Turnover
£2,355m
2004: £1,849m
Proﬁt before tax*
£102.1m
2004: £76.3m
*Before exceptional items and
amortisation of goodwill 
Dividend per share
1.8p
2004: 1.3p
The Carphone Warehouse Group PLC
Annual Report 200
5 Contents
2 Financial Highlights
3 Chairman’s Statement
4 Group Overview
6 Chief Executive Ofﬁcer’s Review
9 Operating and Financial Review
10 Operational Performance
16 Financial Performance
18 Corporate Responsibility
22 Board of Directors 
and Group Advisors
23 Corporate Governance
26 Remuneration Report
32 Directors’ Report
33 Statement of Directors’
Responsibilities
33 Independent Auditors’ Report
34 Consolidated Proﬁt and 
Loss Account
34 Consolidated Statement of Total
Recognised Gains and Losses
35 Consolidated Balance Sheet
36 Company Balance Sheet
37 Consolidated Cash Flow
Statement
38 Notes to the Financial Statements
56 Five Year Record
57 Financial Calendar
The Carphone Warehouse Group PLC Annual Report 200
5
Delivering value from organic and
entrepreneurial growth INVESTOR RELATIONS CONTACT
PEREGRINE RIVIERE 
GROUP DIRECTOR OF CORPORATE AFFAIRS 
+ 44 (0)20 8 753 80 4 1
The Carphone Warehouse is Europe’s leading
independent retailer of mobile phones and services,
with over 1,
4
00 stores in 10 countries
Summary 200
4
/
5
Continued strong growth
in revenues and earnings 
Further market share
gains across Europe
Total connections up
2
3
.
4
% to 6.60 million
2
47
new stores opened
TalkTalk UK base up
1
39
.0% to 
9
20,000
TalkTalk launched in four
other European countries
Recurring revenues
generating 
5
6.1% of
total contribution
Headline Financial
Highlights*
Turnover
£2,355.1m
200
4
: £1,8
49
.0m
EBITDA
£154.8m
200
4
: £122.8m
Profit before tax
£102.1m
200
4
: £
7
6.
3
m
Earnings per share
9.39p
200
4
: 6.81p
*Headline ﬁgures are shown before exceptional 
items and amortisation of goodwill (see note 10 
to the ﬁnancial statements)
www.cpwplc.com 1 HEADLINE PBT UP 
33
.8% (£m)
4 6.8
57 .0
7 6. 3
102.1
’0 5 ’0 4 ’0 3 ’02
HEADLINE EPS UP 
37
.
9
% (pence)
’0 5 ’0 4 ’0 3 ’02
4 . 4
5 . 3
6.8
9 . 4
RETURN ON CAPITAL EMPLOYED (%)
’0 5 ’0 4 ’0 3
1 7 .2
1 7 .6
18. 7
2
47
 NEW STORES
’0 5 ’0 4 ’0 3 ’02
1,10 4 1,1
4
0
1,21 4
1, 4 61
OVER 12,000 EMPLOYEES
’0 5 ’0 4 ’0 3 ’02
6, 99 2
8,1 33
10,18 3
12,2 5 8
DIVIDEND UP 3 8. 5 %
’0 5 ’0 4 ’0 3
1.0p
1.
3
p
1.8p
2
Financial Highlights
2005 2004
£m £m
Turnover 2,355.1 1,849.0
Headline results
EBITDA 154.8 122.8
Proﬁt before tax 102.1 76.3
Earnings per share 9.39p 6.81p
Statutory results
Proﬁt before tax 68.9 44.5
Earnings per share 5.59p 3.17p
Exceptional items – (6.4)
Dividend per share 1.80p 1.30p
The Carphone Warehouse Group PLC Annual Report 200
5
HISTORICAL FINANCIAL
INFORMATION CAN BE FOUND 
AT WWW.CPWPLC.COM KEY ACHIEVEMENTS
Chairman’s Statement
W
e have achieved another year of rapid growth.
The mobile phone market has continued to grow
after last year’s recovery, and our position within it has
strengthened signiﬁcantly. Overall Group revenues were
up 27.4% to £2,355.1m and headline earnings per share
rose 37.9% to 9.39p. Statutory earnings per share rose
76.3% to 5.59p and the Board is proposing a ﬁnal
dividend of 1.25p, taking the total for the year to 
1.80p – an increase of 38.5% on 2004. 
Once again the quality of our earnings improved. The
evolution of our differentiated business model, based 
on providing higher value services beyond the point of
sale but with the store portfolio at its heart, has reached
the stage where over 56% of Group contribution comes
from recurring income streams. This is likely to grow
further this year as TalkTalk moves strongly into proﬁt.
At the same time we are absolutely committed to
developing a business that can continue to deliver
attractive rates of proﬁt growth and cash generation
over the long term. This philosophy underpins our
capital expenditure plans for a rapid roll-out of new
stores, increased capacity and efﬁciency in our ﬁxed
line telecoms network, and continued investment in
technology. This year we opened 247 stores – a record
for the Group – and we plan to open a similar number
in the year ahead. We see numerous opportunities to
continue to improve returns for shareholders through
reinvestment in existing and new businesses.
As we announced in April 2005, I will be stepping down
from the Board at the AGM in July after three years as
Chairman. It has been a great honour to serve the Group
and I have enjoyed every minute. The business has
come a long way and it has enormous potential. John
Gildersleeve, who has served on the Board as a Non-
Executive Director since the IPO in 2000, has agreed 
to become Chairman in my place, and his enormous
experience will be an invaluable asset in steering the
Group through its next exciting phase of growth. 
In summary, my last year as Chairman has been the
most successful in the Group’s short history. We have
put substantial distance between ourselves and our
competitors in our core Retail operations and in TalkTalk.
Growth in revenues and proﬁtability right across the
www.cpwplc.com
We are developing a business
that can continue to deliver
attractive rates of profits
growth and cash generation
over the long term
Group has been substantial. We are conﬁdent that the
programme of investment in the last 12 months and
continuing over the coming years will further strengthen
Carphone Warehouse’s competitive position. 
We value our human capital most highly of all because
ultimately it is our people that differentiate us from our
peers. Their continued commitment and loyalty to the
Group are outstanding and I am very honoured to thank
all our employees for their substantial contributions.
Hans Roger Snook, Chairman
3
2
3
.
4
%
GROWTH IN CONNECTIONS
2
47
NEW STORES OPENED
37
.
9
%
GROWTH IN HEADLINE
EARNINGS PER SHARE
    The Carphone Warehouse
Group Overview
DIVISION
Distribution
The Carphone Warehouse Group PLC Annual Report 200
5
TURNOVER
£1,436.9m
HEADLINE EBIT
£85.0m
CONNECTIONS
6.60m
STORES
1,461
BUSINESS UNITS
Retail 
Online
Insurance
Ongoing
DIVISION
Telecoms Services
DIVISION DESCRIPTION
Our Telecoms Services division
comprises our Mobile Services
operations and our Fixed Line
businesses, addressing the SME
and residential markets.
TURNOVER
£804.0m
HEADLINE EBIT
£22.5m
RESIDENTIAL CUSTOMERS
1.09m
MOBILE CUSTOMERS
2.26m
BUSINESS UNITS
Mobile – Service
Provision
Mobile – Other
Operations
Fixed – 
Business
Fixed – 
Residential
4
DIVISION DESCRIPTION
Our Distribution division 
comprises our Retail 
operations and other directly
related business streams. The Carphone Warehouse
is a multinational group present
in ten European markets. 
The Group operates from two
core divisions: Distribution and
Telecoms Services.
Group Overview www.cpwplc.com 5
Our European network
We have over 1,
4
00 
stores in 10 countries 
throughout Europe
United Kingdom
Belgium
France
Germany
Ireland
Netherlands
Portugal
Spain
Sweden
Switzerland 6
Retail 
Mobile – Service Provision
Online
Mobile – Other Operations
DESCRIPTION AND KEY ASSETS
Provision of mobile handsets and connections,
accessories, and related products and services
through 1,461 stores across 10 European countries
STRATEGY
To grow our market share to at least 10% in all our Retail
markets by opening new stores and driving repeat
business through value-added service and choice
OBJECTIVES FOR 200 5 /6
• Open 250 new stores
• Invest in training and refurbishments
• Continue to drive growth in subscription connections
49.3%
OF GROUP 
REVENUE
40.3%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
Distribution of core Retail services via direct
channels, including inbound and outbound
call centres, print media and the web
STRATEGY
To complement our Retail business with a strong 
multi-channel customer offering across all segments 
of the market
OBJECTIVES FOR 200 5 /6
• Integrate recent acquisitions and pursue
aggressive growth in UK
• Develop non-UK operations
5.4%
OF GROUP
REVENUE
3.1%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
The Phone House Telecom in Germany, a mobile
service provider with 858,000 customers that
recruits, bills and manages customers on its own
mobile packages, based on wholesale
agreements with network operators
STRATEGY
To grow the customer base by increasing our store
portfolio and our third party distribution channels
OBJECTIVES FOR 200 5 /6
• Grow our market share
• Explore new distribution channels
12.7%
OF GROUP
REVENUE
6.5%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
Billing and management of customers on
behalf of network operators in the UK and
France, and the operation of MVNOs in
the UK and France
STRATEGY
To pursue similar agreements with
additional networks and identify new
segments for further MVNO opportunities
OBJECTIVES FOR 200 5 /6
• Grow base of customers under
management
• Diversify our MVNO offerings
3.4%
OF GROUP
REVENUE
3.7%
OF GROUP
CONTRIBUTION www.cpwplc.com
FIND OUT MORE ABOUT OUR
BUSINESS AT WWW.CPWPLC.COM
Insurance
Fixed – Business
Ongoing
Fixed – Residential
DESCRIPTION AND KEY ASSETS
Provision of insurance products covering
loss, theft or damage to mobile handsets.
1.65m customers across Europe
STRATEGY
To increase the customer base through
improved product diversity, and
broadening our distribution
OBJECTIVES FOR 200 5 /6
• Grow the customer base 
• Continue to improve service efficiency
through internal investment
4.3%
OF GROUP
REVENUE
13.9%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
ARPU-sharing agreements with certain 
networks through which the Group receives 
a percentage of customers’ monthly bills 
in return for customer recruitment
STRATEGY
To seek ARPU-sharing agreements with other networks and
to continue to align interests with operators across Europe
OBJECTIVES FOR 200 5 /6
• Grow Ongoing revenue by 20% through
further growth in subscription
connections and focus on network terms
2.0%
OF GROUP
REVENUE
18.5%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
Provision of voice, data and value-added
services to businesses in the UK and Spain
STRATEGY
To expand both organically and via acquisition, and to
invest in enhancing the network and developing a wider
range of telecoms services
OBJECTIVES FOR 200 5 /6
• Launch mobile and broadband services
• Develop data products
• Explore new market segments
11.3%
OF GROUP
REVENUE
12.5%
OF GROUP
CONTRIBUTION
DESCRIPTION AND KEY ASSETS
Provision of voice and broadband services
to residential customers in the UK and
other European markets
STRATEGY
To become the number one alternative to
BT in UK residential telecoms 
OBJECTIVES FOR 200 5 /6
• Continue to recruit new customers 
in all markets
• Refine UK broadband proposition and
launch line rental product
6.8%
OF GROUP
REVENUE
0.9%
OF GROUP
CONTRIBUTION HEADLINE OPERATING PROFIT (£m)
’0 5 ’0 4 ’0 3 ’02
4 6. 5
5 8.0
81.1
106. 9
REVENUE (EX WHOLESALE) (£m)
’0 5 ’0 4 ’0 3 ’02
810
1,0
35
1,6
7
1
2,22 3
6
Chief Executive Officer’s Review
I
t has been another very good year for The Carphone
Warehouse. Our excellent ﬁnancial performance stems
from our continued investment in growing our existing
businesses and our ability to identify and exploit new
commercial opportunities both through our existing asset
base and via acquisition. We are committed to long-term
value creation, through the development of a portfolio of
related businesses and services that can deliver attractive
and sustainable growth in earnings and dividends. Our
track record speaks for itself and the more detailed
analysis of our strategy that follows demonstrates that our
plans for the future are clear, exciting and achievable.
Developing a broad-based telecoms group
Our strategy remains essentially consistent with that
outlined in last year’s Annual Report and is built on
three core objectives:
• To continue to grow market share in all our
geographical markets both by investing in new 
store openings and by generating like-for-like 
growth from our existing estate and developing
additional sales channels;
• To maximise the lifetime value of our customers, 
both by providing a level of service that encourages
repeat business, and by identifying relevant new
products and services where we have a sustainable
competitive advantage over other suppliers; and
• To grow our business-to-business ﬁxed line operations
organically and through acquisition, and to invest in
our network to provide an increasing range of
communications services.
Before reporting on progress in each of these areas in
more detail, it is worth highlighting how closely integrated
the different elements of our strategy really are.
Without our stores and our market share, we would not
be able to provide such consistent levels of service and
value to our customers; without our ﬁxed line network
and its business trafﬁc, we would not enjoy such a
competitive advantage in the provision of residential
services; and without the combination of our mobile
network relationships, our stores and our ﬁxed line
network, we would not have been able to launch a new
service such as Mobile World. Sustainable competitive
advantage does not come from any of these assets in
their own right, but from their unique combination.
Growing our retail presence
At the start of the year we aimed to open 200 new
stores across Europe, in a concerted drive to build on
our substantial retail platform and become a more
signiﬁcant player in all of our markets. By the year end
we had succeeded in opening a record 247 stores, net
of closures. In our two biggest retail markets, the UK and
Spain, we opened 92 stores and 75 stores respectively. 
We continue to generate a very attractive return on 
new store openings, comfortably in excess of our two-
year payback hurdle. Our return on investment on
stores opened since 2002 has consistently been over
60%. Taking into account the lifetime value of Insurance,
Ongoing ARPU share and TalkTalk proﬁts, the return 
on investment is in excess of 140%. However, we also
enjoy other, broader effects of building our presence,
such as the growing handset purchasing beneﬁts that
our increasing scale gives us, and our improving
position as a key partner of the mobile networks in 
all our markets. 
We intend to continue this strategy of rapid physical
expansion into the new ﬁnancial year, and have plans 
to open at least a further 250 stores by March 2006.
Once again, the UK and Spain will represent the
majority of new openings, but we see signiﬁcant
expansion opportunities in all our markets. In particular,
the success of our German business since the
acquisition of Hutchison Telecommunications in 
June 2003 has given us conﬁdence to expand 
our operations in that market, which represents a
signiﬁcant long-term opportunity.
We are developing a portfolio of related
businesses and services that can deliver
attractive and sustainable growth in
earnings and dividends
The Carphone Warehouse Group PLC Annual Report 200
5 KEY TARGETS
further development of broadband, and the introduction
of line rental, will both be key strategic initiatives in the
coming year, and central to our aim of becoming a mass
market provider of telecoms services to the home. We
have set a long-term target of 2 million voice customers
in the UK by March 2008, and expect to have 100,000-
150,000 broadband customers by March 2006.
On the mobile side, we have recently renewed our
strategic focus on our MVNO strategy. During the year
we launched a virtual network in France, Breizh Mobile
– the ﬁrst service of its kind in that country. We have
cut our tariffs aggressively on Fresh, our UK virtual
network, and intend to remain the price leader in the
discount segment of the market. In April 2005, we
launched Mobile World, a highly innovative mobile
service offering international tariffs that compete head-
on with the cheapest available ﬁxed line international
tariffs. The initial response to the launch has exceeded
our expectations and we are in the process of
expanding its distribution, as planned, into thousands
of third-party outlets across the UK.
Growing our business-to-business fixed line operations
Opal has consolidated well on its outstanding year 
of growth last year. The business mix has improved
signiﬁcantly towards directly-managed customers and
trafﬁc growth has continued to be strong. Excluding
TalkTalk trafﬁc, minutes carried rose by 20.9% year-on-
year to 5.45 billion. We also began to consolidate the
smaller end of the alternative carrier market, acquiring 
a number of resellers during the year.
We are excited about the ongoing growth prospects 
for Opal, with its continued strong focus on sales and
marketing. We intend to grow the Opal business both
by winning new customers and by broadening the 
range of services we provide to existing customers. 
We launched line rental successfully this year and 
will extend its roll-out in the coming year, while also
providing DSL-based broadband services for the ﬁrst
time. In addition, we believe that there is strong demand
from our business customer base for mobile services,
and we will invest in the coming year in growing our
corporate mobile proposition to meet that demand.
Maximising customer lifetime value
Since before our IPO ﬁve years ago, we have been
looking at ways to broaden our business model by
introducing new products and services where we 
can add value both to our customers and our mobile
network partners, and improve the quality and visibility
of our earnings. With 56.1% of Group contribution this
year coming from recurring sources, the ﬁnancial case
for this strategy is clear. At the same time, we have
achieved compound annual growth in these recurring
proﬁt streams of 47.4% over the last ﬁve years.
We have always operated on the basic premise that if
we provide a good service for our customers, they are
more likely to reward us with their loyalty. Similarly, if we
can demonstrate good customer traction to the mobile
network operators, we become more of a value-added
partner to them rather than simply a recruitment channel.
This has allowed us to structure customer management
agreements with a number of networks in the UK and
France, and to share in the ongoing value of the
customers we recruit via revenue-sharing agreements.
More recently we have launched residential ﬁxed line
services. Within just two years, we have made TalkTalk
in the UK the clear number one alternative to BT and
now take up to 50% of all customers who leave BT
each month. TalkTalk UK has moved into proﬁtability
already and will be a major driver of Group proﬁts
growth over the medium term.
We have been very active this year in evolving our 
ﬁxed line strategy. TalkTalk has now been launched 
in France, Spain, Germany and Switzerland, and we 
have moved into Ireland and Belgium since the year
end. Our UK business launched a very competitive
broadband service in November 2004, and the
customer response has comfortably exceeded our
expectations. We are now reviewing our options to
assess the most effective way to build a signiﬁcant 
and proﬁtable broadband business while continuing to
deliver outstanding value to our broadband customers.
Looking ahead, we see numerous opportunities to build
on the platform we have created by providing additional
services to our customers. On the ﬁxed line side, the
Chief Executive Officer’s Review continued www.cpwplc.com
10%
MARKET SHARE OF
MOBILE PHONE MARKET
2m
TALKTALK UK CUSTOMERS 
BY MARCH 2008
2
5
0
STORE OPENINGS THIS YEAR
7 8
Chief Executive Officer’s Review continued
Everything that our business-to-business and
residential ﬁxed line operations can achieve is reliant 
on the technical excellence and outstanding efﬁciency
of the Opal network. During the year, the build-out 
into BT’s local exchange network was completed,
maximising the cost efﬁciency of carrying calls over 
our network. This year we plan to add further capacity
and to adapt the network for future integration into 
BT’s 21st Century Network. Through these avenues,
we are preparing our network for continued strong
growth in trafﬁc, and for the further move towards
corporate data products.
Outlook
The business has never been in better shape. The
markets in which we operate are very attractive.
Continued intense competition between mobile
networks translates into compelling offers for our
customers. We expect further competition over the
medium term as networks seek to migrate customers
to their 3G platforms and more MVNOs enter the
market. The handset market is vibrant, with more
models than ever before due to be released in the 
next 12 months and a number of new manufacturers
seeking to gain a foothold in the European market. 
In response to these excellent market conditions, 
the acceleration in the expansion of our retail platform
will continue into this ﬁnancial year, as outlined above.
This feeds through into strong growth prospects across
the whole of the Distribution division. Although the
current weakness in UK consumer spending has been
well documented, we believe the dynamics of mobile
phone retailing are materially different from the sale of
other consumer goods. This, in addition to our diversiﬁed
and service-orientated proposition and our European
platform, gives us some insulation from the consumer
economic environment.
On the ﬁxed line side, we have now proved that
TalkTalk has all the ingredients to become the major
alternative force in UK residential communications, and
further regulatory change over the next year should
allow us to move to the next level in terms of the scale
of our operations and the range of services we offer.
The investment we are making in the Opal network 
will continue to maximise the value we achieve from
providing services to homes and businesses, and
extend the range of those services. Outside the UK, 
we will invest further in building our existing customer
bases and entering new ﬁxed line markets.
The outlook for our mobile services operations is 
very promising. Our German service provision 
business, The Phone House Telecom, has signiﬁcantly
outperformed our expectations and we will continue 
to invest in growing the base strongly. Our MVNO
strategy is gaining pace and reﬂects the true
entrepreneurial roots of the Group: identifying and
exploiting market niches while using our existing 
assets in innovative new ways.
We ask a lot of our employees and every year they
respond to the challenges we set them. This year,
despite no major acquisitions, a further 2,000 people
have joined The Carphone Warehouse, taking the total
number of employees to over 12,000. We are very
pleased to welcome all the new joiners and extend 
our thanks to all of our employees for their exceptional
service in the last twelve months.
