Share premium account, capital redemption reserves and merger reserves comprise:
|1 January 2005||37 ||72 ||3,748 ||3,857 |
|31 December 2005||43 ||83 ||3,748 ||3,874 |
|31 December 2006||48 ||90 ||3,748 ||3,886 |
The share premium account includes the difference between the value of shares issued and their nominal value. The increase of £5 million (2005: £6 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 3, 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 therefore remain in share capital above and are excluded from the transfer to the capital redemption reserve.
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.