Carphone Warehouse 2006 Annual Report Download - page 66

Notes to the Financial Statements continued
21 Provisions
Insurance Reorganisation Sales Other Total
£’000 £’000 £’000 £’000 £’000
At 2 April 2005 7,026 6,799 28,758 15,246 57,829
Acquisitions (see note 14) – – – 14,589 14,589
Utilised in the period (26,722) (4,911) (67,070) (6,444) (105,147)
Released in the period – (1,921) – (1,029) (2,950)
Charge to income statement 29,100 22,288 105,610 1,962 158,960
Foreign exchange – 12 134 111 257
At 1 April 2006 9,404 22,267 67,432 24,435 123,538
Provisions are categorised as follows:
Insurance:
Insurance provisions represent the anticipated costs of all policyholder claims notified but not settled and claims incurred but not reported at the balance sheet
date. Insurance provisions are expected to be utilised within one year.
Reorganisation:
Reorganisation provisions at the start of the period relate principally to a store closure programme launched in the period ended 30 March 2002, and the costs
associated with the ongoing implementation of shared service functions. As detailed in note 4, following the acquisition of Onetel, the Group commenced a
reorganisation programme to integrate Onetel with the rest of the Group. The costs of this integration are estimated at £22.3m, principally being redundancy and
other employee costs, contract termination costs, and network and customer migration costs. These costs are expected to be incurred substantially in the period
ending 31 March 2007.
Sales:
Sales provisions relate to “cash-back” and similar promotions, product warranties, product returns, and network operator performance penalties. Sales provisions
are expected to be used within the following 12 to 24 months.
Other:
Other provisions relate to dilapidations and similar property costs, and all other provisions, principally being the anticipated costs of unresolved tax issues and legal
disputes, and costs associated with onerous contracts.
22 Share capital
2006 2005 2006 2005
million million £’000 £’000
Authorised
Ordinary shares of 0.1p each 1,500 1,500 1,500 1,500
Allotted, called-up and fully paid
Ordinary shares of 0.1p each 888 877 888 877
Movements in share capital in the period arose from the exercise of share options.
23 Reserves
Share Capital
Share premium redemption Translation Accumulated
capital reserve reserve reserve profits Total
£’000 £’000 £’000 £’000 £’000 £’000
At 2 April 2005 877 402,136 30 5,718 139,198 547,959
Adoption of IAS32 and IAS39 (see note 30) ––––(7,741) (7,741)
At 3 April 2005 877 402,136 30 5,718 131,457 540,218
Net profit for the financial period ––––70,541 70,541
Currency translation – – – (3,644) – (3,644)
Tax on items recognised directly in reserves ––––19,597 19,597
Net change in available-for-sale investments ––––4,236 4,236
Issue of share capital 11 16,223 – – (5,550) 10,684
Net purchase of own shares (see below) ––––(15,851) (15,851)
Cost of share-based payments (see note 6) ––––10,665 10,665
Equity dividends (see note 9) ––––(17,443) (17,443)
At 1 April 2006 888 418,359 30 2,074 197,652 619,003
Net purchase of own shares:
The Group has an Employee Share Ownership Trust (ESOT) which holds 14.1m shares (2005 – 7.5m) in the Company for the benefit of the Group’s employees.
The ESOT has waived its rights to receive dividends and none of the shares has been allocated to specific schemes.
At 1 April 2006 the shares had a carrying value of £23.5m and a market value of £43.5m (2005 – carrying value £12.0m, market value £12.5m).
The Carphone Warehouse Group PLC Annual Report 2006
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