Carphone Warehouse 2004 Annual Report Download - page 34

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Notes to the Financial Statements continued
32
www.cpwplc.com
4Profit on ordinary activities before taxation
Profit on ordinary activities before taxation is stated after charging (crediting):
2004 2003
£’000 £’000
Amortisation of goodwill 25,417 20,585
Depreciation of tangible fixed assets 41,684 31,977
Rentals under operating leases – property 51,814 44,811
Operating loss (profit) on disposal of tangible fixed assets 163 (912)
Exceptional profit on disposal of tangible fixed assets –(13,199)
Auditors’ remuneration – audit services 568 500
Auditors’ remuneration – non-audit services 325 307
Further auditors’ remuneration in respect of due diligence reviews of £225,000 (2003 – £53,000) has been capitalised within the cost of investments
during the period.
5Employees
Employee costs consist of:
2004 2003
£’000 £’000
Wages and salaries 194,614 144,568
Social security costs 33,147 24,691
Other pension costs 1,749 947
229,510 170,206
The average monthly number of people employed by the Group during the period was:
2004 2003
Number Number
Administration 1,631 1,274
Selling and distribution 8,552 6,859
10,183 8,133
Details of Directors’ remuneration are provided in the Remuneration Report on pages 20 to 23.
At 27 March 2004 loans of £0.9m (2003 – £nil) were outstanding from certain Group executives, none of whom was a Director of the Company.
6 Exceptional items
Exceptional items include the following operating exceptional items, non-operating exceptional items and amounts written off investments:
2004 2003
Notes £’000 £’000
Costs of operational reorganisation (a) (4,733) –
Exceptional operating items (4,733) –
Profit on disposal of fixed assets (b) – 13,199
Loss on disposal of fixed asset investments (c) (1,652) –
Amounts written off fixed asset investments (d) – (15,145)
Total exceptional items (6,385) (1,946)
a) Costs of operational reorganisation
Following the acquisition of Hutchison Telecommunications GmbH (‘HTG’) in June 2003, the Group closed its support centre in Munich, closed
a further 15 retail stores and commenced the integration of the retail business with HTG. A provision of £4.7m has been booked to cover the cost
of this reorganisation, including the write down of tangible fixed assets.
b) Profit on disposal of fixed assets
During the period ended 29 March 2003 the Group completed the sale and leaseback of its freehold offices in London, generating a net profit
on disposal of £13.2m.
c) Loss on disposal of fixed asset investments
During the period ended 27 March 2004 the Group disposed of 50% of its interest in Wireless Frontiers, an independently managed wireless
investment fund. In exchange, the acquirer assumed the Group’s commitment to make further contributions to Wireless Frontiers. The disposal
resulted in a net loss of £1.7m.
d) Amounts written off fixed asset investments
During the period ended 29 March 2003, £15.1m was written off the Group’s holding in Wireless Frontiers to reflect the diminution in the value
of the fund at 29 March 2003.
Effect of exceptional items on taxation
Exceptional items had no effect on the amounts charged to the profit and loss account for taxation in either period.