SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of
the Securities Exchange Act 1934
Report on Form 6-K dated June 2, 2004
BT Group plc
(Translation of registrant’s name
into English)
BT Centre
81 Newgate Street
London EC1A 7AJ
England
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover form 20-F or Form 40-F.
Form 20-F 
Form
40-F 
Indicate by check mark whether the registrant by furnishing the information contained in the Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No
This Report on Form 6-K is incorporated by reference into the registrant’s annual report on Form 20-F for the year ended March 31, 2004 (Commission file number 1-8819)
Enclosure: BT Group plc – Annual Review 2004 and Notice of Annual General Meeting 2004
Delivering today
Investing for tomorrow
Annual Review and
summary financial
statement 2004
Delivering today
Investing for tomorrow
BT is one of Europe’s leading providers of telecommunications services.
For the last few years BT has been transforming itself. That process is now accelerating.
In the following pages you can read about some of the ways in which we are driving that transformation and shaping the BT of the future.
| 1 | Chairman’s message |
| 2 | Chief Executive’s review |
| 6 | Delivering today |
| Investing for tomorrow | |
| 14 | Report of operations and |
| financial review | |
| 15 | Auditors’ statement |
| 16 | Summary financial statement |
| 18 | Summary report on directors’ |
| remuneration | |
| 20 | Summary directors’ report |
| 20 | Corporate governance |
| 21 | Board of directors |
| 22 | Information for shareholders |
In
this Annual Review, references to “BT Group”, “BT”, “the
group”, “the company”, “we” or “our” are
to BT Group plc (which includes the activities of British Telecommunications
plc) and its subsidiaries, or any of them as the context may require.
|
|
| Highlights | |
 |
Group turnover of £18.5 billion |
|
New wave turnover of £3.4 billion, up 30% |
|
Profit before taxation, goodwill amortisation and exceptional items of £2 billion, up 10% |
|
Earnings per share before goodwill amortisation and exceptional items of 16.9 pence, up 19% |
|
Net debt reduced from £9.6 billion to £8.4 billion |
|
Full year dividend of 8.5 pence, up 31% |
|
ICT contract wins of more than £7 billion |
|
Broadband end users of 2.2 million, up 177% |
| 1 | Chairman’s message | BT Annual Review 2004
|
Chairman’s message
Your company has continued to make good progress this year – delivering strong financial results while continuing to transform the business. New wave revenues grew by 30% to £3,387 million.
Earnings per share, before goodwill amortisation and exceptional items, grew by 19% to 16.9 pence – almost doubling in two years. While continuing to invest for the future, we generated free cash flow of over £2 billion and reduced net debt to £8.4 billion – a reduction of two thirds on the level of three years ago.
Our business
Your
company continues to make progress by innovating in our traditional markets and
by growing revenues in all the new wave markets – ICT (information and communications technology), broadband, mobility and managed services – in
which we operate. We continue to invest where we believe it will make the greatest
difference, while achieving rigorous standards of cost efficiency and smarter
working practices.
Returns to shareholders
Although long-term shareholder
return remains the key measure of our success, our share price performance this
year has not been strong. Earnings per share before goodwill amortisation and
exceptional items have risen well, but this has yet to be reflected in our share
price.
However,
total shareholder return also includes the dividend, and here the news for shareholders
is positive.
We
are recommending a full year dividend of 8.5 pence per share. Reflecting BT’s
commitment to a progressive dividend policy, the dividend pay out ratio for
the 2004 financial year was around 50% of earnings before goodwill amortisation
and
exceptional items. The full year dividend is 31% up on last year, and over
four times higher than two years ago. We are targeting a 60% pay out ratio
in 2005/06.
The
strong cash flow generated by the group also enabled us to begin a share buy
back programme in the 2004 financial year. This is being funded from cash generated
over and above that required to meet our debt target of £7 billion in 2006/07,
after paying dividends and taking into account any acquisitions or disposals.
Regulation
The recently announced strategic review of telecommunications by the UK regulator, Ofcom, is important and welcome to BT.
The review will cover, within the 21 key strategic questions to be addressed, the possibility of the structural separation of BT. Your company believes this is not in the interests of shareholders, customers or employees, and will argue in favour of a strong and integrated BT.
Wider responsibilities
It
is important that companies such as BT live up to their responsibilities in the
wider communities in which we operate. I’m proud to report that in the 2004
financial year, we were the highest placed telecommunications company in the
Dow Jones Sustainability Index for the third year in a row.
Our goal is to help everyone benefit from improved communications and to spread the benefits of new technology as widely as possible. This is demonstrated, for example, by our wide deployment of broadband technology throughout the UK, and by the BT Education Programme, which has enabled more than two million young people to participate in a drama-based campaign designed to help them improve their communications skills.
Strategic progress and outlook
The strong growth in new wave turnover, our ICT order book and broadband shows that our strategy is working. We remain committed to that strategy and are confident in our ability to deliver our key strategic goals.
We’ve come a long way since May 2001, when your Board announced a radical plan to reduce debts, manage costs and improve customer satisfaction. We’ve
established a solid platform for future growth and success.
None of this could have happened without the loyalty and support of our shareholders, customers, suppliers and employees. Given the continued support of all our stakeholders, we will build on this success and accelerate the transformation of our business.
