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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 2007 contain a consolidated
statement of cash flows. Consequently, the company has
taken advantage of the exemption in FRS 1, (Revised
1996) ‘Cash Flow Statements’ not to present
its own cash flow statement.
The
BT Group plc consolidated financial statements for the
year ended 31 March 2007 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 2007 contain financial instrument
disclosures which comply with FRS 25, ‘Financial
Instruments: Disclosure and Presentation’. Consequently,
the company has taken advantage of the exemption in
FRS 25 not to present separate financial instrument
disclosures for the company.
(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)
Investments
Investments
comprise an available-for-sale asset. Available-for-sale
financial assets are carried at fair value, with unrealised
gains and losses recognised in equity until the financial
asset is de-recognised, at which time the cumulative
gain or loss previously recognised in equity is taken
to the income statement, in the line item that most
appropriately reflects the nature of the item or transaction.
(iv)
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.
(v)
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.
(vi)
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.
(vii)
Cash
Cash includes
cash in hand, bank deposits repayable on demand and
bank overdrafts.
(viii)
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 2007 of 10.0 pence will be paid
to shareholders on 17 September 2007, taking the full
year proposed dividend in respect of the 2007 financial
year to 15.1 pence (2006: 11.9 pence). This dividend
is subject to shareholder approval at the Annual General
Meeting and therefore the liability of £825 million
(2006: £631 million) has not been included in
these financial statements.
(ii)
Employees
The five (2006:
five) executive directors of BT Group plc were the only
employees of the company during the 2007 financial year.
The costs relating to qualifying services provided to
the company’s principal subsidiary, British Telecommunications
plc, are recharged to that company.
(iii)
Available-for-sale
The movement
in the available-for-sale reserve in the year was £nil
(2006: £nil).
BT
GROUP PLC COMPANY BALANCE SHEET
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2007
£m |
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2006
£m |
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Fixed
assets
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|
|
|
|
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Investments
in subsidiary undertakings
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10,064 |
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9,971 |
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Total
fixed assets
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10,064 |
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9,971 |
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Current
assets
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Debtorsa
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137 |
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3 |
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Investmentsb
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– |
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|
1 |
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Cash
at bank and in hand
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17 |
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|
22 |
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|
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Total
current assets
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154 |
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26 |
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Creditors:
amounts falling due within one yearc
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40 |
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57 |
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Net
current assets (liabilities)
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114 |
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(31 |
) |
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Total
assets less current liabilities
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10,178 |
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9,940 |
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Capital
and reservesd
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Called
up share capital
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432 |
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432 |
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Share
premium account
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31 |
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7 |
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Capital
redemption reserve
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2 |
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2 |
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| Profit
and loss account |
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9,713 |
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9,499 |
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| Total
equity shareholders’ funds |
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10,178 |
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9,940 |
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| a |
Debtors
consists of amounts owed by subsidiary undertakings
of £137 million (2006: £3 million).
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| b |
At
31 March 2006, the company held an available-for-sale
asset with a book value and market value of £1
million (2007: £nil).
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| c |
Creditors
consists of amounts owed to subsidiary undertakings
of £8 million (2006: £27 million)
and other creditors of £32 million (2006:
£30 million).
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| d |
Capital
and reserves are shown below.
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The
financial statements of the company were approved by the board of the directors on 16
May 2007 and were signed on its behalf by
Sir
Christopher Bland
Chairman
Ben
Verwaayen
Chief Executive
Hanif
Lalani
Group Finance Director
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Capital |
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Profit |
a,c,d |
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Share |
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Share
premium |
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|
redemption |
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and
loss |
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capital |
a |
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account |
b |
|
reserve |
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|
account |
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Total |
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£m |
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£m |
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£m |
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£m |
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£m |
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At
1 April 2005
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432 |
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3 |
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|
2 |
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9,647 |
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10,084 |
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Profit
for the financial year
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– |
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– |
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– |
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1,108 |
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1,108 |
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Dividends
paid
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– |
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– |
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– |
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(912 |
) |
|
(912 |
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Net
purchase of treasury shares
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– |
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– |
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– |
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(344 |
) |
|
(344 |
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Arising
on share issues
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– |
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4 |
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|
– |
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– |
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4 |
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At
31 March 2006
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432 |
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7 |
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2 |
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9,499 |
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9,940 |
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Profit
for the financial year
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– |
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|
– |
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|
– |
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1,458 |
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1,458 |
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Dividends
paid
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– |
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|
– |
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– |
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(1,053 |
) |
|
(1,053 |
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Capital
contribution in respect of share based payments
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|
– |
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|
– |
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|
– |
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|
93 |
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|
93 |
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Net
purchase of treasury shares
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|
|
– |
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|
– |
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|
– |
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(284 |
) |
|
(284 |
) |
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Arising
on share issues
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|
– |
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|
24 |
|
|
– |
|
|
– |
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|
24 |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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At
31 March 2007
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432 |
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|
31 |
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|
2 |
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9,713 |
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10,178 |
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| a |
The
authorised share capital of the company throughout
the years ended 31 March 2007 and 2006 was £13,463
million representing 269,260,253,468 ordinary
shares of 5p each.
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The
allotted, called up and fully paid ordinary share
capital of the company at 31 March 2007 was £432
million (2006: £432 million), representing
8,640,654,852 ordinary shares of 5p each (2006:
8,635,377,801). Of the authorised but unissued
share capital at 31 March 2007, 21 million ordinary
shares (2006: 26 million) were reserved to meet
options granted under employee share option schemes.
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| b |
The
share premium account, representing the premium
on allotment of shares is not available for distribution.
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| c |
The
profit for the financial year, dealt with in the
profit and loss account of the company and after
taking into account dividends from subsidiary
undertakings, was £1,458 million (2006:
£1,108 million). As permitted by Section
230 of the Companies Act 1985, no profit and loss
account of the company is presented.
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| d |
During
the year ended 31 March 2006 the company repurchased
147,550,000 (2006: 165,772,145) of its own shares
of 5p each, representing 2% (2006: 2%) of the
called-up share capital, for consideration (including
transaction costs) of £404 million (2006:
£365 million). At 31 March 2007 370,877,631
shares (2006: 290,047,231) with an aggregate nominal
value of £19 million (2006: £15 million)
are held as treasury shares at cost.
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