Finally, I would like to take this opportunity to thank
Hans Snook for his valuable contribution to the
development of the Group during his three years as
Chairman. We have been very lucky to beneﬁt from 
his knowledge and guidance over that time. In turn, 
I am delighted to welcome John Gildersleeve as our
new Chairman. John knows the business well, having
already served on the Board for ﬁve years, and I know
his rich commercial experience will be invaluable to 
the Group as we enter this next phase of growth.
The Carphone Warehouse Group PLC Annual Report 200
5
Charles Dunstone, Chief Executive Ofﬁcer 
3
G MIGRATION TO BE 
A KEY FUTURE DRIVER
CONVERGENCE OF MULTIPLE
APPLICATIONS ON THE 
MOBILE HANDSET
FURTHER BENEFITS FROM
REGULATORY CHANGE IN THE
UK FIXED LINE MARKET  % OF CONTRIBUTION FROM
RECURRING REVENUES (% OF TOTAL)
’0 5 ’0 4 ’0 3 ’02
44 . 7
49 . 7
55.3 5 6.1
CONTRIBUTION FROM RECURRING 
REVENUES UP 2 7 .6% (£m)
’0 5 ’0 4 ’0 3 ’02
57 . 7
77 .1
110. 5
1 4 1.0
Operating and Financial Review
www.cpwplc.com 9
Trading has been excellent across the
Group and we have delivered another year
of good earnings growth. Our operations
are based on a sound platform of good
cash generation, a strong balance sheet
and improving operational efficiency.
Summary of results
Group turnover for the period was
£2,
355
.1m, compared to £1,8
49
.0m
for the prior year, representing 
growth of 2
7
.
4
%. 
Headline pre-tax profit was £102.1m,
an increase of 
33
.8% on the year 
to March 200
4
. 
Earnings per share on the same 
basis grew by 
37
.
9
% to 
9
.
39
p. 
Statutory profit before tax increased by
54
.8% from £
44
.
5
m to £68.
9
m, while
statutory earnings per share increased
by 
7
6.
3
% from 
3
.1
7
p to 
5
.
59
p. 
Net cash inflow from operating 
activities was £1
43
.1m (200
4
: £102.
7
m). 5
2 WEEK SUBSCRIPTION 
CONNECTIONS UP 1 4 .8% 
(000s)
’0 5 ’0 4 ’0 3 ’02
1,
7
6
7
1, 9 0 9
2,
4
1
3
2, 77 0
5 2 WEEK TOTAL CONNECTIONS 
UP 21.6% (000s)
’0 5 ’0 4 ’0 3 ’02
3 ,61 5
4 , 3 6 4
5 , 35 0
6, 5 0 3
10
Operational Performance
Distribution Division
2005 2004
£m £m
Turnover 1,436.9 1,128.9
Retail 1,160.2 946.4
Online 128.2 64.5
Insurance 102.0 78.6
Ongoing 46.5 39.4
Contribution 190.6 154.9
Retail 101.4 83.0
Online 7.7 4.5
Insurance 35.0 28.0
Ongoing 46.5 39.4
Support costs (70.6) (57.4)
EBITDA 120.0 97.5
Depreciation (35.0) (30.6)
EBIT 85.0 66.9
EBIT % 5.9% 5.9%
Before exceptional items and amortisation of goodwill
T
he key operating assets of the division are our
1,461 stores across 10 European countries and our
Retail and Online brands. Distribution revenues grew 
by 27.3% in the year to £1,436.9m, and the division
generated EBIT of £85.0m, a rise of 27.1% on the prior
year. Growth was strong across all business units, with
Online growth being exceptional, driven primarily by the
full-year impact of the acquisition of E2Save.
Retail and Online
The Group achieved 6.60m connections during the
year, representing year-on-year growth of 23.4%.
However, this year was a 53 week accounting period
and on an equivalent 52 week basis, connections 
were 6.50m, representing growth of 21.6%. Within 
the 52 week ﬁgures, 0.47m connections (2004: 0.31m)
were made through our Online channels (inbound and
outbound call centres, print media and website). 
In the key metric of subscription connections, we
achieved 52 week growth of 14.8% to 2.77m. This
continued strong performance was a result of enduring
competition between mobile networks and an attractive
range of new, richly-featured handsets, allied to our
unique market proposition. We have now achieved
compound annual growth of 20.3% in subscription
connections over the last 5 years.
Our pre-pay business had a very good year, with 52
week connections up 28.1% to 3.23m. The combination
of falling prices on entry level handsets, and increased
network interest in the pre-pay segment, drove demand.
Our SIM-free sales recovered well from the previous
year, rising 21.4% to 0.51m.
We opened 306 new stores during the year and 
closed 59. The total number of stores increased 
from 1,214 at March 2004 to 1,461 at March 2005.
The total includes 70 franchise stores (March 2004: 26).
Including franchises, average selling space increased
by 14.3% to 75,619 sqm (2004: 66,170 sqm), 
and sales per square metre were up by 7.3% to
£15,343. Excluding franchises, average selling 
space increased by 12.3% to 73,399 sqm 
(2004: 65,369 sqm) and sales per square metre
increased by 9.2% to £15,807.
Our Distribution division comprises 
our Retail operations and all directly
related business streams
The Carphone Warehouse Group PLC Annual Report 200
5 SALES PER SQUARE METRE 
UP 
7.3
% (£)
’0 5 ’0 4 ’0 3 ’02
10,200
11,6 7 6
1 4 , 3 0 3
1 5 , 343
AVERAGE SPACE UP 1 4.3 % (sqm)
’0 5 ’0 4 ’0 3 ’02
60,800
6 3 ,2 33
66,1 7 0
75 ,61 9
way, and delivered 52 week connections growth of
40.4%. Our Spanish management team also succeeded
in opening 75 new stores during the period to take the
total to 239, and is conﬁdent of achieving further strong
growth in the portfolio over the coming year. The scale
of our Spanish operation is now feeding through 
into material contributions, not only from a Retail
perspective, but also through Insurance and 
Ongoing ARPU share income. 
Our French Retail operations experienced more
challenging conditions as the market continued to
display subdued levels of network competition.
Nevertheless, connections were up 16.4%, which
represents a creditable performance in the market
context. We opened 9 new stores during the period,
taking the total French portfolio to 185. In the coming
year we are putting a renewed effort into expanding 
our presence with a marked acceleration in new store
openings. In addition, we are conﬁdent that the market
environment will improve, with the entry of MVNOs 
and closer regulatory involvement.
In our other major Retail markets, Sweden and The
Netherlands, we beneﬁted from intense competition
between the network operators. The Swedish business
generated connections growth of 29.9% and opened
11 new stores, taking the base to 69 stores. Dutch
connections were up 11.2% and the portfolio increased
by 29 to 116 stores. 24 of these openings were
franchises, whose connections are excluded for
reporting purposes.
Connections growth across all our other markets,
incorporating Belgium, Germany, Ireland, Portugal 
and Switzerland, was 29.8%. Our Belgian business
Total Retail revenues grew by 22.6% and gross proﬁt
by 16.9%. Like-for-like, after stripping out the impact of
new store openings and the 53rd week, revenues grew
by 8.8% and gross proﬁt by 5.0%. The increase in
revenues was driven both by the strong connections
growth through the year, and an increase in average
revenues per connection, which rose by 1.0% as 
the average value of handsets increased.
Average cash gross proﬁt per connection fell by 3.6%
from £56.0 to £54.0, in line with our expectations.
Subscription gross proﬁt per connection held up very
well but the anticipated competition from other retailers
in the pre-pay market, where there are fewer barriers 
to entry, saw pre-pay gross proﬁt per connection fall.
Nonetheless, the signiﬁcant uplift in volumes that we
experienced delivered a much higher level of overall
proﬁtability from pre-pay connections than in the
previous year and the margin trend improved in the
second half, with gross proﬁt per connection on both
subscription and pre-pay rising year-on-year.
Contribution (see note 10) to the ﬁnancial statements
from Retail grew by 22.2% to £101.4m. The contribution
margin fell from 8.8% to 8.7%. However, the ratio
between contribution and gross proﬁt, which gives a
more meaningful indication of cost efﬁciency given the
variability of revenues per connection, improved from
29.4% to 30.7%. Overall Retail direct costs grew by
14.7%, driven by the greater store base and like-for-like
growth in commission payments to our sales consultants
in the buoyant market. Within these ﬁgures, rent costs
increased by only 10.5%, as we beneﬁted from a wider
geographic spread.
In the UK, our store portfolio increased from 509 stores
to 601 stores. We have continued our strategy of
identifying sites on arterial routes and in retail parks, but
at the same time we have had great success in opening
stores in smaller towns. This new type of location will
provide us with ample opportunities to continue to grow
our UK portfolio over the medium term, and we are
targeting a further 100 openings in the next 12 months.
Our businesses outside the UK continued to deliver
very encouraging growth. Once again, Spain led the
Operating and Financial Review continued www.cpwplc.com 11
LIKE FOR LIKE GROSS
PROFIT UP 5 .0%
RETAIL CONTRIBUTION
UP 22.2%
5 YEAR SUBSCRIPTIONS
GROWTH OF 20. 3 %
Connections (000s)
52 weeks 52 weeks 53 weeks 
to to to 
26 March 27 March 2 April 
2005 2004 2005
Subscription 2,770 2,413 2,816
Pre-pay 3,227 2,520 3,272
SIM-free 506 417 512
Group 6,503 5,350 6,600 CONTRIBUTION FROM 
NON-UK OPERATIONS 
(£m)
’0 5 ’0 4 ’0 3 ’02
3 2.2
4 8.0
7 6.8
9 6. 9
INSURANCE BASE UP 2
4.3
% (000s)
’0 5 ’0 4 ’0 3 ’02
939
1,060
1, 3 2 4
1,6 45
12
Distribution Division continued
continues to perform exceptionally well and represents
a signiﬁcant turnaround from the loss-making position
two years ago, and our Irish and Portuguese operations
consolidated their position as the leading independent
distributors in their respective markets. In Germany, our
retail operations primarily support The Phone House
Telecom service provision business, which is discussed
in more detail below.
The Swiss Retail business reported a small loss for the
year. However, we have made several changes to the
management team and have focused on improving our
competitive position, and the business is now trading
back in line with budget, with a strong recovery
forecast in the current year.
Online connections increased by 53.7% year-on-year 
to 0.47m on a 52 week basis. Revenues were 
£128.2m (2004: £64.5m) and contribution was 
£7.7m (2004: £4.5m). The UK continues to be the
engine of growth for our Online business, enhanced 
by a full-year contribution from E2Save, and very strong
growth in the off-the-page and web segments of the
mobile phone market. As highlighted last year, we have
begun to explore direct channels in other geographical
markets, but at this stage these are not material to
overall Online performance. Just before the year end,
we acquired One Stop Phone Shop, another strong 
off-the-page brand in the UK market.
Insurance
The Group offers a range of insurance products to 
its retail customers, providing protection against the
replacement cost of a lost, stolen or broken handset,
as well as cover for any outstanding contractual liability
and the cost of any calls made if a mobile phone falls
into the wrong hands. Insurance is a core element of
the Group’s customer proposition.
Our Insurance customer base continued to grow
strongly during the year. Overall the customer base grew
by 24.3% to 1.65m. The UK base grew by 22.7% to
1.02m and the non-UK base grew by 26.8% to 0.63m.
The non-UK base now represents 38.2% of the total.
Insurance revenues grew 29.7% to £102.0m 
(2004: £78.6m) and contribution increased by 25.0% 
to £35.0m (2004: £28.0m). Margins remained relatively
steady, as a gradual decrease in claims rates, driven 
by increased public awareness about mobile phone
crime, was offset by a rising average claims cost as
higher value handsets became more widely owned. 
We continue to see good growth prospects in our
Insurance business as we build out the store portfolio
across Europe. Our third-party business, acting as
underwriter to other organisations offering mobile
phone insurance, is still in its infancy but provides a
further source of long-term growth. 
Ongoing
Ongoing represents the share in customer call spend
(or ARPU) we receive as a result of connecting
subscription customers to certain networks. We are
typically contractually entitled to our share of revenue
for as long as a customer is active, so this income
stream represents an important element of our overall
commercial agreement with many networks.
Ongoing revenues grew by 18.2% to £46.5m during
the year (2004: £39.4m). This performance reﬂects the
sustained strong subscription connections growth over
the last two years. We continue to view Ongoing share
as a vital element of our network agreements, as it
provides us with excellent visibility of earnings and
clearly aligns our interests with those of the networks.
The Carphone Warehouse Group PLC Annual Report 200
5
ONLINE CHANNELS GROWING
IN IMPORTANCE
INSURANCE CONTRIBUTION 
UP 2 5 .0%
ONGOING REVENUE 
DRIVEN BY SUSTAINED 
SUBSCRIPTIONS GROWTH  OPAL SWITCHED MINUTES 
UP 
73
.
4
% (m)
5 , 5 1 7
9 , 5 6 3
’0 5 ’0 4
MOBILE CUSTOMER BASE 
UP 1
4
.6% (000s)
’0 5 ’0 4 ’0 3 ’02
1,01 9
1,11
5
1, 973
2,262
Operational Performance
Telecoms Services Division
2005 2004
£m £m
Turnover 804.0 554.5
Mobile 377.7 305.9
Fixed 426.3 248.6
Contribution 59.4 43.2
Mobile 25.7 23.5
Fixed 33.7 19.7
Support costs (24.7) (18.1)
EBITDA 34.7 25.1
Depreciation (12.2) (10.1)
EBIT 22.5 15.0
EBIT % 2.8% 2.7%
Before exceptional items and amortisation of goodwill
T
he Group’s Telecoms Services operations are split
into two businesses, Mobile and Fixed. The Mobile
business encompasses our facilities management
(‘FM’) operations, managing customers on behalf of
networks, and our own customers, including our virtual
network, Fresh, and our German service provision
(‘SP’) business, The Phone House Telecom. The Fixed
business primarily comprises Opal, our business-to-
business network, and TalkTalk, our residential service,
both in the UK. We also operate a number of smaller
ﬁxed line businesses across Europe. 
Telecoms Services revenues grew by 45.0% year-on-
year to £804.0m (2004: £554.5m), with good growth
across all major business lines. EBIT increased by
50.0% to £22.5m (2004: £15.0m). The EBIT margin
increased slightly from 2.7% to 2.8% as strong top line
growth was offset by continued investment in recruiting
customers to TalkTalk and building support functions to
create a robust platform for long-term growth.
Mobile
Overall we achieved revenue growth of 23.5% to
£377.7m (2004: £305.9m), with contribution rising
9.3% to £25.7m (2004: £23.5m). 
The Phone House Telecom, our German SP business,
performed very strongly. The rate of customer acquisition
accelerated in the second half and by March 2005 we
had 0.86m customers, of whom 0.64m were on two-
year subscriptions. We completed the integration of our
German retail operations and are now focused on
growing our distribution network, both by opening new
stores and by expanding our dealer channel. Revenues
rose by 41.3% to £298.3m compared to the ten-months
ﬁgure from the previous year, with contribution up by
52.8% to £16.4m on the same basis. The contribution
margin increased from 5.1% to 5.5% as the business
beneﬁted from strong competition between the
incumbent networks.
Total revenues from the rest of our Mobile businesses
fell 16.2% to £79.4m, while contribution fell 27.3% 
to £9.3m. The fall in revenues was the result of the
migration of Sainsbury’s customers from an SP to an
FM arrangement, and a lower average base at Fresh.
Operating and Financial Review continued www.cpwplc.com 13
The Telecoms Services division
comprises a range of network
and support services to business
and residential telecoms customers 14
Telecoms Services Division continued
The decline in contribution includes a start-up loss from
our French MVNO of £1.0m.
We continued to grow our UK FM business with
customers managed on behalf of O2 and Vodafone up
by 19.7% to 0.67m (2004: 0.56m). Growth is driven by
new subscription customers signed up to these networks
in our stores. The key drivers of our FM businesses are
the number of customers under management, and the
efﬁciency with which we manage our call centres and
bad debt. We continue to manage 0.6m customers in
France on behalf of Orange and SFR. 
Our other own customer operations, predominantly
Fresh, our UK virtual network, did not make a material
ﬁnancial contribution during the year. However, we have
recently taken a more proactive approach to our MVNO
strategy, with a number of initiatives that will support
long-term growth in this business unit. In July 2004 
we launched Breizh Mobile, an MVNO in France
addressing the low-penetration Brittany region with 
a locally-tailored offering. In the last quarter, we
aggressively promoted our Fresh proposition to
maintain our status as the best value pre-pay offer 
in the UK market. Finally, we announced just after the
year end the launch of Mobile World, a unique pre-pay
service which offers very attractive rates to international
destinations, designed to compete directly with the
ﬁxed line pre-paid calling card market.
Fixed
Our ﬁxed line operations continued their strong
momentum from the previous year. Total revenues 
were £426.3m, up 71.5% on the previous year, and
contribution was £33.7m, a rise of 71.7%.
Total revenues from business operations were
£267.3m. Opal, the network provider for all of 
our ﬁxed line activity in the UK, generated revenues 
of £237.7m, an increase of 8.8% (2004: £218.4m).
Revenues in the second half were, as expected,
adversely affected by the regulatory cuts to mobile
termination rates. With the cost of terminating calls 
on mobile networks falling, we passed on the saving to
our customers, which reduced revenue per minute by
approximately 12% over the second half. Total business
trafﬁc over the network increased by 20.9% to 5.45bn
minutes. Including TalkTalk activity, total trafﬁc increased
by 73.4% to 9.56bn minutes. 
Total contribution from business operations was
£31.5m. Opal contribution was £30.6m, broadly the
same as in 2004. Underlying growth in our direct
channel, where we recruit and manage our own
corporate customers, was very encouraging. However,
we experienced increased price competition in our
reseller channel, and scaled down our low margin
premium rate services during the year. 
We made a number of small reseller acquisitions in the
UK during the year, as the rate of consolidation in the
sector picked up. These acquisitions are attractive
because we are able to improve the margin on customer
trafﬁc immediately by moving the lines onto the Opal
network. Acquisitions also give us ready access to sales
platforms in regions of the UK where we are currently
under-represented. In total these deals added £17.8m of
revenues and £3.0m of contribution to the year’s results.
Xtra, our Spanish ﬁxed line network acquired in March
2004, recorded revenues of £29.6m and contribution 
of £0.9m in its ﬁrst full year in the Group.
Opal’s engineering strategy made further good progress
during the year. We provisioned a further 5 switches,
taking the total to 11. In addition, we completed our
three-year programme of building interconnect into the
BT exchange network, so that by March 2005 over
90% of calls across the Opal network originated and
terminated at the local exchange level. This was
signiﬁcantly ahead of our 75% target and makes Opal
one of the most efﬁcient networks in the UK based on
the costs paid to BT – a call that is originated onto
Opal at the local exchange level is 27% cheaper than 
a call originating at the regional exchange level.
Opal’s network strategy will evolve over the next 12
months in two important ways: ﬁrstly, to add more
capacity through the provisioning of additional switches
and further ﬁbre leases to meet the demands of our
growing business; and secondly, to prepare for the
provision of broadband services and integration to 
BT’s 21st Century Network, which will be key to our
long-term strategy for Opal and TalkTalk.
The Carphone Warehouse Group PLC Annual Report 200
5
GERMAN SP BUSINESS
GROWING STRONGLY
MULTIPLE NICHE MVNO
OPPORTUNITIES
OPAL INVESTING FOR NEXT
GENERATION SERVICES  TalkTalk’s competitive position is strengthening 
all the time as it gains real scale. We will continue 
to invest in developing the brand and recruiting
customers aggressively
Our non-UK residential ﬁxed line operations have made
a promising start. The acquisitions of Xtra in Spain and
N Tel in Switzerland in the previous ﬁnancial period have
been successfully integrated into the Group and we
have launched TalkTalk in those two countries, as well
as in France and Germany. At the year end we had
170,000 ﬁxed line customers outside the UK, generating
revenues of £35.4m and contribution of £1.8m. N Tel
continued to be strongly proﬁtable, while we incurred
start-up losses elsewhere. Since the year end we have
launched TalkTalk in Belgium and Ireland, and we expect
a similar overall result from our non-UK TalkTalk
operations in the next 12 months.
Wholesale Division
2005 2004
£m £m
Turnover 132.0 178.1
Contribution 1.5 1.8
Support costs (1.4) (1.7)
EBITDA 0.1 0.1
Depreciation (0.7) (0.9)
EBIT (0.6) (0.8)
EBIT % (0.5%) (0.5%)
Wholesale operations comprise our pre-pay voucher
distribution business, our dealer operations and the
wholesale shipment of trade-in handsets. We are still
aware that European VAT authorities continue to
investigate the recovery of VAT in the industry for
trading activities conducted prior to April 2003. Having
undertaken a detailed internal investigation and taken
advice, we continue to believe that we have no ﬁnancial
exposure to this issue within the ﬁnancial statements.
We are continuing to invest in Opal to maximise its
potential in the business telecoms market. We intend 
to develop and grow a number of new business areas
this year, including line rental, data products, and a
corporate mobile proposition. In addition, we are
launching TalkTalk Business, addressing the small
business market. At the same time, our core voice
business is set for continued growth.
