BT 2006 Annual Report Download - page 3

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BT is one of the world’s leading providers of communications solutions and
services operating in 170 countries. Our principal activities include networked IT
services, local, national and international telecommunications services, and
higher-value broadband and internet products and services. In the UK, we serve
around 20 million business and residential customers, as well as providing
network services to other operators.
CONTENTS
2 Financial headlines
3 Chairman’s message
4 Chief Executive’s statement
6 Operating and financial review
6Business review
22 Selected financial data
26 Financial review
40 Board of directors and Operating Committee
42 Report of the directors
48 Report of the Audit Committee
49 Report of the Nominating Committee
50 Report on directors’ remuneration
62 Statement of directors’ responsibility
63 Report of the independent auditors
64 Consolidated financial statements
123 Financial statements for BT Group plc
127 Subsidiary undertakings and associate
128 Quarterly analysis of revenue and profit
129 Financial statistics
131 Operational statistics
132 Additional information for shareholders
144 Cross reference to Form 20-F
147 Index
BT Group plc is a public limited company registered in England and Wales and listed on the London and New York stock exchanges. It was incorporated in England and Wales on 30 March 2001 as
Newgate Telecommunications Limited with the registered number 4190816. Its registered office address is 81 Newgate Street, London EC1A 7AJ. The company changed its name to BT Group plc
on 11 September 2001. Following the demerger of O2 in November 2001, the continuing activities of BT were transferred to BT Group plc.
British Telecommunications plc is a wholly-owned subsidiary of BT Group plc and encompasses virtually all the businesses and assets of the BT group. The successor to the statutory corporation
British Telecommunications, it was incorporated in England and Wales as a public limited company, wholly owned by the UK Government, as a result of the Telecommunications Act 1984.
Between November 1984 and July 1993, the UK Government sold all of its shareholding in British Telecommunications plc in three public offerings.
This is the annual report for the year ended 31 March 2006. It complies with UK regulations and is the annual report on Form 20-F for the US Securities and Exchange Commission to meet US
regulations.
This annual report has been sent to shareholders who have elected to receive a copy. A separate annual review and notice of meeting (including summary financial statements) for the year
ended 31 March 2006 has been issued to all shareholders.
In this annual report, references to ‘BT Group’, ‘BT’, ‘the group’, ‘the company’, ‘we’ or ‘our’ are to BT Group plc (which includes the continuing activities of British Telecommunications plc) and
its subsidiaries and lines of business, or any of them as the context may require.
References to the ‘financial year’ are to the year ended 31 March of each year, eg the ‘2006 financial year’ refers to the year ended 31 March 2006. Unless otherwise stated, all non-financial
statistics are at 31 March 2006.
Please see cautionary statement regarding forward-looking statements on page 133.
For the purposes of US reporting requirements applicable to first time adopters of IFRS, BT hereby incorporates by reference from its Annual report on Form 20-F for 2005 the five year financial
summary on pages 23 to 24 thereof, the discussion of the 2005 financial year on pages 26 to 143 in the Financial review section thereof and the Financial statements and supporting notes on
pages 72 to 122 thereof.
A number of measures quoted in this Annual Report are ‘non-GAAP’ measures. The directors believe these measures provide a more meaningful analysis of the trading results of the group and are
consistent with the way financial performance is measured by management. These include EBITDA and profit before specific items, earnings per share before specific items, net debt and free cash
flow. The rationale for using non-GAAP measures and reconciliations to the most directly comparable IFRS indicator are provided on pages 27, 65, 83 and 84.
BT Group plc Annual Report and Form 20-F 2006 1