the Directors are responsible for the preparation of the Parent Company Financial Statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Parent Company Financial Statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB's) Ethical Standards for Auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website, frc.org.uk/apb/scope/UKP.

Opinion on financial statements

In our opinion, the Parent Company Financial Statements:

• Give a true and fair view of the state of the Company's affairs as at 31 December 2009.
• Have been properly prepared in accordance with UK Generally Accepted Accounting Practice.
• Have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

• The part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006.
• The information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the Parent Company Financial Statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

• Adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us.
• The Parent Company Financial Statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or
• Certain disclosures of Directors' Remuneration specified by law are not made; or
• We have not received all the information and explanations we require for our audit.

Other matters

We have reported separately on the Group Financial Statements of AstraZeneca PLC for the year ended 31 December 2009.

Jimmy Daboo
Senior Statutory Auditor

For and on behalf of KPMG Audit Plc,
Statutory Auditor
Chartered Accountants
8 Salisbury Square, London, EC4Y 8BB

28 January 2010

Registered Number: 2723534

Balance Sheet

At 31 December	Notes	2009 $m	2008 $m
Fixed assets
Fixed asset investments	1	25,230	26,727
Current assets
Debtors - other		1	1
Debtors - amounts owed by Group undertakings		8,966	8,217
		8,967	8,218
Total assets		34,197	34,945
Creditors: Amounts falling due within one year
Non-trade creditors	2	(252)	(414)
Interest bearing loans and borrowings	3	(1,790)	(650)
		(2,042)	(1,064)
Net current assets		6,925	7,154
Total assets less current liabilities		32,155	33,881
Creditors: Amounts falling due after more than one year
Amounts owed to Group undertakings	3	(283)	(283)
Interest bearing loans and borrowings	3	(8,582)	(10,255)
		(8,865)	(10,538)
Net assets		23,290	23,343
Capital and reserves
Called-up share capital	6	363	362
Share premium account	4	2,180	2,046
Capital redemption reserve	4	94	94
Other reserves	4	2,922	2,743
Profit and loss account	4	17,731	18,098
Shareholders' funds	5	23,290	23,343

$m means millions of US dollars.

The Financial Statements on this page were approved by the Board of Directors on 28 January 2010 and were signed on its behalf by:

David R Brennan
Director

Simon Lowth
Director

Basis of accounting

The Company Financial Statements are prepared under the historical cost convention, modified to include revaluation to fair value of certain financial instruments as described below, in accordance with the Companies Act 2006 and UK Generally Accepted Accounting Practice (UK GAAP). The Group Financial Statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and as issued by the IASB and are presented above.

The following paragraphs describe the main accounting policies under UK GAAP, which have been applied consistently.

New accounting standards

The Company has adopted the following accounting standards in the year:

The Amendments to FRS 2 'Accounting for Subsidiary Undertakings', FRS 6 'Acquisitions and Mergers', FRS 20 (IFRS 2) 'Amendment regarding Vesting Conditions and Cancellations', FRS 28 'Corresponding Amounts', FRS 29 (IFRS 7) 'Financial Instruments: Disclosures', UITF Abstract 42 (IFRIC 9) 'Reassessment of Embedded Derivatives' and FRS 26 (IAS 39) 'Financial Instruments Recognition and Measurement'. The adoptions have no impact on the net results or net assets of the Company.

The Amendments to FRS 20 (IFRS 2) 'Share-based Payment - Group Cash-settled Share-based Payment Transactions' and FRS 30 'Heritage Assets' have been issued but not yet adopted by the Company.

Foreign currencies

Profit and loss account items in foreign currencies are translated into US dollars at average rates for the relevant accounting periods. Assets and liabilities are translated at exchange rates prevailing at the date of the Company Balance Sheet. Exchange gains and losses on loans and on short-term foreign currency borrowings and deposits are included within net interest payable. Exchange differences on all other transactions, except relevant foreign currency loans, are taken to operating profit.

Taxation

The charge for taxation is based on the result for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and for accounting purposes. Full provision is made for the effects of these differences. Deferred tax assets are recognised where it is more likely than not that the amount will be realised in the future. These estimates require judgements to be made including the forecast of future taxable income. Deferred tax balances are not discounted.

Accruals for tax contingencies require management to make judgements and estimates in relation to tax audit issues. Tax benefits are not recognised unless the tax positions will probably be sustained. Once considered to be probable, management reviews each material tax benefit to assess whether a provision should be taken against full recognition of that benefit on the basis of potential settlement through negotiation and/or litigation.

