BT 1997 Annual Report Download - page 58

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NOTES TO THE FINANCIAL STATEMENTS
58
23. Financial instruments and risk management (continued)
Carrying amount Fair value
1997 1996 1997 1996
£m £m £m £m
Non-derivatives:
Assets
Cash at bank and in hand 26 121 26 121
Short-term investments (i) 2,974 2,568 2,974 2,568
Liabilities
Short-term borrowings (ii) 221 13 221 13
Long-term borrowings, excluding finance leases (iii) 2,953 3,620 3,168 3,874
Derivatives relating to borrowings (net) (iv):
Assets –16 –61
Liabilities 11 –7–
(i) The fair values of listed short-term investments were estimated based on quoted market prices for those investments. The
carrying amount of the other short-term deposits and investments approximated to their fair values due to the short maturity of
the instruments held.
(ii) The fair value of short-term borrowings approximated to carrying value due to the short maturity of the instruments.
(iii) The fair value of the group’s bonds, debentures, notes and other long-term borrowings has been estimated on the basis of
quoted market prices for the same or similar issues with the same maturities where they existed, and on calculations of the
present value of future cash flows using the appropriate discount rates in effect at the balance sheet dates, where market
prices of similar issues did not exist.
(iv) The fair value of the group’s outstanding foreign currency and interest rate swap agreements was estimated by calculating
the present value, using appropriate discount rates in effect at the balance sheet dates, of affected future cash flows translated,
where appropriate, into pounds sterling at the market rates in effect at the balance sheet dates.
24. Directors
Directors’ emoluments
The emoluments of the directors for the year ended 31 March 1997 and the gains made by them on the exercise of share
options were, in summary, as follows:
1997 1996(b)
£000 £000
Salaries 1,543 1,471
Performance-related bonus 636 543
Other benefits 87 68
2,266 2,082
Payments to non-executive directors (a) 273 381
Total emoluments 2,539 2,463
Gain on the exercise of share options 93 6
(a) Payments to non-executive directors include fees paid to their principal employer of £31,000 (1996 – £24,000).
(b) Disclosure has been amended in accordance with revised Companies Act disclosure requirements.
Pensions in respect of the management services of past and present directors paid by the company for the year ended
31 March 1997 were £87,000 (1996 – £84,000). The cumulative provision for present and past directors’ unfunded pension
benefits at 31 March 1997 was £4,689,000 (1996 – £4,171,000), including the interest accounted for on the provision, and is
based on actuarial advice.
More detailed information concerning directors’ remuneration, shareholdings, options and long-term incentive plans is shown
in the report of the Board Committee on Executive Remuneration on pages 27 to 33.