Allotted, called up and fully paid2019
Number of shares
2018
Number of shares
2019
£m
2018
£m
Ordinary shares of 1p each at the beginning of the year277,660,081276,510,1372.82.8
Ordinary shares of 1p each issued in the year170,5441,149,944
Ordinary shares of 1p each at the end of the year277,830,625277,660,0812.82.8

During the year, 170,544 (2018: 1,149,944) new ordinary shares of one pence were issued as a result of the exercise of share options. The proceeds of £0.3m (2018: £1.5m) were credited to the share premium account. As at 31 May 2019, no shares were held in treasury (2018: nil).

SHARE PREMIUM

The share premium account records the difference between the nominal amount of shares issued and the fair value of the consideration received. The share premium account may be used for certain purposes specified by UK law, including to write off expenses incurred on any issue of shares and to pay fully paid bonus shares. The share premium account is not distributable but may be reduced by special resolution of the Company's ordinary shareholders and with court approval.

MERGER RESERVE

The merger reserve arose in 2015 from the acquisition of Accumuli plc through a share-for-share exchange in part consideration for the business.

RETAINED EARNINGS

Retained earnings for the Group are made up of accumulated reserves. For the Company, retained earnings are made up of accumulated reserves and are considered distributable reserves.

CURRENCY TRANSLATION RESERVE

The results of overseas operations are translated at the average foreign exchange rates for the year, and their balance sheets are translated at the rates prevailing at the balance sheet date. Exchange differences arising on the translation of opening net assets and results of overseas operations are recognised in the currency translation reserve. All other exchange differences are included in the Income Statement.