BT 2006 Annual Report Download - page 24

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For the year ended 31 March 2006, the group is required to prepare its audited annual consolidated financial statements in
accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee
(IFRIC) Interpretations, as adopted by the European Union (EU) and those parts of the UK Companies Act 1985 applicable to
companies reporting under IFRS.
Previously the group prepared its audited annual financial statements under UK generally accepted accounting principles (UK
GAAP). The 2005 comparative financial statements have therefore been restated as part of the first-time adoption requirements of
IFRS. As allowed by the US Securities and Exchange Commission (SEC) rules in relation to first-time adoption of IFRS, only one year
of comparative financial statements are presented in this Annual report. The policies set out on pages 65 to 72 of this report have
been applied consistently to the 2006 and 2005 financial years, with the exception of those policies relating to financial
instruments under IAS 32, ‘Financial Instruments: Disclosure and Presentation’ (IAS 32) and IAS 39, ‘Financial Instruments:
Recognition and Measurement’ (IAS 39), which have been applied with effect from 1 April 2005.
The selected financial data on pages 22 to 25 is shown in accordance with IFRS for 2006 and 2005 and UK GAAP for 2005 to
2002. The UK GAAP data should be read in conjunction with the IFRS transition adjustments in note 34 to gain an understanding
of the nature of the adjustments made to UK GAAP financial information to comply with IFRS. IFRS differs in certain respects from
accounting principles generally accepted in the United States. The material differences between IFRS and US GAAP relevant to the
group are explained on pages 114 to 121.
Summary of group income statement - IFRS
Year ended 31 March
2006
£m
2005
£m
Revenue 19,514 18,429
Other operating income 227 551
Operating costs (17,246) (15,988)
Operating profit
Before specific items
a
2,633 2,693
Specific items
a
(138) 299
2,495 2,992
Net finance expense
Finance expense (2,740) (2,773)
Finance income 2,268 2,174
(472) (599)
Share of post tax profits (losses) of joint ventures and associates
Before specific items
a
16 (14)
Specific items
a
–(25)
16 (39)
Profit on disposal of joint venture
Before specific items ––
Specific items 1–
1–
Profit before tax
Before specific items
a
2,177 2,080
Specific items
a
(137) 274
2,040 2,354
Taxation
Before specific items
a
(533) (541)
Specific items
a
41 16
(492) (525)
Profit for the year
Before specific items
a
1,644 1,539
Specific items
a
(96) 290
1,548 1,829
Year ended 31 March 2006 2005
Average number of shares used in basic earnings per share (millions) 8,422 8,524
Average number of shares used in diluted earnings per share (millions) 8,537 8,581
Basic earnings per share 18.4p 21.5p
Diluted earnings per share 18.1p 21.3p
Dividends per share
c
11.9p 10.4p
Dividends per share, cents
bc
20.7c 19.5c
Basic earnings per share before specific items
a
19.5p 18.1p
Diluted earnings per share before specific items
a
19.2p 17.9p
aEarnings and profit numbers are stated throughout the commentary before specific items – see page 27 for definitions. The directors believe these measures provide a more meaningful analysis of
the trading results of the group and are consistent with the way the financial performance is measured by management.
bBased on actual dividends paid and/or year end exchange rate on proposed dividends
cDividends per share represents the dividend proposed in respect of the relevant financial year. Under IFRS, dividends are recognised as a deduction from shareholders’ equity when they are paid.
SELECTED FINANCIAL DATA
BT Group plc Annual Report and Form 20-F 2006 Operating and financial review22