Sir Christopher Bland
Chairman
19 May 2004
| 2 | Chief Executive’s review | BT Annual Review 2004
|
Chief Executive’s review
We live in an era of greater customer choice than we have ever seen before. This choice is good for customers and good for our industry.
Changes in technology are leading to
changes in people’s behaviour. People are, for example, spending more
time on the internet and sending information by email, where once they would
have used the phone or fax.
This transformation is putting converged services at the heart of our offering, enabling our customers to communicate wherever they happen to be.
As
we move from a narrowband to a broadband world, we are offering a new
mix of products and services in new markets – ICT, broadband, mobility
and managed services.
“Technology substitution” is
also having a significant impact in our traditional voice markets where
fixed-to-fixed voice revenues were down in both the consumer and business
markets.
This
is both a challenge and an opportunity. We have to respond to those changes in
technology, the market
and behaviour, at the same time as working to accelerate them.
We
have to be absolutely focused on defending and reinventing our traditional
markets, through imaginative sales and marketing, through delivering the
right products at the right prices. And we have to follow our customers
where they want to go, offering them new, flexible services that match
their changing personal and business needs.
Customer
satisfaction
Our passion for customers is at
the heart of everything we do.
A
year ago we launched our brand promise to make every customer experience “simple
and complete”. This is essential to driving down customer dissatisfaction,
which remains a critical goal for us. In the 2004 financial year, we reduced
dissatisfaction by 22%.
BT’s strategic imperatives Keep a relentless focus on improving customer satisfaction We must strive to lead the market in customer satisfaction, and provide all our customers with a simple and complete experience that meets their needs, first time, every time. We aim to manage relationships with our customers so well that we become their partner of choice for new services. |
| 3 | Chief Executive’s review | BT Annual Review 2004
|
As customer dissatisfaction is driven down, so is the cost of failure. A great customer experience – and cost savings – really can be two sides of the same coin. Getting things right for customers the first time keeps them loyal, contributes to cost effectiveness, and boosts our reputation.
New wave business
ICT used to be an aspiration;
it’s now a reality. We had a superb year with ICT orders worth more than £7 billion – up 59% on just a year ago. The three deals we signed with the NHS, for example – expected to be worth more than £2.1 billion – indicate
our strength in this market.
I
believe that we have something very special to offer – the ability
to act as “the telco inside” our customers’ organisations.
We offer our customers – businesses and other large organisations,
including local and national government – the
chance to enhance their productivity, through expert management of their
information systems, desktop to desktop.
And
we have a full range of network-centric ICT solutions depending on what
our
customers want – from full service assurance across their ICT infrastructure,
through monitoring levels of service throughout their operations, to validation
of their networks, data centres and desktops.
Broadband
It’s been
a tremendous year for broadband as well. People were sceptical when we
said we’d reach two million DSL wholesale lines by the summer of 2004.
What nobody expected was that we would achieve two million in February
2004. As at 14 May 2004, we had 2.45 million – and climbing. The UK
is now moving towards the top of the broadband league.
And
our programme for upgrading our exchanges to broadband has been extremely
effective in bringing the benefits of this amazing technology to some of
the remoter parts of the UK. In April 2004, we announced a roll-out plan
that will bring broadband to 99.6% of the UK’s homes and businesses.
The
announcement, in May 2004, that we will redesign and reduce the cost of our local
loop unbundling product,
should encourage investment in broadband infrastructure and promote innovation.
It’s a major move towards the telecommunications market of the future.
In
the consumer broadband market we’ve teamed up with Yahoo! to offer
compelling, world-class content and launched a suite of new products that
will enable customers to get the most from broadband. A couple of years
ago we were among the first to offer a broadband connection for less than £30
a month. This year we’ve broken the £20 barrier, with an entry-level
broadband product for just £19.99 a month.
Mobility
We also stepped back into the consumer
mobility market with BT Mobile Home Plan and we established the high street
presence that will enable us to offer converged products and services in the
future.
Put broadband at the heart of BT Broadband is a transformational technology, and the platform from which we will deliver new services. Our priorities include: Create mobility services and solutions We will respond to growing customer demand for converged and seamless, fixed and mobile services, by creating a radical new wave of mobile services and solutions. We will use our existing capabilities and partner with leading mobile operators to create sustainable growth in this highly competitive market. Transform our network for the 21st century We are working to create the
21st century network – a customer-focused, intelligent, flexible
network to be operated at best cost that will enable communications
in a range of formats across an internet protocol-based network. The
main focus will be on ensuring that customer communications are seamless,
secure and offer multi-device capability. |
helping
to build Broadband Britain;
| 4 | Chief Executive’s review | BT Annual Review 2004
|
Chief Executive’s review continued
Again, our goal is to offer communications flexibility, enabling our customers to communicate the information they choose, in the way that they choose, using whatever communications device they choose.
In May 2004, we announced that we will be working with Vodafone UK to dismantle the barriers between fixed and mobile services, by offering fully converged, fixed/mobile services in the business and consumer mobile markets. Our customers will benefit from being able to communicate and access the same information and services however and wherever they want; whether they are connected to a fixed network or on the move.
For our larger business customers we also offer convergence, managing their fixed and mobile communications seamlessly.
And
the growth of Wi-Fi (wireless broadband) suggests that it could well be
one of those technologies which rapidly becomes a part of our customers’ lives. Once they’ve
experienced it, they find it hard to imagine life without it.