Total residential revenues rose from £30.2m to £159.0m,
and contribution was £2.3m, compared to a loss of
£11.0m last year. Our UK residential ﬁxed line service,
TalkTalk, had an outstanding year. We exceeded our
target of 900,000 customers by March 2005, ﬁnishing
the year with 920,000. TalkTalk UK generated revenues
of £123.6m and became proﬁtable in its second full
year, despite continued heavy investment in marketing
and customer acquisition. In addition, we launched 
a broadband service in the second half of the year 
and recruited nearly 50,000 customers by the year 
end, which was well ahead of our own expectations.
Contribution in the UK was £0.5m, net of £1.4m start-
up losses from our broadband activities, compared to 
a loss of £11.0m in 2004.
We believe that TalkTalk’s competitive position is
strengthening all the time as it gains real scale. This gives
us scope to continue to invest in developing the brand and
recruiting customers aggressively. We intend to introduce
further enhancements to our broadband service during the
year, and will launch a line rental product when the
regulatory environment allows. We expect this to have a
positive impact both on customer recruitment and on
churn, since it allows us to consolidate all of a customer’s
phone bill and terminates the billing relationship with BT.
We have set a target of 2 million residential customers by
March 2008 – equivalent to a 10% share of the UK market.
Operating and Financial Review continued www.cpwplc.com 15
LINE RENTAL LAUNCH PLANNED
FOR LATER THIS YEAR
NON-UK FIXED LINE
OPERATIONS HAVE STARTED
PROMISINGLY
TARGETING 10% OF THE UK
RESIDENTIAL MARKET BY 2008 
FIND OUT MORE ABOUT OUR
BUSINESS AT WWW.CPWPLC.COM 16
Financial Performance
Eliminations
Included within Retail revenue is £17.9m of commissions
from the Group’s German SP business (2004: £12.5m).
This revenue is reported within Retail to avoid distortion
of performance.
Exceptional items
There were no exceptional items during the year 
(2004: £6.4m exceptional charge).
Interest and tax
Net interest of £4.8m was payable during the year,
compared to a charge of £4.9m in the prior year.
Signiﬁcant investment in capital expenditure and
acquisitions was ﬁnanced largely out of operating 
cash ﬂow.
The effective tax rate before amortisation and
exceptionals was 19.5% (2004: 22.0%). The tax rate
continued to beneﬁt from the utilisation of tax losses
incurred in earlier years, and the effect of proﬁt within
low tax rate jurisdictions.
Goodwill amortisation
Goodwill of £53.7m arose during the year, principally on
the acquisition of a number of ﬁxed line
telecommunications providers, as detailed in note 15 
to the ﬁnancial statements. The total goodwill
amortisation charge for the year increased by 30.7% 
to £33.2m (2004: £25.4m), reﬂecting the increase in
goodwill over the past two years and a shorter average
amortisation period for a number of recent acquisitions.
Earnings per share (‘EPS’)
Headline EPS was 9.39p (2004: 6.81p). Statutory EPS
was 5.59p (2004: 3.17p).
Cash flow and dividend
At 2 April 2005, the Group had net debt of £68.4m
(2004: £40.6m). During the year the Group generated
cash ﬂow from operations of £143.1m (2004: £102.7m),
and total free cash ﬂow, before acquisitions, new stores,
freehold investments and dividend payments, of £68.2m
(2004: £57.0m).
Cash generation is a prime objective of the Group and
we expect to continue to generate signiﬁcant levels of
free cash ﬂow in the future, allowing us to reinvest in the
growth of the business and to pursue a progressive
dividend policy. We are proposing a ﬁnal dividend of
1.25p per share, taking the total dividend for the ﬁnancial
year to 1.80p, an increase of 38.5% on the prior year,
reﬂecting underlying EPS growth. The ex-dividend date 
is Wednesday 6 July 2005, with a record date of 
Friday 8 July 2005 and an intended payment date 
of Friday 5 August 2005.
Net debt
2005 2004
£m £m
Operating cash ﬂow 143.1 102.7
Tax and interest (16.5) (7.2)
Capex (ex new stores 
and freeholds) (58.4) (38.5)
Free cash ﬂow 68.2 57.0
New store capex (25.2) (13.7)
Freehold acquisitions (4.2) (47.3)
Acquisitions and investments (46.5) (59.3)
Dividends (12.7) (12.2)
Net cash outﬂow (20.4) (75.5)
Opening net (debt) funds* (40.6) 29.1
Shares and foreign exchange (7.4) 5.8
Closing net debt* (68.4) (40.6)
* including short-term investments.
Balance sheet
Acquisitions and capital investment during the period
are reﬂected in an increase in ﬁxed assets from
£604.7m to £674.0m year-on-year. Debtors and short-
term creditors also increased substantially from March
2004 to March 2005, reﬂecting acquisitions during the
period, together with growth in turnover of 27.4%.
Short-term investments increased from £10.8m at
March 2004 to £60.5m at March 2005, reﬂecting the
reallocation of funds held by the Group’s insurance
business from cash into bonds and managed funds,
further to its relocation to Dublin last year.
The increase in provisions for liabilities and charges
from £40.2m to £68.0m principally reﬂects an uplift in
the Group’s use of ‘cashback’ and similar promotions,
the anticipated costs of which are provided for on sale.
The Carphone Warehouse Group PLC Annual Report 200
5
HEADLINE EARNINGS PER
SHARE UP 37 . 9 % 
DIVIDEND UP 3 8. 5 %
OPERATING CASH FLOW 
OF £1 43 .1M Roger Taylor, Chief Financial Ofﬁcer
movements in interest rates will have a limited impact
on Group proﬁts. The Group does not trade or
speculate in any ﬁnancial instruments. 
Accounting policies
The accounting policies applied during the period are
consistent with those applied in the prior year and 
are set out in note 1 to the ﬁnancial statements.
International financial reporting standards
The Group will be required to adopt International
Reporting Standards (IFRS) for the period ending 
1 April 2006. We will continue to assess the impact 
of adopting IFRS on an ongoing basis until then.
Return on capital employed 
Total shareholders’ funds at March 2005 were
£502.9m, compared to £471.8m at March 2004. 
After taking into account average net debt, and
adjusting for goodwill amortisation and goodwill arising
on historic minority acquisitions, the Group generated 
a return on capital employed of 18.7% (2004: 17.6%).
Assuming a weighted average cost of capital for the
period ended 2 April 2005 of 6.9% (2004: 7.1%), this
represents an increase in economic value added from
£37.8m to £54.4m, being 10.5% and 11.8% respectively.
Financing and treasury
The Group’s operations are ﬁnanced by committed
bank facilities, retained proﬁts and equity. During the
period, the Group agreed a new £300m revolving credit
facility to replace the previous £180m facility, which was
due to expire in August 2005. This reﬁnancing also took
advantage of the signiﬁcant reduction in bank loan
margins that occurred during 2004. We also took this
opportunity to renegotiate the terms of the £120m term
loan facility, which was signed in July 2003. The new
facility was arranged by HSBC Bank PLC, ING Bank
NV and The Royal Bank of Scotland PLC. The Group
was in compliance with the covenant conditions of both
facilities throughout the period.
Net borrowings peaked late in 2004, in line with the
normal annual cycle as the Group invests in inventory
ahead of the Christmas trading season. The Group
seeks to maintain comfortable headroom on committed
facilities at all times. 
In addition to the revolving credit facility and term loan,
the Group has a number of uncommitted loan facilities,
overdrafts and guarantee lines, all technically repayable
on demand, which enable it to optimise cash
management efﬁciency particularly at times of peak
working capital requirements. 
Funding of our subsidiaries is arranged centrally. All
cross-border funding is provided on an arm’s length
basis and currency risk is hedged using foreign exchange
swaps or currency borrowings, as appropriate, at all
times. Other than through inter-company loans and
capital funding, balance sheet translational risk is not
hedged against adverse movements in exchange rates
and the results of any such movements are taken to
reserves. The Group is exposed to limited cross-border
transactional commitments and where signiﬁcant, these
are hedged at inception using forward currency contracts. 
Treasury policy permits the use of long-term derivative
treasury products for the management of currency and
interest rate risk; however, with the current low levels 
of Group debt, all debt is liable to ﬂoating rate interest.
The interest cover covenant was comfortably exceeded
at the year end and, whilst low levels of debt persist,
Operating and Financial Review continued www.cpwplc.com 17
FIND OUT MORE ABOUT OUR
BUSINESS AT WWW.CPWPLC.COM 18
Corporate Responsibility
In February 2005 we hosted an auction to help raise
funds for Get Connected. Held at BAFTA, Piccadilly
and hosted by Charles Dunstone and Andrew Harrison,
the event was supported by suppliers and partners 
and raised nearly £70,000 for the charity.
Business Action on Homelessness
CPW supports the Business Action on Homelessness
(‘BAOH’) programme, offering two-week work
experience placements to people who have been
homeless. Most are now in hostels and their placement
is part of a recovery process to give them the experience
and conﬁdence to look at long-term employment
and prevent “revolving door” homelessness. The 
work placements vary and aim to give participants 
a broad view of the business, looking at different
aspects of the operation. We also give practical help 
in respect of interview techniques and producing 
CVs. Of the 12 placements over the past two years,
three have subsequently been employed by the
Company and are working in our Acton Support
Centre. We support the programme nationally and
Richard Smelt, the Group’s HR Director, is on the
BAOH Planning Board. 
Comic Relief
The Acton Support Centre acted as a call centre for
Comic Relief’s Sport Relief event in July 2004 and 
took £80,000 worth of donations for the charity. 
50 employees, including Andrew Harrison, UK CEO,
and Chris Murton, Managing Director of CPW Online,
volunteered their Saturday night to take donations 
from the general public. Due to the success of an
internally developed bespoke data input system the
Comic Relief team visited the Acton ofﬁce after the
event when they were researching models for their 
own online data processing procedures.
After the success of this night Carphone Warehouse
decided to expand operations for Red Nose Day in
March 2005 and recruited 200 volunteers over two
sites to act once more as a call centre. The night
helped to raise a grand total of over £175,000 in
donations taken in response to the Comic Relief
television broadcast. Between the Acton and
The Carphone Warehouse Group PLC Annual Report 200
5
T
he Group has a strong track record as a
responsible employer, consumer and distributor. 
We divide our corporate responsibility activities into 
two categories: our charity, community and employee
activities; and our social and regulatory responsibilities.
There are separate committees composed of
executives from across the Group that manage our
involvement in these areas. We have a dedicated
Corporate Social Responsibility manager who co-
ordinates strategy and actions across both elements,
and in the past year Martin Dawes, a Non-Executive
Director, has sponsored activities at Board level. 
A new Non-Executive Director will be our sponsor
following the retirement of Martin Dawes at this 
year’s Annual General Meeting.
Charity, community and employee activities
In September 2004 The Carphone Warehouse
launched a new charity partnership with Barnardo’s 
and Get Connected with an aim of raising £500,000
over two years to help children and young adults
throughout the UK. In addition, a percentage of the
funds raised goes towards supporting small and local
charities either put forward by employees or situated 
in a community close to a CPW store or non-retail
operation. Funds are being raised in many different
ways from in-store activities to overseas treks to 
mobile phone recycling.
Get Connected
The Carphone Warehouse has had a relationship 
with Get Connected for ﬁve years and has now 
made it a beneﬁciary of the Carphone Warehouse
Charity Partnership. In addition, we provide Get
Connected with its accommodation, phone lines 
and IT support, and offer volunteers the opportunity 
to earn extra holiday or take matched company 
hours for giving up their time to help out. In 2004, 
in response to the expansion of the charity, we
relocated them to new premises in central London,
providing newly renovated and fully equipped ofﬁces,
doubling the capacity for volunteers and employees
and providing a meeting room and facilities for 
disabled volunteers.
NEW CHARITY INITIATIVE
LAUNCHED TO RAISE £ 5 00,000
GET CONNECTED REMAINS 
A UNIQUE AND SUCCESSFUL
PARTNERSHIP
OUTSTANDING EMPLOYEE
CONTRIBUTIONS  Birchwood call centres 1,100 volunteer hours were
spent on the phones ﬁelding 5,500 calls.
Tsunami
On 17 January 2005 the UK’s commercial radio stations
came together for the ﬁrst time to create UK RadioAid
to raise money for the victims of the tsunami that
devastated hundreds of thousands of lives on 
26 December 2004. The Carphone Warehouse
sponsored the prime 8am – 9am slot, hosted by 
Chris Evans. Listeners who sent the word ‘phone’ 
via text message during the show had £1.50 donated
to the tsunami appeal on their behalf and this was 
then matched by us.
Employees across the Group worked hard to raise
money for the appeal, donating out of their payroll 
and performing stunts up and down the country such
as shaving their heads and bathing in baked beans.
Donations from employees and in store contributions
from the general public in the UK were matched by
CPW, resulting in a donation of over £200,000 to the
Disasters Emergency Committee.
Employees
As an organisation we are aware that our employees
are our greatest asset and as a growing and
developing Group have to ensure that our values and
the treatment of our employees are not compromised.
There are many ways in which our HR department
constantly examine and address the work environment,
from stores to repair centres and contact centres, but
the best way to ﬁnd out how satisﬁed our employees
are is by asking them directly.
In 2001, Backchat was launched, offering an
opportunity for all employees at every level of the
business to express how they felt about all aspects 
of the Group, their roles within it and their personal
development, through a conﬁdential survey. In the ﬁrst
year, 33% of employees completed the survey but with
re-examination and assessment of the content and
presentation of the survey year-on-year, we have made
it more and more accessible, and the survey in 2004
saw a 92.7% response rate. This massive uptake
allows us as an organisation to undertake open and
honest self-analysis. 
There are many areas where we are pleased to 
see sustained and improved feedback year-on-year.
Highlights of this year’s survey include:
• 87% of people are proud to work for CPW, 
an increase of 6% on the previous year;
• 81% feel that CPW is a fun place to work; and
• 83% feel that the training and development they
have received in the last 12 months has been
valuable and worthwhile.
The year-on-year results have shown a steady
improvement and not one area saw a negative trend 
in the 2004 survey. This analysis allows us to continue
our work in areas where we are doing well, but more
importantly, to focus on addressing areas that are not
regarded so favourably. This year’s results showed
score improvements from 9% to 18% across the least
favourable scores, showing that targeted dedication
and listening to our employees allows us to improve 
the work environment.
As well as the targets we can set ourselves, we are 
able to use the data against external benchmarks and
track our performance against other major retailers. 
Operating and Financial Review continued www.cpwplc.com 19
9 2. 7 % OF EMPLOYEES
RESPONDED TO OUR 
LATEST SURVEY
ALL SURVEYED AREAS SHOWED
IMPROVEMENTS ON LAST YEAR
AWARDS REFLECT THE
IMPORTANCE PLACED ON A
GOOD WORKING ENVIRONMENT 
FIND OUT MORE ABOUT OUR
BUSINESS AT WWW.CPWPLC.COM
As we grow and develop as a Group
we have to ensure that our values
and the treatment of our employees
are not compromised 20
Corporate Responsibility continued
Areas where we hold the greatest difference against 
the average in the retail sector include being personally
valued by the organisation, making good use of skills 
and abilities, fair pay, and being proud to work for 
the organisation.
This success is reﬂected in the awards that The
Carphone Warehouse has won in the last year.
• Mobile Choice Best High Street Retailer
• Mobile News Best Large Retailer
• Retail Week Business Excellence
• Retail Week Innovative Employer
• Sunday Times 4th Best Large Company 
to Work For
• What Mobile Best High Street Retailer
Regulatory and social responsibilities
We continue to operate in a relatively low impact
industry and our meetings and discussions with 
Group businesses on social, environmental and 
ethical (‘SEE’) matters give us conﬁdence both that 
the SEE risks to our business are relatively low, and
also that controls are in place to ensure compliance
with new laws and regulations where necessary. We
remain very much abreast of key issues and business
risks arising in these areas (as outlined below). Over 
the coming year we will undertake to put the SEE
committee on a more formal footing and renew our
Board representation.
Below we have identiﬁed the key SEE-related risks
currently affecting the Group. The list is not intended to
be exhaustive but to address those risks that are most
material to the business.
Waste Electrical and Electronic Equipment Directive
(‘WEEE Directive’)
In March 2005, the UK Government announced its
intention to transpose the WEEE Directive into law 
by the summer of 2005. The producer responsibility
obligations and the take-back obligations on retailers
and distributors are planned to commence in January
2006. Our purchasing teams across the Group are
working with our Group legal department and our
suppliers to ensure compliance within this timetable.
Disability discrimination
We are constantly reviewing and improving our websites
and stores to provide greater accessibility for our
disabled customers. We have a special needs section
on our retail website (www.carphonewarehouse.com),
and in June 2004 we launched dedicated phone
numbers for our customers. In addition, we now
provide bills in a number of formats for the visually-
impaired. During the year our corporate website
(www.cpwplc.com) was also extensively overhauled 
to comply with the Royal National Institute of the Blind’s
“See It Right” accessibility criteria and priority level 1
criteria of the World Wide Web Consortium’s Web
Content Accessibility Guidelines.
The Disability Discrimination Act came into force in the
UK in October 2004. Over 90% of our UK stores are
now fully accessible for wheelchair users. To assist
customers, we have published a list of stores with access
difﬁculties on our website, with suggested alternative
stores in the area. Induction loops have been provided
to all stores, and drop counters are now ﬁtted in new
stores as standard. Stores also have customer care
packs containing magnifying glasses and easy-grip pens. 
We remain fully committed to the principle that 
disabled customers should as far as possible be 
able to obtain goods and services in just the same 
way as any other customer, and we continue to
monitor the situation to improve access facilities
wherever possible.
Fighting mobile crime
In 2003 The Carphone Warehouse spearheaded the
joint industry ‘Immobilise’ campaign, with the aim of
encouraging customers to report their lost or stolen
handset, so that it could be blacklisted. In January
2005 a second ‘Immobilise’ campaign was launched,
this time asking customers to register their lost or
stolen phones on Immobilise.com for the best chance
of getting it back. 
The Carphone Warehouse Group PLC Annual Report 200
5
WE ARE A LOW IMPACT
BUSINESS IN SEE TERMS
MORE FORMAL CO-ORDINATION
OF ISSUES TO BE PUT IN PLACE
COMMITMENT TO EQUAL
ACCESS FOR ALL OUR
CUSTOMERS  Adult content
In the UK, network operators have collectively
developed a code of practice for the self-regulation of
age-sensitive content on mobiles. As part of this, they
will appoint an independent classiﬁcation body to
provide a framework for classifying commercial content
that is unsuitable for customers under the age of 18. 
Promoting safe driving
We followed our successful ‘Hang up or Go Handsfree’
awareness campaign in December 2003 with a further
campaign a year after the new driving legislation
coming into force. In December 2004 we conducted
customer research to ﬁnd out which area in the UK 
had the highest and lowest awareness of the new
legislation. We then used the results to target areas
where awareness of the legislation was low. We also
created a guide to help customers choose the right
handsfree solution and now have over 60 dedicated 
car kit installation centres across the UK.
As a member of Mobile Industry Crime Action Forum,
we also endorse the work of MEND, the Mobile
Equipment National Database, that provides recovery
and assistance with an aim to reunite owners with 
their property. The Carphone Warehouse is leading 
the way in supporting this new campaign as the 
ﬁrst UK retailer to automatically register all of its
insurance customers.
Mobile phones and health
The Carphone Warehouse continues to lead the
industry in providing customers with all of the
information on mobile phones and health concerns 
so that they can make informed decisions. An
independent and extensive health fact sheet is 
available in our stores and on our website, with the
11th edition due for publication in the next few months.
We also continue to list speciﬁc absorption rates 
for every handset in our buyers’ guide every month 
and again on our website.
Operating and Financial Review continued www.cpwplc.com 21
FIND OUT MORE ABOUT OUR
BUSINESS AT WWW.CPWPLC.COM
We are constantly reviewing and
improving our websites and stores 
to provide greater accessibility 
for our disabled customers 22
Board of Directors and Group Advisors
Non-Executive Directors
Hans Roger Snook
Chairman
Age 57. Joined the Board in May 2002 as Chairman.
He was the founding Chief Executive of Orange. 
Under his leadership Orange launched in 1994 and 
by June 1996 became the youngest ever company 
to enter the FTSE 100. He will stand down as a 
Non-Executive Director with effect from this year’s
Annual General Meeting.
John Gildersleeve
Age 60. Joined the Board in June 2000. He was an
Executive Director of Tesco PLC until he retired in
February 2004. He will become the Group’s Non-
Executive Chairman with effect from this year’s Annual
General Meeting. He is Non-Executive Chairman of
Gallaher Group PLC and Deputy Chairman of EMI
Group PLC. Prior to this he was a Non-Executive
Director of Lloyds TSB Bank PLC from 1994 to 1997
and Vodafone Group PLC from 1998 to 2000. 
