NOTES TO THE FINANCIAL STATEMENTS


25. Directors
Directors’ emoluments

The emoluments of the directors for the year ended 31 March 1996 were, in summary, as follows:

1996
£000
1995
£000

Salaries 1,471 1,482
Performance-related bonus 543 351
Other benefits 68 153


2,082 1,986
Payments to non-executive directors (a) 381 313


2,463 2,299
Payments to pension scheme 235 216
Provision for unfunded pensions 789 380


Total emoluments 3,487 2,895


(a) Payments to non-executive directors include fees paid to their principal employer of £24,000 (1995 - £39,000).

Pensions in respect of the management services of past and present directors paid by the company for the year ended 31 March 1996 were £84,000 (1995 - £82,000). The cumulative provision for present and past directors’ unfunded pension benefits at 31 March 1996 was £4,171,000 (1995 - £3,150,000), including the interest accounted for on the provision, and is based on actuarial advice.

More detailed information concerning directors’ remuneration, shareholdings, options and long-term incentive plans is shown in the report of the Board Committee on Executive Remuneration (Part 1 and Part 2).

1996 1995


26. People employed Year end
’000
Average
’000
Year end
’000
Average
’000



Number of employees in the group:
UK 127.8 132.6 134.9 146.6
Overseas 2.9 2.6 2.6 2.3



Total employees 130.7 135.2 137.5 148.9



27. Employee share schemes
The company has a share ownership scheme used for employee share allocations (profit sharing), savings-related share option schemes for its employees and those of participating subsidiaries and further share option schemes for selected group employees. It also has a performance share plan which was introduced during the year and a long-term remuneration plan.

Share option schemes
The major share option scheme, the BT Employee Sharesave Scheme, is savings related and the share options are normally exercisable on completion of a five-year Save As You Earn contract; there is a similar savings-related scheme for group employees overseas. Under the other share option schemes, share options are normally exercisable between the third and tenth anniversaries of the date of grant.

Options outstanding under these share option schemes at 31 March, together with their exercise prices and dates, were as follows:

Number of
ordinary shares
Number of
ordinary shares


Normal dates of exercise Option price
per share
1996
millions
1995
millions
Normal dates of exercise Option price
per share
1996
millions
1995
millions


Savings-related schemes:Other share option schemes:
1995210p- 421991-1998 243p1 1
1996244p58641992-1999 281p1 2
1997265p50551993-2000 289p4 7
1998320p50551994-2001 380p1 1
1999341p30351995-2002 333p5 8
2000306p50521996-2003 430p3 3
1997-2004 375p4 4


Total options outstanding257329

In the year ended 31 March 1996, options for 57 million shares were exercised under the share option schemes and options for 15 million shares lapsed. No significant options were granted in the year.

Long-term remuneration and performance share plans

A long-term remuneration plan (LTRP) and a performance share plan (PSP) were introduced for employees of the group in 1994 and 1995, respectively. Under the plans, company shares are acquired by an employee share ownership trust and are conditionally awarded to participants, although participants will only be entitled to these shares in full at the end of a five-year period under the LTRP and the end of a three-year period, which may be extended to four or five years, under the PSP if, at the end of the applicable period, the company has met the relevant pre-determined corporate performance measure and the participants are still employed by the group. Awards of shares were granted in 1994 and 1995 under the LTRP and in 1995 under the PSP. The corporate performance measure assesses the company’s overall performance against those top 100 companies listed on the London Stock Exchange, as rated by the Financial Times (the FT-SE 100 index), at the beginning of the relevant performance period.

27. Employee share schemes (continued)
At 31 March 1996, 1.8 million shares were held in trust for the PSP and 1.5 million (1995 – 0.7 million) were held in trust for the LTRP. Dividends earned on the shares during the conditional periods are reinvested in company shares for the potential benefit of the participants. Additional information relating to the plans is as follows:

PSP LTRP


1996
£m
1996
£m
1995
£m


Value of range of possible future transfers: nil to 6.5 4.7 2.7
Provision for the costs of the plans charged to the profit and loss account in year 2.0 0.7 0.2
Nominal value of shares held in trust 0.4 0.4 0.2
Market value of shares held in trust 6.6 5.5 2.7




The values of possible future transfers of shares under the plans were based on the company’s share price at 31 March 1996 of 369p (1995 - 391p). The provisions for the costs of the plans were based on best estimates of the company’s performance over the plans’ performance periods, relating to those portions of the plan performance periods from commencement up to the financial year end.

28. Auditors
The auditors’ remuneration for the year ended 31 March 1996 for the group was £2,138,000 (1995 - £1,879,000), including £1,170,000 (1995 - £1,164,000) for the company.

The following fees were paid or are payable to the company’s auditors, Coopers & Lybrand, in the UK for the year ended 31 March 1996:

1996
£000
1995
£000

Audit of the company’s statutory accounts 1,170 1,164
Audits of the UK subsidiary undertakings’ statutory accounts 380 432
Other services, including regulatory audits and tax compliance work 4,004 3,049


Total 5,554 4,645


In addition, fees of £1,364,000 (1995 - £637,000) were paid or are payable to other members of Coopers & Lybrand International for the year ended 31 March 1996 in respect of audit and other services to the company’s overseas subsidiary undertakings and in respect of other services to the group.
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