Traditional business
Given
the impact of new technology and increasing competition, voice call volumes
may no
longer be the absolute guide to the health of the company that they once
were, but they remain a fundamental part of our business and we are bringing
an innovative approach to product development, sales and marketing in
the voice calls business. Robust defence doesn’t mean retreat, it means
seizing new opportunities.
BT
Together, for example, has been a major success with around nine million
customers. During the year, we announced that we will be abolishing the
standard rate for our existing customers from 1 July 2004, and launched
an enhanced range of option packages. In the business calls market BT Business
Plan has had similar success – customer numbers were up from 20,000
to 175,000 in the year. And BT Local Business is demonstrating that getting
close to our customers can deliver significant revenue benefits.
Cost leadership
Cost leadership is vital to the
accelerating transformation of BT.
We
can and must operate as efficiently and effectively as possible, benchmarking
our costs against those of other European telecommunications companies.
Most recently, these comparisons showed that our costs are better than
average for large telecommunications companies but that we still have some
way to go to achieve best-in-class costs. In the last three years, we’ve
made major reductions in the costs of our operations and we’ve identified
a further £1 billion that can be achieved.
Our
Hands Off Access Network (HOAN) project, for example, is helping to improve
network efficiency by minimising manual network intervention and reducing
the need for exchange visits.
This
is not about cutting corners or compromising on service, but about finding
innovative, cost-effective new ways to meet customers’ needs.
Achieve competitive advantage through cost leadership Achieving cost leadership will give us the flexibility both to compete effectively in our traditional markets and to invest in new business opportunities. We must eliminate duplication, streamline our activities, and raise our operations to the levels achieved by the best worldwide. Lead the world in network-centric ICT solutions The ICT market is experiencing rapid growth, as networking issues become ever more important in delivering increased productivity and competitive advantage for our customers. We are seizing the opportunity to move from our core network skills into the adjacent ICT market. Reinvent our traditional business Our traditional markets face major change – in customer demands, in technology and in regulatory conditions. Reinventing our traditional business means challenging existing models and creating new ways to compete more effectively. |
| 5 | Chief Executive’s review | BT
Annual Review 2004 |
And, over the next few years, we’ll be creating the 21st century network. We are transforming our networks, converging them on to a modern, single, multi-purpose platform that will enable us to reduce costs, meet customers’ changing needs and improve customer satisfaction. The 21st century network will offer higher performance in return for lower operating costs.
Our people
Of course, without the commitment and
hard work of BT people, our strategy would be nothing more than words on the
page.
A year
ago, we introduced our new values – trustworthy, helpful, inspiring, straightforward,
heart. Since then, our people
have translated those values into action, driving down customer dissatisfaction,
defending the traditional business and winning business in new markets.
We’re
very proud of what they’ve done and of what they are continuing to do.
Ben Verwaayen
Chief Executive
19 May 2004
Motivate our people and live our values People not strategies create shareholder value and delight customers. We aim to create a high-performance culture where everyone is motivated to succeed and clear about the contribution they make to the achievement of our strategic objectives. |
| 6 | Delivering today Investing for tomorrow | BT
Annual Review 2004 |
Delivering today
Investing for tomorrow
Today, BT offers a wide range of communications products and services to our residential, business and wholesale customers.
Success tomorrow will depend on defending our position in our traditional markets and investing for profitable growth in new markets – specifically ICT (information and communications technology), broadband, mobility and managed services. This means offering a simple and complete customer experience, developing products and services that match our customers’ needs, delivering compelling sales and marketing and achieving cost leadership.
Getting it right
Transformation is not something we can do a bit at a time, tinkering with this, changing that. It’s a full-on commitment. But some things don’t change. Things like providing excellent customer service. Things like developing and delivering innovative sales and marketing programmes. Things like meeting our wider responsibilities to the communities in which we operate.
20m of whom around nine million |
The Queen’s THE
QUEEN’S AWARD |
| 7 | Delivering today Investing for tomorrow | BT
Annual Review 2004 |
What customers want
Getting it right for customers is, and
will remain, our number one priority.
We have
the privilege of serving more than 20 million customers and getting it right
for them is the best way of getting it right for our shareholders.
We know
what customers want. They want all their contacts with BT to be simple and complete.
We don’t
always get it right – given the number of transactions that we have with
customers every day it would be surprising if we did. But we never stop working
at it.
Two years
ago, we set ourselves the target of reducing levels of customer dissatisfaction
by 25% a year over three years on a compound annual basis. Since then, we’ve
achieved a 37% reduction in the 2003 financial year and a 22% reduction in the
2004 financial year.
Because
customer service is at the centre of everything we do, it’s one of the
key objectives of our training and development programmes.
For example,
our retail customer-facing and support teams participated in the my
customer training programme,
designed to improve our customers’ experience and promote teamworking.
Examples
of my
customer successes include
the introduction of a new contact centre structure that enables our people to
handle more calls at the first point of contact and enabling engineering and
contact centre teams directly to update customer records.
Reinventing
the traditional
But customers don’t just want an
excellent customer experience; they also want communications services that add
value to their lives – at home or at work – at the right price.
