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BT GROUP PLC ANNUAL REPORT & FORM 20-F
USER GUIDE
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ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS’ BUSSINESS AND FINANCIAL REVIEWS OVERVIEW
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Table of contents

  • Page 1
    BT group plc annual reporT & form 20-f user guide Welcome to the BT Annual Report and Form 20- F 2009. In this interactive pdf you can do many things to help you easily access the information that you want, whether that's printing, searching for a specific item or going directly to another page, ...

  • Page 2
    BT Group plc Annual Report & Form 20-F 2009

  • Page 3
    ... the Committee for Responsible and Sustainable Business Report on directors' remuneration Directors' information Business policies Shareholders and Annual General Meeting 76 77 79 136 137 BT Group plc is a public limited company registered in England and Wales and listed on the London and New York...

  • Page 4
    ...21.5p 15.8p group-wide 'right first time' performance increase in 2009 2005 2006 2007 2008 2009 (2008: £1,503m) Key points Revenue growth of 3% EBITDA decline due to the unacceptable performance of BT Global Services The rest of the business delivered a good performance in spite of the economic...

  • Page 5
    ... in this fast changing world. Sir Michael Rake Chairman 13 May 2009 BT GROUP PLC ANNUAL REPORT & FORM 20-F 3 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS The world looks a very different place than it did a year ago. Global trade has contracted for the first time in many...

  • Page 6
    ... One Plan service, which is the UK's first triple play of landline, mobile and broadband for small and medium-sized businesses. It launched three years ago and in 2009 added free calls within an organisation - even between 4 BT GROUP PLC ANNUAL REPORT & FORM 20-F Ian Livingston Chief Executive 13...

  • Page 7
    ...to the development of new products and services. BT GROUP PLC ANNUAL REPORT & FORM 20-F 5 Dow Jones Sustainability Indexes Member 2008/09 ADDITIONAL INFORMATION FINANCIAL STATEMENTS Doing business sustainably Networks and innovation REPORT OF THE DIRECTORS External revenue by customer segment...

  • Page 8
    ... the needs of our different customer groups through four customer-facing lines of business, supported by two internal functional units. BT Retail, BT Wholesale and Openreach operate mainly in the UK. BT Global Services provides services in more than 170 countries around the world. We believe that...

  • Page 9
    ... 33 Group results 36 Other group items 40 Cash ï¬,ow 41 Balance sheet 44 Taxation 45 Financial risk management 10 How we are structured 10 BT Global Services 13 BT Retail 16 BT Wholesale 17 Openreach 19 BT Design 20 BT Operate 20 Our resources 23 Corporate responsibility 47 Alternative performance...

  • Page 10
    ...due to the effective delivery of cost savings. However, these achievements were overshadowed by the unacceptable performance in BT Global Services. Building future networks The digital revolution is opening up a world of new possibilities for all our customers. It means people can work together and...

  • Page 11
    ... the dividend to grow at the same time as investing in the business, reducing debt and supporting the pension scheme. a Measuring our performance For 2009, the key performance indicators (KPI) against which we measured the delivery of our strategy were: customer service earnings per share free cash...

  • Page 12
    ...four customer-facing lines of business: BT Global Services, BT Retail, BT Wholesale and Openreach. These are supported by two internal functional units: BT Design and BT Operate. BT Retail, BT Wholesale and Openreach operate mainly in the UK, where we are the largest communications services provider...

  • Page 13
    ... a number of deals with major UK corporate sector customers including: a seven-year, £160m outsourcing deal with Nationwide Building Society to manage its networked IT services BT GROUP PLC ANNUAL REPORT & FORM 20-F 11 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS...

  • Page 14
    BUSINESS AND FINANCIAL REVIEWS BUSINESS REVIEW BT Global Services UK/Non UK revenue (£m) 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 47% 40% 36% 64% 60% 53% Non UK UK 2007 2008 2009 a three-year contract extension with Manpower to provide fully managed global wide area network (...

  • Page 15
    ...8m broadband lines. numbers would be included for free in our packages - a first for the UK market. Our new BT Basic tariff offers very low line rentals to vulnerable customers on low income benefits. We are the only communications provider in the UK to provide this service. In addition we design...

  • Page 16
    ...of wholesale network services. We are one of the largest DSL broadband providers to consumers and SMEs. We gained significant traction in the private and public sectors and secured a number of the largest managed services contracts awarded in the market. O2 Ireland outsourced its network operations...

  • Page 17
    ...& FORM 20-F 15 ADDITIONAL INFORMATION Managed solutions revenue increased by 14% to £519m in 2009 (2008: £456m, 2007: £361m) due to growth in BT Business and reï¬,ecting the acquisitions of Basilica and Lynx in the second quarter of 2008. Towards the end of 2009 the group saw a slowdown in new...

  • Page 18
    ... FINANCIAL REVIEWS BUSINESS REVIEW DSL broadband connections year end (m) 14 12 10 8 6 4 2 0 LLU External wholesale broadband 2007 2008 2009 Operational performance Managed network solutions To date, we have signed managed network solutions contracts with eight of our top 15 customers by revenue...

  • Page 19
    ... as mobile operators build their own networks and are able to bypass BT. These declines, however, have been partially offset by growth in the managed network solutions business, where revenue increased by 76% to £518m (2008: £295m, 2007: £306m), principally due to new contracts signed in the year...

  • Page 20
    ... of new applications. In 2009, Openreach continued to protect its market leading position in the provision of Ethernet services by investing in its product portfolio to provide greater ï¬,exibility and increased bandwidth and setting more competitive prices. Openreach products Wholesale line rental...

  • Page 21
    ...BT Design BT Design is responsible for designing and building the platforms, IT systems and processes that support the products and services we provide to our customers around the world. It is also responsible for network planning and the implementation of BT's global 21CN platform. The development...