Adrian Martin 
Age 55. Joined the Board in November 2000. He is
Chief Executive of Reynolds Porter Chamberlain
Solicitors and a Non-Executive Director of M & C
Saatchi PLC and one privately controlled company.
Previously he was UK Managing Partner of BDO Stoy
Hayward, where he was also Chairman of its
International Policy Board.
Sir Brian Pitman
Age 73. Joined the Board in January 2001 and is 
the Senior Independent Director. A senior adviser to
Morgan Stanley, he is also Non-Executive Director of
Tomkins PLC, ITV PLC and Singapore Airlines Limited.
He retired in 2001 from Lloyds TSB Group PLC, where
he was Chief Executive for 13 years and Chairman for
4 years. He was also Chairman of NEXT PLC from
1998 to 2002.
Martin Dawes
Age 61. Joined the Board in June 2003. He has been
involved in the mobile telecommunications industry
since 1985 when he launched Martin Dawes
Telecommunications, which was sold to BT Cellnet 
in 1999. He was Non-Executive Deputy Chairman of
Opal Telecom PLC until its acquisition by the Group 
in November 2002. He will stand down as a Non-
Executive Director with effect from this year’s Annual
General Meeting.
Executive Directors
Charles Dunstone
Chief Executive Ofﬁcer
Age 40. Founder and Chief Executive Ofﬁcer of the
Group since 1989. He is also responsible for new
business development and strategic initiatives. He is a
Non-Executive Director of HBOS PLC, The Daily Mail
and General Trust PLC, and Independent Media
Distribution PLC. He is also Chairman of The Prince’s
Trust Trading Board and a member of its Council.
David Ross ACA
Deputy Chairman
Age 39. Deputy Chairman with responsibility for the
strategic development of the Group. Prior to this, 
he was Chief Operating Ofﬁcer between 1990 and 
July 2003 and was responsible for the Group’s activities
in mainland Europe. He is Non-Executive Chairman 
of National Express Group PLC and a Non-Executive
Director of Trinity Mirror PLC, Big Yellow Group PLC 
and Cosalt PLC. 
Geoffroy Roux de Bezieux ESSEC (MBA)
Chief Operating Ofﬁcer, Distribution
Age 42. Joined the Group in 1996 and was appointed to
the Board in June 2000. He is responsible for the Group’s
Distribution activities. Prior to joining the Group he was
UK Marketing Director for L’Oreal and Managing Director
of L’Oreal’s Polish operations between 1994 and 1996.
Roger Taylor ACA
Chief Financial Ofﬁcer
Age 40. Chief Financial Ofﬁcer of the Group since
January 2000. Prior to joining he was a corporate
ﬁnance partner at BDO Stoy Hayward. He is responsible
for controlling the Group’s ﬁnance function and ﬁnancial
reporting and procedures. He also manages the Group’s
corporate ﬁnance function and has a direct involvement
in strategic decisions and the appraisal process. He is 
a Non-Executive Director of Berkeley Scott Group PLC. 
James Dale FCA
Executive Chairman of Carphone Warehouse Insurance
Age 65. Joined the Group in January 1997 and
appointed to the Board in March 2001. He is responsible
for the management of the Group’s insurance operations. 
The Carphone Warehouse Group PLC Annual Report 200
5
Company Secretary
T S Morris
Board Committees
Audit Committee:
Adrian Martin (Chairman)
John Gildersleeve
Sir Brian Pitman
Martin Dawes
Remuneration Committee:
John Gildersleeve (Chairman)
Sir Brian Pitman
Martin Dawes
Adrian Martin
Nomination Committee:
Sir Brian Pitman (Chairman)
John Gildersleeve
Martin Dawes
David Ross
Advisors
Bankers
HSBC Bank PLC
ING Bank NV 
Deutsche Bank AG
Royal Bank of Scotland PLC
Legal Advisors
Ashurst Morris Crisp
Clyde & Co
DLA
Osborne Clarke
Corporate Brokers
Credit Suisse First Boston
(Europe) Limited
1 Cabot Square 
London E14 4QJ
Deutsche Bank
1 Great Winchester Street
London EC2N 2DB
Registrars
Lloyds TSB Registrars
The Causeway, Worthing 
West Sussex BN99 6DA
Auditors
Deloitte & Touche LLP, London 
Registered Ofﬁce
1 Portal Way 
London W3 6RS
Registered number: 3253714 Corporate Governance
Introduction
The Board of Directors recognises the importance of high standards of
corporate governance. This Report and the Remuneration Report set out
on pages 26 to 31 explain that the Company has complied during the
period with the principles contained in the new Combined Code on
corporate governance issued by the Financial Reporting Council in 
July 2003 (the ‘Code’) except as stated to the contrary in this Report. 
In accordance with Listing Rule 12.43A as varied by the instrument issued
by the Financial Services Authority in October 2004, the relevant parts 
of this Report have been reviewed by the Auditors and their opinion is
contained in the Independent Auditor’s Report on page 33.
Board of Directors
Composition of the Board
During the period there were ﬁve Executive Directors and ﬁve Non-Executive
Directors (including the Non-Executive Chairman). Biographies of each of
the Directors, their responsibilities and principal Board Committee
memberships are set out on page 22. 
On 14 April 2005 the Company announced that with effect from the Annual
General Meeting on 28 July 2005 (‘AGM’), Hans Roger Snook will stand
down as Non-Executive Chairman, that John Gildersleeve will become
Non-Executive Chairman and that David Goldie will become an Executive
Director. On 19 May 2005 the Company announced that Martin Dawes
would stand down as a Non-Executive Director with effect from the AGM.
The effect of all of these changes on the composition of the Board and its
committees will be reported on in next year’s Annual Report. Charles
Dunstone is the Chief Executive Ofﬁcer, Sir Brian Pitman is the Senior
Independent Director and David Ross is Deputy Chairman. 
All Directors are subject to election by shareholders at the ﬁrst Annual General
Meeting following appointment and thereafter to re-election at least every three
years. Each Executive Director has a service contract that can be terminated
by either the Company or the Director on twelve-months’ notice or less. 
The Non-Executive Directors, apart from Hans Roger Snook, have three-
year periods of appointment, the terms of which are substantially in the
same format as suggested by the Code, with three-month notice periods
and no compensation for loss of ofﬁce. Hans Roger Snook has a service
contract which can be terminated by either party on twelve-months’ notice
with no provision for compensation on early termination. As stated above,
Hans Roger Snook will stand down as a Director of the Company with
effect from the AGM such that a notice period of less than twelve months
will have applied and no other compensation for loss of ofﬁce will be paid.
Further details on each Director’s remuneration including the dates of their
contracts with the Company are set out in the Remuneration Report on
pages 26 to 31. 
All the Non-Executive Directors, except Hans Roger Snook, are considered
by the Board to be independent. Hans Roger Snook is not considered to be
independent as he holds 1 million share options in the Company. Four out of
the nine Directors, excluding the Chairman, are independent. Whilst the Code
states that at least half the Board excluding the Chairman should consist of
independent Directors, the Board believes that the current composition of
four out of nine is sufﬁcient to produce a well balanced Board in terms of
size, balance of skills and experience, and independence in character and
judgement, to meet the requirements of the Group’s business.
Board meetings
The Board meets at least six times a year, with additional meetings as
required. The Board met seven times formally during the period (including 
a strategy day). With the exception of Sir Brian Pitman, who was absent for
the meetings held on 28 July 2004 and 28 October 2004 because he had
other meetings ﬁxed for such dates before the Company had arranged
such meetings, all of the Directors attended these meetings.
The Company Secretary ensures that all Board papers are sent out to 
non-attending Directors and that, where possible, any comments they have
are received beforehand so that they can be expressed at the meeting.
Operation of the Board
The wide range of experience and expertise of the Non-Executive Directors,
combined with the skill sets of the Executive Directors, provides vast
experience of mobile and ﬁxed line telecommunications and general
business experience, strong personal skills and independence of thought
and perspective. 
The overriding responsibility of the Board is to provide entrepreneurial and
responsible leadership to the Group within a framework of prudent and
effective controls. These allow for the key issues and risks surrounding the
business to be assessed and managed. The Board determines the overall
strategic direction for the Group, reviews management performance and
ensures that the necessary ﬁnancial and human resources are in place to
enable the Group to meet its objectives. The Board is comfortable that the
necessary controls and resources exist within the Group to enable these
responsibilities to be met.
The Board ensures that the Directors, and in particular the Non-Executive
Directors, develop an understanding of the views of major shareholders
about the Company. The Company regularly communicates with major
shareholders and has a dedicated internal investor relations department.
Brieﬁngs on market activity, together with the views of shareholders and
analysts on the Company, are also regularly provided to the Board.
There is a clear division of responsibilities between the roles of the
Chairman and the Chief Executive Ofﬁcer. There are also documented
schedules of matters reserved to the Board and matters delegated to
Committees of the Board. Such reserved matters include decisions on
strategic and policy issues, the approval of published ﬁnancial statements
and major acquisitions and disposals, authority levels for expenditure,
treasury and risk management policies. Strategic and policy issues are
reviewed annually at a combined Board and senior executive strategy day.
Performance evaluation
During the period the balance of skills, knowledge and experience of Directors
was reviewed. The Board, and each individual Director, also undertook
performance evaluations. Using the Higgs ‘Suggestions for Good Practice’ as
guidance, the individual Directors initially completed separate questionnaires.
The results were compiled and analysed by the Company Secretary, who
prepared reports as appropriate to the Chairman, the Senior Independent
Director, the Chief Executive Ofﬁcer and to the Board as a whole. The areas
covered included the role of the Executive and Non-Executive Directors, the
Board and the Board Committees, preparation for and performance at
meetings, the effectiveness of each Director, leadership, culture and corporate
governance. The results were then considered by the Board as a speciﬁc item
of business. These exercises or similar ones will be carried out each year.
Following such performance evaluation the Chairman conﬁrms that all those
Non-Executive Directors seeking re-election at the AGM continue to be
effective and demonstrate a commitment to the role, including having time
to attend all necessary meetings and to carry out other appropriate duties.
The Chairman also convened a formal meeting of the Non-Executive
Directors to assess the performance of the Board in the absence of the
Executive Directors. 
www.cpwplc.com 23 24
Corporate Governance continued
The Carphone Warehouse Group PLC Annual Report 200
5
The Senior Independent Director also met with the Non-Executive
Directors, in the absence of the Chairman, to assess the Chairman’s
effectiveness (having taken soundings beforehand from the Executive
Directors). The Chairman had no other signiﬁcant commitments during 
the period that would have affected his performance in his role.
External appointments
The Board supports Executive Directors taking up Non-Executive
Directorships as part of their continued development, and the Board
believes that this will ultimately beneﬁt the Company. Further details 
are provided in the Remuneration Report on pages 26 to 31.
Board Committees
There are three principal Board Committees: Audit, Remuneration and
Nomination. The Committees are provided with sufﬁcient resources via 
the Company Secretary and, where necessary, have direct access to
independent professional advisers to undertake their duties.
Audit Committee
During the period the Committee comprised three independent Non-Executive
Directors, Adrian Martin (Chairman), John Gildersleeve and Sir Brian Pitman.
Adrian Martin is deemed by the Board to be the Committee member with
recent and relevant ﬁnancial experience. All of the Committee members have
extensive commercial experience. The Committee met formally four times during
the period. All members of the Committee were present at each meeting, except
Sir Brian Pitman who was absent from the meetings on 13 May 2004 and
28 October 2004 because he had to attend other meetings that had been
ﬁxed before the Company had arranged the meetings. The Company
Secretary ensured that he received all relevant papers in advance and that any
comments he had were communicated to the meeting. The Chairman of the
Committee updates the Board on any signiﬁcant issues that may have arisen
at the Board meeting following each Committee meeting. Martin Dawes was
appointed to the Committee on 27 January 2005, from which point the
Committee comprised four independent Non-Executive Directors. 
During the period, all the requirements of the Code in respect of the
Committee were met. The work undertaken by the Committee is described
within the following sections of this Report.
The Group’s Chief Financial Ofﬁcer and other senior management attend
Committee meetings by invitation of the Committee. Representatives of the
Group’s external auditors and the Group Director of Risk also attend these
meetings by invitation of the Committee. The external and internal auditors
have direct access to the Committee during formal meetings and time is
set aside for them to have private discussions with the Committee, in the
absence of management.
The Committee’s terms of reference, which are available on request from
the Company Secretary and are published on the Company’s website,
comply with the Code. During the period, the formal calendar of items
considered at each Audit Committee meeting within each annual cycle
embraced the Code requirements to:
• monitor the integrity of the ﬁnancial statements of the Company, and any
formal announcements relating to the Group’s ﬁnancial performance, including
reviewing signiﬁcant ﬁnancial reporting judgements contained in them; 
• review the Company’s internal ﬁnancial controls and its internal control and
risk management systems and to make recommendations to the Board; 
• monitor and review the effectiveness of the Group’s internal audit function; 
• make recommendations to the Board in relation to the appointment, re-
appointment and removal of external auditors and to approve their
remuneration and terms of engagement; 
• review and monitor the external auditors’ independence and objectivity
and the effectiveness of the audit process, taking into consideration
relevant UK professional and regulatory requirements; and
• review the Group’s policy on the engagement of the external auditors 
to supply non-audit services. In this context the Committee’s remit
requires it to report to the Board identifying any matters in respect of
which it considers that action or improvement is needed and to make
recommendations as to the steps to be taken. 
In the light of the assessments and review undertaken, the Committee
recommended to the Board that Deloitte & Touche LLP be retained as
auditors of the Group. This recommendation was endorsed by the Board.
The policy relating to the provision of non-audit services by the external
auditors speciﬁes the types of work from which the external auditors are
excluded; for which the external auditors can be engaged without referral 
to the Committee; and for which a case-by-case decision is required. The
ratio of non-audit fees to audit fees is monitored by the Committee within
an overall limit set by the Board on the recommendation of the Committee.
A statement of fees paid or accrued for services from the external auditors
during the period is set out below:
2005 2004
£000 £000
Audit services:
– statutory audit 836 568
– non-statutory audit 98 –
Further assurance services 15 225
Tax services:
– compliance services 10 –
– advisory services 150 313
Other services 54 12
Total 1,163 1,118
Certain non-audit services are pre-approved by the Committee depending
upon the nature and size of the service. Non-statutory audit services during
the period primarily related to work undertaken in respect of International
Accounting Standards. Tax services comprise compliance services and
technical advice associated with relevant UK and international ﬁscal laws
and regulations and, in particular, assessment of the potential implications
of proposed corporate transactions or restructuring.
Having undertaken a review of the non-audit related work the Committee
has satisﬁed itself that the services undertaken during the period did not
prejudice the external auditors’ independence.
At each of its meetings the Committee reviewed and considered reports
from the Group Director of Risk on the status of the Group’s risk management
systems, ﬁndings from the internal audit function concerning internal
controls, and reports on the status of any weaknesses in internal controls
identiﬁed by the internal or external auditors.
Remuneration Committee
During the period the Committee comprised four independent Non-Executive
Directors, John Gildersleeve (Chairman), Sir Brian Pitman, Martin Dawes and
Adrian Martin. The Committee met formally three times during the period and
each member attended every meeting, except Adrian Martin who was absent
from the meeting on 27 May 2004 because he was not appointed to the
Committee until 27 January 2005. Other Directors, the Company Secretary,
the Group Director of Human Resources and advisers attended by invitation
only. A detailed description of the Committee’s remit and work during the
period is contained in the Remuneration Report on pages 26 to 31. Its terms of
reference comply with the Code, are available on request from the Company www.cpwplc.com
Secretary and are published on the Company’s website. The Chairman of
the Committee updates the Board following each Committee meeting.
Nomination Committee
During the period the Committee comprised three independent Non-Executive
Directors, Sir Brian Pitman (Chairman), John Gildersleeve and Martin Dawes
and David Ross. It meets as and when required and met once formally
during the period. Every member attended this meeting, except that John
Gildersleeve did not attend the part of the meeting in respect of his own
proposed appointment as Non-Executive Chairman of the Company.
The Committee’s terms of reference comply with the Code and are
available from the Company Secretary on request and are published on 
the Company’s website. The Committee is responsible for succession
planning at Board level, overseeing the selection and appointment of
Directors, regularly reviewing the structure, size and composition of the
Board and making its recommendations to the Board. It assists in
evaluating the commitments of individual Directors and the balance 
of skills, knowledge and experience on the Board. 
During the period, the work of the Committee reﬂected succession planning
and a consideration of appropriate appointments to the Board. In particular,
the Committee (excluding John Gildersleeve) carried out such work and
recommended that John Gildersleeve be appointed as Non-Executive
Chairman when Hans Roger Snook stands down as Chairman with effect
from the AGM. The full Committee also recommended the appointment of
David Goldie as an Executive Director with effect from the AGM. 
The Committee did not use an external search consultancy nor open
advertising in respect of John Gildersleeve’s appointment, although the
Committee did follow the other principles of the Code in leading and
making recommendations to the Board. Given the level of experience 
of John Gildersleeve and his existing knowledge of the Company, the
Committee determined that he was the best candidate for Non-Executive
Chairman and as such decided that it was not appropriate to look
externally for a suitable candidate. The Committee also determined that
John Gildersleeve satisﬁed the test of independence set out in the Code
on his appointment. Similarly, David Goldie was already an existing
member of senior management and the Committee determined that his
appointment was part of the Company’s orderly succession plans so as 
to maintain the appropriate balance of skills and experience within the
Company on the Board.
Both of these recommendations were unanimously approved by the Board. 
Risk management and internal control
The Group has established a risk management programme that assists
management throughout the Group to identify, assess and mitigate business,
ﬁnancial, operational and compliance risks. The Board views management
of risk as integral to good business practice. The programme is designed to
support management’s decision-making and to improve the reliability of
business performance.
The risk management programme is supported by a dedicated team of risk
specialists, including internal auditors, who comprise the Group Risk and
Assurance function. To ensure that all parts of the Group have a good
understanding of risk, members of this team have conducted risk
workshops and reviews within each of the main operating divisions in the
past year, culminating in an assessment of key business risks by the
Executive Directors and senior management. These risk assessments have
been wide-ranging, covering risks arising from the regulatory environment,
strategy, counter-parties and organisational change associated both with
major projects and with acquisitions. The risk management process
operates throughout the Group, being applied equally to the main business
divisions and corporate functions.
The output from each annual assessment is a list of key strategic, ﬁnancial,
operational and compliance risks. Associated action plans and controls to
mitigate them are also put in place where this is possible and to the extent
considered appropriate by the Board taking account of costs and beneﬁts.
Changes in the status of the key risks and changes to the risk matrix are
reported regularly to the Audit Committee and at each Board Meeting.
The Directors have overall responsibility for the Group’s systems of
internal control and for reviewing their effectiveness. The Board delegates
to executive management the responsibility for designing, operating 
and monitoring these systems. The systems are based on a process 
of identifying, evaluating and managing key risks and include the risk
management processes set out above. The systems of internal control
were in place throughout the period and up to the date of approval 
of the Annual Report and financial statements. The effectiveness of 
these systems is periodically reviewed by the Audit Committee in
accordance with the guidance in the Turnbull Report. These systems 
are also refined as necessary to meet changes in the Group’s business
and associated risks. 
The systems of internal control are designed to manage rather than
eliminate the risk of failure to achieve business objectives. They can only
provide reasonable and not absolute assurance against material errors,
losses, fraud or breaches of laws and regulations.
The Board has conducted an annual review of the effectiveness of the
systems of risk management and internal control in operation during 
the year and up to the date of the approval of the Annual Report and
ﬁnancial statements. Controls required to mitigate such risks and any
signiﬁcant control failings are reviewed by the Board through operational
reports from management. 
Communication with investors
The Board believes it is important to explain business developments and
ﬁnancial results to the Company’s shareholders and to understand any
shareholder concerns. The principal communication media used to impart
information to shareholders are news releases (including results
announcements) and Company publications. In all such communications,
care is taken to ensure that no price sensitive information is released.
The Chief Executive Ofﬁcer and Chief Financial Ofﬁcer have lead
responsibility for investor relations. They are supported by a dedicated
investor relations department that, amongst other matters, organises
presentations for analysts and institutional investors. There is a full
programme of regular dialogue with major institutional shareholders, fund
managers, analysts, retail brokers and credit investors, upon which the
Chairman ensures that the Board receives regular updates at Board
meetings. The Board also receives periodic reports on investors’ views of
the performance of the Group. All the Non-Executive Directors and, in
particular, the Chairman and Senior Independent Director, are available to
meet with major shareholders, if such meetings are required. Further
ﬁnancial and business information is available on the Company’s website,
www.cpwplc.com.
The Company also communicates with shareholders through the Annual
General Meeting, at which the Chairman gives an account of the progress
of the business over the last year, and a review of current issues, and
provides the opportunity for shareholders to ask questions. 