In the
consumer market, for example, our BT Together packages, with their choice
of competitive call prices and fixed-fee options, are central to the reinvention
of our traditional voice business. As at 31 March 2004, BT Together had around
nine million customers. In March 2004, we
announced we would abolish the BT standard rate on 1 July 2004 to give more
value for money. Existing standard rate customers will move to join those already
on BT Together Option 1, which will become the benchmark for our fixed-line
call prices.
And because
we recognise that our smaller business customers often prefer to deal with
other smaller companies, rather than large corporations, we’ve been creating
a number of BT Local Businesses with exclusive access to such customers
in a contained geographic patch. At the end of the 2004 financial year, BT Local
Business was active in 73 locations, managing £1.1 billion of annual billed
turnover.
BT Business
Plan is designed to give business customers greater certainty and predictability
when it comes to their communications spend. During the year, we enhanced it
by introducing a ten pence price cap on calls to the US (the most popular business
route) and a 20 pence cap on calls to Europe and certain countries in the
Asia Pacific region. At 31 March 2004, we had more than 175,000 BT Business
Plan customers, an increase of more than 700% on the previous year.
|
150,000+ BT wins a ProShare |
| 8 | Delivering today Investing for tomorrow | BT Annual Review 2004 |
Good business
We also believe that the way in which
we manage social, ethical and environmental issues can contribute to business
success. We have, for example, demonstrated a clear connection between the
public perception of our social responsibility activities and retail customer
satisfaction figures. And we are increasingly required to demonstrate BT’s commitment to social and environmental issues when bidding for business. In the 2004 financial year, we were required to demonstrate expertise in these matters in bids worth £900
million.
The fact that we are
one of the UK’s largest consumers of industrial and commercial electricity imposes certain responsibilities on us. That is why we’ve been investing in energy conservation programmes. The use of renewable energy and combined heat and power – together with energy and transport efficiency measures – has
enabled us to reduce our carbon dioxide emissions by 42% since 1996.
Broadband
“Information technology is transforming
our world and broadband is at the forefront of this revolution.
By
speeding up communication, broadband is opening up new opportunities in almost
every area of our lives. It will
play a central role in the reform of our public services, improving our competitiveness
and building a modern digitally connected Britain.”
More than |
Alison Ritchie
|
| 9 | Delivering today Investing for tomorrow | BT Annual Review 2004 |
So said the Prime Minister, Tony Blair, when he visited the broadband-enabled Trimdon exchange in his constituency.
A couple of years ago, people were sceptical about the idea of Broadband Britain. They thought it was only something for the tech-savvy.
But
as the UK’s leading supplier of DSL (digital subscriber line) broadband services, we’ve turned that perception round. We’ve put the infrastructure in place and we’ve
proved that the demand for broadband is enormous.
From narrowband to broadband
BT is transforming itself from a narrowband to a broadband company. In February 2004, we passed our target of two million wholesale broadband lines, just eight months after hitting our first million, and in May 2004 we reached 2.45 million. 90% of UK homes and businesses are now connected to broadband-enabled exchanges. And we continue to work in partnership with community organisations and business development agencies, to explore innovative ways to bring broadband
to people connected to the very smallest exchanges in the UK, or who live more than six kilometres from their nearest exchange.
The first step was upgrading to broadband more than 1,100 of our exchanges where there was a clear commercial case for doing so.
In
July 2002, we introduced a demand-driven registration scheme, which enabled people
in areas where the exchange had not been upgraded to register an interest. This
hugely successful scheme attracted more than 860,000 registrations, helping us
match our investment to demand, and the total of exchanges upgraded as at 19 May
2004 stood at 2,652.
Because the registration scheme gave us such a clear picture
of demand, we were able to announce in April 2004 the speeding up of the delivery
of broadband services to rural communities. The scheme is now closed and we intend
to roll out broadband to exchanges serving 99.6% of the UK’s homes and businesses,
by no later than the summer of 2005.
The broadband experience
For customers at home, broadband is
more than just another technology; it’s a whole new experience – faster,
richer, more interactive, more rewarding than its dial-up predecessor.
And the visual dimension is proving to be critical. Narrowband may be OK for text; but the broadband experience offers the chance of video emails, the chance to download video clips or holiday trailers, without ever leaving home.
Because
we know that different customers have different broadband requirements, we offer
a Broadband from BT Family range of products and services, from BT
Broadband
Basic – for less than £20 a month – to BT Broadband 1Mb – our
fastest broadband service so far.
During
the year, BT and Yahoo! jointly launched BT Yahoo! Broadband,
which gives customers high quality, compelling and personalised content and services
(news, sport and entertainment) and advanced security (anti-spam, email anti-virus
and a free firewall) for £29.99 a month.
In May
2004 we had and |
|
| 10 | Delivering today Investing for tomorrow | BT Annual Review 2004 |
| We also announced a set of innovative broadband services that will be at the heart of our broadband lifestyle strategy, enabling the delivery of compelling, personalised content. These are: | |
|
Flexible Bandwidth, which enables users to upgrade the speed of their connection at a click of a button if, for example, they want to watch a movie |
|
BT Communicator, for making free PC-to-PC calls, or PC-to-phone calls at BT Together prices, and instant messaging |
|
BT Rich Media, which enables users to receive, manage and pay for content, securely, online. |
| By giving customers a wide choice of connection speeds and content options we aim to drive broadband adoption in the UK and reach our target of five million broadband connections by 2006. | |
The broadband economy
And broadband is driving change in the economy as a whole.
