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 2004 financial year.
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 plcís mobile activities in the UK, the Netherlands, Germany
and the Republic of Ireland) was demerged on 19 November 2001.
and financial review, the discussion on Corporate
governance, the Report
on directorsí remuneration and Risk
Factors form part of this report. The audited
financial statements are also presented.
The groupís principal
activity is the supply of communications services and equipment. In the 2004
financial year, approximately 93% of group turnover arose from operations in
The names and biographical details of
the directors of the company are available from the Board
of directors and Operating Committee section. All served throughout
the financial year.
with the articles of association, Sir Christopher Bland retires
by rotation at the forthcoming annual general meeting and will be
proposed for re-election. Andy Green, Ian Livingston and John Nelson
also retire by rotation and will be proposed for re-election. Details
of these directorsí contracts of appointment are included in the
directorsí remuneration and the discussion on Corporate
At 19 May 2004, the
company had received notifications from Legal & General Investment
Management Limited, Barclays PLC and Brandes Investment Partners LLC, under
Part VI of the Companies Act 1985, in respect of holdings of 289,727,496
shares, 347,436,030 shares and 347,201,310 shares respectively, representing
holdings of 3.37%, 4.04% and 4.04% of the companyís issued ordinary share
Interest of management in
During and at the end of
the 2004 financial year, none of the companyís directors was materially
interested in any material transaction in relation to the groupís business and
none is materially interested in any presently proposed material transactions.
Policy on the payment of
BTís policy is to use its purchasing
power fairly and to pay promptly and as agreed.
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 BTís 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. BTís payment
terms are printed on the companyís 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 2004 financial year and the amounts owed to its trade
creditors at the end of the year was 35 calendar days.
continuing policy is not to make political donations in the everyday
sense of those words. This is explained in the Corporate
governance section. However, during the 2004 financial year
British Telecommunications plc made the following payments to cover
the cost of hosting briefing meetings about the companyís activities
with MPs and MEPs: Labour Party £8,882; Conservative Party £8,366;
Liberal Democrat Party £5,942; Scottish National Party £2,500.
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
The authority given at last yearís
AGM of the company held on 16 July 2003 for the company to purchase in the
market 867 million of its shares, representing 10% of the issued share capital,
expires on 15 October 2004. Shareholders will be asked to give a similar
authority at the AGM.
the 2004 financial year, 81 million shares of 5 pence each were purchased under
this authority (1% of the share capital) for a total consideration of £144
million, at an average price of £1.77 per share. The shares were purchased in
an on-market programme of buying back the companyís shares, initiated in
November 2003, as part of the companyís shareholder distribution strategy. 36
million shares were cancelled and 44 million shares have been retained as
treasury shares. At 14 May 2004, 0.2 million treasury shares had been
transferred to meet the companyís obligations under its employee share plans.
The resolutions to be
proposed at the AGM to be held on 14 July 2004, together with explanatory
notes, appear in the separate Notice of Annual
General Meeting sent to all shareholders.
|By order of the Board
|19 May 2004
|Registered office: 81 Newgate
Street, London EC1A 7AJ
Registered in England and Wales No. 4190816