Any recorded exposure to interest on tax liabilities is provided for in the tax charge. All provisions are included in creditors due within one year.

Investments

Fixed asset investments, including investments in subsidiaries, are stated at cost and reviewed for impairment if there are indications that the carrying value may not be recoverable.

Share-based payments

The issuance by the Company to employees of its subsidiaries of a grant over the Company's options, represents additional capital contributions by the Company to its subsidiaries. An additional investment in subsidiaries results in a corresponding increase in shareholders' equity. The additional capital contribution is based on the fair value of the grant issued, allocated over the underlying grant's vesting period.

Financial instruments

Loans and other receivables are held at amortised cost. Long-term loans payable are held at amortised cost.

Litigation

Through the normal course of business, AstraZeneca is involved in legal disputes, the settlement of which may involve cost to the Company. Provision is made where an adverse outcome is probable and associated costs can be estimated reliably. In other cases, appropriate descriptions are included.

For the year ended 31 December	2005 $m	2006 $m	2007 $m	2008 $m	2009 $m
Revenue and profits
Revenue	23,950	26,475	29,559	31,601	32,804
Cost of sales	(5,356)	(5,559)	(6,419)	(6,598)	(5,775)
Distribution costs	(211)	(226)	(248)	(291)	(298)
Research and development	(3,379)	(3,902)	(5,162)	(5,179)	(4,409)
Selling, general and administrative costs	(8,695)	(9,096)	(10,364)	(10,913)	(11,332)
Other operating income and expense	193	524	728	524	553
Operating profit	6,502	8,216	8,094	9,144	11,543
Finance income	665	888	959	854	462
Finance expense	(500)	(561)	(1,070)	(1,317)	(1,198)
Profit before tax	6,667	8,543	7,983	8,681	10,807
Taxation	(1,943)	(2,480)	(2,356)	(2,551)	(3,263)
Profit for the period	4,724	6,063	5,627	6,130	7,544
Other comprehensive income for the period, net of tax	(1,122)	931	342	(1,906)	(54)
Total comprehensive income for the period	3,602	6,994	5,969	4,224	7,490
Profit attributable to:
Equity holders of the Company	4,706	6,043	5,595	6,101	7,521
Minority interests	18	20	32	29	23
Earnings per share
Earnings per $0.25 Ordinary Share (basic)	$2.91	$3.86	$3.74	$4.20	$5.19
Earnings per $0.25 Ordinary Share (diluted)	$2.91	$3.85	$3.73	$4.20	$5.19
Dividends	$1.025	$1.410	$1.750	$1.900	$2.09
Return on revenues
Operating profit as a percentage of revenues	27.2%	31.0%	27.4%	28.9%	35.2%
Ratio of earnings to fixed charges	85.6	92.7	15.6	13.5	19.9

At 31 December	2005 $m	2006 $m	2007 $m	2008 $m	2009 $m
Statement of Financial Position
Property, plant and equipment, goodwill and intangible assets	9,697	11,657	29,649	29,240	29,422
Other investments	306	146	299	605	446
Deferred tax assets	1,117	1,220	1,044	1,236	1,292
Current assets	13,720	16,909	16,996	15,869	23,760
Total assets	24,840	29,932	47,988	46,950	54,920
Current liabilities	(6,839)	(9,447)	(15,218)	(13,415)	(17,640)
Non-current liabilities	(4,310)	(5,069)	(17,855)	(17,475)	(16,459)
Net assets	13,691	15,416	14,915	16,060	20,821
Share capital	395	383	364	362	363
Reserves attributable to equity holders	13,202	14,921	14,414	15,550	20,297
Minority equity interests	94	112	137	148	161
Total equity and reserves	13,691	15,416	14,915	16,060	20,821

For the year ended 31 December	2005 $m	2006 $m	2007 $m	2008 $m	2009 $m
Cash flows
Net cash inflow/(outflow) from:
Operating activities	6,743	7,693	7,510	8,742	11,739
Investing activities	(1,182)	(272)	(14,887)	(3,896)	(2,476)
Financing activities	(4,572)	(5,366)	6,051	(6,362)	(3,629)
	989	2,055	(1,326)	(1,516)	5,634

Ratio of earnings to fixed charges

For the purpose of computing these ratios, earnings consist of the income from continuing ordinary activities before taxation of Group companies and income received from companies owned 50% or less, plus fixed charges. Fixed charges consist of interest on all indebtedness, amortisation of debt discount and expense and that portion of rental expense representative of the interest factor.