Annual Report and Accounts 2009

Notes to the Company Financial Statements for the year to 31 December 2009

11. Merger relief reserve

2009
£m
2008
£m
1 January 934.2
New share capital subscribed 488.8
Transfer to profit and loss account (488.8) (934.2)
31 December

In accordance with section 612 of the Companies Act 2006, the £488.8m premium on ordinary shares issued as part of the placing and open offer in June 2009 was initially recorded within the merger relief reserve and subsequently transferred to the profit and loss account.

The reserve is not distributable but can be used to:

  • Make a bonus issue of fully paid shares;
  • Transfer to the profit and loss account an amount equal to the amount that has become realised by virtue of either:

    The disposal of the related investment; or
    An amount written off the related investment and charged to the profit and loss account.

In 2008 £934.2m was transferred to the profit and loss account following an impairment charge being recognised in respect of the George Wimpey Plc investment.