  • Page 22
    .... The community benefits from their involvement, while they benefit from the opportunity to enhance existing skills and acquire new ones. 20 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 23
    ... years. For Openreach senior managers, the key measure is Openreach's performance over a three-year period. For 2009, our bonus scheme was restructured to improve alignment to overall business results and affordability. Employees outside the UK receive an annual award of free BT shares or a cash...

  • Page 24
    .... In 2009, we invested £1,119m (2008: £1,252m) in R&D to support our drive for innovation. This investment comprised capitalised software development costs of £529m (2008: £720m) and R&D operating costs of £590m (2008: £532m). 22 BT GROUP PLC ANNUAL REPORT & FORM 20-F BUSINESS AND FINANCIAL...

  • Page 25
    .... We have been rated number one in the telecommunications sector in the Dow Jones Global Sustainability Index for the past eight years. We also hold the Queen's Award for Enterprise for Sustainable Development and Business in the Community's Community Mark. BT GROUP PLC ANNUAL REPORT & FORM 20-F 23...

  • Page 26
    BUSINESS AND FINANCIAL REVIEWS BUSINESS REVIEW Key performance indicators Direct company impacts: Non-financial indicators Target 2010 2009 17% improvement in RFT service from 2008 3.61 2008 9% improvement in RFT service from 2007 2007 3% increase in customer satisfaction (our previous measure) ...

  • Page 27
    ..., supports better international governance BT GROUP PLC ANNUAL REPORT & FORM 20-F 25 ADDITIONAL INFORMATION Income from recycling Landfill tax savings Waste costs £7.42m £1.15m £(7.90)m £6.70m £0.89m £(7.27)m £4.48m Dealing with end of life products sold £0.84m into the market place...

  • Page 28
    BUSINESS AND FINANCIAL REVIEWS Regulation BT operates in a dynamic and competitive environment both in the UK and around the world. Innovation is accelerating, driven by customer demand. Products and services are evolving and converging, supported by increasingly sophisticated networks. Service ...

  • Page 29
    ...many of the mobile operators as the voice and text markets approach saturation. Broadband providers are now expected to deliver an excellent level of service in addition to a range of applications and products tailored to the individual needs of customers. BT GROUP PLC ANNUAL REPORT & FORM 20-F 27...

  • Page 30
    ... of any such claim. 28 BT GROUP PLC ANNUAL REPORT & FORM 20-F the acquisition of the remaining shares of Net2S SA, a publicly traded IT services company listed in France, other than certain treasury shares and locked-up shares issued under employee share plans (we had acquired over 91% of the...

  • Page 31
    ...of business. In 2007, we completed a number of acquisitions, including: dabs.com (an online retailer of IT and technology products) PlusNet (an internet service provider) International Network Services (INS) (the California-based global provider of IT consulting and software solutions). In 2008, our...

  • Page 32
    ... charge control, and the wholesale local access market. Whilst these reviews are, in our view, an opportunity to create regulatory stability, there is a risk that they may adversely affect our competitive position and future returns on our regulated copper asset base. 30 BT GROUP PLC ANNUAL REPORT...

  • Page 33
    ...of investment markets, interest and inï¬,ation rates and the general trend towards longer life expectancy, as well as regulatory changes, all of which are outside our control. BT GROUP PLC ANNUAL REPORT & FORM 20-F 31 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS...

  • Page 34
    ...' provided in addition to the disclosure requirements defined under IFRS. The rationale for using non-GAAP measures is explained on pages 33, 47 and 48. 32 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 35
    ... operating profit (loss) by line of business, and for the group, is provided in the table at the foot of pages 34 to 35. Internal cost recorded by BT Global Services £m BT BT Retail Wholesale Openreach £m £m £m Other £m Total £m Product revenue 2009 £m Revenue by product Managed solutions...

  • Page 36
    ...FINANCIAL REVIEW Revenue by customer segment - year ended 31 March 2009 (%) OVERVIEW ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS Business 12% Consumer 23% Wholesale/carrier 25% Major corporate 40% from networked IT services and MPLS. Broadband...

  • Page 37
    ... EBITDAb 2008 2007 £m £m 5,784 5,633 Group totals BT GROUP PLC ANNUAL REPORT & FORM 20-F 35 ADDITIONAL INFORMATION 861 1,495 1,395 1,911 122 735 1,357 1,500 1,927 114 BT Global Services BT Retail BT Wholesale Openreach Other Intra-group FINANCIAL STATEMENTS Group operating costs before...

  • Page 38
    ... IT services contracts and increased levels of activity in the network. Other operating costs include the maintenance and support of the networks, accommodation, sales and marketing costs, research and development and general overheads. Operating profit REPORT OF THE DIRECTORS FINANCIAL STATEMENTS...

  • Page 39
    BUSINESS AND FINANCIAL REVIEWS FINANCIAL REVIEW 2009 £m Other operating income Net loss on sale of group undertakings Profit on sale of non current asset investments Operating costs BT Global Services restructuring charges - Networks and products rationalisation - People and property - Intangible...

  • Page 40
    ... 2009 (2008: £41m, 2007: £4m). In 2008, losses on derivatives not in a designated hedge relationship of £41m included a charge of £26m on a low cost borrowing transaction which was marginally earnings positive after tax in the year. FINANCIAL STATEMENTS REPORT OF THE DIRECTORS (72) BUSINESS...

  • Page 41
    ... £2,495m in 2007. The reduction in 2009 is primarily due to the unacceptable performance in BT Global Services, partially offset by good performance in the other lines of business. In 2008, adjusted profit before taxation was broadly ï¬,at year on year, with the increase in operating profit being...

  • Page 42
    ...Ofcom. Net cash expenditure on acquiring new businesses was £227m in 2009 (2008: £364m, 2007: £237m). Significant acquisitions made in the current year include Wire One Holdings Inc (£74m), Ribbit FINANCIAL STATEMENTS REPORT OF THE DIRECTORS (3,038) (3,253) (3,209) Corporation (£46m) and...

