BTPLC Annual Report 2005 - Financial review

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	Financial headlines

	Chairman's message

	Chief Executive's statement


	Operating and Financial Review

	Business review

	Five-year financial summary

	Financial review

	Our commitment to society

	Board of directors and Operating Committee

	Report of the directors

	Corporate governance

	Report on directors' remuneration

	Statement of directors' responsibility

	Report of the independent auditors

	Consolidated financial statements

	United States Generally Accepted Accounting Principles

	Subsidiary undertakings, joint ventures and associates

	Quarterly analysis of turnover and profit

	Financial statistics

	Operational statistics

	Risk factors

	Additional information for shareholders

	Glossary of terms and US equivalents

	Cross reference to Form 20-F

Treasury policy

The group has a centralised treasury operation whose primary role is to manage liquidity, funding, investment and the group’s financial risk, including risk from volatility in currency and interest rates and counterparty credit risk. The treasury operation is not a profit centre and the objective is to manage risk at optimum cost.
The Board sets the treasury department’s policy and its activities are subject to a set of controls commensurate with the magnitude of the borrowings and investments under its management. Counterparty credit risk is closely monitored and managed within controls set by the Board. Derivative instruments, including forward foreign exchange contracts, are entered into for hedging purposes only.
We have set out further details on this topic and on our capital resources and foreign currency exposure in note 33 to the financial statements in compliance with FRS 13.

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