26 Notes to statement of changes in equity
Consolidated
The shares held by the ESOP are available to satisfy awards under LTISP (see Note 27).
At 31 March 2010 the ESOP held 171,015 shares (2009: 483,723 shares) in the Company at a cost of £0.7 million (2009: £1.9 million). The ESOP was established in August 1996 to purchase shares in the Company in order to hedge certain future obligations of the Group including shares awarded under the LTISP and the ESOS. During the year the Trustee of the ESOP issued 312,708 (2009: 468,156) shares following exercises of LTISP options. The Company issued no shares to the ESOP in the year ended 31 March 2010 (2009: 200,000 shares were issued to the ESOP in March 2009 at the prevailing market price of £2.60). The market value of the shares held by the ESOP, which are listed on the London Stock Exchange, was £0.6 million at 31 March 2010 (2009: £1.3 million).
| Other reserves – Consolidated | Merger reserve £m |
Hedging reserve £m |
Translation* £m |
Other reserves £m |
|
|---|---|---|---|---|---|
| At 31 March 2009 | 55.9 | 3.2 | 17.4 | 76.5 | |
| Total recognised in other comprehensive income | – | (2.6) | (7.5) | (10.1) | |
| At 31 March 2010 | 55.9 | 0.6 | 9.9 | 66.4 | |
| At 31 March 2008 | 55.9 | 9.1 | 2.0 | 67.0 | |
| Total recognised in other comprehensive income | – | (5.9) | 15.4 | 9.5 | |
| At 31 March 2009 | 55.9 | 3.2 | 17.4 | 76.5 |
* The classification of reserves at 31 March 2009 has been restated to correctly analyse net investment hedges in relation to Wexford Creamery Limited between translationreserve and retained earnings. The impact is to increase retained earnings at that date by £0.9 million and to reduce the translation reserve by £0.9 million. There is no impact on total share capital and reserves, nor on minority interests at that date. The classification of reserves at 31 March 2008 is not affected by this change.
The merger reserve includes the premium on shares issued to satisfy the purchase of Dairy Crest Limited in 1996. The cumulative amount of goodwill charged against the merger reserve is £86.8 million (2009: £86.8 million). The reserve is not distributable.
The hedging reserve records the movements on designated hedging items, offset by any movements recognised directly in equity on underlying hedging items.
The translation reserve records exchange differences arising from the translation of the accounts of foreign currency denominated subsidiaries offset by the movements on loans and derivatives used to hedge the net investment in foreign subsidiaries.
Parent Company
As permitted by section 408 of the Companies Act 2006, no separate profit and loss account is presented for the Company. The loss for the year dealt with in the accounts of the Company is £7.0 million (2009: £11.7 million profit) including dividends received from subsidiary companies of nil (2009: £25.0 million). Dividends paid amounted to £24.3 million (2009: £32.3 million) which, along with a credit for share based payments of £0.5 million (2009: £0.1 million debit) resulted in a £30.8 million decrease in retained earnings (2009: £21.2 million decrease after including the cost of the cash gift to the ESOP of £0.5 million).
In 1996 the Company acquired the entire issued share capital of Dairy Crest Limited. Consideration was in the form of cash and the issue of 109.8 million ordinary shares of 25 pence each. The fair value of the shares issued was estimated as £170.2 million. The capital reserve of £142.7 million, shown in the statement of changes in equity, represents the difference between the fair value of shares issued and their nominal value of £27.5 million.