Notes to the Consolidated Financial Statements
Notes 1-5
- 1. Basis of preparation
- 2. Significant accounting policies
- 3. Segment analysis
- 4. Operating profit/(loss)
- 5. Investment income and financing costs
4. Operating profit/(loss)
Operating profit/(loss) has been arrived at after charging/(crediting):
| 2008 £m |
2007 £m |
2006 £m |
|
|---|---|---|---|
| Net foreign exchange (gains)/losses | (27) | 6 | – |
| Depreciation of property, plant and equipment (note 11): | |||
| Owned assets | 3,400 | 2,994 | 3,069 |
| Leased assets | 27 | 17 | 10 |
| Amortisation of intangible assets (note 9) | 2,482 | 2,100 | 1,625 |
| Impairment of goodwill (note 10) | – | 11,600 | 23,515 |
| Research and development expenditure | 234 | 222 | 206 |
| Staff costs (note 35) | 2,698 | 2,466 | 2,310 |
| Operating lease rentals payable: | |||
| Plant and machinery | 43 | 35 | 35 |
| Other assets including fixed line rentals | 1,117 | 984 | 933 |
| Loss on disposal of property, plant and equipment | 70 | 43 | 69 |
| Own costs capitalised attributable to the construction or acquisition of property, plant and equipment | (245) | (244) | (256) |
The total remuneration of the Group’s auditor, Deloitte & Touche LLP, and its affiliates for services provided to the Group is analysed below:
| 2008 £m |
2007 £m |
2006 £m |
|
|---|---|---|---|
| Audit fees: | |||
| Parent company | 1 | 1 | 1 |
| Subsidiary undertakings | 5 | 4 | 3 |
| 6 | 5 | 4 | |
| Fees for statutory and regulatory filings(1) | 1 | 2 | – |
| Audit and audit-related fees | 7 | 7 | 4 |
| Other fees: | |||
| Taxation | 1 | 1 | 1 |
| Corporate finance transactions | – | – | 1 |
| Other(2) | 1 | 2 | 2 |
| 2 | 3 | 4 | |
| Total fees | 9 | 10 | 8 |
| Notes: | |
|---|---|
| (1) | Amounts for 2008 and 2007 include mainly audit fees in relation to Section 404 of the US Sarbanes-Oxley Act of 2002. |
| (2) | Amounts for 2007 and 2006 include fees mainly relating to the preparatory work required in advance of the implementation of Section 404 of the US Sarbanes-Oxley Act of 2002 and general accounting advice. |
The total remuneration includes £nil (2007: £nil, 2006: £1 million) in respect of the Group’s discontinued operations in Japan. In addition to the above, the Group’s joint ventures and associated undertakings paid fees totalling £2 million (2007: £2 million, 2006: £2 million) and £3 million (2007: £4 million, 2006: £4 million), respectively, to Deloitte & Touche LLP and its affiliates during the year. Deloitte & Touche LLP and its affiliates have also received amounts totalling less than £1 million in each of the last three years in respect of services provided to pension schemes and charitable foundations associated to the Group.
A description of the work performed by the Audit Committee in order to safeguard auditor independence when non-audit services are provided is set out in Corporate Governance.