  • Page 43
    ... FINANCIAL REVIEW Free cash ï¬,ow 2009 £m Net cash inï¬,ow from operating activities Net purchase of property, plant equipment and software Net purchase of non current financial assets Dividends from associates and joint ventures Interest received Interest paid Free cash ï¬,ow 2008 £m 2007...

  • Page 44
    ...March 2009 (2008: £19,648m) in the group balance sheet because it provides useful financial information being an indication of the level of capital employed at the balance sheet date, namely total equity and non current liabilities. BT Group plc, the parent company, whose financial statements are...

  • Page 45
    ...ficient cash ï¬,ow to allow the dividend to grow at the same time as investing in the business, reducing debt and supporting the pension scheme. During 2008, the group commenced a £2.5bn share buy back programme, which was expected to be completed by 31 March 2009. However, in July 2008, the Board...

  • Page 46
    ... year. In 2009 we collected and paid £1,239m of VAT, £1,178m of PAYE and National Insurance, £210m of UK corporation tax and £236m of UK business and UK network rates. 44 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS At 31 March 2009, the group had cash...

  • Page 47
    ... capital allowances in the current financial year. The effective corporation tax rate on profits before specific items is expected to increase from (4.2)%, the rate applicable to 2009. The 2009 rate reï¬,ects the tax credit arising on the BT Global Services contract and financial review charges...

  • Page 48
    ... agreed after the balance sheet date. This facility is for a term of 364 days from March 2009 with a one-year term out. FINANCIAL STATEMENTS REPORT OF THE DIRECTORS The group's credit policy for trading related financial assets is applied and managed by each of the lines of business to ensure...

  • Page 49
    ...similarly titled measures used by other companies. BT GROUP PLC ANNUAL REPORT & FORM 20-F 47 ADDITIONAL INFORMATION Underlying revenue and operating costs Underlying revenue and operating costs refers to the amounts excluding 1) the contribution in the current year from acquisitions that are not...

  • Page 50
    ..., current asset investments and cash and cash equivalents are measured at the lower of cost and net realisable value. Currency denominated balances within net debt are translated to Sterling at swapped rates where hedged. 48 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL...

  • Page 51
    ...74 SHAREHOLDERS AND ANNUAL GENERAL MEETING 74 Relations with shareholders 74 Substantial shareholdings 74 AGM resolutions 74 Authority to purchase shares BT GROUP PLC ANNUAL REPORT & FORM 20-F 49 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 52
    ...is a member of the Executive Committee of the International Institute for Management Development (IMD), a non-executive director of UPM-Kymmene Corporation, and chairman of the board of trustees of Aalto University, Helsinki. A Finnish national, he is aged 56. 50 BT GROUP PLC ANNUAL REPORT & FORM 20...

  • Page 53
    ..., Chief Executive, BT Design Key to membership of Board committees: a Operating b Audit c Remuneration d Nominating e Responsible and Sustainable Business f Pension Scheme Performance Review Group g Equality of Access Board BT GROUP PLC ANNUAL REPORT & FORM 20-F 51 ADDITIONAL INFORMATION FINANCIAL...

  • Page 54
    ... Exchange in the form of American Depositary Shares. The directors submit their report and the audited financial statements of the company, BT Group plc, and the group, which includes its subsidiary undertakings, for the 2009 financial year. The Business review, Other matters and Financial review...

  • Page 55
    ... Main Board committees The Operating Committee, the key management committee, meets weekly and is chaired by the Chief Executive. The other members are the Group Finance Director and the Chief Executives of BT Retail, BT Wholesale, BT Global Services, BT Design and BT Operate. The Company Secretary...

  • Page 56
    ... effectiveness of internal control procedures; the annual financial statements, full year results announcement, and related formal statements; the basis of accounting for long term contracts; BT Global Services major contracts review; annual review of security, business continuity and fraud; annual...

  • Page 57
    ... Committee also reviewed the experience, skills and succession planning within the Group Finance function. management of corporate fraud risks. BT GROUP PLC ANNUAL REPORT & FORM 20-F 55 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 58
    ... search consultants, MWM, conducted a thorough search process to identify candidates for the positions of Chief Executive, and consequently of Chief Executive BT Retail, Chief Executive BT Global Services and consequently Group Finance Director. The Committee recommended to the Board the internal...

  • Page 59
    ... and Employee Relations, and the Company Secretary. BUSINESS AND FINANCIAL REVIEWS ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS OVERVIEW Remuneration review (audited) (ii) Remuneration principles BT's policy is to reward its senior executives competitively, taking account of...

  • Page 60
    ... the net finance income relating to the group's pension liabilities were excluded from the target. All executive directors and members of the Operating Committee will, immediately after payment, use their annual cash bonus for 2008/09, net after tax, to purchase shares in the company. The deferred...

  • Page 61
    ... of cash generation to dividend payments. BT GROUP PLC ANNUAL REPORT & FORM 20-F 59 ADDITIONAL INFORMATION FINANCIAL STATEMENTS Changes to performance measure in 2009/10 The Remuneration Committee has reviewed the performance measure for the ISP. For awards granted in 2009 and in future years, it...

  • Page 62
    ...of the award will vest for performance at the upper end of the range. A number of key investors and the main representative bodies were consulted about these changes and were supportive. Other share plans The executive directors and the Chairman may participate in BT's all-employee share plans, the...

  • Page 63
    ... directors with those of shareholders, the company's policy is to encourage these directors to purchase, on a voluntary basis, £5,000 of BT shares BT GROUP PLC ANNUAL REPORT & FORM 20-F 61 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 64
    ... non-executive remuneration is performance- related. Non-executive directors do not participate in BT's bonus or employee share plans and are not members of any of the company pension schemes. Directors' service agreements and contracts of appointment The dates on which directors' initial service...

