Annual Report PDF - Carphone Warehouse Group plc

www.cpwplc.com 33Directors’ ReportThe Directors have pleasure in presenting the Annual Report and financialstatements of The Carphone Warehouse Group PLC for the 52 weeksended 1 April 2006.Principal activities and review of the businessThe principal activity of the Group continues to be the provision of mobilecommunication products and services and fixed line communication services.For the purposes of segmental reporting, operations are classified intothree divisions, being Distribution, Telecoms Services and Dealer. Thesubsidiary undertakings principally affecting the results or net assets ofthe Group in the period are listed in note 14 to the financial statements.A detailed review of the business is contained in the Operating andFinancial Performance Review on pages 9 to 16 in accordance withs234ZZB of the Companies Act 1985. Our responsibility under s234ZAof the Companies Act have been included in the statement of Directors’Responsibilities set out on page 34.ResultsThe profit before taxation for the financial period decreased from £91.9min the prior period to £81.0m. An interim dividend of 0.75p per share(2005 – 0.55p) was paid in the period. The Directors recommend thepayment of a final dividend of 1.75p per share (2005 – 1.25p). Subject toshareholders’ approval at the Annual General Meeting, the final dividendwill be paid on 4 August 2006 to shareholders on the register at the closeof business on 7 July 2006. Details of significant events since the balancesheet date are provided in note 32 to the financial statements.DirectorsThe names and brief biographical details of the Directors are shown onpage 21. Particulars of Directors’ remuneration, interests in the shares ofthe Company and its subsidiaries, and interests in share options are givenin the Remuneration Report on pages 26 to 32.Employment of disabled peopleIt is the Group’s policy to encourage application for employment fromdisabled people and to assist with their training and career development,having regard to particular aptitudes and abilities. Every endeavour is madeto find suitable alternative employment and to re-train any employee whobecomes disabled while serving the Group.Employee involvementThe Group places significant emphasis on its employees’ involvementin the business at all levels. Managers are remunerated according toresults wherever possible and all employees are kept informed of issuesaffecting the Group through formal and informal meetings and throughthe Group’s internal publications. Members of the management teamregularly visit all Group locations and discuss matters of current interestand concern with employees.Supplier payment policyThe Group’s policy is to agree terms of transactions, including paymentterms, with suppliers and, provided that suppliers perform in accordancewith the agreed terms, it is the Group’s normal practice that payment ismade accordingly. Details of the average credit period taken on tradepayables are provided in note 18 to the financial statements.DonationsThe Group made charitable donations of £107,000 during the period(2005 – £477,000). No political donations were made during either period.Contracts with controlling shareholdersThere are no material contracts with controlling shareholders.Share capitalDetails of the movements in authorised and issued share capital duringthe period are provided in notes 22 and 23 to the financial statements.Property, plant and equipmentMovements in property, plant and equipment are set out in note 13to the financial statements. In the opinion of the Directors the currentopen market value of the Group’s interests in freehold land and buildingsexceeds the book value by £27.9m at 1 April 2006. It is expected thatany capital gains would either be covered by capital losses or carriedforward for relief against capital expenditure.Significant shareholdingsThe following interests appeared on the Register of Members or had beennotified to the Company in accordance with sections 198 to 208 of theCompanies Act 1985 on 6 June 2006:Number Percentageof shares of share capitalWellington Management Company LLP 50,458,712 5.7%The total interests of the Directors are detailed in the Remuneration Reporton pages 26 to 32.Going concernOn the basis of current financial projections and facilities available, theDirectors are satisfied that the Group has adequate resources to continuein operation for the foreseeable future and consequently the financialstatements continue to be prepared on the going concern basis.AuditorsDeloitte & Touche LLP have expressed their willingness to continue inoffice as auditors and a resolution to re-appoint them will be proposedat the forthcoming Annual General Meeting.By order of the BoardThe Carphone Warehouse Group PLC1 Portal WayLondon W3 6RST S MorrisCompany Secretary6 June 2006Governance