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 Home >> Report of the directors

Report of the directors

The directors submit their report and the audited financial statements of the company, BT Group plc, and the group, which includes its subsidiary undertakings, for the 2003 financial year.

Introduction
BT Group plc is the listed holding company for the BT group of companies and was formed when the mmO2 business (comprising what had been British Telecommunications plc’s mobile activities in the UK, the Netherlands, Germany and the Republic of Ireland) was demerged on 19 November 2001.
 
The Business review, Our commitment to society, Financial review, the discussion on Corporate governance, Report on directors’ remuneration and Risk Factors form part of this report.
The audited financial statements are also presented here.

Principal activity
The group’s principal activity is the supply of communications services and equipment. In the 2003 financial year, approximately 94% of group turnover arose from operations in the UK.

Directors
The names and biographical details of the directors of the company are given here. All served throughout the financial year, with the exception of Ian Livingston and Clayton Brendish who joined the Board on 8 April and 1 September 2002, respectively. In addition, Philip Hampton served as a director until his retirement on 30 April 2002.
 
Following his retirement from the Board on 1 May 2001, the former Chairman, Sir Iain Vallance, remained with BT as President Emeritus until 31 July 2002.
 
In accordance with the articles of association, Clayton Brendish, having been appointed as a director by the Board, retires at the forthcoming annual general meeting (AGM) and will be proposed for election. Sir Anthony Greener, Louis Hughes and Maarten van den Bergh retire by rotation and will be proposed for re-election. Details of these directors’ contracts of appointment are included in the Report on directors’ remuneration and the discussion on Corporate governance.

Substantial shareholdings
At 21 May 2003, the company had received notifications from Legal & General Investment Management Limited and Barclays PLC under Part VI of the Companies Act 1985 in respect of holdings of 261,519,674 shares and 261,518,424 shares respectively each representing holdings of 3.02% of the company’s issued ordinary share capital.

Interest of management in certain transactions
During and at the end of the 2003 financial year, none of the company’s directors was materially interested in any material transaction in relation to the group’s business and none is materially interested in any presently proposed material transactions.

Policy on the payment of suppliers
BT’s policy is to use its purchasing power fairly and to pay promptly and as agreed.
 
BT has a variety of payment terms with its suppliers. The terms for payments for purchases under major contracts are settled when agreeing the other terms negotiated with the individual suppliers. It is BT’s policy to make payments for other purchases within 30 working days of the invoice date, provided that the relevant invoice is presented to the company in a timely fashion and is complete. BT’s payment terms are printed on the company’s standard purchase order forms or, where appropriate, specified in individual contracts agreed with the supplier. The ratio, expressed in days, between the amounts invoiced to the company by its suppliers in the 2003 financial year and the amounts owed to its trade creditors at the end of the year was 23 days.

Auditors
Following the conversion of PricewaterhouseCoopers, the company’s auditors, to a limited liability partnership from 1 January 2003, PricewaterhouseCoopers resigned and the directors appointed the new firm, PricewaterhouseCoopers LLP, as auditors.
 
A resolution to reappoint PricewaterhouseCoopers LLP as auditors of the company and authorise the directors to settle their remuneration will be proposed at the AGM.

Authority to purchase shares
The authority given at last year’s AGM of the company held on 17 July 2002 for the company to purchase in the market 867 million of its shares, representing 10% of the issued share capital, expires on 16 October 2003. This authority was not used during the year and shareholders will be asked to give a similar authority at the AGM.

AGM resolutions
The resolutions to be proposed at the AGM to be held on 16 July 2003, together with explanatory notes, appear in the separate Notice of Annual General Meeting sent to all shareholders.

By order of the Board
Larry Stone
Secretary
21 May 2003

Registered office: 81 Newgate Street, London EC1A 7AJ
Registered in England and Wales No. 4190816

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