  • Page 65
    ...dividends. BT's total shareholder return (TSR) performance over the five financial years to 31 March 2009 240 220 200 180 160 140 120 100 80 60 40 31 Mar 2004 31 Mar 2005 31 Mar 2006 31 Mar 2007 31 Mar 2008 31 Mar 2009 BT FTSE 100 31 March 2004 = 100 Source: Datastream BT GROUP PLC ANNUAL...

  • Page 66
    ... as a member of the Committee for Responsible and Sustainable Business for which she receives an annual fee of £6,500. v John Nelson retired as a director on 13 January 2008. 64 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS Sir...

  • Page 67
    ... left the company on 31 December 2007. FINANCIAL STATEMENTS Change in transfer value c-d less directors' contributions Transfer value of increase in accrued benefits in e less directors' contributions REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS During the financial year 2008/09...

  • Page 68
    ... Employee Sharesave Scheme. The option lapsed on 30 November 2008, the date François Barrault left the company. REPORT OF THE DIRECTORS Former directors F Barrault 362,500j 3,606k - - - 3,606 - - 362,500 - 180p 21/05/2007 21/05/2014 262p 14/08/2010 13/02/2011 BUSINESS AND FINANCIAL REVIEWS...

  • Page 69
    ... position against the European Telecom Sector of 17 companies. As a result, all of the shares awarded lapsed on that date. d The performance periods for the ISP 2007 and ISP 2008 end on 31 March 2010 and 2011 respectively. Share awards under long-term incentive plans held at 31 March 2009, or date...

  • Page 70
    ... left the company on 30 November 2008. His 2006 and 2007 awards were pro-rated and part of the awards vested and part of the awards lapsed on 10 December 2008. His 2008 award lapsed on that date. 68 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS Details of...

  • Page 71
    ...84 116 307 By order of the Board Maarten van den Bergh Deputy Chairman and Chairman of Remuneration Committee 13 May 2009 BT GROUP PLC ANNUAL REPORT & FORM 20-F 69 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS 116 56 107 84 - - - 116 56...

  • Page 72
    ... governance policies and procedures, including the powers reserved to the group's most senior executives, and the latest financial information. There are also visits to key BT locations and meetings with members of the 70 BT GROUP PLC ANNUAL REPORT & FORM 20-F BUSINESS AND FINANCIAL REVIEWS...

  • Page 73
    ... party by any company in the BT group. OVERVIEW ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS Pension funds BT's two main UK pension funds - the BT Pension Scheme and the BT Retirement Plan (BTRP) - are not controlled by the Board but by separate...

  • Page 74
    ...ed for improvement and promote effective risk management in the lines of business operations; and the Audit Committee, on behalf of the Board, considers the effectiveness of the operation of internal control procedures in the group during the financial year. It reviews reports from the internal and...

  • Page 75
    ... on all major contracts. have concluded that, as of such date, BT's disclosure controls and procedures were effective to ensure that material information relating to BT was made known to them by others within the group. The Chief Executive and Group Finance Director have also provided the certi...

  • Page 76
    ... for viewing on the BT website. OVERVIEW ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS Substantial shareholdings At 13 May 2009, BT had received notifications from Invesco Limited, Legal & General Group plc and Barclays PLC, under the Disclosure...

  • Page 77
    ... Retirement benefit plans 126 Employees 126 Share based payments 129 Audit and non-audit services 130 Financial instruments and risk management 136 GLOSSARY OF TERMS AND US EQUIVALENTS 137 REPORT OF THE INDEPENDENT AUDITORS - PARENT COMPANY 138 FINANCIAL STATEMENTS OF BT GROUP PLC 141 SUBSIDIARY...

  • Page 78
    ... Rules of the United Kingdom Financial Services Authority. The names and functions of all of the directors are set out on pages 50 to 51. OVERVIEW ADDITIONAL INFORMATION FINANCIAL STATEMENTS 76 BT GROUP PLC ANNUAL REPORT & FORM 20-F REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS

  • Page 79
    ... and cash ï¬,ows for the year then ended. PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors London, United Kingdom 13 May 2009 BT GROUP PLC ANNUAL REPORT & FORM 20-F 77 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 80
    ... - CONSOLIDATED FINANCIAL STATEMENTS United States opinion Report of Independent Registered Public Accounting Firm to the Board of Directors and Shareholders of BT Group plc (the 'company') In our opinion, the accompanying Group income statements, Group balance sheets, Group cash ï¬,ow statements...

  • Page 81
    ... total contract costs, or other measures of completion such as contract milestone customer acceptance. In the case of time and materials contracts, revenue is recognised as the service is rendered. BT GROUP PLC ANNUAL REPORT & FORM 20-F 79 (ii) Basis of consolidation The group financial statements...

  • Page 82
    ... operating leases. Rentals are charged to the income statement on a straight line basis over the period of the lease. If a sale and leaseback transaction results in an 80 BT GROUP PLC ANNUAL REPORT & FORM 20-F FINANCIAL STATEMENTS REPORT OF THE DIRECTORS Costs related to delivering services under...

  • Page 83
    ... STATEMENTS Assets held under finance leases are depreciated over the shorter of the lease term or their useful economic life. Residual values and useful lives are reassessed annually and, if necessary, changes are recognised prospectively. REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 84
    ...by the company's shareholders in general meeting. Interim dividends are recognised when they are paid. FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS If a cash generating unit is impaired, provision is made to reduce the carrying amount of the related assets to their...

  • Page 85
    ... to or by the group. Financial assets Financial assets at fair value through income statement A financial asset is classified in this category if acquired principally for the purpose of selling in the short term (held for trading) or if so designated by management. Financial assets held in this...

