Notes to the Company accounts

9 Share capital

	Number of shares	Issued capital £m	Consideration £m
Ordinary shares
At 5 August 2006	567,328,353	141.8
Exercise of share options	10,693,635	2.8	77.7
Effect of share consolidation	(192,523,715)
At 31 July 2007	385,498,273	144.6

B shares
Issued	577,571,145	5.8
Converted to deferred shares	(348,205,433)	(3.5)
Purchased and cancelled	(224,439,118)	(2.2)
At 31 July 2007	4,926,594	0.1

Deferred shares
Issued	348,205,433	3.5
Purchased and cancelled	(348,205,433)	(3.5)
At 31 July 2007

Share capital classified as equity at 31 July 2007	385,498,273	144.6
Share capital classified as debt at 31 July 2007	4,926,594	0.1
Total share capital at 31 July 2007	390,424,867	144.7

During the year the Group issued £5.8m of B shares out of the share premium account. The B shares could be: converted into deferred shares with a negligible value in return for a dividend of 365p; redeemed for 365p per share in cash; or retained. £4.2m of associated costs were charged to the share premium account.

572.6 million B shares were redeemed on 25 June 2007, including 348.2 million B shares which had been converted into deferred shares and, as a result, £5.7m was transferred from retained earnings to a capital redemption reserve.

It is currently expected that JPMorgan Cazenove, acting as principal, will make a final purchase offer to acquire any retained B shares for 365p each, free of all dealing expenses and commissions, on or around 17 April 2008, although there can be no guarantee that such an offer will be made. Until they are redeemed the B shares carry annual interest of 75% of 12 month LIBOR, payable in arrears in April. Smiths may redeem and cancel the remaining B shares at any time between May and November 2008 for a consideration of 365p per share.

The following creditor relating to the outstanding B shares has been included in net debt:

		2007 £m
B shares
Nominal value		0.1
Expected redemption premium		17.9
Accrued interest		0.1
B shares included in short term borrowings		18.1

After the allotment of the B shares a capital reorganisation was undertaken. Existing 25p ordinary shares were subdivided and consolidated so that Shareholders received two new 37.5p ordinary shares for every three existing 25p ordinary shares.

The authorised capital at 31 July 2007 consisted of:

533,333,333 (2006: 800,000,000) ordinary shares of 37.5p (2006: 25p) each; and 533,333,333 (2006: 800,000,000) ordinary shares of 37.5p (2006: 25p) each; and
600,000,000 (2006: nil) non-cumulative B shares of 1p each. 600,000,000 (2006: nil) non-cumulative b shares of 1p each.
At 31 July 2007 all of the issued share capital was in free issue. All issued shares are fully paid.

	31 July 2007	5 August 2006
Number of ordinary shares issuable under outstanding options	11,585,441	20,582,309

	Year issued	Number of shares	Subscription prices	Dates normally exercisable
Smiths Sharesave Scheme	2000	3,600	612.00p	2003/2007
	2001	75,796	608.00p	2004/2008
	2002	284,984	645.00p	2005/2009
	2003	508,562	554.00p	2006/2010
	2004	946,761	525.00p	2007/2011
	2005	579,069	704.00p	2008/2012
	2006	670,504	798.00p	2009/2013
	2007	267,919	868.00p	2010/2014
Smiths Industries Executive Share Option Schemes	1997	39,383	934.00p	2000/2007
	1998	59,475	765.00p	2001/2008
	1999	116,851	858.50p	2002/2009
	2000	110,991	750.00p	2003/2010
	2001	157,552	790.00p	2004/2011
	2002	1,578,882	806.00p	2005/2012
	2002	217,500	654.00p	2005/2012
	2003	325,016	669.00p	2006/2013
	2004	1,690,100	774.00p	2007/2014
	2005	1,362,437	901.00p	2008/2015
	2006	2,074,177	896.50p	2009/2016
TI Group Savings-Related Share Option Scheme	2000	44,315	587.54p	2003/2007
TI Group Executive Share Option Schemes	1997		1,097.82p	2001/2007
	1997	174,858	1,219.80p	2001/2007
	1998	74,762	1,026.66p	2001/2008
	1998	13,525	849.79p	2001/2008
	1999		943.31p	2002/2009
	1999	54,106	907.23p	2002/2009
	1999	110,543	1,103.92p	2002/2009
	2000	19,182	661.23p	2003/2010
	2000	22,132	626.16p	2003/2010
	2000	2,459	672.92p	2003/2010

Smiths Group divisions:
Smiths Detection, Smiths Medical, Smiths Specialty Engineering