Notes to the Financial Statements

For the short period 1 April 2006 to 3 March 2007

8. NET OPERATING EXPENSES



(a) By function
  Before
exceptional
items
£m
  Exceptional
items
(note 10)
£m
  2007
£m
  Before
exceptional
items
£m
  Exceptional
Items
(note 10)
£m
  2006
£m
Net operating expenses comprise:                      
Selling costs (1,321.8)     (1,321.8)   (1,252.6)     (1,252.6)
Administrative costs (276.5)   (22.7)   (299.2)   (262.9)   (24.7)   (287.6)
Total net operating expenses (1,598.3)   (22.7)   (1,621.0)   (1,515.5)   (24.7)   (1,540.2)

(b) Profit before tax is stated after (charging)          
  Notes   2007
£m
  2006
£m
Operating lease rental expense          
– Plant and equipment     (9.4)   (9.9)
– Property     (310.6)   (289.3)
Cost of inventories recognised as an expense in cost of sales     (3,564.0)   (3,581.6)
Write down of inventories     (116.5)   (104.9)
Exceptional items 10   (15.8)   (24.7)
Loss on sale of property, plant and equipment     (0.9)   (1.0)
Depreciation of property, plant and equipment 17   (130.0)   (118.0)
Amortisation of intangible assets 16   (16.4)   (16.9)
Employee benefit costs 9   (717.2)   (696.3)

(c) Auditors’ remuneration          
      2007
£m
  2006
£m
Audit services:          
Fees payable for the audit of the Company and the Consolidated Financial Statements     (0.8)  
Other services:          
Fees payable to the Company’s auditors and its associates for other services          
– the audit of the Company’s subsidiaries pursuant to legislation     (0.1)   (0.6)
– services relating to taxation     (0.2)  
– all other services     (0.2)   (1.3)
Total fees payable to PricewaterhouseCoopers LLP     (1.3)   (1.9)

The above disclosure is presented in accordance with SI 2005/2417, where audit fees in respect of the audit of the Company’s
subsidiaries pursuant to legislation are included within other services.

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