  • Page 86
    ... company, BT Group plc, held by employee share ownership trusts and repurchased shares are recorded in the balance sheet as a deduction from shareholders' equity at cost. 84 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS...

  • Page 87
    ... plans (including the group's 21CN programme), prospective economic utilisation and physical condition of the assets concerned. Changes to the service lives of assets implemented from 1 April 2008 had no significant impact in aggregate on the results for the year ended 31 March 2009. Income tax...

  • Page 88
    ...on the group's financial statements. IFRIC 12, 'Service Concession Arrangements' (effective from 1 April 2009; effective under full IFRS from 1 April 2008, but not adopted by the EU until 25 March 2009) IFRIC 12 addresses the accounting by operators of public-private service concession arrangements...

  • Page 89
    ... exchange of dissimilar goods or services has occurred, IAS 18, 'Revenue'. The group is currently assessing the impact of the amendment upon the group's financial statements. BT GROUP PLC ANNUAL REPORT & FORM 20-F 87 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS...

  • Page 90
    ...21.1p 88 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS 1,976 (238) REPORT OF THE DIRECTORS Dividends paid in the year were £1,222m (2008: £1,241m, 2007: £1,053m), as shown in note 6. Dividends proposed in respect of 2009 were 6.5p per share (2008: 15.8p...

  • Page 91
    ...) 979 968 Total £m 20,223 233 (17,915) 2,541 (2,604) 2,510 (94) 15 22 2,484 368 2,852 Year ended 31 March 2007 Revenue Other operating income Operating costs Operating profit Finance expense Finance income Net finance expense Share of post tax profit of associates and joint ventures Profit on...

  • Page 92
    ... for 2009 includes BT Global Services contract and financial review charges of £1,639m (2008 and 2007: £nil), which are non-cash charges. For further detail, see note 3. b Primarily consists of investment in and redemption of amounts held in liquidity funds. 90 BT GROUP PLC ANNUAL REPORT & FORM...

  • Page 93
    ... Board of Directors on 13 May 2009 and were signed on its behalf by Sir Michael Rake Chairman Ian Livingston Chief Executive Tony Chanmugam Group Finance Director ADDITIONAL INFORMATION 91 BT GROUP PLC ANNUAL REPORT & FORM 20-F FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL...

  • Page 94
    ...internal functional units, BT Design and BT Operate. The activities of each of the customer-facing lines of business are as follows: BT Global Services serves major corporate, carrier and government organisations across the world, providing high-performance managed networked IT services, application...

  • Page 95
    ... 2,852 BT GROUP PLC ANNUAL REPORT & FORM 20-F 93 ADDITIONAL INFORMATION 484 181 402 43 864 44 663 44 123 72 2,536 384 FINANCIAL STATEMENTS BT Global Services £m BT Retail £m BT Wholesale £m Openreach £m Other £m Total £m REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 96
    ... include current and deferred taxation, retirement benefit obligations, finance lease liabilities, corporate borrowings and related derivatives. 94 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS 7,501...

  • Page 97
    ... items Specific items (note 4) Other operating income 52 72 228 352 (13) 339 2008 £m 50 74 235 359 (10) 349 2007 £m 20 68 148 236 (3) 233 BT GROUP PLC ANNUAL REPORT & FORM 20-F 95 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 98
    ... FINANCIAL STATEMENTS - NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3. Operating costs 2009 £m Costs by nature Staff costs: Wages and salaries Social security costs Pension costs Share based payment costs Total staff costs Own work capitalised Net staff costs Depreciation of property...

  • Page 99
    ... items is provided on page 79. 2009 £m Other operating income Net loss on sale of group undertakingsa Profit on sale of non current asset investmentsb 2008 £m 2007 £m 13 - 13 10 - 10 5 (2) 3 Operating costs BT Global Services restructuring charges: - Networks and products rationalisationc...

  • Page 100
    ... statements. The proposed dividend will be payable to all shareholders on the Register of Members on 14 August 2009. 98 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS - 14 17 - - 25 40 - 39 16 17 139 BUSINESS AND FINANCIAL REVIEWS...

  • Page 101
    ... THE CONSOLIDATED FINANCIAL STATEMENTS 7. Taxation Analysis of taxation (credit) expense for the year 2009 £m United Kingdom Corporation tax at 28% (2008 and 2007: 30%) Adjustments in respect of prior periods Non UK taxation Current Adjustments in respect of prior periods Total current tax (credit...

  • Page 102
    ... (83) (1.1)p (1.1)p 2008 millions of shares 8,066 106 51 8,223 1,737 21.5p 21.1p 2007 millions of shares 8,293 123 63 8,479 2,850 34.4p 33.6p 100 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS - (64) 164...

  • Page 103
    ...on sale of non current asset investments BT Global Services restructuring charges - Networks and products rationalisation - People and property - Intangible asset impairment 21CN asset impairment and related charges Restructuring costs Property rationalisation costs Reassessment of carrying value of...

  • Page 104
    ... and S&P rating. Cash and cash equivalents are primarily fixed rate financial assets held for periods ranging from one day to three months. 102 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS 2008 £m BUSINESS AND FINANCIAL REVIEWS...

  • Page 105
    ... Currency movements Other non-cash movements Net debt at 31 March 2008 £m 9,460 921 (2) (36) 18 10,361 7,914 1,510 35 (4) 5 9,460 BT GROUP PLC ANNUAL REPORT & FORM 20-F 103 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 106
    ... income statement. The recoverable amount of the impaired assets is equal to their value in use. The group performs an annual goodwill impairment test, based on its cash generating units (CGUs). The CGUs that have associated goodwill are BT Global Services and the following business units within BT...

  • Page 107
    ... than anticipated realisation of cost savings from the revised operating model, particularly in the next two financial years. BT GROUP PLC ANNUAL REPORT & FORM 20-F 105 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS Growth rates BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 108
    ... BT Global Services restructuring charges of £129m and £18m in relation to the review of the 21CN programme and associated voice strategy. All impairment losses were recognised in the income statement. The recoverable amount of the impaired assets is equal to their value in use. 106 BT GROUP PLC...

