Notes to the company accounts

10 Share premium account and reserves

	Share premium £m	Capital redemption reserve £m	Merger reserve £m	Profit and loss account £m
At 31 July 2007 (as previously reported)	289.0	5.7	180.5	2,164.2
UITF 44 adoption				6.5
At 31 July 2007 (as restated)	289.0	5.7	180.5	2,170.7
Exercise of share options	14.6			5.5
Purchase of own shares				(20.7)
Redemption of B shares		0.1		(0.1)
Profit for the period				47.2
Dividends paid to equity shareholders				(131.4)
Actuarial loss on retirement benefits				(147.9)
Deferred tax credit related thereto				41.5
Share-based payment				11.8
At 31 July 2008	303.6	5.8	180.5	1,976.6

The retained profit of the Company represents a profit for the year of £47.2m less dividends paid of £131.4m.

The retained earnings include the purchase of Smiths Group plc shares by the Smiths Industries Employee Benefit Trust, and the issue of these shares upon the exercise of share options. The consideration paid was £20.7m (2007:£7.0m) and £5.5m was received as a result of the issue of shares. At 31 July 2008 the trust held 1,095,965 (2007: 634,274) ordinary shares with a nominal value of £0.4m (2007: £0.2m) and a market value of £11.5m (2007: £6.6m).

The Company’s profit and loss reserve of £1,976.6m includes £895.7m (2007: £926.1m) not available for distribution as dividend.

During the year, the Company received £15.5m (2007: £77.7m) on the issue of shares in respect of the exercise of options awarded under various share option schemes.

Smiths Group divisions:
Smiths Detection, Smiths Medical, John Crane, Smiths Interconnect, Flex-Tek