Corporate Governance continued 25 Remuneration Report
The Carphone Warehouse Group PLC Annual Report 200
5 26
Compliance
This Remuneration Report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002 (‘Regulations’) and the new
Combined Code on Corporate Governance issued in July 2003 (the ‘Code’). The constitution and operation of the Remuneration Committee are in
compliance with the Code. In framing its remuneration policy the Committee has given full consideration to the matters set out in Schedule A of the Code. 
As required by the Regulations, a resolution to approve this Report will be proposed at the Annual General Meeting (‘AGM’) to be held on 28 July 2005.
The Regulations require the Company’s auditors to report to the members on the “auditable part” of this Report (marked with a *) and to state, in their
opinion, that this part of the Report has been properly prepared in accordance with the Companies Act 1985 (as amended by the Regulations).
Remuneration Committee
Responsibility for the establishment of overall remuneration policy for the Group lies with the full Board of Directors. The Remuneration Committee is
responsible for making recommendations to the Board on the remuneration of the Chairman, Executive Directors and senior managers. The terms of
reference of the Committee are available on the Group’s website (www.cpwplc.com) or on request from the Company Secretary.
The Committee’s current composition is John Gildersleeve (Chairman), Sir Brian Pitman, Martin Dawes and Adrian Martin (who was appointed to the
Committee on 27 January 2005), all of whom are independent Non-Executive Directors. Upon becoming Non-Executive Chairman of the Company at the
AGM, John Gildersleeve will relinquish the Committee chairmanship in line with the requirements of the Code, and a new Chairman will be appointed. None 
of the members of the Committee has any personal ﬁnancial interest, other than as shareholders, in the matters to be decided by the Committee, 
no potential conﬂicts of interest arising from cross-memberships and no day-to-day involvement in running the Group’s business.
New Bridge Street Consultants LLP (‘NBSC’) have been appointed lead advisors to the Committee and have conducted a total reward survey for Executive
Directors and other senior managers. NBSC have no other connection with the Group. Deloitte & Touche LLP (‘Deloitte’) provided advice to the Remuneration
Committee on the administration of share option and SAYE schemes. Deloitte are the Group’s auditors and provide other services to the Group as set out in
the Corporate Governance Report on pages 23 to 25. The Deputy Chairman, the Group Director of Human Resources and the Company Secretary also
provided internal advice in respect of matters raised by the Committee. No Director nor any person advising the Committee plays a part in any discussion
about his or her own remuneration.
Remuneration policy
The primary aim of the Committee is to ensure that remuneration aligns the interests of management and shareholders and reinforces behaviour which 
will lead to the continued long-term development of the business.
The Committee makes its recommendations by taking into account:
• The experience of Executive Directors and other senior managers;
• The Group’s competitiveness in the market place, assessed through independent external market comparisons;
• The growing international nature of the Group;
• The development of new business streams; and
• Pay and conditions throughout the Group as a whole.
The overall remuneration policy is to provide competitive remuneration packages to attract, retain and motivate executives of the calibre required, and to align
their interests with those of shareholders by relating a signiﬁcant element of the remuneration package to speciﬁc performance measures. The approach is to
set ﬁxed remuneration at market median levels and to offer variable rewards which are linked to the performance of the Group. Before long-term incentive
share awards are taken into account, approximately 43% of Executive Directors’ remuneration earned in the year was performance related. Messrs Dunstone
and Ross do not receive long-term incentive share awards.
Components of remuneration
The main ﬁxed and performance related elements of remuneration that can be awarded to Executive Directors are as follows:
• basic salary, and beneﬁts and pension contributions (ﬁxed); 
• annual performance bonus (variable); 
• share options (variable); and
• Performance Shares (see below) (variable).
The Company operates a minimum shareholding policy, requiring Executive Directors to build up and retain a shareholding in the Company equal 
to at least 100% of their annual salaries. 
Salaries and beneﬁts
Executive Directors’ basic salaries are reviewed annually and take into account the roles, responsibilities, performance and experience of the individuals and
information obtained from published market data on the salary rates for similar positions in companies of a similar size. Salaries are reviewed on 1 July each year.
Following the most recent review, salaries from 1 July 2005 will be as follows:
Charles Dunstone £450,000, David Ross £210,000, Roger Taylor £300,000, Geoffroy Roux de Bezieux £285,000, Jim Dale £128,000, David Goldie £250,000.
The increases over the year reﬂect very strong Group performance and a further increase in the size of the business and complexity of the Directors’ roles.
These basic salaries remain generally below market median levels compared to companies of a similar size. Executive Directors also receive beneﬁts in
respect of cars or car allowances, private medical cover and a deﬁned contribution pension scheme.
Annual performance bonus
The Company operates a bonus scheme designed to reﬂect the performance of the Group. Bonuses are governed by performance conditions set by 
the Remuneration Committee to ensure that maximum variable rewards are paid only for exceptional performance. The bonus scheme for the period Remuneration Report continued www.cpwplc.com 27
ending 1 April 2006 will have targets based on improvements in Headline EPS (see note 10 to the ﬁnancial statements). This performance measure was
chosen to focus the Executive Directors on the key measure of the Group’s short-term ﬁnancial performance, thereby aligning the Executive Directors’
interests with those of shareholders.
The Remuneration Committee has determined that for the forthcoming ﬁnancial year the annual bonus potential should be increased from 100% to 195% of
base salary and that the threshold for compulsory deferral (into the Annual Deferred Bonus Plan) should be raised from 60% to 100% of salary. In addition, the
bonus award for reaching target has been increased from 40% to 60% of base salary. These changes have been made after considering the following factors:
• Targets are extremely stretching, with no bonus payable if targets are not met.
• First level target for Headline EPS in the forthcoming year is higher than Headline EPS for the year ended 2 April 2005. The upper end of the EPS range
represents truly exceptional performance.
• Considering other elements of pay, including the fact that these percentages are leveraged off generally below median base salary levels, total
remuneration is still considered to be no higher than market median levels.
Headline EPS performance and its implications for bonuses payable will be disclosed in next year’s Remuneration Report to provide shareholders with a
clear indication of the link between reward and performance. 
Annual Deferred Bonus Plan 
In the forthcoming year, any bonus earned in excess of 100% of salary will be compulsorily paid as a deferred share award under the Annual Deferred
Bonus Plan approved by shareholders at the Annual General Meeting on 28 July 2004. 
Executive Directors and senior managers also have the option of taking some or all of their cash bonus in the form of a deferred share award. The rights to
deferred shares cannot be exercised for 12 months. Matching shares may also be awarded if the deferred share award is not exercised for up to a further two
years. The number of matching shares awarded equates to 12.5% of the deferred amount at the beginning of each year. The share equivalent of dividends
which would have been paid on the shares is added to the deferred share award each year. Given the modest level of potential match and the Committee’s 
aim of encouraging Executive Directors to build up a signiﬁcant shareholding, no additional performance criteria are attached to the matching shares. 
Share options
The Company has a performance related share option scheme for Executive Directors and senior managers both in the UK and overseas. No options were
granted to Executive Directors in the period ended 2 April 2005 and it is currently not envisaged that grants will be made to them in the forthcoming year. 
A UK savings related share option scheme is open to all eligible employees in the UK, including Executive Directors. No Executive Director currently
participates in the scheme.
Performance Share Plan
Senior managers, including Executive Directors, received awards of Performance Shares (as deﬁned in the Annual General Meeting on 28 July 2004) in the period
ended 2 April 2005. These awards are subject to a mixture of Headline EPS and Total Shareholder Return (‘TSR’) performance targets measured over a three
or four year performance period. Details of the grants to Executive Directors and the performance targets are set out in the share tables later in this Report.
It is not envisaged that further awards of Performance Shares will be made to the Executive Directors in the forthcoming year. The Remuneration
Committee intends to review the Group’s remuneration requirements during the next year with a view to seeking shareholder approval, if required, 
for revised arrangements at the Annual General Meeting in 2006. 
Aggregate remuneration*
The total amounts of Directors’ remuneration and other beneﬁts (excluding pension contributions) were as follows:
Basic Taxable Annual 2005 2004 
salary/fees beneﬁts (ii) bonuses (iii) Total Total 
Director £’000 £’000 £’000 £’000 £’000
Executive
C W Dunstone 375 14 300 689 632
D P J Ross (i) 229 7 177 413 620
R W Taylor 270 14 216 500 448
G Roux de Bezieux 240 14 192 446 409
J H Dale 150 9 120 279 251
Non-Executive
Hans Roger Snook 150 – – 150 150
Sir Brian Pitman 35 – – 35 33
J Gildersleeve 35 – – 35 33
A H Martin 45 – – 45 42
M Dawes 31 – – 31 23
D Wilson – – – – 8
Aggregate emoluments 1,560 58 1,005 2,623 2,649
(i) Includes a salary supplement in lieu of pension and company car. During the period David Ross moved to a part-time role as Deputy Chairman.
(ii) The taxable beneﬁts provided consist of a company car or car allowance, car insurance and fuel and private medical cover.
(iii) Annual bonuses for the period ended 2 April 2005 were accrued at the balance sheet date and will be paid in June 2005. For this period the bonus was
based on improvements in Headline EPS. Headline EPS for the period was 9.39p which meant that a bonus of 80% of salary was earned (out of a maximum
potential of 100% of salary). Only bonus worth up to 60% of salary is payable in cash. The remainder of the bonus will be payable in deferred shares under
the Annual Deferred Bonus Plan. Details of the deferred share awards (and the related potential matching shares) will be announced separately for Directors
and will be disclosed in next year’s Remuneration Report. At the time the Report was prepared the time period for the Directors to decide if any of the 60%
bonus should be paid in shares instead of cash had not yet expired. Messrs Dunstone and Ross do not participate in such a plan. The Carphone Warehouse Group PLC Annual Report 200
5
Pensions*
The schedule below sets out payments to deﬁned contribution pension schemes on behalf of Executive Directors. Geoffroy Roux de Bezieux and Roger
Taylor are members of a UK stakeholder pension scheme. Under this scheme a ﬁxed proportion of salary is paid by the Company, together with a ﬁxed
proportion by the Executive Director. Both amounts are invested on behalf of the Executive Director. Pension beneﬁts are then funded by the total
investment. Jim Dale is in a similar scheme in the Isle of Man. Levels are reviewed annually against published market data. None of the Directors was 
a member of a deﬁned beneﬁt pension scheme. Pension entitlements are based on basic salary only.
£’000 £’000
Director 2005 2004
R W Taylor 14 11
G Roux de Bezieux 12 15
J H Dale 7 6
Total 33 32
Share options*
Details of Directors’ interests in options to buy shares in the Company are as follows:
27 March Exercised during 2 April Exercise price 
Director 2004 the period 2005 per share £ Exercisable from Expiry date
R W Taylor 250,000 250,000 0.80 14/07/00 29/01/10
500,000 500,000 1.00 14/07/00 29/01/10
200,000 200,000 1.50 19/05/02 19/05/10
200,000 200,000 2.00 19/05/02 19/05/10
240,000 240,000 1.25 21/05/04 21/05/11
500,000 (i) 500,000 0.83 11/06/05 11/06/12
444,444 (ii) 444,444 0.90 06/06/06 06/06/13
2,334,444 – 2,334,444
G Roux de Bezieux 3,500,000 3,500,000 1.50 19/05/02 19/05/10
120,000 120,000 1.25 21/05/04 21/05/11
475,000 (i) 475,000 0.83 11/06/05 11/06/12
422,222 (ii) 422,222 0.90 06/06/06 06/06/13
4,517,222 – 4,517,222
J H Dale 200,000 (200,000) (vi) – 0.50 14/07/00 03/10/09
200,000 200,000 1.50 19/02/02 19/05/10
200,000 200,000 2.00 19/02/02 19/05/10
96,000 (96,000) (vi) – 1.25 21/05/04 21/05/11
300,000 (i) 300,000 0.83 11/06/05 11/06/12
222,222 (ii) 222,222 0.90 06/06/06 06/06/13
1,218,222 (296,000) 922,222
Hans Roger Snook 1,000,000 1,000,000 0.80 23/03/05 25/03/12
1,000,000 – 1,000,000
Notes
(i) Options granted in June 2002 (exercisable from June 2005) are subject to performance conditions. 100% are exercisable if the Group achieves upper
quartile TSR performance over the three-year performance period, 50% for median performance, and 25% for performance between median and lower
quartile. None will be exercisable for lower quartile performance. Upper quartile performance has been achieved.
(ii) For options granted in June 2003 (exercisable from June 2006), the performance criteria are the same as for June 2002 grants except that no options
are exercisable for below median performance. The interests in options listed above assume upper quartile performance.
(iii) The TSR calculation is independently calculated for the Remuneration Committee by Deloitte. 
(iv) Executive Directors may only exercise share options (and Performance Shares – see below) provided they remain in employment and hold a minimum
of 100% of salary in shares up until the date of exercise.
(v) The market price per share was 165.8p at 2 April 2005. The market price during the year varied between 121.0p and 180.0p. 
(vi) Exercised on 20 January 2005 at a share price of 173.0p.
Remuneration Report continued
28 Remuneration Report continued www.cpwplc.com 29
Performance Shares*
Details of Executive Directors’ conditional right to receive nil priced options in the Company are shown in the following table. 
Granted during the period 
Type of 27 March Number of Date of Share price on 2 April 
Name award 2004 shares award date of award £ 2005
R W Taylor Basic – 450,000 28/07/04 1.36 450,000
Stretch – 450,000 28/07/04 1.36 450,000
Super Stretch – 450,000 28/07/04 1.36 450,000
G Roux de Bezieux Basic – 450,000 28/07/04 1.36 450,000
Stretch – 450,000 28/07/04 1.36 450,000
Super Stretch – 450,000 28/07/04 1.36 450,000
J H Dale Basic – 250,000 28/07/04 1.36 250,000
Stretch – 250,000 28/07/04 1.36 250,000
Super Stretch – 250,000 28/07/04 1.36 250,000
Notes
(i) Up to 50% of the shares will vest in July 2007, subject to the Group’s Headline EPS growth and TSR performance compared to the FTSE Mid 250
Index over a three-year performance period. The remaining 50% of shares will vest in July 2008, subject to the Group’s performance against the same
performance criteria over a four-year performance period. 
(ii) All types of award are 50% based on TSR performance and 50% based on Headline EPS performance. Performance required for awards to fully vest 
is summarised below:
TSR Headline EPS
Basic awards Outperform FTSE Mid 250 index 25% if 2005 EPS is at least 20% above 2004 and does not fall in 2006 and 2007
consistently by at least 5% over 25% if 2006 EPS is at least 43% above 2004 and does not fall in 2007
the performance period 50% if 2007 EPS is at least 73% above 2004 and does not fall in 2008
Stretch awards Outperform FTSE Mid 250 index 25% if 2005 EPS is at least 29% above 2004 and does not fall in 2006 and 2007
consistently by at least 20% over 25% if 2006 EPS is at least 53% above 2004 and does not fall in 2007
the performance period 50% if 2007 EPS is at least 82% above 2004 and does not fall in 2008
Super Stretch awards Outperform FTSE Mid 250 index 25% if 2005 EPS is at least 38% above 2004 and does not fall in 2006 and 2007
consistently by at least 35% over 25% if 2006 EPS is at least 62% above 2004 and does not fall in 2007
the performance period 50% if 2007 EPS is at least 90% above 2004 and does not fall in 2008
(iii) The TSR calculation is independently calculated for the Remuneration Committee by NBSC. The Committee will ensure that a consistent basis 
is used under both UK GAAP and International Accounting Standards in the calculation of Headline EPS. 
Executive Directors’ service contracts
All Executive Directors have service contracts which are terminable by the Company or the Executive Director with twelve months’ notice or less.
The dates of each contract are set out below and none speciﬁcally provides for compensation for early termination. 
External appointments
The Board supports Executive Directors holding Non-Executive Directorships of other companies and believes such appointments are part of the continuing
development of the Executive Directors from which the Company will ultimately beneﬁt. The Board has reviewed all such appointments and the following
sets out those appointments that the Board believes require disclosure pursuant to the Code. The Board has also agreed that the Directors may retain their
fees from such appointments.
Currently, Charles Dunstone is a Non-Executive Director of HBOS PLC, The Daily Mail and General Trust PLC and Independent Media Distribution PLC, 
for which the annual fees are £56,000, £34,000 and £20,000 respectively. David Ross is Non-Executive Chairman of National Express Group PLC and 
a Non-Executive Director of Trinity Mirror PLC, Big Yellow Group PLC and Cosalt PLC, for which the annual fees are £150,000, £40,000, £22,500 and
£25,000 respectively. Roger Taylor is a Non-Executive Director of Berkeley Scott Group PLC for which the annual fee is £15,000. Fees for Non-Executive Directors
The fees for each of the Non-Executive Directors are determined by the Board after considering external market research. The Non-Executive Directors do
not take part in discussions on their remuneration.
Each of the Non-Executive Directors have letters of appointment substantially in the form suggested by the Code and each has a three-month notice
period with no compensation for loss of ofﬁce. The Company has no age limit for Directors.
The dates of each contract are set out below. 
Directors’ interests in shares and dates of service contracts
Ordinary shares of 0.1p
Director 2 April 2005 27 March 2004 Date of contract
C W Dunstone 304,578,535 306,528,535 26 June 2000
D P J Ross 199,840,759 214,840,759 4 July 2002
R W Taylor 2,276,806 2,276,806 2 March 2000
G Roux de Bezieux 9,938,670 12,038,670 26 June 2000
J H Dale 150,500 150,500 30 March 2001
Hans Roger Snook * 50,000 50,000 1 May 2002
Sir Brian Pitman 14,687 5,000 26 May 2005
J Gildersleeve ** 246,000 45,000 14 April 2005
A H Martin 12,461 12,461 26 May 2005
M Dawes *** 6,460,714 6,460,714 2 June 2003
* will stand down as Non-Executive Chairman on 28 July 2005
** to be appointed Non-Executive Chairman on 28 July 2005
*** will stand down on 28 July 2005
On 1 April 2004 C W Dunstone transferred 450,000 shares by way of a gift into The Charles Dunstone Charitable Trust, and D P J Ross sold 
15,000,000 shares.
On 7 July 2004 J Gildersleeve purchased 201,000 shares. 
On 3 August 2004 G Roux de Bezieux sold 2,000,000 shares and transferred 1,100,000 by way of a gift, of which 1,000,000 was to related parties. 
On 3 November 2004 Sir Brian Pitman purchased 9,687 shares. 
On 7 December 2004 C W Dunstone transferred 1,500,000 shares by way of a gift into The Charles Dunstone Charitable Trust.
On 20 January 2005 J H Dale exercised options and sold 296,000 shares.
G Roux de Bezieux has an interest in the shares of a subsidiary of the Group as disclosed in note 32 to the ﬁnancial statements.
As potential beneﬁciaries under the Company Employee Share Ownership Trust (‘EBT’), the Executive Directors are deemed to be interested in all of the
shares held by the EBT, which at 2 April 2005 amounted to 7,455,929 shares. 
30
Remuneration Report continued
The Carphone Warehouse Group PLC Annual Report 200
5 Remuneration Report continued www.cpwplc.com 31
Performance graphs
Graph 1 shows the Group’s performance measured by TSR, compared with the performance of the FTSE Mid 250 Index also measured by TSR since
ﬂotation in July 2000 to 2 April 2005. A three month rolling average has been applied. The FTSE Mid 250 was selected as it is a broad market index of
which the Group is a member. In addition, the Group uses that index as a comparator for determining whether or not Performance Shares vest.
Graph 2 shows the same information as Graph 1 but measured over the last three years.
Graph 3 shows the Group’s performance measured by TSR compared with a sector comparator group comprising a number of UK general retailers 
and European telecoms companies for the period June 2002 to 2 April 2005. A three month rolling average has been applied.
Graph 4 shows the same information as Graph 3 but measured from June 2003.
Source: Datastream
Graph 1 Graph 2
Graph 3 Graph 4
This Report was approved by the Board on 6 June 2005.
J Gildersleeve
6 June 2005
0
20
40
60
80
100
120
140
160
180
200
Mar 05 Mar 04 Mar 03 Mar 02
FTSE Mid 250 Index
Carphone Warehouse
TSR (rebased to 30 March 2002)
0
20
40
60
80
100
120
140
Jan 05 Jan 04 Jan 03 Jan 02 Jan 01
FTSE Mid 250 Index
Carphone Warehouse
TSR (rebased to 14 July 2000)
Dec 04 Jun 04 Dec 03 Jun 03
0
50
100
150
200
250
300
TSR (rebased to 6 June 2003)
Carphone Warehouse
UQ
Median
LQ
Dec 04 Jun 04 Dec 03 Jun 03 Dec 02 Jun 02
0
50
100
150
200
250
300
TSR (rebased to 11 June 2002)
Carphone Warehouse
UQ
Median
LQ The Carphone Warehouse Group PLC Annual Report 200
5 32
Directors’ Report
The Directors have pleasure in presenting the Annual Report and ﬁnancial
statements of The Carphone Warehouse Group PLC for the 53 weeks
ended 2 April 2005.