  • Page 109
    ... term loans denominated in Sterling with a fixed coupon. BT GROUP PLC ANNUAL REPORT & FORM 20-F 107 ADDITIONAL INFORMATION FINANCIAL STATEMENTS The majority of current asset investments are held for periods ranging from one day to one year. REPORT OF THE DIRECTORS 31 BUSINESS AND FINANCIAL...

  • Page 110
    ... assets in 2009 reï¬,ects the impact of the BT Global Services contract and financial review charges (see note 3). 108 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS 1,966 825 1,135 259 1,853 981 1,340 275 REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL...

  • Page 111
    ... most appropriate disclosure of credit concentrations. Cash collateral held against trade and other receivables amounted to £23m (2008: £29m). ADDITIONAL INFORMATION BT GROUP PLC ANNUAL REPORT & FORM 20-F 109 FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 112
    ... BT's credit rating by one ratings category to Baa2 and BBB, respectively. At the next coupon date in the 2010 financial year, the rate payable on these bonds will therefore increase by 0.5 percentage points. Hedged in a designated cash ï¬,ow hedge. Hedged in a designated cash ï¬,ow and fair value...

  • Page 113
    ... 267 805 BT GROUP PLC ANNUAL REPORT & FORM 20-F 111 ADDITIONAL INFORMATION 1,072 FINANCIAL STATEMENTS 2009 Liabilities £m 2008 Liabilities £m REPORT OF THE DIRECTORS Minimum lease payments £m £m 2009 2008 Repayment of outstanding lease obligations £m £m BUSINESS AND FINANCIAL REVIEWS...

  • Page 114
    ... 112 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS Non current payables mainly relate to operating lease liabilities and deferred gains on a prior period sale and finance leaseback transaction. REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS - 200...

  • Page 115
    ... 23 years. Financial liabilities comprise £166m (2008: £127m) of this balance. Other provisions includes: - Amounts provided in relation to networks and products rationalisation and people and property restructuring and rationalisation, following the 2009 BT Global Services operational review. The...

  • Page 116
    ... in equity 2009 £m Total equity at 1 April (Loss) profit for the year Dividends Share based payments Issue of shares Net purchase of treasury shares Exchange differences Actuarial (losses) gains Net fair value movements on cash ï¬,ow hedges Net fair value movements on available-for-sale assets Tax...

  • Page 117
    ... of the share capital, share premium account and capital redemption reserve of the prior parent company, British Telecommunications plc. BT GROUP PLC ANNUAL REPORT & FORM 20-F 115 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS 62 - OVERVIEW

  • Page 118
    ..., shareholdings, pension entitlements, share options and other long-term incentive plans is shown in the audited part of the Report on directors' remuneration (pages 64 to 69), which forms part of the financial statements. During 2009, the group purchased services in the normal course of business...

  • Page 119
    ... in the year ending 31 March: 2009 2010 2011 2012 2013 2014 Thereafter Total future minimum operating lease payments - 484 455 430 403 377 5,855 8,004 469 453 432 408 388 365 6,227 8,742 BT GROUP PLC ANNUAL REPORT & FORM 20-F 117 ADDITIONAL INFORMATION FINANCIAL STATEMENTS Operating lease...

  • Page 120
    ...fair value of net assets acquired Goodwill arising Consideration: Cash Deferred consideration Equity shares issued Total The outï¬,ow of cash and cash equivalents is as follows: Cash consideration Less: cash acquired Year ended 31 March 2009 BT Global Services On 31 July 2008 the group acquired 100...

  • Page 121
    ... had occurred on 1 April 2008, the group's revenue would have been higher by £3m and profit for the year would have been lower by £1m. BT GROUP PLC ANNUAL REPORT & FORM 20-F 119 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 122
    ...FINANCIAL STATEMENTS 28. Acquisitions continued Year ended 31 March 2008 BT Global Services Comsat International On 14 June 2007, the group acquired Comsat International Inc (Comsat International) through the purchase of 100% of the issued share capital of its parent company, CI Holding Corporation...

  • Page 123
    ... of employees' pay. The total pension cost for the year in respect of the group's main defined contribution scheme was £47m (2008: £37m, 2007: £28m) and £4m (2008: £3m, 2007: £3m) of contributions were outstanding at 31 March 2009. FINANCIAL STATEMENTS ADDITIONAL INFORMATION Defined...

  • Page 124
    ... group's pension schemes are as follows: FINANCIAL STATEMENTS ADDITIONAL INFORMATION 2009 £m Current service cost (including defined contribution schemes) Total operating charge Expected return on pension scheme assets Interest on pension scheme liabilities Net finance income Total amount charged...

  • Page 125
    ...ts paid Exchange differences Closing fair value of plan assets 37,448 2,621 (9,451) 441 - 18 (1,741) 17 29,353 2008 £m 38,390 2,448 (2,572) 388 320 19 (1,559) 14 37,448 BT GROUP PLC ANNUAL REPORT & FORM 20-F 123 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND...

  • Page 126
    ... point increase to: - discount rate - salary increases Additional 1 year increase to life expectancy 1.2 (0.3) (1.3) 124 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS The assumption for the expected return on scheme assets is...

  • Page 127
    ... current service cost, as a proportion of the active members' pensionable salaries, is expected to increase as the members of the scheme approach retirement. Despite the scheme being closed to new entrants, the projected payment profile extends over more than 60 years. FINANCIAL STATEMENTS REPORT...

  • Page 128
    ... part time employees. 31. Share based payments REPORT OF THE DIRECTORS ADDITIONAL INFORMATION FINANCIAL STATEMENTS The total charge recognised in 2009 in respect of share based payments was £31m (2008: £73m, 2007: £93m). The company has an employee share investment plan and savings-related share...

