BT 2010 Annual Report Download - page 109

FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
107BT GROUP PLC ANNUAL REPORT & FORM 20-F
FINANCIAL STATEMENTSADDITIONAL INFORMATION REPORT OF THE DIRECTORS REVIEW OF THE YEAR OVERVIEW
6. Finance expense and finance income
2010 2009 2008
Year ended 31 March £m £m £m
Finance expense
Interest on listed bonds, debentures and notesa,b 806 777 629
Interest on finance leasesa18 25 31
Interest on other borrowingsa58 130 159
Unwinding of discount on provisionsa433
Fair value loss on derivatives not in a designated hedge relationshipe19 29 41
Interest on pension scheme liabilities 2,211 2,308 2,028
Finance expensec,d 3,116 3,272 2,891
Less: amounts included in the cost of qualifying assetsf(3) – –
Total finance expense 3,113 3,272 2,891
aCalculated using the effective interest rate method unless otherwise stated below.
bIncludes a net charge of £44m (2009: £25m, 2008: £77m) relating to fair value movements on derivatives recycled from the cash flow reserve.
cIncludes a net credit of £29m (2009: net charge of £39m, 2008: net credit of £6m) relating to fair value movements arising on hedged items and net charge of £29m (2009: net credit of £39m, 2008: net
charge of £6m) relating to fair value movements arising on derivatives designated as fair value hedges.
dIncludes a net credit of £451m (2009: net charge of £2,161m, 2008: net charge of £373m) relating to foreign exchange movements on loans and borrowings and a net charge of £451m (2009: net credit
of £2,161m, 2008: net credit of £373m) relating to fair value movements on derivatives recycled from the cash flow reserve. The items generating this foreign exchange are in designated hedge
relationships.
eIncludes a loss of £nil (2009: £nil, 2008: £2m) recycled from the cash flow reserve arising on de-designation of derivatives from a hedge relationship and includes a charge of £9m arising from the
negotiation of swap break dates on certain derivatives.
fThe weighted average capitalisation rate on general borrowings was 7.9% in 2010.
2010 2009 2008
Year ended 31 March £m £m £m
Finance income
Other interest and similar income
Interest on available-for-sale investments 5 14 25
Interest on loans and receivables 71740
Other interest and similar incomea11––
Expected return on pension scheme assets 1,932 2,621 2,448
Total finance income 1,955 2,652 2,513
a2010 includes £11m relating to interest on settlement of tax matters disclosed as a specific item (see note 5).
2010 2009 2008
Year ended 31 March £m £m £m
Net finance expense before specific items and pensions 890 933 798
Net interest expense (income) on pensions 279 (313) (420)
Net finance expense before specific items 1,169 620 378
Specific items (11) – –
Net finance expense 1,158 620 378
7. Dividends
2010 2009 2008
pence pence pence
Year ended 31 March per share £m per share £m per share £m
Final dividend paid in respect of the prior year 1.10 85 10.40 804 10.00 810
Interim dividend paid in respect of the current year 2.30 178 5.40 418 5.40 431
3.40 263 15.80 1,222 15.40 1,241
The Board recommends that a final dividend in respect of the year ended 31 March 2010 of 4.6p per share will be paid to shareholders on
6 September 2010, taking the full year proposed dividend in respect of the 2010 financial year to 6.9p (2009: 6.5p, 2008: 15.8p) which
amounts to approximately £534m (2009: £503m, 2008: £1,236m). This dividend is subject to approval by shareholders at the Annual
General Meeting and therefore the liability of approximately £356m (2009: £85m) has not been included in these financial statements.
The proposed dividend will be payable to all shareholders on the Register of Members on 13 August 2010.