Principal activities
The principal activity of the Group continues to be the provision of mobile
communication products and services and ﬁxed line communication
services. For the purposes of segmental reporting, operations are classiﬁed
into three divisions, being Distribution, Telecoms Services and Wholesale.
The subsidiary undertakings principally affecting the results or net assets 
of the Group in the period are listed in note 15 to the ﬁnancial statements.
Results
The proﬁt before tax for the ﬁnancial period increased from £44.5m in the
prior period to £68.9m. An interim dividend of 0.55p per share (2004 –
0.40p) was paid in the period. The Directors recommend the payment of 
a ﬁnal dividend of 1.25p per share (2004 – 0.90p). Subject to shareholders’
approval at the Annual General Meeting, the ﬁnal dividend will be paid on 
5 August 2005 to shareholders on the register at the close of business 
on 8 July 2005. No signiﬁcant events have occurred since the balance
sheet date.
Directors
The names and brief biographical details of the Directors are shown on
page 22. Particulars of Directors’ remuneration, interests in the shares of 
the Company and its subsidiaries, and interests in share options are given
in the Remuneration Report on pages 26 to 31.
Employment of disabled people
It is the Group’s policy to encourage application for employment from
disabled people and to assist with their training and career development,
having regard to particular aptitudes and abilities. Every endeavour is made
to ﬁnd suitable alternative employment and to re-train any employee who
becomes disabled while serving the Group.
Employee involvement
The Group places signiﬁcant emphasis on its employees’ involvement 
in the business at all levels. Managers are remunerated according to results
wherever possible and all employees are kept informed of issues affecting
the Group through formal and informal meetings and through the Group’s
internal publications. Members of the management team regularly visit 
all Group locations and discuss matters of current interest and concern
with employees.
Supplier payment policy
The Group’s policy is to agree terms of transactions, including payment
terms, with suppliers and, provided that suppliers perform in accordance
with the agreed terms, it is the Group’s normal practice that payment is
made accordingly. The number of days outstanding between receipt of
invoices and date of payment, calculated by reference to the amount owed
to trade creditors at the period end as a proportion of the amounts invoiced
by suppliers during the period, was 47 days (2004 – 42 days). The Company
did not have any trade creditors at 2 April 2005 or 27 March 2004.
Donations
The Group made charitable donations of £477,000 during the period 
(2004 – £85,000). No political donations were made during either period.
Contracts with controlling shareholders
There are no material contracts with controlling shareholders.
Share capital
Details of the movements in authorised and issued share capital during 
the period are provided in note 24 to the ﬁnancial statements.
Tangible fixed assets
Movements in tangible ﬁxed assets are set out in note 14 to the ﬁnancial
statements. In the opinion of the Directors the current open market value of
the Group’s interests in freehold land and buildings exceeds the book value
by £9.7m at 2 April 2005. The Group’s liability to taxation if such assets
were sold at that value would be insigniﬁcant.
Significant shareholdings
The following interests appeared on the Register of Members or had been
notiﬁed to the Company in accordance with sections 198 to 208 of the
Companies Act 1985 on 6 June 2005:
Number Percentage
of shares of share capital
Aviva PLC 39,378,699 4.49%
Wellington Management Company LLP 42,183,998 4.81%
The total interests of the Directors are detailed in the Directors’
Remuneration Report on pages 26 to 31.
Going concern
On the basis of current ﬁnancial projections and facilities available, the
Directors are satisﬁed that the Group has adequate resources to continue
in operation for the foreseeable future and consequently the ﬁnancial
statements continue to be prepared on the going concern basis.
Auditors
Deloitte & Touche LLP have expressed their willingness to continue in ofﬁce
as auditors and a resolution to re-appoint them will be proposed at the
forthcoming Annual General Meeting.
By order of the Board
The Carphone Warehouse Group PLC 
1 Portal Way 
London W3 6RS
T S Morris
Company Secretary 
6 June 2005 www.cpwplc.com 33
Statement of Directors’ Responsibilities
United Kingdom company law requires the Directors to prepare ﬁnancial
statements for each ﬁnancial period which give a true and fair view of the
state of affairs of the Company and Group and of their proﬁt or loss for that
period. In preparing those ﬁnancial statements, the Directors are required to: 
• Select suitable accounting policies and then apply them consistently; 
• Make judgements and estimates that are reasonable and prudent; 
• State whether applicable accounting standards have been followed; and 
• Prepare the ﬁnancial statements on the going concern basis unless it 
is inappropriate to presume that the Group will continue in business. 
The Directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the ﬁnancial position of the
Company and Group and enable them to ensure that the ﬁnancial statements
comply with the Companies Act 1985. They are also responsible for taking
such steps as are reasonably open to them to safeguard the assets of the
Company and Group and to prevent and detect fraud and other irregularities.
Independent Auditors’ Report
Independent Auditors’ Report to the members of The Carphone 
Warehouse Group PLC 
We have audited the ﬁnancial statements of The Carphone Warehouse
Group PLC for the period ended 2 April 2005 which comprise the proﬁt
and loss account, the balance sheets, the cash ﬂow statement, the
reconciliation of operating proﬁt to net cash inﬂow from operating activities,
the statement of total recognised gains and losses, the statement of
accounting policies, and the related notes 1 to 32. These ﬁnancial
statements have been prepared under the accounting policies set out
therein. We have also audited the information in the part of the Directors’
Remuneration Report that is described as having being audited.
This Report is made solely to the Company’s members, as a body, in
accordance with section 235 of the Companies Act 1985. Our audit work
has been undertaken so that we might state to the Company’s members
those matters we are required to state to them in an auditors’ report and
for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company and the
Company’s members as a body, for our audit work, for this Report, or for
the opinions we have formed.
Respective responsibilities of Directors and Auditors
As described in the Statement of Directors’ Responsibilities, the Company’s
Directors are responsible for the preparation of the ﬁnancial statements in
accordance with applicable United Kingdom law and accounting standards.
They are also responsible for the preparation of the other information
contained in the Annual Report including the Directors’ Remuneration
Report. Our responsibility is to audit the ﬁnancial statements and the part 
of the Directors’ Remuneration Report described as having been audited in
accordance with relevant United Kingdom legal and regulatory requirements
and auditing standards.
We report to you our opinion as to whether the ﬁnancial statements give a
true and fair view and whether the ﬁnancial statements and the part of the
Directors’ Remuneration Report described as having been audited have
been properly prepared in accordance with the Companies Act 1985. We
also report if, in our opinion, the Directors’ Report is not consistent with the
ﬁnancial statements, if the Company has not kept proper accounting
records, if we have not received all the information and explanations we
require for our audit, or if information speciﬁed by law regarding Directors’
remuneration and transactions with the Company and other members of
the Group is not disclosed.
We review whether the corporate governance statement reﬂects the
Company’s compliance with the nine provisions of the July 2003 FRC
Combined Code speciﬁed for our review by the Listing Rules of the Financial
Services Authority, and we report if it does not. We are not required to
consider whether the Board’s statements on internal control cover all risks
and controls, or form an opinion on the effectiveness of the Group’s
corporate governance procedures or its risk and control procedures.
We read the Directors’ Report and the other information contained in the
Annual Report for the above period as described in the contents section
including the unaudited part of the Directors’ Remuneration Report for the
above period and consider the implications for our Report if we become
aware of any apparent misstatements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing
standards issued by the Auditing Practices Board. An audit includes
examination, on a test basis, of evidence relevant to the amounts and
disclosures in the ﬁnancial statements and the part of the Directors’
Remuneration Report described as having been audited. It also includes 
an assessment of the signiﬁcant estimates and judgements made by 
the Directors in the preparation of the ﬁnancial statements and of whether
the accounting policies are appropriate to the Company’s circumstances,
consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements
and the part of the Directors’ Remuneration Report described as having been
audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion, we also evaluated the overall
adequacy of the presentation of information in the ﬁnancial statements and the
part of the Directors’ Remuneration Report described as having been audited.
Opinion
In our opinion:
• the ﬁnancial statements give a true and fair view of the state of affairs 
of the Company and the Group as at 2 April 2005 and of the proﬁt of 
the Group for the period then ended; and
• the ﬁnancial statements and the part of the Directors’ Remuneration Report
described as having been audited have been properly prepared in
accordance with the Companies Act 1985.
Deloitte & Touche LLP
Chartered Accountants and Registered Auditors
London
6 June 2005 The Carphone Warehouse Group PLC Annual Report 200
5
Consolidated Profit and Loss Account
For the 53 weeks ended 2 April 2005
Before amortisation Amortisation After amortisation 
of goodwill of goodwill of goodwill
53 weeks ended 53 weeks ended 53 weeks ended 52 weeks ended
2 April 2005 2 April 2005 2 April 2005 27 March 2004
Notes £’000 £’000 £’000 £’000
Turnover
Existing operations 3 2,323,180 2,323,180 1,849,011
Acquisitions 2,3 31,913 31,913 –
2,3 2,355,093 2,355,093 1,849,011
Cost of sales 3 (1,651,141) (1,651,141) (1,303,246)
Gross proﬁt 3 703,952 703,952 545,765
Operating expenses excluding amortisation and depreciation 3 (549,108) (549,108) (427,667)
EBITDA 10 154,844 154,844 118,098
Depreciation 3,4 (47,896) (47,896) (41,684)
Amortisation of goodwill 3,4 (33,229) (33,229) (25,417)
Operating proﬁt 2,3 106,948 (33,229) 73,719 50,997
Existing operations 3 104,339 (26,675) 77,664 50,997
Acquisitions 3 2,609 (6,554) (3,945) –
Loss on disposal of ﬁxed asset investments 6–– (1,652)
Proﬁt before interest and taxation 106,948 (33,229) 73,719 49,345
Net interest payable 7 (4,845) (4,845) (4,858)
Proﬁt on ordinary activities before taxation 102,103 (33,229) 68,874 44,487
Tax on proﬁt on ordinary activities 8 (19,910) (19,910) (16,783)
Proﬁt for the ﬁnancial period 82,193 (33,229) 48,964 27,704
Equity dividends 9 (15,782) (15,782) (11,369)
Retained proﬁt for the ﬁnancial period 66,411 (33,229) 33,182 16,335
Earnings per share
Basic 11 9.39p 5.59p 3.17p
Diluted 11 8.99p 5.35p 3.13p
Headline earnings per share 10
Basic 11 9.39p 6.81p
Diluted 11 8.99p 6.72p
The accompanying notes are an integral part of this consolidated proﬁt and loss account. All amounts relate to continuing operations.
Consolidated Statement of Total Recognised Gains and Losses
For the 53 weeks ended 2 April 2005
53 weeks ended 52 weeks ended
2 April 2005 27 March 2004
Notes £’000 £’000
Proﬁt for the ﬁnancial period 48,964 27,704
Currency translation 804 (1,014)
Total recognised gains and losses relating to the period 49,768 26,690
Prior period adjustments 12 – (3,949)
Total gains and losses recognised since last ﬁnancial statements 49,768 22,741
The accompanying notes are an integral part of this consolidated statement of total recognised gains and losses.
34 Consolidated Balance Sheet
As at 2 April 2005
2 April 2005 27 March 2004
Notes £’000 £’000
Fixed assets
Intangible assets – goodwill 13 426,841 403,191
Tangible assets 14 241,139 195,594
Investments 15 6,069 5,897
674,049 604,682
Current assets
Stock 16 95,185 78,298
Debtors 17 377,390 271,444
Short-term investments 18 60,468 10,805
Cash at bank and in hand 41,576 72,813
574,619 433,360
Creditors: Amounts falling due within one year 19 (574,439) (408,231)
Net current assets 180 25,129
Total assets less current liabilities 674,229 629,811
Creditors: Amounts falling due after more than one year 20 (103,247) (117,737)
Provisions for liabilities and charges 22 (68,040) (40,231)
Net assets 502,942 471,843
Capital and reserves
Called-up share capital 24 877 874
Share premium 25 402,136 397,262
Capital redemption reserve 25 30 30
Proﬁt and loss account 25 99,899 73,677
Total capital employed 26 502,942 471,843
The accompanying notes are an integral part of this consolidated balance sheet.
The ﬁnancial statements on pages 34 to 55 were approved by the Board on 6 June 2005 and signed on its behalf by:
C W Dunstone R W Taylor
Chief Executive Ofﬁcer Chief Financial Ofﬁcer
www.cpwplc.com 35 The Carphone Warehouse Group PLC Annual Report 200
5
Company Balance Sheet
As at 2 April 2005
2 April 2005 27 March 2004
Notes £’000 £’000
Fixed assets
Investments 15 415,402 411,952
415,402 411,952
Current assets
Debtors 17 642,447 528,272
Cash at bank and in hand – 36,443
642,447 564,715
Creditors: Amounts falling due within one year 19 (447,554) (344,544)
Net current assets 194,893 220,171
Total assets less current liabilities 610,295 632,123
Creditors: Amounts falling due after more than one year 20 (100,958) (113,458)
Net assets 509,337 518,665
Capital and reserves
Called-up share capital 24 877 874
Share premium 25 402,136 397,262
Proﬁt and loss account 25 106,324 120,529
Total capital employed 26 509,337 518,665
The accompanying notes are an integral part of this balance sheet.
The ﬁnancial statements on pages 34 to 55 were approved by the Board on 6 June 2005 and signed on its behalf by:
C W Dunstone R W Taylor
Chief Executive Ofﬁcer Chief Financial Ofﬁcer
36 Consolidated Cash Flow Statement
For the 53 weeks ended 2 April 2005
53 weeks ended 52 weeks ended
2 April 2005 27 March 2004
Notes £’000 £’000
Net cash inﬂow from operating activities 143,061 102,657
Net cash outﬂow from returns on investment and servicing of ﬁnance 27a (4,845) (4,858)
Net cash outﬂow from taxation 27b (11,641) (2,350)
Net cash outﬂow from capital expenditure and ﬁnancial investment 27c (137,675) (84,245)
Net cash outﬂow from acquisitions and disposals 27d (46,315) (59,050)
Equity dividends paid (12,683) (12,229)
Net cash outﬂow before ﬁnancing (70,098) (60,075)
Net cash inﬂow from ﬁnancing 27e 17,552 96,596
(Decrease) increase in cash in the period (52,546) 36,521
The accompanying notes are an integral part of this consolidated cash ﬂow statement.
Reconciliation of Operating Profit to 
Net Cash Inflow from Operating Activities
53 weeks ended 52 weeks ended
2 April 2005 27 March 2004
£’000 £’000
Operating proﬁt including exceptional items 73,719 50,997
Depreciation of tangible ﬁxed assets 47,896 41,684
Amortisation of goodwill 33,229 25,417
EBITDA including exceptional items 154,844 118,098
Loss on disposal of ﬁxed assets 482 163
Increase (decrease) in provisions 20,810 (1,469)
Increase in stock (14,745) (20,684)
Increase in debtors (86,870) (53,621)
Increase in creditors 68,540 60,170
Net cash inﬂow from operating activities 143,061 102,657
www.cpwplc.com 37 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements
1 Accounting policies
The ﬁnancial statements have been prepared in accordance with applicable
United Kingdom accounting standards under the historical cost convention. 
The following principal accounting policies have been applied consistently
throughout the period and the preceding period.
a) Turnover
Turnover is stated net of VAT and other sales related taxes. The following
accounting policies are applied to each business segment:
Distribution:
Distribution turnover comprises revenue generated from the sale of mobile
communication products and services, commissions receivable on sales less
provision for promotional offers and network operator performance penalties,
ongoing revenue (share of customer airtime spend, and customer revenue and
retention bonuses) and insurance premiums.
• Commission receivable on sales is recognised when the sales to which 
the commission relates are made.
• Volume bonuses are recognised when the conditions on which they 
are earned have been met.
• Ongoing revenue is recognised as it is earned over the life of the relevant
customers.
• Insurance premiums are typically paid quarterly in advance. Initial administration
fees, which are speciﬁed in the contract, are recognised at the point of sale.
Insurance premium income is recognised over the life of the relevant policies.
• All other revenue is recognised when sales are made.
Telecoms Services:
Telecoms Services turnover comprises revenue generated from facilities management,
revenue from mobile and ﬁxed network services and ongoing revenue. All such
revenue is recognised as it is earned over the life of the relevant customers.
Wholesale:
Wholesale turnover comprises revenue generated from the sale of mobile
hardware and is recognised when sales are made.
b) Basis of consolidation
The consolidated ﬁnancial statements incorporate the results of The Carphone
Warehouse Group PLC and its subsidiary undertakings drawn up to 2 April
2005. The results of subsidiaries acquired or sold during the period are included
from or to the date on which control passed. Acquisitions are accounted for
under the acquisition method.
c) Intangible assets – goodwill
Goodwill arising on the acquisition of subsidiary undertakings and businesses,
representing any excess of the fair value of the consideration given over the fair
value of the identiﬁable assets and liabilities acquired, is capitalised and written
off on a straight-line basis over its useful economic life of up to 20 years.
Provision is made for any impairment. Deferred consideration is recognised 
to the extent that it is considered probable that it will be paid.
d) Tangible fixed assets
Tangible ﬁxed assets are stated at cost, net of depreciation and any provision for
impairment. Depreciation is provided on all tangible ﬁxed assets at rates calculated
to write off the cost, less estimated residual value, of each asset on a straight-line
basis over its expected useful life from the date it is brought into use, as follows:
Freehold buildings 2-4% per annum
Short leasehold costs 10 years or the lease term if less
Computer hardware and software, 
network and ofﬁce equipment 12.5-50% per annum
Fixtures and ﬁttings 20-25% per annum
Motor vehicles 25% per annum
e) Stock
Stock is stated at the lower of cost and net realisable value. Cost includes 
all direct costs incurred in bringing stock to its present location and condition
and represents ﬁnished goods and goods for resale.
Net realisable value is based on estimated selling price, less further costs
expected to be incurred to disposal. Provision is made for obsolete, slow-
moving or defective items where appropriate.
38
f) Investments
Fixed asset investments are shown at cost less provision for impairment, other
than investments held via independently managed external funds which are
evaluated on a portfolio basis at the end of the period. Current asset
investments are stated at the lower of cost and net realisable value.
g) Leases
Rental payments under operating leases are charged to the proﬁt and loss
account on a straight-line basis over the period of the lease. Lease incentives
and rent-free periods are amortised through the proﬁt and loss account over the
shorter of the period of the lease or the period until rentals are expected to 
be revised to prevailing market rates.
h) Taxation
Current tax, including UK corporation tax and overseas tax, is provided at
amounts expected to be paid or recovered using the tax rates and laws that
have been enacted or substantively enacted by the balance sheet date. Deferred
tax is recognised in respect of all timing differences that have originated but not
reversed at the balance sheet date where transactions or events that result in an
obligation to pay more, or a right to pay less, tax in the future have occurred at
the balance sheet date, with the following exceptions:
• Provision is made for the tax that would arise on remittance of the retained
earnings of overseas subsidiaries only to the extent that, at the balance sheet
date, distributions are expected.
• Deferred tax assets are recognised only to the extent that the Directors consider
that it is more likely than not that there will be suitable taxable proﬁts from which
the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantively enacted at the balance sheet date.
i) Subscriber acquisition costs
Subscriber acquisition costs, being the direct third-party costs of recruiting and
retaining new customers, net of incentives from network operators and provision
for in-contract churn, are capitalised and amortised over the minimum subscription
period. Subscriber acquisition costs for customers with no minimum subscription
commitment are taken to the proﬁt and loss account as incurred.
j) Software and website development costs
The Group capitalises both internal and external infrastructure and design costs
incurred in the development of software for internal use and in the development
of the functionality of its website. These costs are depreciated in accordance
with the policy deﬁned in note 1d.
k) Pensions
Contributions to deﬁned contribution schemes are charged to the proﬁt and loss
account as they become payable in accordance with the rules of the scheme.
l) Foreign exchange
Material transactions in foreign currencies are hedged using forward purchases
or sales of the relevant currencies and are recognised in the ﬁnancial statements
at the exchange rates thus obtained. Unhedged transactions are recorded at 
the exchange rate on the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are hedged, mainly using forward foreign
exchange contracts to create matching liabilities and assets. At the balance
sheet date, both the monetary assets and liabilities and the foreign currency
hedges are retranslated at rates prevailing at the balance sheet date and any
differences are taken to the proﬁt and loss account. The results of overseas
operations are translated at the average foreign exchange rates for the period,
and their balance sheets are translated at the rates prevailing at the balance
sheet date. Exchange differences arising on translation of opening net assets
and results of overseas operations are dealt with through reserves. All other
exchange differences are included in the proﬁt and loss account.
m) Employee incentive schemes
The cost of awards made under the Company’s Performance Share Plan is based
on the intrinsic value of the awards at the date of grant and is charged to the proﬁt
and loss account on a straight-line basis over the relevant performance period.
