Annual Report and Accounts 2006
Notes to the Financial Statements
6. Profit from operations
Profit from operations for continuing operations is after charging:
| 2006 £m |
2005 £m |
2004 £m |
|
|---|---|---|---|
| Research and product development | 77 | 67 | 58 |
| Depreciation of property, plant and equipment – owned assets | 193 | 158 | 159 |
| Depreciation of property, plant and equipment – under finance leases | 12 | 12 | 9 |
| Amortisation of definite life intangibles | 23 | 6 | 7 |
| Impairment of goodwill | 15 | – | – |
| Amortisation of software intangibles | 33 | 19 | 21 |
| Maintenance and repairs | 105 | 82 | 77 |
| Advertising and promotional marketing | 693 | 680 | 663 |
| Impairment of trade receivables | 5 | 5 | 11 |
There were net foreign exchange gains of £3 million recognised in the income statement in 2006.
Analysis of profit from operations for discontinued operations is given in Note 32(c).
Auditors' remuneration
| 2006 £m |
2005 £m |
2004 £m |
|
|---|---|---|---|
| Audit services | |||
| – for the audit of the Company's annual accounts | 0.7 | 0.7 | 0.6 |
| – for the audit of the Company's subsidiaries | 4.3 | 4.1 | 3.4 |
| Total audit fees | 5.0 | 4.8 | 4.0 |
| Other services pursuant to legislation | 2.6 | 1.3 | 0.7 |
| Tax services | 0.7 | 1.1 | 1.1 |
| Corporate finance services | 0.6 | 0.2 | – |
| Other services | 0.1 | 0.1 | – |
| Total non-audit fees | 4.0 | 2.7 | 1.8 |
| Auditors' remuneration – continuing and discontinued operations | 9.0 | 7.5 | 5.8 |
| Less: auditors' remuneration for discontinued operations (Note 32(c)) | – | (0.5) | (0.5) |
| 9.0 | 7.0 | 5.3 |
Other services pursuant to legislation primarily relates to assurance regarding controls as required by the Sarbanes-Oxley Act in the US, the half year review and shareowner/debt circular work.
The nature of tax services comprises corporation tax advice and compliance services and amounts payable in relation to advice and compliance services on personal tax for expatriates.
Corporate finance services relates to work in connection with the disposal of the Europe Beverages business.
Amounts payable to Deloitte & Touche LLP (the auditor) and their associates by the Company and its UK subsidiary undertakings included above in respect of non-audit services were £3.2 million (2005: £2.1 million; 2004: £1.3 million).
The policy for approval of non-audit fees is set out on page 49. In addition to the above the Group engages other accounting firms to perform certain non-audit services. Total amounts paid to other accounting firms in 2006 were £9.0 million (2005: £7.6 million; 2004: £2.6 million) principally in relation to tax compliance and advisory services.