- Financial Statements
Notes to the Company Financial Statements
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for the year to 31 December 2007
12. Merger relief reserve
| £m | |
| 31 December 2006 | – |
| Premium on ordinary shares issued on acquiring 100% equity in George Wimpey Plc | 1,934.2 |
| Transfer to profit and loss reserve | (1,000.0) |
| Balance at 31 December 2007 | 934.2 |
In accordance with section 131 of the Companies Act 1985, the premium on ordinary shares issued on the merger with George Wimpey Plc was recorded as a merger relief reserve.
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 reserve 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.
During the year, £1,000.0m was transferred to the profit and loss account reserve. The amount being equal to the impairment charge in respect of the George Wimpey Plc investment.