Carphone Warehouse 2008 Annual Report Download - page 63

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www.cpwplc.com 51
3Profit before interest and taxation (continued)
Fees for the audit of the Company’s accounts represent fees payable to Deloitte & Touche LLP in respect of the audit of the Company’s individual
financial statements prepared in accordance with UK GAAP and the Group’s consolidated financial statements prepared in accordance with IFRS.
Tax advisory services relate mainly to assessing the tax implications of significant corporate transactions. Other services relate primarily to the provision
of advice on accounting and employment matters.
4Reorganisation costs
The Group acquired AOL’s UK internet access business in December 2006. Since this time the Group has commenced the reorganisation of the
business, initially through a programme to transfer network operations, hosting, billing and customer management away from a transitional platform
provided by AOL Time Warner onto the Group’s own systems and infrastructure. Reorganisation costs of £15.2m were incurred in the period and have
been separately disclosed given their size and one-off nature, and comprise the following elements:
£m
Changes to billing and customer services processes 3.2
Project co-ordination and management 4.0
IT systems changes and duplicated IT costs 4.8
Redundancy and other employee costs 0.6
Other 2.6
15.2
Reorganisation costs are expected to attract tax relief at 30% and a tax credit of £4.6m has therefore been recognised in the period.
5Employee costs
The average monthly number of employees (including Executive Directors) was:
2008 2007
Number Number
Administration 4,546 3,839
Sales and customer management 16,834 15,971
21,380 19,810
Their aggregate remuneration (including Executive Directors) recognised in the income statement comprised:
2008 2007
£m £m
Wages and salaries 497.7 439.2
Social security costs 70.5 62.0
Other pension costs 4.8 3.4
573.0 504.6
Share-based payments (see note 6) 9.6 10.4
582.6 515.0
In addition to the costs recognised in the income statement, employee costs of £29.8m (2007 – £32.0m) were capitalised in the period in relation to
internally generated intangible assets and network equipment.
A further £8.8m of redundancy and other employee costs were incurred in the period ended 31 March 2007 and offset against the reorganisation
provision arising from the acquisition of Onetel in December 2005.
Compensation earned by key management, comprising all Directors and other employees who serve on the Executive Committee, was as follows:
2008 2007
£m £m
Salaries and fees 4.4 4.1
Performance bonuses 3.1 3.4
Benefits 0.2 0.2
Pension costs 0.3 0.2
Share-based payments 2.8 2.5
10.8 10.4
Details of Directors’ remuneration are provided in the Remuneration Report on pages 32 to 38.
At 29 March 2008 there were no loans (2007 – nil) outstanding from Group executives.
Financial Statements