At
the end of the 2004 financial year, BT Business Broadband remained the
leading ISP (internet service provider) for SMEs (small and medium enterprises)
in the
UK. We had more than 240,000 business customers, many of whom were customers
for our added-value broadband services such as Internet Security Pack and Internet
Business Pack.
At
the end of March 2004, we were converting business customers to broadband
at the rate of
more than one business customer for every minute of the working day.
Broadband can also transform the ways corporations and other large organisations communicate with customers, suppliers and employees. Broadband teleworking, for example, offers businesses the chance to build a diverse and motivated workforce, while offering employees the chance to create a more rewarding work-life balance.
In April 2004 we launched BT
Connected & Complete,
featuring Microsoft technology – a one-stop shop providing small businesses with secure broadband access, applications, services, support and maintenance – all
from a single source and on one bill.
In
May 2004 we announced a series of price cuts – of between 15% and 70% – and
simplification of our LLU (local loop unbundling) product, which will benefit
those companies willing to innovate and invest in broadband infrastructure.
Information and communications technology
Corporations and other large organisations rely increasingly on communications and information technology for mission-critical services and to remain competitive. And with the convergence of both these technologies, we have a great opportunity to establish ourselves as a global ICT player capable of competing with the world’s best. In fact, this is already happening. Recent contract wins have propelled us into the world league of ICT companies.
ICT revenues
in the 2004
|
ICT contract
wins |
| 11 | Delivering today Investing for tomorrow | BT Annual
Review 2004
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From connectivity to capability
Being in the ICT business means offering not just connectivity but capability, not just integration but innovation.
The
impressive growth in our ICT revenues – to £2.6 billion in the 2004 financial year, a rise of 19% on the previous year – indicates
the speed with which we are making our presence felt in this market.
Of
course, our strategy is a focused one – we can’t go after everything. Instead, we’ve
targeted a number of growth markets in which we are particularly well placed.
These include: outsourcing, the provision of IP (internet protocol) infrastructure, broadband, mobility, managed desktop solutions and customer relationship management.
And
they’re the right markets for us because they make use of our skills
and experience, our brand has clear value and our partnerships reinforce
our capabilities.
In
February 2004, for example, we launched BT Applications Assured Infrastructure
(AAI), designed to help our customers understand and master the complexities of
their communications infrastructure – all the way from the data centre
to the desktop.
And
just as importantly, it makes it possible for us to guarantee that our
customers’ ICT systems really do support their business priorities.
AAI
is what’s known in the business as an “intelligent solution”,
which means that it can help resolve networking problems before they
happen.
That’s competitive advantage. And it’s the kind of
competitive advantage that BT is increasingly delivering.
BT’s
larger and more complex global customer contracts are delivered through
or managed by BT Global Solutions and BT Syntegra.
Networking the NHS
The highest profile of these were
three NHS contracts which are expected to be worth more than £2.1 billion
and form an integral part of the National Programme for Information Technology
in the NHS. These contracts represent some of the largest BT has ever won.
One,
worth
up to £620 million over ten years, is to design, deliver and manage a national
patient record database and transactional messaging service for the NHS Care
Records Service. This will provide all 50 million NHS patients in England with
an individual electronic care record and connect more than 30,000 GPs and 270
acute community and mental health NHS trusts in a single, secure national system.
A
second contract, expected to be worth up to £996 million over ten
years, is to design, deliver and operate integrated local patient record
applications and systems for the whole of the London care community.
NHS deals expected to be |
|
| 12 | Delivering today Investing for tomorrow | BT Annual
Review 2004
|
The third, worth an estimated £533 million over seven years, is to procure, integrate and manage high-speed, broadband networking services for the New National Network for the NHS.
Other Deals
In addition, we achieved a number of
other groundbreaking wins in the year, including a six-year contract with ITV
to create a new multimedia network, and a five-year deal with Alliance & Leicester worth £10.5
million to upgrade its existing network infrastructure to IP.
In May 2004, BT and HP announced plans to develop a strategic alliance to address mutual growth opportunities jointly in the global ICT marketplace. As a first step, we have signed managed service agreements with a combined value of $1.5 billion over the next seven years.
Mobility
There’s more to mobility than mobile phones. Real mobility is a way of life. It’s all about being able to communicate wherever we are, whenever we like, using whichever device – phone, mobile, laptop, palmtop – we choose. The key concept is “convergence” – providing solutions that meet people’s needs, as cost-effectively as possible, by combining “the best of fixed and the best of mobile”.
Business and corporate mobility
For our business customers, we focus on providing mobility solutions for voice and data communications, both in the UK and globally, working with these customers to deliver improved productivity and cost management.
For example,
we launched BT Mobile Office. The people who advertisers like to think
of as “corporate road warriors” –that’s sales people, engineers, drivers and so on – can
contact their work base and access their corporate network via a single, smart
log-in application.
By
making use of the best possible connection available – fixed, mobile, or wireless broadband – they have access to all kinds of information – emails, texts, voice messages and so on – while
in the office or on the move.
In
2003, we reached agreement to provide Vodafone UK with a managed access
transmission network in the UK, connecting its base stations to its core
switches. Vodafone will benefit from simplification of processes – including
a formalised payment structure – as
well as access to any new technologies implemented
by BT within the five-year term of the contract.
