Notes to the accounts

26 Share capital

	Number of shares	Issued capital £m	Consideration £m
Ordinary shares
At 31 July 2007	385,498,273	144.6
Exercise of share options	2,380,908	0.9	15.5
At 31 July 2008	387,879,181	145.5

B shares
At 31 July 2007	4,926,594	0.1
Purchased and cancelled	(4,467,437)	(0.1)
At 31 July 2008	459,157

Share capital classified as equity at 31 July 2008		145.5
Share capital classified as debt at 31 July 2008
Total share capital at 31 July 2008		145.5

On 17 April 2008 4.5 million B shares were purchased and cancelled. The remaining 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 up to November 2008 for a consideration of 365p per share in cash or convert them to ordinary shares. B shares have no voting rights.

In 2007 the Group issued 577.6 million B shares with a nominal value of £5.8m. £4.2m of associated costs were charged to the share premium account. Of these shares 572.6 million were redeemed on 25 June 2007 for a consideration of 365p per share including 348.2 million B shares which had been converted into deferred shares.

After the allotment of the B shares in 2007 a capital reorganisation was undertaken. The shareholders received two new 37.5p ordinary shares for every three 25p ordinary shares which they previously held.

The authorised capital at 31 July 2008 consisted of:

533,333,333 (2007: 533,333,333) ordinary shares of 37.5p each; and
600,000,000 (2007: 600,000,000) non-cumulative B shares of 1p each.

At 31 July 2008 all of the issued share capital was in free issue. All issued shares are fully paid.

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