  • Page 129
    ... Plan (DBP) awards are granted annually to selected employees of the group. Shares in the company are transferred to participants at the end of three years if they continue to be employed by the group throughout that period. In accordance with the terms of the ISP, RSP and DBP, dividends or dividend...

  • Page 130
    ... price per share Number of outstanding options millions Number of exercisable options millions Normal dates of vesting and exercise (based on calendar years) BT Group Employee Sharesave Plans 2008 2009 2010 2011 2012 2013 2014 Total BT Group Legacy Option Plan 2001-2011 Total BT Group Global Share...

  • Page 131
    ...value-added benefits to the company. FINANCIAL STATEMENTS 4,675 1,211 1,247 32 887 3,848 1,590 727 549 527 3,518 1,212 763 748 23 REPORT OF THE DIRECTORS Employee Sharesave grants, under the BT Group Employee Sharesave and the BT Group International Employee Sharesave option plans, are valued...

  • Page 132
    ... THE CONSOLIDATED FINANCIAL STATEMENTS 33. Financial instruments and risk management The group issues or holds financial instruments mainly to finance its operations; to finance corporate transactions such as dividends, share buy backs and acquisitions; for the temporary investment of short-term...

  • Page 133
    ... treasury operation tightened the credit limits applied when investing with counterparties in response to market conditions and continued to monitor their credit quality and actively managed any exposures which arose. BT GROUP PLC ANNUAL REPORT & FORM 20-F 131 BUSINESS AND FINANCIAL REVIEWS...

  • Page 134
    ...'s European Medium Term Note and US Shelf programmes with maturities ranging between 2013 and 2037 and bank loans (see note 16). 132 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS (18) (21) (92) (146) - BUSINESS AND FINANCIAL REVIEWS...

  • Page 135
    ... the relevant reporting date. Future variable interest rate cash ï¬,ows were calculated using the most recent rate applied at the relevant balance sheet date. BT GROUP PLC ANNUAL REPORT & FORM 20-F 133 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS 2009 Loans and borrowings...

  • Page 136
    ... of £512m which had matured by 31 March 2008 realising a loss of £26m. 134 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS Less than 1 month 5 years REPORT OF THE DIRECTORS See note 16. BUSINESS AND FINANCIAL REVIEWS Derivative fair value OVERVIEW

  • Page 137
    ... exchange at the balance sheet date. Carrying amount 2008 £m Fair value 2008 £m 2009 £m Financial liabilities: Listed bonds, debentures and notes Finance leases Other loans and borrowings 2009 £m 12,189 332 1,386 9,298 320 1,724 11,384 366 1,338 9,436 347 1,690 BT GROUP PLC ANNUAL REPORT...

  • Page 138
    FINANCIAL STATEMENTS GLOSSARY OF TERMS AND US EQUIVALENTS Term used in UK Annual Report Accounts Associates Capital allowances Capital redemption reserve Finance lease Financial year Freehold Interests in associates and joint ventures Leaver costs Loans to associates and joint ventures Own work ...

  • Page 139
    ... parent company financial statements. OVERVIEW ADDITIONAL INFORMATION FINANCIAL STATEMENTS BT GROUP PLC ANNUAL REPORT & FORM 20-F 137 PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors London, United Kingdom 13 May 2009 REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS

  • Page 140
    ... directors and the Chairman of BT Group plc were the only employees of the company during the 2009 financial year. The costs relating to qualifying services provided to the company's principal subsidiary, British Telecommunications plc, are recharged to that company. 138 BT GROUP PLC ANNUAL REPORT...

  • Page 141
    ... Ian Livingston Chief Executive Tony Chanmugam Group Finance Director BT GROUP PLC ANNUAL REPORT & FORM 20-F 139 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS a Throughout 2009, the company held a 100% investment in BT Group Investments Limited, a company registered in...

  • Page 142
    ... 140 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS a The authorised share capital of the company throughout 2009 and 2008 was £13,463m, representing 269,260,253,468 ordinary shares of 5p each. The allotted, called up and fully paid...

  • Page 143
    ... group. A full list of subsidiaries, joint ventures and associates will be annexed to the company's next annual return filed with the Registrar of Companies. b The principal operating subsidiaries (listed above) have a reporting date of 31 March, except for BT US Investments Limited which changed...

  • Page 144
    ... before contract and financial review charges recorded within BT Global Services and specific items. Quarters Year ended 31 March 2008 Revenue Other operating income Operating costs Operating profit Net finance expense Share of post tax losses of associates and joint ventures Profit (loss...

  • Page 145
    ...the accounting policies section on page 79. 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. b Based on actual dividends paid and/or year end exchange rate...

  • Page 146
    ...Retirement benefit obligations Other non current liabilities Total assets less liabilities Called up share capital Share premium account Capital redemption reserve Other reserves Retained (loss) earnings Total parent shareholders' equity Minority interests Total equity 2009 £m 3,788 15,405 - 4,068...

  • Page 147
    ... net pension finance income is covered by adjusted operating profit. d The number of times net finance expense is covered by total operating profit. BT GROUP PLC ANNUAL REPORT & FORM 20-F 145 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS Expenditure on property, plant...

  • Page 148
    ... revenue, less mobile POLOs, divided by average number of primary lines. c Includes line rental, broadband, select services and packages. 146 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS 107.0 111.9 106.2 104.4 102.1 BUSINESS...

  • Page 149
    148 INFORMATION FOR SHAREHOLDERS 160 CROSS REFERENCE TO FORM 20-F 163 GLOSSARY OF TERMS 166 INDEX BT GROUP PLC ANNUAL REPORT & FORM 20-F 147 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW ADDITIONAL INFORMATION

  • Page 150
    ... conditions resulting in a material increase in overtime, staff or other costs; the timing of entry and profitability of BT in certain communications markets; significant changes in market shares for BT and its principal products and services; ï¬,uctuations in foreign currency exchange rates...

