Annual Report and Accounts 2009

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

27. Own shares

  £m
Balance at 1 January 2008 282.0
Disposed of on exercise of options (6.3)
Balance at 31 December 2008 275.7
Cancellation of treasury shares (245.9)
Disposed of on exercise of options (24.8)
Balance at 31 December 2009 5.0

As part of the equity raise process in June 2009 92.7m treasury shares held outside of the employee share ownership trusts were cancelled with an associated charge to retained earnings of £222.7m. This did not impact distributable reserves.

The own shares reserve represents the cost of shares in Taylor Wimpey plc purchased in the market, those held as treasury shares and held by the Taylor Wimpey plc Employee Benefit Trust to satisfy options under the Group's share plans.

During the year, Taylor Wimpey plc purchased none of its own shares (2008: nil).

  2009
Number
2008
Number
These comprise ordinary shares of the Company:
Treasury shares 92.7m
Shares held in trust for bonus, option and performance award plans 3.3m 6.8m
  3.3m 99.5m

Employee Share Ownership Trusts ('ESOTs') are used to hold the Company's shares ('shares') which are either acquired on the market or (during 2008) transferred out of the Company's holding of shares in Treasury. These shares are used to meet the valid exercise and/or vesting of conditional awards (under the deferred bonus plan and performance share plan) and options (under the Savings-Related, Executive Share Option, George Wimpey LTIP and Executive Bonus Plans) over shares, and the matching award of shares under the Share Purchase Plan. During the year, nil (2008: 10.0m) shares were transferred out of the Company's Treasury holding to the ESOTs for this purpose.

The ESOTs' entire holding of shares at 31 December 2009, aggregating 3.3m shares (2008: 6.7m), was covered by outstanding options and conditional awards over shares at that date.