Note 21: Employee share ownership plan (ESOP)

The purpose of the ESOP is to enable the Company to offer participation in the ownership of its shares to Group
employees principally as a reward and incentive scheme.

Arrangements for the distribution of benefits to employees which may be the ownership of shares in the Company or the granting of options over shares in the Company held by the ESOP, are made at the ESOP’s discretion in such manner as the ESOP considers appropriate.

Administration costs of the ESOP are accounted for in the profit and loss account of the Company as they are incurred.

At 31 July 2007 the ESOP held 2,105,596 (2006: 4,588,788) ordinary shares in the Company, which represents 3.9% (2006: 8.8%) of the ordinary share capital. The ESOP reserve of £681,000 (2006: £1,487,000) represents the cost of these shares held by the ESOP in the Company at 31 July 2007. The nominal value of shares held was £53,000 (2006: £115,000), and the market value at 31 July 2007 was £1,727,000 (2006: £2,524,000). The right to receive dividends on all shares has been waived.

During the year to 31 July 2007, a number of employees exercised their options. In total 2,483,192 (2006: 554,001) ESOP options were exercised for proceeds of £952,586 (2006: £182,913).