BT Openzone in |
BT Mobile |
| 13 | Delivering today Investing for tomorrow | BT Annual
Review 2004
|
Consumer mobility
During the 2004 financial year, we re-entered
the consumer mobility market with BT Mobile Home Plan. Aimed at families,
its features include voice and text bundles to suit the family’s
calling habits and reduced monthly rental rates for more than one mobile.
And
because research shows that people phone home from their mobiles an average of
five times a week, we’ve included the opportunity for them to make free
quick calls home to the family fixed-line.
And our mobile services are back in over 1,000 high street stores through our relationships with Carphone Warehouse, The Link and Phones 4U.
In May 2004, we announced plans to change the face of communications in the UK by working with Vodafone to offer fully converged, fixed/mobile services in the business and consumer mobile markets.
Project
Bluephone is the first step
towards handset convergence because it removes the need to own more than one phone.
Customers will be able to use a single device that can switch seamlessly between
fixed and mobile networks,
offering a better service with more guaranteed coverage and lower overall costs.
A “soft launch”, involving more than 1,000 users, is planned for
the summer of 2004 and a full launch for later in the year.
Wireless broadband
We’ve also been developing our position as the UK’s
leading provider of public wireless broadband (Wi-Fi) services.
BT Openzone gives
our customers a public-access, wireless broadband connection, enabling them to
access the internet at selected public venues or “access points”, using
their wireless-enabled laptop or PDA (personal digital assistant) at almost 2,400
locations (as at 31 March 2004).
This means that anyone with an enabled laptop can sit down in motorway service
stations, airports, conference
centres, hotels and cafes, BA lounges globally and over 500 McDonald’s restaurants
around the country and log on.
To experience Openzone is to experience just one of the ways in which communication is being transformed.
This is where we came in
BT is transforming
itself as a business and helping to drive the transformation of our industry.
Our
traditional business, based on fixed-voice calls, is changing. And we’re
changing with it.
We’re
moving our brand and expertise into exciting new wave markets – for
broadband, for ICT, for mobility.
Markets
that have the power to change our customers’ lives.
More
connections really do mean more possibilities. And better communications
really can make for a better world.
High street presence 1,000 Carphone Warehouse |
|
| 14 | Report of operations and financial review | BT Annual
Review 2004
|
Report of operations and financial review
Operating performance
The
2004 financial year was marked by the continuing transformation of our business
operations and markets, where the pace of change is accelerating. We are driving
the change by providing our customers with new technology and services with greater
capabilities and lower cost. The focus on delivering the strategy continued and
the group’s performance benefited from the growth in new wave activities
such as Information and Communications Technology (ICT) solutions, broadband,
mobility and managed services and continued cost efficiency programmes.
Profit and loss account
Group
turnover from new wave businesses showed strong growth of 30% to £3.4 billion in the year driven by growth in ICT solutions and broadband. Turnover from our traditional business was impacted by regulatory reductions in mobile termination rates. These reductions are passed on to BT customers resulting in lower charges but are profit neutral and contributed to the decline in traditional turnover of 6% to £15.1 billion. Group turnover of £18.5 billion declined by 1%, but was flat after excluding the impact of the regulatory reductions in mobile termination rates. Group operating profit before goodwill amortisation and exceptional items increased by 4% to £2.9 billion. This reflects cost efficiency savings achieved during the year, the improved performance of BT Global Services and lower leaver costs. Our share of operating results in our ventures declined following the sale of our interest in Cegetel in January 2003. Net interest payable before exceptional items was £0.9 billion for the year, an improvement of £0.3
billion, reflecting the reduction in net debt. Earnings per share before goodwill
amortisation and exceptional items were 16.9 pence, an increase of 19%.
Lines of business
The following table sets out the group turnover and group operating profit (loss) for each of our lines of business.
| Group turnover | Group operating profit (loss) | |||||||
| 2004 | 2003 | 2004 | 2003 | |||||
| Years ended 31 March | £m | £m | £m | £m | ||||
| BT Retail | 13,534 | 13,882 | 1,434 | 1,528 | ||||
| BT Wholesale | 10,859 | 11,247 | 1,681 | 1,758 | ||||
| BT Global Services | 5,782 | 5,417 | (105 | ) | (375 | ) | ||
| Other | 35 | 41 | (118 | ) | (121 | ) | ||
| Intra-group | (11,691 | ) | (11,860 | ) | – | – | ||
| Totals | 18,519 | 18,727 | 2,892 | 2,790 | ||||
Note – before goodwill amortisation and exceptional items |
||||||||
BT Retail
BT
Retail is the UK’s largest communications service provider, by market share,
to the residential and business markets, supplying over 20 million customers
with a wide range of communications products and services, including voice, data,
internet and multimedia services, and offering a comprehensive range of managed
and packaged communications solutions.
The total number of BT Retail lines, including voice, digital and broadband was more than 29 million at 31 March 2004.
The BT Together pricing packages had around nine million customers as at 31 March 2004. During the year we announced that we will be abolishing the standard rate for residential customers from 1 July 2004. Existing standard rate customers will move to join those already on BT Together Option 1.
At 31 March 2004, BT Retail had 928,000 broadband customers, an increase of 116% over the previous year.
