- Financial Statements
Notes to the Consolidated Financial Statements
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for the year to 31 December 2007
27. Merger relief reserve
| £m | |
| Balance at 1 January 2006 and 31 December 2006 | – |
| Premium on ordinary shares issued on acquiring 100% equity in George Wimpey Plc | 1,934.2 |
| Balance at 31 December 2007 | 1,934.2 |
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 against the profit and loss account.