The Company operates a Save As You Earn scheme that allows for the grant 
of share options at a discount to the market price at the date of the grant. The
Company has made use of the exemption under UITF 17 ‘Employee Share
Schemes’ not to recognise any compensation charge in respect of these options. 2 Segmental analysis
Divisional results are analysed as follows:
2005 2004
Turnover Proﬁt before tax Net assets Turnover Proﬁt before tax Net assets
£’000 £’000 £’000 £’000 £’000 £’000
Distribution 1,436,970 85,068 449,138 1,128,939 66,939 440,521
Telecoms Services 804,039 22,536 53,804 554,491 15,021 31,322
Wholesale 131,952 (656) – 178,067 (813) –
Eliminations (17,868) – – (12,486) – –
2,355,093 106,948 502,942 1,849,011 81,147 471,843
Amortisation of goodwill (33,229) (25,417)
Operating exceptional items – (4,733)
73,719 50,997
Non-operating exceptional items – (1,652)
Net interest payable (4,845) (4,858)
Proﬁt before tax 68,874 44,487
Results by geographical location are analysed by origin as follows:
2005 2004
Turnover Proﬁt before tax Net assets Turnover Proﬁt before tax Net assets
£’000 £’000 £’000 £’000 £’000 £’000
United Kingdom 1,358,580 67,489 204,701 1,102,185 49,836 177,144
Rest of Europe 996,513 39,459 298,241 746,826 31,311 294,699
2,355,093 106,948 502,942 1,849,011 81,147 471,843
Amortisation of goodwill (33,229) (25,417)
Operating exceptional items – (4,733)
73,719 50,997
Non-operating exceptional items – (1,652)
Net interest payable (4,845) (4,858)
Proﬁt before tax 68,874 44,487
Turnover originating in the United Kingdom includes £0.7m (2004 – £25.3m) of sales to the Rest of Europe; otherwise there is not a material difference between
turnover by destination and turnover by origin.
The information above includes the following amounts in respect of acquisitions during the period:
Proﬁt (loss) 
Turnover before tax Net assets
£’000 £’000 £’000
Distribution 2,400 8 15,008
Telecoms Services 29,513 (4,802) 35,330
31,913 (4,794) 50,338
United Kingdom 31,913 (4,794) 50,338
Details of acquisitions are given in note 15.
Notes to the Financial Statements continued www.cpwplc.com 39 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
3
Analysis of profit and loss account
2005 2004
Existing operations Acquisitions Total Total
£’000 £’000 £’000 £’000
Turnover 2,323,180 31,913 2,355,093 1,849,011
Cost of sales (1,632,915) (18,226) (1,651,141) (1,303,246)
Gross proﬁt 690,265 13,687 703,952 545,765
Depreciation (47,093) (803) (47,896) (41,684)
Amortisation of goodwill (26,675) (6,554) (33,229) (25,417)
Exceptional operating expenses (see note 6a) ––– (4,733)
Other operating expenses (538,833) (10,275) (549,108) (422,934)
Total operating expenses (612,601) (17,632) (630,233) (494,768)
Operating proﬁt 77,664 (3,945) 73,719 50,997
Total operating expenses for statutory purposes are analysed as follows:
2005 2004
Existing operations Acquisitions Total Total
£’000 £’000 £’000 £’000
Distribution costs (485,917) (16,432) (502,349) (387,543)
Administrative expenses (126,684) (1,200) (127,884) (102,492)
Exceptional operating expenses (see note 6a) ––– (4,733)
Total operating expenses (612,601) (17,632) (630,233) (494,768)
4
Profit on ordinary activities before taxation
Proﬁt on ordinary activities before taxation is stated after charging:
2005 2004
£’000 £’000
Amortisation of goodwill 33,229 25,417
Depreciation of tangible ﬁxed assets 47,896 41,684
Rentals under operating leases – property 57,456 51,814
Operating loss on disposal of ﬁxed assets 482 163
Auditors’ remuneration – audit services 934 568
Auditors’ remuneration – non-audit services 214 325
Further auditors’ remuneration in respect of due diligence reviews of £15,000 (2004 – £225,000) has been capitalised within the cost of investments during 
the period. Auditors’ remuneration for audit services includes £8,000 (2004 – £8,000) for the Company.
5
Employees
Employee costs (including Executive Directors) consist of:
2005 2004
£’000 £’000
Wages and salaries 249,134 194,614
Social security costs 38,735 33,147
Other pension costs 1,906 1,749
289,775 229,510
The average monthly number of people employed by the Group (including Executive Directors) during the period was:
2005 2004
Number Number
Administration 1,953 1,631
Selling and distribution 10,305 8,552
12,258 10,183
Details of Directors’ remuneration are provided in the Remuneration Report on pages 26 to 31.
At 2 April 2005 loans of £1.0m (2004 – £0.9m) were outstanding from certain Group executives, none of whom was a Director of the Company.
40 6 Exceptional items
Exceptional items include the following operating and non-operating exceptional items:
2005 2004
Notes £’000 £’000
Costs of operational reorganisation (a) – (4,733)
Exceptional operating items – (4,733)
Loss on disposal of ﬁxed asset investments (b) – (1,652)
Total exceptional items – (6,385)
(a) Costs of operational reorganisation
Following the acquisition of The Phone House Telecom GmbH (formerly Hutchison Telecommunications GmbH) (‘HTG’) in June 2003, the Group closed its support
centre in Munich, closed a further 15 retail stores and commenced the integration of the retail business with HTG. A provision of £4.7m was booked to cover the 
cost of this reorganisation, which included the write down of tangible ﬁxed assets.
(b) Loss on disposal of ﬁxed asset investments
During the period ended 27 March 2004 the Group disposed of 50% of its interest in Wireless Frontiers, an independently managed wireless investment fund. 
In exchange, the acquirer assumed the Group’s commitment to make further contributions to Wireless Frontiers. The disposal resulted in a net loss of £1.7m.
Effect of exceptional items on taxation 
Exceptional items had no effect on the amounts charged to the proﬁt and loss account for taxation in either period.
7
Net interest payable
2005 2004
£’000 £’000
Interest receivable and similar income 5,903 2,120
Interest payable and similar charges:
Bank overdrafts and loans (10,588) (6,755)
Other loans (160) (223)
Interest payable and similar charges (10,748) (6,978)
Net interest payable (4,845) (4,858)
Notes to the Financial Statements continued www.cpwplc.com 41 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
8 Tax on profit on ordinary activities
The tax charge comprises:
2005 2004
£’000 £’000
Current tax:
UK corporation tax 17,611 11,144
Overseas tax 8,770 3,247
26,381 14,391
Adjustments in respect of prior periods:
UK corporation tax (6,801) 1,677
Overseas tax (1,499) (2,088)
Total current tax 18,081 13,980
Deferred tax:
Origination and reversal of timing differences 1,829 2,803
Total deferred tax 1,829 2,803
Total tax on proﬁt on ordinary activities 19,910 16,783
The differences between the total current tax charge shown above and the amount calculated by applying the standard rate of UK corporation tax to proﬁt 
on ordinary activities before tax are as follows:
2005 2004
£’000 £’000
Proﬁt on ordinary activities before tax 68,874 44,487
Proﬁt on ordinary activities before tax at 30% 20,662 13,346
Effect of:
Amortisation of goodwill 8,859 6,984
Exceptional items attracting no tax relief or liability – 1,916
Other items attracting no tax relief or liability 9,845 7,778
Use of tax losses brought forward and income taxed at lower rates (11,156) (12,830)
Adjustments in respect of prior periods (8,300) (411)
Other timing differences (1,829) (2,803)
Current tax charge for the period 18,081 13,980
The Group earns the majority of its proﬁts in the UK; therefore the tax rate used for tax on proﬁt on ordinary activities is the standard rate for UK corporation tax,
currently 30%.
Deferred tax assets of approximately £43m (2004 – £27m) for tax losses have not yet been recognised as there is insufﬁcient evidence that there will be suitable
taxable proﬁts against which these losses can be recovered.
Details of deferred tax assets and liabilities are provided in note 23.
9
Equity dividends
2005 2004
£’000 £’000
Interim dividend paid of 0.55p (2004 – 0.40p) per ordinary share 4,814 3,500
Final dividend proposed of 1.25p (2004 – 0.90p) per ordinary share 10,968 7,869
15,782 11,369
42 10 Reconciliation of headline information to statutory information
2005 2004
EBITDA Operating proﬁt Proﬁt before tax EBITDA Operating proﬁt Proﬁt before tax
£’000 £’000 £’000 £’000 £’000 £’000
Headline 154,844 106,948 102,103 122,831 81,147 76,289
Amortisation of goodwill – (33,229) (33,229) – (25,417) (25,417)
Exceptional items (see note 6) ––– (4,733) (4,733) (6,385)
Statutory 154,844 73,719 68,874 118,098 50,997 44,487
EBITDA represents earnings before interest, taxation, depreciation and amortisation of goodwill. Contribution represents EBITDA before allocation of support costs.
11 Earnings per share
The calculations of earnings per share are based on the following proﬁts and numbers of shares:
2005 2004
£’000 £’000
Proﬁt for the ﬁnancial period 48,964 27,704
Amortisation of goodwill 33,229 25,417
Operating exceptional items (net of tax) – 4,733
Non-operating exceptional items (net of tax) – 1,652
Headline earnings (before amortisation of goodwill and exceptional items) 82,193 59,506
2005 2004
Number of shares Number of shares
000’s 000’s
Weighted average number of shares:
For basic earnings per share 875,569 873,555
Dilutive effect of share options 39,078 11,318
For diluted earnings per share 914,647 884,873
Basic pence per share Diluted pence per share
2005 2004 2005 2004
Earnings per share 5.59 3.17 5.35 3.13
Headline earnings per share (see note 10) 9.39 6.81 8.99 6.72
Headline earnings per share is provided because the Directors consider that it gives a better indication of underlying performance than standard earnings per share.
12 Prior period adjustments
During the period ended 27 March 2004 the Group implemented Urgent Issues Task Force 38 ‘Accounting for ESOP Trusts’, and in accordance with the abstract
restated prior period ﬁgures. The effect of the adjustment was to transfer the Group’s investment in an Employee Share Ownership Trust from investments to reserves.
Notes to the Financial Statements continued www.cpwplc.com 43 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
1
3
Intangible fixed assets – goodwill
Total
Group £’000
Cost
At 27 March 2004 474,092
Acquisitions (see note 15) 53,748
Foreign exchange 3,795
At 2 April 2005 531,635
Amortisation
At 27 March 2004 (70,901)
Charge for the period (33,229)
Foreign exchange (664)
At 2 April 2005 (104,794)
Net book value
At 2 April 2005 426,841
At 27 March 2004 403,191
1
4
Tangible fixed assets
Computer hardware 
and software, 
Freehold land Short leasehold network and ofﬁce Fixtures and
and buildings costs equipment ﬁttings Motor vehicles Total
Group £’000 £’000 £’000 £’000 £’000 £’000
Cost
At 27 March 2004 50,570 71,427 116,205 86,675 2,299 327,176
Additions 4,299 17,919 50,211 16,203 571 89,203
Disposals (145) (2,509) (4,134) (3,804) (615) (11,207)
Acquisitions (see note 15) – 1,526 3,044 162 43 4,775
Foreign exchange – 889 669 1,115 12 2,685
At 2 April 2005 54,724 89,252 165,995 100,351 2,310 412,632
Depreciation
At 27 March 2004 (1,118) (22,876) (56,355) (50,149) (1,084) (131,582)
Charge for the period (918) (6,599) (25,473) (14,327) (579) (47,896)
Disposals 65 2,373 2,982 3,368 574 9,362
Foreign exchange (17) (251) (312) (785) (12) (1,377)
At 2 April 2005 (1,988) (27,353) (79,158) (61,893) (1,101) (171,493)
Net book value
At 2 April 2005 52,736 61,899 86,837 38,458 1,209 241,139
At 27 March 2004 49,452 48,551 59,850 36,526 1,215 195,594
44 1
5
Fixed asset investments
Total
Group £’000
At 27 March 2004 5,897
Additions 172
At 2 April 2005 6,069
Company £’000
At 27 March 2004 411,952
Additions 69,615
Disposals (69,378)
Foreign exchange 3,213
At 2 April 2005 415,402
Principal Group investments
The Company and the Group have investments in the following subsidiary undertakings, which principally affected the proﬁts or losses or net assets of the Group. 
To avoid a statement of excessive length, details of investments which are not signiﬁcant have been omitted. All holdings are in equity share capital and give the
Group an effective holding of 100% on consolidation.
Country of incorporation 
Name or registration Nature of business
The Carphone Warehouse Limited* England and Wales Retail of mobile communication equipment and telecoms services
One Stop Phone Shop Limited* England and Wales Retail of mobile communication equipment
The Phone House SA Belgium Retail of mobile communication equipment
The Phone House SA France Retail of mobile communication equipment
The Phone House Deutschland GmbH Germany Retail of mobile communication equipment
The Carphone Warehouse Limited Ireland Retail of mobile communication equipment
The Phone House Netherlands BV Netherlands Retail of mobile communication equipment
The Phone House Lda Portugal Retail of mobile communication equipment
The Phone House SL Spain Retail of mobile communication equipment
GEAB Teleshop AB Sweden Retail of mobile communication equipment
The Phone House SA Switzerland Retail of mobile communication equipment
Opal Telecom Limited* England and Wales Telecoms services
TalkTalk Telecom Limited* England and Wales Telecoms services
TalkTalk Direct Limited* England and Wales Telecoms services
VarTec Telecom Europe Limited* England and Wales Telecoms services
The Phone House Services Telecom-CMC SA France Telecoms services
The Phone House Telecom GmbH Germany Telecoms services
Xtra Telecom SA Spain Telecoms services
N Tel Com GmbH Switzerland Telecoms services
The Phone House Insurance Limited Isle of Man Insurance underwriting
New Technology Insurance Limited Ireland Insurance underwriting
Cooch 1020 Ltd Isle of Man Investment in commercial property
Ise-Net Solutions Limited England and Wales Information technology services
The Carphone Warehouse UK Limited England and Wales Property management company
Antika Retail Limited England and Wales Holding company
Beheer-en Beleggingsmaatschappij Antika BV* Netherlands Holding company
The Carphone Warehouse Resources Limited Isle of Man Holding company
The Carphone Warehouse UK Group Limited England and Wales Holding company
Cellcom Limited* England and Wales Holding company
Evergreen Services Holdings Limited England and Wales Holding company
MViva Limited England and Wales Holding company
The Phone House Holdings (UK) Limited* England and Wales Holding company
Storm Tide Limited* Isle of Man Holding company
The Phone House BV Netherlands Holding company
*held directly by the Company.
Notes to the Financial Statements continued www.cpwplc.com 45 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
1
5
Fixed asset investments continued
Acquisitions
a) VarTec Telecom Europe Limited
On 15 December 2004, the Group acquired 100% of the issued share capital of VarTec Telecom Europe Limited, a ﬁxed line telecommunications provider registered
in England and Wales, for a gross consideration of £5.8m.
The following table sets out the book values of the identiﬁable assets and liabilities acquired and their preliminary fair value to the Group:
Book Accounting policy Other fair value Fair value to 
value alignments adjustments Group
£’000 £’000 £’000 £’000
Fixed assets
Tangible 8,566 – (4,367) 4,199
Current assets
Debtors 5,051 1,645 – 6,696
Cash 2,241 – – 2,241
Total assets 15,858 1,645 (4,367) 13,136
Creditors
Trade creditors (2,048) – – (2,048)
Other taxes (706) – – (706)
Other creditors (94) – – (94)
Accruals and deferred income (3,425) – – (3,425)
Provisions – – (3,607) (3,607)
Total liabilities (6,273) – (3,607) (9,880)
Net assets 9,585 1,645 (7,974) 3,256
Goodwill 2,521
Satisﬁed by cash 5,777
Net cash outﬂows in respect of the acquisition comprised:
£’000
Gross cash consideration 5,777
Cash acquired (2,241)
3,536
Accounting policy alignments relate to the recognition of deferred tax assets and provision for doubtful debts. Other fair value adjustments relate to the write 
down of network equipment and other tangible ﬁxed assets, a pre-acquisition commitment to the closure of part of a call centre in Germany, and to various
unrecorded liabilities.
46 1
5
Fixed asset investments continued
b) One Stop Phone Shop Limited
On 1 March 2005, the Group acquired 100% of the issued share capital of One Stop Phone Shop Limited, a company registered in England and Wales that specialises
in the mobile ‘off-the-page’ market, for an initial gross cash consideration of £8.3m, with a further contingent deferred consideration of up to £6.7m payable over two years.
The following table sets out the book values of the identiﬁable assets and liabilities acquired and their preliminary fair value to the Group:
Book Accounting policy Other fair value Fair value to 
value alignments adjustments Group
£’000 £’000 £’000 £’000
Fixed assets
Tangible 330 – – 330
Current assets
Stock 953 – – 953
Debtors 3,973 (304) – 3,669
Cash 4,711 – – 4,711
Total assets 9,967 (304) – 9,663
Creditors
Trade creditors (3,478) – (246) (3,724)
Accruals and deferred income (2,850) – (555) (3,405)
Total liabilities (6,328) – (801) (7,129)
Net assets 3,639 (304) (801) 2,534
Goodwill 12,466
15,000
Satisﬁed by 
Cash 8,261
Deferred consideration 6,739
15,000
Net cash outﬂows in respect of the acquisition comprised:
£’000
Gross cash consideration 8,261
Cash acquired (4,711)
3,550
Accounting policy alignments relate to provisions for doubtful debt. Other fair value adjustments relate to various unrecorded liabilities.
c) Other acquisitions
During the period the Group acquired 100% of the issued share capital of a number of other companies, all of which are ﬁxed line telecommunications providers
registered in England and Wales. The details of these acquisitions are as follows:
Company acquired Telequip Ecocall Cable Direct Voice Connect
Limited Limited Limited Limited
Date of acquisition 1 June 30 September 31 December 31 January 
2004 2004 2004 2005
£’000 £’000 £’000 £’000
Cash acquired 2,130 85 1,476 953
Other net liabilities (283) (151) (1,344) (317)
Net assets (liabilities) 1,847 (66) 132 636
Goodwill 5,400 12,156 11,286 1,251
7,247 12,090 11,418 1,887
Satisﬁed by
Cash 5,747 9,846 4,688 1,887
Deferred consideration 1,500 2,244 6,730 –
7,247 12,090 11,418 1,887
Deferred consideration in respect of these acquisitions is contingent on future performance and is payable over the next two years. Included within cash paid in
respect of Ecocall Limited are loan notes of £6.3m, which may be cancelled if certain performance conditions are not met.
Notes to the Financial Statements continued www.cpwplc.com 47 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
1
5
Fixed asset investments continued
Net cash outﬂows in respect of these acquisitions comprised:
Telequip Ecocall Cable Direct Voice Connect
Limited Limited Limited Limited
£’000 £’000 £’000 £’000
Gross cash consideration 5,747 9,846 4,688 1,887
Cash acquired (2,130) (85) (1,476) (953)
3,617 9,761 3,212 934
In April 2004, the Group purchased the trade and assets of the network services business of STL Networks Limited, a ﬁxed line telecommunications provider
registered in England and Wales. Under the terms of the agreement, a net cash consideration of £3.6m was paid, giving rise to goodwill of £3.6m.
During the year, the Group paid a total of £16.2m in deferred consideration in respect of Opal Telecom plc (£13.0m), J Sainsbury PLC (£1.5m), and E2Save.com
Limited (£1.7m). This consideration relates to acquisitions from previous years, and was provided for in full in the year of acquisition.
The Group made a number of other acquisitions during the period for a net cash consideration of £1.9m and provided for contingent deferred consideration of up to
£0.7m payable over the next two years. These acquisitions resulted in goodwill of £1.7m.
In addition, further goodwill of £3.3m arose during the period from adjustments to fair value and deferred consideration on previous acquisitions.
16 Stock
Group
2005 2004
£’000 £’000
Finished goods and goods for resale 95,185 78,298
There is no material difference between the balance sheet value of stock and its replacement cost.
1
7
Debtors
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Amounts falling due within one year:
Trade debtors 317,261 224,949 – –
Amounts owed by Group undertakings – – 620,668 509,811
Other debtors 26,659 18,746 – –
Prepayments and accrued income 28,962 23,806 627 656
372,882 267,501 621,295 510,467
Amounts falling due after more than one year:
Amounts owed by Group undertakings – – 21,152 17,805
Other debtors 4,508 3,943 – –
377,390 271,444 642,447 528,272
Included within Group other debtors falling due within one year are subscriber acquisition costs of £14.4m (2004 – £9.6m). Included within Group other debtors falling
due after more than one year are subscriber acquisition costs of £4.5m (2004 – £3.9m).
18 Short-term investments
Group
2005 2004
£’000 £’000
Short-term investments 60,468 10,805 
Short-term investments include listed investments, principally bonds, with a cost of £40.4m (2004 – £8.5m). The market value of these investments at 2 April 2005 
is £40.4m (2004 – £9.6m).
