Notes 10-16

Movements in called up share capital

The Company has one class of ordinary shares which carry no right to fixed income. The ordinary shares of 5p each have full voting rights.

The Company issued a total of 11,734,190 shares (2006: 13,735,183) in the year with an aggregate nominal value of £586,710 (2006: £686,759), 11,734,190 (2006: 13,735,183) of which were due to the exercise of share options. The total share premium arising on the issue of shares in the year was £9,273,491 (2006: £10,471,549).

Under the Company's share option schemes, there were outstanding options over 42,297,035 ordinary shares of 5p each at 31 December 2007 (2006: 60,473,849), for which the participants have the right to exercise their options at prices ranging from 63.7p to 214.5p. These options are exercisable between 31 December 2007 and 11 April 2017.

At 31 December 2007, the Company's ESOP (the 'Aegis Group Employee Share Trust') held 24,516,101 Ordinary Shares in the Company with a nominal value of £1,225,805 and a market value of £28.7 million.

At 31 December 2006, the Company's ESOP held 17,923,182 ordinary shares in the Company with a nominal value of £896,159 and a market value of £25.1 million.

The capital redemption reserve represents the conversion, issue and redemption of shares by the Company, less expenses.

The ESOP reserve represents the cost of shares in Aegis Group plc acquired in the open market by the Trust using funds provided by Aegis Group plc. The Trust has waived any entitlement to the receipt of dividends in respect of all of its holding of the Company's ordinary shares.The Trust has purchased the shares to satisfy future share options and share awards under the Company's share based payment schemes.

The monthly average number of persons employed by the Company (excluding directors) during the year was 43 (2006: 44).

Their aggregate remuneration comprised:

For the year ended 31 December 2007, dividends paid to shareholders comprise the final 2006 dividend of £13.2 million (1.175p per share) and the interim 2007 dividend of £9.5 million (0.84p per share). For the year ended 31 December 2006, dividends paid to shareholders comprise the final 2005 dividend of £11.3 million (1.0p per share) and the interim 2006 dividend of £8.1 million (0.725p per share). The proposed final dividend for the year ended 31 December 2007 is £16.5 million (1.46p per share).

As at 31 December 2007, the Company does not have sufficient distributable reserves to meet the proposed final 2007 dividend of £16.5 million. The directors have initiated the necessary steps to increase these reserves to ensure there are sufficient distributable reserves to permit the payment of the final 2007 dividend.

The Company recognised a total expense of £1.3 million (2006: £0.7 million) in respect of all share-based payments in the year. Share-based payments include share options and conditional share awards.

Share options

The Company issues share options to certain employees. The grant price for share options is equal to the average quoted market price of the Company shares on the date of grant. The vesting period is typically three years. If share options remain unexercised after a period of 10 years from the date of grant, the options expire. Share options are forfeited if the employee leaves the Company before the options vest and are subject to EPS performance conditions. Further details are provided in the Remuneration Report.

Details of outstanding share options are provided in note 32 to the Group's financial statements.

The weighted average share price at the date of exercise for share options exercised during the period was £0.98 (2006: £0.92).
The options outstanding at 31 December 2007 had a weighted average exercise price of £1.04 (2006: £1.07), and a weighted average remaining contractual life of 4.9 years (2006: 5.4 years). The fair value per option granted (weighted average) in the year was £0.38 (2006: £0.36).

The fair value of share options was determined using a stochastic model using the assumptions given in the table below.

Expected volatility was determined by considering the historical volatility of the Company's share price over the previous three years, with certain periods where the share price was particularly volatile for specific reasons, being disregarded as these were not considered to be indicative of expected future volatility. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

The Company recognised a total expense of £0.3 million (2006: £0.3 million) in respect of share options in the year.

Conditional share awards

The Company issues conditional share awards to certain employees. The vesting period is typically three years. The extent to which awards vest is determined partly by reference to the Company's Total Shareholder Return (TSR) performance relative to a group of similar businesses and partly by reference to the Company's EPS growth relative to RPI. Further details are provided in the Remuneration Report.

The fair value of conditional share awards was determined using a stochastic model using the assumptions given in the table above.

The Company recognised a total expense of £1.0 million (2006: £0.4 million) in respect of conditional share awards in the year.

At 31 December 2007, there were the following annual commitments in respect of non-cancellable operating leases:

All shareholdings are of ordinary shares.

All of the principal subsidiary and associated undertakings disclosed above are directly held.