Annual report and financial statements 2009
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Notes to the Group financial statements
23 Reconciliation of movements in capital and reserves
| Share capital £m |
Share premium £m |
Capital redemption reserve £m |
Merger reserve £m |
Hedging reserve £m |
Retained earnings £m |
Total £m |
|
|---|---|---|---|---|---|---|---|
| Current year | |||||||
| At 3 February 2008 | 269 | 57 | – | 2,578 | 6 | 1,468 | 4,378 |
| Share options exercised | – | 3 | – | – | – | – | 3 |
| Shares purchased for cancellation | (6) | – | 6 | – | – | (146) | (146) |
| Total recognised income and expense | – | – | – | – | 6 | 396 | 402 |
| Share option charge | – | – | – | – | – | 14 | 14 |
| Dividends | – | – | – | – | – | (131) | (131) |
| At 1 February 2009 | 263 | 60 | 6 | 2,578 | 12 | 1,601 | 4,520 |
| Share capital £m |
Share premium £m |
Capital redemption reserve £m |
Merger reserve £m |
Hedging reserve £m |
Retained earnings £m |
Total £m |
|
|---|---|---|---|---|---|---|---|
| Prior year | |||||||
| At 4 February 2007 | 268 | 41 | – | 2,578 | (1) | 1,041 | 3,927 |
| Total recognised income and expense | – | – | – | – | 7 | 526 | 533 |
| Share issues | 1 | 16 | – | – | – | – | 17 |
| Share option charge | – | – | – | – | – | 9 | 9 |
| Dividends | – | – | – | – | – | (108) | (108) |
| At 3 February 2008 | 269 | 57 | – | 2,578 | 6 | 1,468 | 4,378 |
Included in retained earnings is a deduction of £44m (2008: £44m) in respect of treasury shares held at the balance sheet date. This represents the cost of 17,641,448 (2008: 17,641,448) of the Company’s ordinary shares (nominal value of £1.8m). These shares are held by a trust using funds provided by the Group and were acquired to meet obligations under the share option schemes. The costs of funding and administering the schemes are charged to the income statement of the Company in the period to which they relate. The market value of the shares at 1 February 2009 was £48m (2008: £53m). The trust has waived its rights to dividends. These shares are not treasury shares as defined by the London Stock Exchange or the Companies Act 2006.
a) Share buyback
The Company purchased 57,788,600 of its own shares in the open market for cancellation between 31 March 2008 and 21 November 2008 at a cost of £146m. The shares repurchased represent 2.15% of the ordinary share capital at 3 February 2008.
b) Merger reserve
The merger reserve represents the reserve in the Company’s balance sheet arising on the acquisition in 2004 of Safeway Limited. In the opinion of the Directors, this reserve is not distributable and accordingly it will be carried forward as a capital reserve.
c) Hedging reserve
This represents the gains and losses arising on the cash flow hedge from the Group’s cross-currency swaps, see note 18.