  • Page 151
    ... PLC ANNUAL REPORT & FORM 20-F 149 FINANCIAL STATEMENTS The prices are the highest and lowest closing middle market prices for BT ordinary shares, as derived from the Daily Official List of the London Stock Exchange and the highest and lowest closing sales prices of ADSs, as reported on the New...

  • Page 152
    ... on the date the ordinary dividends were paid. per ordinary share Final Total pence pence 6.50 7.60 10.00 10.40 1.10 10.40 11.90 15.10 15.80 6.50 per ADS Total £ 1.040 1.190 1.510 1.580 0.650 per ADS Total US$ 1.919 2.162 2.963 2.863 -a Financial years ended 31 March 2005 2006 2007 2008 2009 3.90...

  • Page 153
    ... shareholder return REPORT OF THE DIRECTORS ADDITIONAL INFORMATION FINANCIAL STATEMENTS Total shareholder return (TSR) is the measure of the returns that a company has provided for its shareholders, reï¬,ecting share price movements and assuming reinvestment of dividends. Over the last five years...

  • Page 154
    ... THE DIRECTORS ADDITIONAL INFORMATION FINANCIAL STATEMENTS BT, along with many other leading UK companies, subscribes to Experian's Unclaimed Assets Register (UAR), a register of individuals owed unclaimed financial assets such as shareholdings and dividends. UAR provides members of the public with...

  • Page 155
    ... shares. Subject to this, the rights of new shares can take priority over the rights of existing shares, or existing shares can take priority over them, or the new shares and the existing shares can rank equally. BT GROUP PLC ANNUAL REPORT & FORM 20-F 153 BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 156
    ... year the company must hold an annual general meeting. The Board can call a general meeting at any time and, under general law, must call one on a shareholders' requisition. 154 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS...

  • Page 157
    ... be paid their expenses properly incurred in connection with the business of the company. The Board can award extra fees to a director who holds an executive position; acts as chairman or deputy chairman; serves on a Board committee at the request of the Board; or performs any other services which...

  • Page 158
    ... the computations of his foreign tax credit limitation with respect to any qualified dividend income paid by BT to him, as applicable. 156 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW

  • Page 159
    ...UK), provided that the transfer documents are executed and always retained outside the UK. BT GROUP PLC ANNUAL REPORT & FORM 20-F 157 ADDITIONAL INFORMATION UK stamp duty FINANCIAL STATEMENTS US information reporting and backup withholding REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 160
    ... Values EAB Annual Report Quarterly results releases Current Cost Financial Statements Statement of Business Practice (The Way We Work) Publication date May May May May July, November, February and May September January 2009 For printed copies, when available, contact the Shareholder Helpline...

  • Page 161
    ... BUSINESS AND FINANCIAL REVIEWS ADDITIONAL INFORMATION FINANCIAL STATEMENTS BT GROUP PLC ANNUAL REPORT & FORM 20-F 159 If private shareholders have any enquiries about their shareholding, they should contact our Registrars, Equiniti, at the address below. Equiniti maintain BT Group's share...

  • Page 162
    ... results 5B Liquidity and capital resources 110 117 130 5C Research and development, patents and licences 5D Trend information 148 160 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION 22 145 32 FINANCIAL STATEMENTS REPORT OF THE DIRECTORS 42 42 8 BUSINESS AND FINANCIAL...

  • Page 163
    ... Financial review Group results Consolidated financial statements Notes to the consolidated financial statements Employees Operational statistics Report on directors' remuneration Consolidated financial statements Notes to the consolidated financial statements Share based payments Shareholders...

  • Page 164
    ... purchasers Change in registrant's reporting accountant Corporate Governance Financial statements Financial statements 53 77 78 79 142 162 BT GROUP PLC ANNUAL REPORT & FORM 20-F ADDITIONAL INFORMATION FINANCIAL STATEMENTS 73 REPORT OF THE DIRECTORS Not applicable Information for shareholders...

  • Page 165
    ...customers on low income benefits BT Business One Plan: a combined landline, mobile and broadband calling package designed for businesses BT Conferencing: a business within BT Enterprises offering global audio, video and web collaboration services BT Design: a BT internal functional unit responsible...

  • Page 166
    ... exchange lines are physically disconnected from BT's network and connected to other communications providers' networks. This enables operators, other than BT, to use the company's local loop to provide services to customers 164 BT GROUP PLC ANNUAL REPORT & FORM 20-F T TSR: Total shareholder return...

  • Page 167
    ...) connection WLR: wholesale line rental - enables communications providers to offer their own-branded telephony services over the Openreach network BT GROUP PLC ANNUAL REPORT & FORM 20-F 165 ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS...

  • Page 168
    ... 23 Exchange rates 152 B Balance sheet 41-44, 91, 139-140, 144 Board, the 52-53 Board of Directors and Operating Committee 50-51 Branches outside the UK 28 BT Design 19 BT Global Services 10-13 BT Operate 20 BT Retail 13-16 BT Wholesale 16-17 Business policies 71-73 Business review 8-25 Financial...

  • Page 169
    ... buy back 153 Share capital 84, 115, 138 Share based payments 82, 126-129, 138 ShareGift 152 Shareholder communication 159 Shareholders and annual general meeting 74 Shareholdings, analysis of 150 Specific items 36-38, 97 Statement of recognised income and expense, group 89 Stock exchange listings...

  • Page 170
    ... Street, London EC1A 7AJ Registered in England and Wales No. 4190816 Produced by BT Group Printed in England by Pindar Graphics Printed on Revive 50:50 Silk, which is produced using 50% recovered waste fibre and 50% virgin wood fibre. All pulps used are elemental chlorine free (ECF). www.bt.com...