During the financial year, BT and Yahoo! relaunched the Openworld consumer internet service as BT Yahoo! Broadband, and rebranded our business broadband products and information portal.
BT Business Broadband remained the leading internet service provider for SMEs (companies with between one and 500 employees) in the UK with more than 240,000 business customers.
At
31 March 2004, our BT Local Business initiative to build closer relationships
with smaller business customers was active in 73 locations around the country
and managing £1.1 billion of annual billed turnover.
BT Wholesale
BT Wholesale provides network services and solutions to around 500 communications companies, fixed and mobile network operators and service providers. Its UK network consists of 873 local and trunk processor units, 121.7 million kilometres of copper wire and 7.3 million kilometres of optical fibre. BT Wholesale has the most extensive IP backbone network in the UK.
As
at 31 March 2004, BT Wholesale’s installed base of broadband lines was 2.2
million – up 177% on the previous year – and we were taking an average
of 50,000 orders a week in March 2004. 2,465 exchanges had been upgraded for
broadband at the end of the 2004 financial year, and more than 85% of the UK’s
homes and businesses were connected to a broadband-enabled exchange. In May 2004,
the number of broadband lines increased to 2.45 million, 2,652 exchanges had
been upgraded and total UK coverage reached 90%.
As
one of our strategic priorities, BT Wholesale is working to create an intelligent,
flexible and customer-focused network for the 21st century (21CN). BT’s
21CN is designed to support the next generation of services and revenues for
BT and for our wholesale customers, while enhancing the customer experience and
reducing costs through greater network intelligence and automation.
BT Global Services
BT
Global Services is BT’s managed services and solutions provider. Its core
target market is the top 10,000 multi-site corporations and European multi-site
organisations. BT Global Services provides global reach and a complete range
of ICT solutions and services.
Our extensive communications network and strong strategic partnerships enable us to serve customers in the key commercial centres of Europe, North America and the Asia Pacific region. In Europe, this network links more than 270 towns and cities in 19 countries back into our UK network, and beyond into the Americas and the Asia Pacific region.
Our
larger, and more complex and global customer contracts are delivered through
or managed by our BT Global Solutions and BT Syntegra businesses, which between
them won business worth more than £7 billion during the year. The highest profile contracts in the year were three NHS contracts, which are expected to be worth more than £2.1
billion.
Research and development and IT support
BT
Exact is BT’s research, technology and IT operations business, with a team of 6,000 technologists and one of the world’s largest communications research and development facilities. The work done by BT Exact is part of our investment of £334
million in research and development made by BT in the 2004 financial year.
| 15 | Report of operations and financial review | BT Annual Review
2004
|
Balance sheet
The
group balance sheet continued to strengthen during the year and provides confidence
to our customers and suppliers. Net debt of £8.4 billion declined by a further £1.2 billion and is now 30% of the level it was three years ago. Fixed assets totalled £16.1 billion, of which £15.5
billion were tangible fixed assets, principally the UK fixed network. The return
on capital employed, before goodwill amortisation and exceptional items on the
average capital employed, was 15.3%.
Cash flow
Cash
inflow from operating activities was £5.4 billion and includes early payment of £0.4 billion deficiency contributions to the BT Pension Scheme, which represents most of the deficiency contributions for the 2005 and 2006 financial years. Capital expenditure of £2.7 billion increased by 4%, reflecting the rising investment in our network transformation programme. Free cash flow (before acquisitions, disposals and dividends) of £2.1
billion was generated, an increase of 21%.
Dividend
The
Board recommends a final dividend of 5.3 pence per share to shareholders, amounting
to £454 million, taking the full year dividend to 8.5 pence per share, an increase of 31% on the previous year. This year’s
dividend pay out ratio is 50% of earnings before goodwill amortisation and exceptional
items and we expect this to increase to around 60% for the 2006 financial year.
Customer satisfaction
Customer satisfaction is at the heart of our strategy. During the 2004 financial year we reduced customer dissatisfaction by 22% following an improvement of 37% in the 2003 financial year.
Our people
As
at 31 March 2004, we employed 99,900 people throughout the world, of whom around
91,600 worked in the UK. During the financial year, we invested more than £61
million on the training and development of our workforce, and we have achieved
a 40% reduction in workplace injuries over three years.
For
the 2004 financial year, we allocated £20 million to provide free shares
to our employees under the BT Employee Share Investment Plan (employees outside
the UK receive a cash payment equivalent to the value of the shares). The amount
allocated was linked to corporate performance measures determined by the Board.
Corporate social responsibility
We
aim to manage social, ethical and environmental issues in ways that grow shareholder
value and help promote sustainable development. For the 2004 financial year,
BT was ranked as the top telecommunications company in the Dow Jones Sustainability
Index for the third year running. We commit a minimum of 0.5% of our UK pre-tax
profits to direct activities in support of society. Our contribution in the 2004
financial year was £5.6 million, including £1.2 million to charities.
More
details of our social and environmental performance are available at www.bt.com/betterworld
Statement of business
practice
BT’s policy
is to achieve best practice in our standards of business integrity in all our
operations, in line with our published statement of business practice – The Way We Work,
which is available from the company’s website.
