Net debt has been halved since the last year end to £13.7 billion at 31 March 2002 – £5.9 billion raised by the rights issue, £8 billion from the disposal of businesses, including interests in Japan and Spain, and Yell, and £2.4 billion from the sale and leaseback of our properties.

Capital expenditure on property, plant and equipment in continuing activities has been reduced by 20% to £3.1 billion, reflecting tight control over spending.

Return on capital employed from continuing activities before goodwill amortisation and exceptional items was 16% for the year.

Fixed assets This is mainly exchange and network equipment, property and similar items which we own and use to run our business, goodwill and investments in our ventures.

Current assets Principally, amounts which we have billed our customers but not yet received and short-term investments.

Creditors: amounts falling due after one year Money borrowed on a long-term basis to fund our operations.

Provisions for liabilities and charges Amounts set aside for liabilities that are not yet certain.

		2002 £m		Proforma (e) 2001 £m		2001 (b) £m
Fixed assets		17,551		23,883		45,209
Current assets		10,122		8,103		9,590
Creditors: amounts falling due within one year		(9,390	)	(12,492	)	(20,733	)
Net current assets (liabilities)		732		(4,389	)	(11,143	)
Total assets less current liabilities		18,283		19,494		34,066
Creditors: amounts falling due after one year		16,245		18,775		18,775
Provisions for liabilities and charges		2,324		2,512		2,738
Minority interests		72		499		499
Capital and reserves (f)		(358	)	(2,292	)	12,054
		18,283		19,494		34,066
(e) Unaudited pro forma balance sheet information has been presented for BT at 31 March 2001 as if the demerger of mmO2 and the sale of other discontinued businesses (see note a, Summary group profit and loss account) had occurred on that date. (f) Although the consolidated capital and reserves show a deficiency of £358 million, BT Group plc, the company, has capital and reserves at 31 March 2002 of £10 billion.

Total shareholder return
Total shareholder return (TSR) is the measure of the returns that a company has provided for its shareholders reflecting share price movements and assuming reinvestment of dividends. It is therefore a good indicator of a company’s overall performance.

Since the demerger on 19 November 2001, BT Group’s share price rose slightly from 278p to close at 280p on 31 March 2002. In this period, BT Group’s TSR was in line with the FTSE 100 index at 0.7%. This was significantly better than the performance of the FTSE 350 UK telco index and the FTSE European 300 telecom services sector.

During the 2002 financial year, BT’s TSR was 21.7% negative while the FTSE 100 TSR was minus 4.0%. However, BT outperformed the UK telco index and European telecom sector as noted above.

Over the last five years, BT initially performed very strongly but, like many stocks in the technology, media and telecommunications (TMT) sector, suffered falls in its share price during the decline of the past two years. BT Group’s TSR (as adjusted for the rights issue and demerger) over the last five years was 16.4%, compared to a FTSE 100 TSR rise of 40.5%.

Corporate governance
BT is committed to the highest standards of corporate governance. The directors consider that, throughout the year, BT has applied the principles in section 1 of the Combined Code on Corporate Governance, issued by the UK Listing Authority.