| ||Share |
|1 January 2006||43 ||83 ||3,748 ||3,874 |
|31 December 2006||48 ||90 ||3,748 ||3,886 |
|31 December 2007||53 ||101 ||3,748 ||3,902 |
The share premium account includes the difference between the value of shares issued and their nominal value. The increase of £5 million (2006: £5 million) relates solely to ordinary shares issued under the Company’s share option schemes. These schemes are described in the Remuneration Report.
On the purchase of own shares as part of the buy-back programme, a transfer is made from retained earnings to the capital redemption reserve equivalent to the nominal value of shares purchased. As described in note 4, in 2006 a technical infringement of the Companies Act 1985 occurred in relation to £100 million of the £500 million shares purchased under the buy-back programme in the table above, which remained in the share capital as at 31 December 2006 shown above and were excluded from the transfer to the capital redemption reserve in that year. As these payments were ratified by the shareholders in 2007, in the table above the share capital is adjusted with a consequent transfer to the capital redemption reserve.
Shareholders’ funds are stated after deducting the cost of treasury shares which include £123 million (2006: £nil) for shares repurchased and not cancelled and £173 million (2006: £197 million) in respect of the cost of own shares held in employee share ownership trusts.
In 1999, shares were issued for the acquisition of the Rothmans International B.V. Group, and the difference between the fair value of shares issued and their nominal value was credited to merger reserves.
Movements in other reserves and retained earnings (which is after deducting treasury shares) shown above comprise: