Notes 21-29

Certain deferred tax assets and liabilities have been offset in accordance with the Group's accounting policy. The following is the analysis of the deferred tax balances (after offset).

The Group has the following temporary differences in respect of which no deferred tax asset has been recognised.

The tax losses and other temporary differences have no expiry date. The total amount of tax losses and other temporary differences for which no deferred tax was recognised at 31 December 2006 was £159.1 million.

Balances in the subsidiary entities are shown on a 100% basis, regardless of ownership percentage. Balances for joint ventures are shown in proportion to the Group's ownership percentage. Balances in associates are not included.

At the balance sheet date, the aggregate amount of earnings in overseas subsidiaries for which deferred tax liabilities have not been recognised was £303.3 million (2006: £318.4 million). No liability has been recognised in respect of these differences because the Group is in a position to control the timing of the reversal of the temporary differences and it is probable that such differences will not reverse in the foreseeable future.

Temporary differences arising in connection with interests in associates and joint ventures are insignificant.

The Group's vacant leasehold properties are principally located in the US, the UK and the Netherlands. Provision has been made for the residual lease commitments for the remaining period of the leases, which at 31 December 2007 is approximately three years.

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 (2006: 13,735,183) shares in the year with an aggregate nominal value of £586,710 (2006: £689,259), 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: £10,472,141).

Under the Group'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 Group'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 Group'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 own shares 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 Group's share-based payment schemes.

During the period, the Group acquired subsidiaries (all acquisition accounted for) as detailed below:

During the year the Group acquired the assets and contracts of the ad-serving business of Bluestreak.com for a consideration of £6.3 million.

During the period, the Group also acquired additional stakes in existing subsidiaries as detailed below:

If the acquisitions above had been completed on the first day of the financial year, Group revenues for 2007 would have been £1,129.9 million and Group profit attributable to equity holders of the parent would have been £92.4 million. Post acquisition profit before interest and tax on 2007 acquisitions was £8.1 million.

Initial consideration, including acquisition costs, totalled £79.8 million with estimated deferred consideration of £48.8 million payable between 2007 and 2011, subject to performance criteria. Aegis Group shares to be issued are subject to performance criteria being met in relation to the acquisition of AgenciaClick in Brazil. A summary of the net assets acquired and goodwill arising is given below.

Of the initial goodwill arising in the period of £121.6 million, £88.4 million remained provisional at the year-end pending the determination of the final purchase price allocation.

Final fair value adjustments in AgenciaClick and Interview NSS and provisional fair value adjustments have been made to properly reflect the fair value of existing assets and liabilities in the Group's balance sheet.

a) Deferred consideration

Deferred consideration, which has been included within trade and other payables, may be paid to the vendors of certain subsidiary undertakings in the years to 2012. Such payments are either fixed under the terms of the acquisition or are contingent on future financial performance. The directors estimate that, at the rates of exchange ruling at the balance sheet date, the liability at 31 December 2007 for payments that may be due is as follows:

The minimum potential liability is £62.9 million and the maximum potential liability is £181.2 million.

b) Liabilities in respect of put option agreements

There are put options held by certain minority interest shareholders in respect of a small number of Group companies. The Group recognises its best estimate of the amount it is likely to pay, should these options be exercised by the minority interests, as a liability in the balance sheet.

As reported last year, during 2006 the Group became aware of a fraud perpetrated against Aegis Media Germany. The Group continues to take steps to seek recompense and, although it is probable there will be some recovery of funds, the amount is not sufficiently certain to be recognised as an asset.