BT 2008 Annual Report Download - page 142

BT Group plc Annual Report & Form 20-F 141
BT Group plc accounting policies
(i) Accounting basis
The financial statements are prepared on a going concern basis
and under the historical cost convention as modified by the
revaluation of certain financial assets and liabilities at fair value
in accordance with the Companies Act 1985 and applicable
United Kingdom accounting standards (UK GAAP).
As permitted by Section 230(3) of the Companies Act 1985,
the company’s profit and loss account has not been presented.
The BT Group plc consolidated financial statements for the
year ended 31 March 2008 contain a consolidated statement of
cash flows. Consequently, the company has taken advantage of
the exemption in FRS 1, ‘Cash Flow Statements’ not to present
its own cash flow statement.
The BT Group plc consolidated financial statements for the
year ended 31 March 2008 contain related party disclosures.
Consequently, the company has taken advantage of the
exemption in FRS 8, ‘Related Party Disclosures’ not to disclose
transactions with other members of the BT Group.
The BT Group plc consolidated financial statements for the
year ended 31 March 2008 contain financial instrument
disclosures which comply with FRS 29, ‘Financial Instruments:
Disclosures’. Consequently, the company is exempted by FRS 29
from providing its disclosure requirements in respect of its
financial instruments.
(ii) Investments in subsidiary undertakings
Investments in subsidiary undertakings are stated at cost and
reviewed for impairment if there are indicators that the carrying
value may not be recoverable.
(iii) Taxation
Full provision is made for deferred taxation on all timing
differences which have arisen but not reversed at the balance
sheet date. Deferred tax assets are recognised to the extent that
it is regarded as more likely than not that there will be sufficient
taxable profits from which the underlying timing differences can
be deducted. The deferred tax balances are not discounted.
(iv) Dividends
Dividend distributions are recognised as a liability in the year in
which the dividends are approved by the company’s
shareholders. Interim dividends are recognised when they are
paid; final dividends when authorised in general meetings by
shareholders.
(v) Share capital
Ordinary shares are classified as equity. Repurchased shares of
the company are recorded in the balance sheet as treasury
shares and presented as a deduction from shareholders’ equity
at cost.
(vi) Cash
Cash includes cash in hand, bank deposits repayable on demand
and bank overdrafts.
(vii) Share based payments
The company does not incur a charge for share based payments.
However the issuance by the company of share options and
awards to employees of its subsidiaries represents additional
capital contributions to its subsidiaries. An addition to the
company’s investment in subsidiaries is recorded with a
corresponding increase in equity shareholders’ funds. The
additional capital contribution is determined based on the fair
value of options and awards at the date of grant and is
recognised over the vesting period.
Other information
(i) Dividends
The directors are proposing that a final dividend in respect of
the year ended 31 March 2008 of 10.4 pence will be paid to
shareholders on 15 September 2008, taking the full year
proposed dividend in respect of the 2008 financial year to 15.8
pence (2007: 15.1 pence). This dividend is subject to
shareholder approval at the Annual General Meeting and
therefore the liability of approximately £805 million (2007:
£825 million) has not been included in these financial
statements.
(ii) Employees
The four (2007: five) executive directors and the Chairman of BT
Group plc were the only employees of the company during the
2008 financial year. The costs relating to qualifying services
provided to the company’s principal subsidiary, British
Telecommunications plc, are recharged to that company.
Financial statements
Financial statements of BT Group plc
Financial statements