48 1
9
Creditors: Amounts falling due within one year
Group Company
Restated
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Loans and overdrafts 71,994 16,274 67,499 15,000 
Trade creditors 254,768 181,780 – – 
Amounts owed to subsidiary undertakings – – 353,007 314,152 
Corporation tax 37,556 30,106 – – 
Other taxes and social security costs 33,612 26,668 – – 
Other creditors 44,648 38,988 11,296 1,230 
Accruals and deferred income 120,893 106,546 4,784 6,293 
Proposed dividends 10,968 7,869 10,968 7,869 
574,439 408,231 447,554 344,544 
Prior year accruals and deferred income have been restated to reﬂect the reallocation of unearned insurance income of £8.1m which had previously been included 
in provisions for liabilities and charges (see note 22).
20 Creditors: Amounts falling due after more than one year
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Loans 98,494 107,916 98,420 107,826 
Other creditors 2,567 7,469 2,538 5,632 
Accruals and deferred income 2,186 2,352 – –
103,247 117,737 100,958 113,458 
The repayment proﬁle of loans is provided in note 21.
21 Derivatives and other financial instruments
The Operating and Financial Review on pages 9 to 20 provides an explanation of the role that ﬁnancial instruments have in managing the Group’s currency and
interest rate risk. The disclosures below deal with ﬁnancial assets and ﬁnancial liabilities as deﬁned in FRS 13 ‘Derivatives and other ﬁnancial instruments’.
As permitted by FRS 13, short-term trade debtors and creditors have been excluded from these disclosures. This has no material effect on the currency disclosures.
Certain ﬁnancial assets such as investments in subsidiaries are also excluded from the scope of these disclosures.
(a) Interest rate and currency proﬁle of ﬁnancial assets and liabilities
The Group’s ﬁnancial assets include cash and short-term deposits, mainly denominated in Sterling, Euro and US Dollars. Foreign exchange swaps, used for hedging
purposes, create an asset and a liability. For the purposes of this note, foreign exchange assets and liabilities have been netted against each other. The Group’s
ﬁnancial liabilities, other than currency hedges, consist of committed and uncommitted loans in Sterling and Euro as well as local overdraft facilities, which are
denominated in several European currencies. 
2005 2004
Sterling Euro Other Total Sterling Euro Other Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Financial assets
By instrument
Cash 16,601 21,151 3,824 41,576 65,348 6,442 1,023 72,813 
Short-term investments 46,198 3,840 10,430 60,468 10,805 – – 10,805 
Total 62,799 24,991 14,254 102,044 76,153 6,442 1,023 83,618 
Financial liabilities
By instrument
Loans and overdrafts (48,342) (122,146) – (170,488) – (124,190) – (124,190)
Total (48,342) (122,146) – (170,488) – (124,190) – (124,190)
All ﬁnancial assets and liabilities attract interest at ﬂoating rates. There are no ﬁxed rate ﬁnancial liabilities (2004 – 4.84% for weighted average periods of 0.3 years).
The interest rates on ﬂoating rate ﬁnancial assets and liabilities are linked to market interest rates, mainly on an overnight basis or for one, two or three-month periods.
Notes to the Financial Statements continued www.cpwplc.com 49 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
21 Derivatives and other financial instruments continued
(b) Currency exposures
The extent to which Group companies have ﬁnancial assets or liabilities in currencies other than their own functional currencies is as follows:
2005 2004
Sterling Euro Other Total Sterling Euro Other Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Functional currency of Group operation
Sterling – (103,894) 12,196 (91,698) – (124,694) 178 (124,516)
Other 218 2 – 220 338 320 – 658
Total 218 (103,892) 12,196 (91,478) 338 (124,374) 178 (123,858)
Euro liabilities held by companies operating in Sterling include the Group’s term loan, which is drawn in Euros to fund overseas investments, and of which £105m
remains unamortised at 2 April 2005.
(c) Maturity of ﬁnancial liabilities
The maturity proﬁle of the Group’s ﬁnancial liabilities at 2 April 2005 was as follows:
2005 2004
£’000 £’000
In one year or less (71,994) (19,190)
In more than one year but not more than two years (30,000) (30,000)
In two to ﬁve years (68,494) (75,000)
Total (170,488) (124,190)
(d) Borrowing facilities
The Group had undrawn committed borrowing facilities at 2 April 2005, in respect of which all conditions precedent had been met, as follows:
2005 2004
£’000 £’000
Expiring in more than one year but not more than two years – (180,000)
Expiring in two to ﬁve years (275,000) –
Total (275,000) (180,000)
(e) Fair values
The book and fair values of the Group’s ﬁnancial assets and liabilities at 2 April 2005 were as follows:
2005 2004
Book value Fair value Book value Fair value
£’000 £’000 £’000 £’000
Financial assets
Cash 41,576 41,576 72,813 72,813
Short-term investments 60,468 62,613 10,805 11,907
Financial liabilities
Loans and overdrafts (170,488) (170,488) (124,190) (124,190)
Forward foreign currency contracts – (167) – 200
Cash, loans and overdrafts have been included at carrying value; the fair value of short-term investments has been derived by reference to market values; other fair
values have been arrived at by discounting future cashﬂows, assuming no early redemption, or marking deals to period-end market rates or rates as appropriate to
the instrument.
(f) Unrecognised gains and losses
At 2 April 2005, the Group had unrecognised gains of £2.0m (2004 – £1.3m), all of which are expected to be recognised in the period ending 1 April 2006. During the
period a gain of £1.3m was recognised in relation to previous periods (2004 – £0.2m loss).
50 22 Provisions for liabilities and charges
Restructuring Sales-related 
Insurance provisions Deferred tax provisions Other Total
Group £’000 £’000 £’000 £’000 £’000 £’000 
At 27 March 2004 (restated) 6,839 8,884 7,299 5,119 12,090 40,231
Acquisitions (see note 15) – – (1,563) – 3,607 2,044
Net charge to proﬁt and loss account 28,882 – 4,475 41,967 1,635 76,959
Utilised in the period (28,695) (2,147) – (18,364) (2,191) (51,397)
Foreign exchange – 62 – 36 105 203
At 2 April 2005 7,026 6,799 10,211 28,758 15,246 68,040
Insurance 
Insurance provisions represent provision for known policy holder claims. Prior year insurance provisions have been restated to reﬂect the reallocation of unearned
insurance income of £8.1m to accruals and deferred income (see note 19).
Restructuring provisions
Restructuring provisions at the start of the period relate to a reorganisation and store closure programme launched in the period ended 30 March 2002 and the
exceptional cost of reorganising operations in Germany following the acquisition of Hutchison Telecommunications GmbH in June 2003, including provisions for ﬁxed
asset write offs, as detailed in note 6a. Utilisation in the period relates to the disposal of excess stores and the ongoing implementation of shared service functions.
Deferred tax
Details of movements on the deferred tax provision are given in note 23.
Sales-related provisions
Sales-related provisions include the anticipated costs of ‘cash-back’ and similar promotions, product warranties, product returns, and network operator 
performance penalties.
Other
Other provisions relate to dilapidations and similar property costs, and all other provisions, principally being the anticipated costs of unresolved tax issues 
and legal disputes.
2
3
Deferred tax
2005 2004
Group £’000 £’000 
Deferred tax liabilities
Accelerated capital allowances (3,699) (2,321)
Other timing differences (6,512) (4,978)
(10,211) (7,299)
Deferred tax assets
Other timing differences 4,570 717 
4,570 717 
Total (5,641) (6,582)
Notes to the Financial Statements continued www.cpwplc.com 51 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
2
4
Share capital
2005 2004 2005 2004
Group and Company million million £’000 £’000 
Authorised
Ordinary shares of 0.1p each 1,500 1,500 1,500 1,500
Allotted, called-up and fully paid
Ordinary shares of 0.1p each 877 874 877 874
Movements in share capital in the period arose from the exercise of share options.
Share options
The Group has issued the following options to purchase ordinary shares in the Company:
a) Executive share option schemes
Exercise
Number of options outstanding
price per share Exercisable Expiry
Date options granted £ from date 2005 2004
01/04/99 0.25 14/07/00 01/04/09 580,000 950,000 
02/04/99 0.80 20/01/01 02/04/09 666,660 666,660 
25/07/99 0.25 14/07/00 25/07/09 10,000 10,000 
01/04/99 0.50 14/07/00 01/04/09 260,000 540,000 
25/07/99 0.50 14/07/00 25/07/09 290,000 319,000 
06/10/99 0.50 14/07/00 06/10/09 – 200,000 
06/10/99 0.50 30/06/01 06/10/09 120,000 120,000 
01/02/00 0.80 14/07/00 01/02/10 500,000 500,000 
01/02/00 0.80 30/06/02 01/02/10 200,000 200,000 
02/04/99 1.00 21/07/02 02/04/09 166,665 166,665 
02/04/99 1.00 21/07/03 02/04/09 166,665 166,665 
01/02/00 1.00 14/07/00 01/02/10 1,000,000 1,000,000 
01/02/00 1.00 30/06/03 01/02/10 200,000 200,000 
24/06/00 1.50 24/06/02 24/06/10 4,000,000 4,000,000 
19/05/00 1.50 19/05/02 19/05/10 5,760,900 5,992,900 
19/05/00 2.00 19/05/02 19/05/10 600,000 600,000 
21/05/01 1.25 21/05/04 21/05/11 5,072,043 6,201,391 
01/12/01 1.30 01/12/04 01/12/11 430,648 430,648 
25/03/02 0.80 25/03/05 25/03/12 1,000,000 1,000,000 
11/06/02 0.83 11/06/05 11/06/12 13,661,870 14,860,068 
28/11/02 0.86 28/11/05 28/11/12 69,767 126,744 
06/06/03 0.90 06/06/06 06/06/13 6,369,999 6,958,221 
06/06/03 0.90 06/06/06 06/06/13 (i) 6,369,999 6,958,221 
07/11/03 1.35 07/11/06 07/11/13 165,000 165,000 
07/11/03 1.35 07/11/06 07/11/13 (i) 165,000 165,000 
20/01/04 1.44 20/01/07 20/01/14 (ii) 4,515,010 5,950,000 
19/01/05 1.71 19/01/08 19/01/15 (ii) 2,810,000 – 
28/07/04 – 28/07/07 28/07/14 (iii)13,935,000 – 
28/07/04 – 28/07/08 28/07/15 (iii)13,935,000 – 
83,020,226 58,447,183 
(i) Options granted since April 2002 are subject to the same performance conditions as described in the Remuneration Report on pages 26 to 31. These options
will only be exercisable in full if the Group’s performance is in the upper quartile for the relevant period.
(ii) Exercises of these options are conditional upon the achievement of performance targets speciﬁc to the Distribution business.
(iii) Exercises of these awards are conditional upon the achievement of performance targets in relation to Performance Shares as described in the Remuneration
Report on pages 26 to 31.
52 2
4
Share capital continued
b) Employee share option schemes
Exercise
Number of options outstanding
price per share Exercisable Expiry
Date options granted £ from date 2005 2004
31/12/99 – 01/01/01 31/12/09 320,550 335,800 
05/06/00 1.50 01/01/02 05/06/10 429,900 430,200 
750,450 766,000 
The savings-related share option scheme permits the grant to employees of options linked to a bank save-as-you-earn contract for a term of three or ﬁve years with
contributions from employees of an amount between £5 and £250 per month. Options may be exercised at the end of the three or ﬁve year period at a subscription price
not less than 80% of the middle market quotation of an ordinary share immediately prior to the date of grant. The following options were outstanding at 2 April 2005: 
Exercise
Number of options outstanding
price per share Exercisable Expiry
Date options granted £ from date 2005 2004
30/05/01 1.00 30/05/04 30/11/04 – 618,330 
30/05/01 1.00 30/05/06 30/11/06 435,738 454,862 
03/07/02 0.67 03/07/05 03/01/06 1,036,256 1,133,510 
03/07/02 0.67 03/07/07 03/01/08 402,125 440,658 
01/06/03 0.73 01/06/06 01/12/06 1,690,915 1,909,465 
01/06/03 0.73 01/06/08 01/12/08 441,978 483,864 
01/08/04 1.15 01/08/07 01/02/08 2,519,274 – 
01/08/04 1.15 01/08/09 01/02/10 518,014 – 
7,044,300 5,040,689 
2
5
Reserves
Proﬁt Capital 
and loss Share redemption
account premium reserve Total
£’000 £’000 £’000 £’000 
Group
At 27 March 2004 73,677 397,262 30 470,969
Retained proﬁt for the ﬁnancial period 33,182 – – 33,182
Currency translation 804 – – 804
Issue of share capital (2,127) 4,874 – 2,747
Employee share option schemes (see below) 2,427 – – 2,427
Purchase of own shares (see below) (8,064) – – (8,064)
At 2 April 2005 99,899 402,136 30 502,065
Company
At 27 March 2004 120,529 397,262 – 517,791
Retained loss for the ﬁnancial period (16,632) – – (16,632)
Issue of share capital – 4,874 – 4,874
Employee share option schemes (see below) 2,427 – – 2,427
At 2 April 2005 106,324 402,136 – 508,460
In accordance with the exemption permitted by section 230 of the Companies Act 1985, the proﬁt and loss account of the Company is not separately presented. 
The loss attributable to the shareholders of the Company for the period is £0.9m (2004 – proﬁt £116.4m).
Employee share option schemes
The cost of employee share option schemes relates to the grant of Performance Shares as described in the Remuneration Report on pages 26 to 31. 
Purchase of own shares
As described in note 12, the Group has an Employee Share Ownership Trust which holds 7.5m shares (2004 – 2.0m) in the Company for the beneﬁt of the Group’s
employees. The Trust has not waived its right to receive dividends and none of the shares has been allocated to speciﬁc schemes. During the period, the Trust
purchased in the market 5.6m shares in the Company at an average price of £1.45 per share. At 2 April 2005 the shares had a carrying value of £12.0m and a
market value of £12.5m (2004 – carrying value £3.9m, market value £2.8m). 
Notes to the Financial Statements continued www.cpwplc.com 53 The Carphone Warehouse Group PLC Annual Report 200
5
Notes to the Financial Statements continued
26 Reconciliation of movements in shareholders’ funds
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Proﬁt (loss) for the ﬁnancial period 48,964 27,704 (850) 116,427
Dividends (15,782) (11,369) (15,782) (11,369)
Currency translation 804 (1,014) – –
Issue of share capital 2,750 928 4,877 1,787
Employee share option schemes (see note 25) 2,427 – 2,427 –
Purchase of own shares (see note 25) (8,064) – – –
Net movement in shareholders’ funds 31,099 16,249 (9,328) 106,845
Opening shareholders’ funds as previously stated 471,843 459,543 518,665 411,820
Prior period adjustments (see note 12) – (3,949) – –
Opening shareholders’ funds as restated 471,843 455,594 518,665 411,820
Closing shareholders’ funds 502,942 471,843 509,337 518,665
2
7
Analysis of cash flows
2005 2004
£’000 £’000 
a) Returns on investments and servicing of ﬁnance
Interest received 5,903 2,120
Interest paid (10,748) (6,978)
Net cash outﬂow from returns on investment and servicing of ﬁnance (4,845) (4,858)
b) Taxation
Corporation tax paid (11,641) (2,350)
Net cash outﬂow from taxation (11,641) (2,350)
c) Capital expenditure and ﬁnancial investment
Payments to acquire ﬁxed asset investments (172) (257)
Payments to acquire tangible ﬁxed assets (89,203) (100,305)
(Payments to acquire) receipts from sale of short-term investments (49,663) 15,471
Receipts from sale of tangible ﬁxed assets 1,363 846
Net cash outﬂow from capital expenditure and ﬁnancial investment (137,675) (84,245)
d) Acquisitions and disposals
Purchase of subsidiary undertakings (58,153) (74,135)
Net cash acquired with subsidiary undertakings 11,838 15,085
Net cash outﬂow from acquisitions and disposals (46,315) (59,050)
e) Financing
Net receipts from issuing shares 2,750 928
Purchase of own shares (8,064) –
Increase in loans 22,866 95,668
Net cash inﬂow from ﬁnancing 17,552 96,596
54 2
7
Analysis of cash flows continued
f) Analysis of changes in net debt
At 27 March Cash Currency At 2 April
2004 ﬂows translation 2005
£’000 £’000 £’000 £’000
Cash at bank and in hand 72,813 (31,525) 288 41,576
Overdrafts (1,175) (21,021) (28) (22,224)
71,638 (52,546) 260 19,352
Debt due within one year (15,099) (34,668) (3) (49,770)
Debt due after more than one year (107,916) 11,802 (2,380) (98,494)
Net debt (51,377) (75,412) (2,123) (128,912)
g) Reconciliation of net cash inﬂow to movements in net debt
2005 2004
£’000 £’000 
(Decrease) increase in cash in the period (52,546) 36,521
Cash inﬂow from increase in loans (22,866) (95,668)
Change in net debt (75,412) (59,147)
Currency translation (2,123) 4,948
Movement in net debt in the period (77,535) (54,199)
Net (debt) funds brought forward (51,377) 2,822
Net debt carried forward (128,912) (51,377)
h) Acquisitions
Companies acquired in the period contributed £2.8m to the Group’s net operating cashﬂows, paid £0.8m in respect of net returns on investments and servicing 
of ﬁnance, and utilised £0.3m for capital expenditure.
28 Commitments under operating leases
The Group’s annual commitments under non-cancellable operating leases, all of which relate to land and buildings, are as follows:
2005 2004
£’000 £’000 
Operating leases which expire:
Within one year 9,790 7,558 
In two to ﬁve years 17,145 13,948 
After ﬁve years 34,143 29,325 
61,078 50,831 
2
9
Capital commitments
2005 2004
£’000 £’000 
Expenditure contracted, but not provided for in the ﬁnancial statements of the Group 10,371 6,564 
3
0 Pension arrangements
The Group provides various pension schemes for the beneﬁt of a signiﬁcant number of its employees:
Deﬁned contribution schemes
The Group operates a number of deﬁned contribution schemes for which the cost for the period was £1.9m (2004 – £1.7m).
Deﬁned beneﬁt schemes
On 5 April 2000 the Group commenced the winding up of a deﬁned beneﬁt pension scheme. Based on actuarial advice, the assets of the scheme are anticipated 
to be sufﬁcient to meet the levels required by the Government’s Minimum Funding Requirements calculations. On completion of the winding up of the scheme, the
Group will retain no obligations in relation to the funding of scheme beneﬁts.
3
1 Contingent liabilities
We are still aware that European VAT authorities continue to investigate the recovery of VAT in the industry for trading activities conducted prior to April 2003. Having
undertaken a detailed internal investigation and taken advice, we continue to believe that we have no ﬁnancial exposure to this issue within the ﬁnancial statements.
3
2 Related party transactions
On 29 March 2005, G Roux de Bezieux, a Director of the Company, acquired 5% of the issued share capital of Omer Telecom SAS (‘Omer’), a subsidiary of the
Group, which was set up to develop virtual networks in the French market. G Roux de Bezieux was given an option to invest up to 1 million Euros for 20% of 
the shares in Omer and has an option to increase his stake by up to a further 20% depending on Omer’s future business performance.
The investment does not require the consent of the Company’s shareholders either under the Companies Act 1985 or the Listing Rules or otherwise, and in particular 
falls within the exemptions set out in Chapter 11 of the Listing Rules in relation to transactions with related parties. The investment has however been approved by
the Company’s Board of Directors and Remuneration Committee.
Notes to the Financial Statements continued www.cpwplc.com 55 The Carphone Warehouse Group PLC Annual Report 200
5
Five Year Record (unaudited)
2005 2004 2003 2002 2001
£m £m £m £m £m
Headline results
Turnover 2,355.1 1,849.0 1,841.5 1,152.7 1,110.7
EBITDA 154.8 122.8 90.0 72.8 66.0
PBT 102.1 76.3 57.0 46.8 49.6
Assets employed
Fixed assets 674.0 604.6 511.7 412.7 392.2
Net current assets 0.1 25.1 24.4 72.9 86.6
Creditors: Amounts falling due after more than one year (103.2) (117.7) (49.4) (39.1) (15.4)
Provisions for liabilities and charges (68.0) (40.2) (31.1) (42.4) (32.8)
Net assets 502.9 471.8 455.6 404.1 430.6
Financed by
Shareholders’ funds 502.9 471.8 455.6 403.3 428.9
Equity minority interests – – – 0.8 1.7
Total capital employed 502.9 471.8 455.6 404.1 430.6
Headline earnings per share
Basic 9.4p 6.8p 5.3p 4.4p 5.0p
Diluted 9.0p 6.7p 5.2p 4.4p 4.9p
56 Financial Calendar
Key dates
Results announcement 7 June 2005
Ex-dividend date 6 July 2005
Record date 8 July 2005
Dividend payment date 5 August 2005
Interim results announcement 3 November 2005
www.cpwplc.com 57
Published by Black Sun Plc +44 (0)20 7736 0011.
Printed in England by SVTWO. The Carphone Warehouse Group PLC
1 Portal Way
London
W3 6RS
Tel +44 (0)20 8896 5000
Fax +44 (0)20 8753 8009
Email investorrelations@cpw.co.uk
Registered no. 3253714
www.cpwplc.com