Going concern
The
company’s financial statements for the year ended 31 March 2004 have been
prepared on a going concern basis as, after making appropriate enquiries, the
directors have a reasonable expectation that the group has adequate resources
to continue in operational existence for the foreseeable future.
| Auditors’ statement
to the members of BT Group plc We have examined the summary financial statement as set out on pages 16 and 17, summary directors’ report set out on pages 20 and 21 and the directors’ remuneration disclosures set out on page 19. |
||
| Respective
responsibilities of directors and auditors The directors are responsible for preparing the summarised annual report in accordance with applicable law. Our responsibility is to report to you our opinion on the consistency of the summary financial statement within the BT Group annual review with the annual financial statements, the directors’ report and the directors’ remuneration report, and its compliance with the relevant requirements of Section 251 of the Companies Act 1985 and the regulations made thereunder. We also read the other information contained in the summarised annual report and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the summary financial statement. |
||
| This statement, including the opinion, has been prepared for and only for the company’s members as a body in accordance with Section 251 of the Companies Act 1985 and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whom this statement is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. | ||
| Basis of opinion We conducted our work in accordance with Bulletin 1999/6, “The auditors’ statement on the summary financial statement” issued by the Auditing Practices Board for use in the United Kingdom. |
||
| Opinion In our opinion the summary financial statement is consistent with the full annual financial statements, the directors’ report and the directors’ remuneration report of BT Group plc for the year ended 31 March 2004 and complies with the applicable requirements of section 251 of the Companies Act 1985, and the regulations made thereunder. |
||
| PricewaterhouseCoopers LLP Chartered Accountants and Registered Auditors London 19 May 2004 |
||
The auditors’ report on the full annual accounts for the year ended 31 March 2004 is unqualified and does not contain any statement concerning accounting records or failure to obtain necessary information and explanations. |
| 16 | Summary financial statement | BT Annual Review 2004
|
Summary financial statement
Summary group profit and loss account
for the year ended 31 March 2004
| Before goodwill | Goodwill | |||||||
| amortisation | amortisation | |||||||
| and exceptional | and exceptional | |||||||
| items | items | (a) | Total | Total | (b) | |||
| 2004 | 2004 | 2004 | 2003 | |||||
| £m | £m | £m | £m |
| Group turnover | 18,519 | – | 18,519 | 18,727 | ||||
| Group operating profit (loss) | 2,892 | (19 | ) | 2,873 | 2,572 | |||
| Group’s share of operating (loss) profit | ||||||||
| of associates and joint ventures | (8 | ) | (26 | ) | (34 | ) | 329 | |
| Total operating profit (loss) | 2,884 | (45 | ) | 2,839 | 2,901 | |||
| Profit on sale of fixed asset investments | ||||||||
| and group undertakings | 4 | 32 | 36 | 1,691 | ||||
| Profit on sale of property fixed assets | 14 | – | 14 | 11 | ||||
| Amounts written off investments | – | – | – | (7 | ) | |||
| Net interest payable | (886 | ) | (55 | ) | (941 | ) | (1,439 | ) |
| Profit (loss) before taxation | 2,016 | (68 | ) | 1,948 | 3,157 | |||
| Tax | (568 | ) | 29 | (539 | ) | (459 | ) | |
| Profit (loss) after taxation | 1,448 | (39 | ) | 1,409 | 2,698 | |||
| Minority interests | 8 | – | 8 | (12 | ) | |||
| Profit (loss) for the financial year | 1,456 | (39 | ) | 1,417 | 2,686 | |||
| Dividends | (732 | ) | (560 | ) | ||||
| Retained profit | 685 | 2,126 | ||||||
| Earnings per share | 16.4 | p | 31.2 | p | ||||
| Dividends per share | 8.5 | p | 6.5 | p | ||||
| Earnings per share before goodwill | ||||||||
| amortisation and exceptional items | 16.9 | p | 14.2 | p | ||||
| (a) Includes goodwill amortisation of £12 million, a net exceptional charge of £7 million reflecting the release of an exceptional bad debt provision of £23 million offset by rectification costs relating to a major incident, our share of a goodwill impairment charge made by Albacom SpA of £26 million, a profit of £32 million on the sale of our interest in Inmarsat, and a one-off interest credit of £34 million offset by a charge for the premium on buying back bonds of £89 million. This resulted in a net charge of £68 million to profit before taxation. | ||||||||
(b) Includes goodwill amortisation of £22 million and net exceptional profits of £1,350 million before taxation. These net exceptional profits relate principally to the net profit on sale of our stake in Cegetel of £1,216 million and the release of exit related cost provisions of £150 million, offset by a charge of £198 million relating to property rationalisation costs. |
||||||||
Group turnover
Products and services sold to customers by BT.
Net interest payable
Interest paid on borrowings less interest received on short term investments.
Earnings per share
Our profit for the financial year divided by the average number of shares in issue during the period.
This summary financial statement was approved by the Board on 19 May 2004 and was signed on its behalf by:
Sir Christopher Bland
Chairman
Ben
Verwaayen
Chief Executive
Ian Livingston
Group Finance Director
 |
 |
 |
| 17 | Summary financial statement | BT Annual Review
2004 |
| Summary group balance sheet | ||||
| at 31 March 2004 | ||||
| 2004 £m |
2003 £m |
|||
| Fixed assets | 16,068 | 16,661 | ||
| Current assets | 10,550 | 11,556 | ||
| Creditors: amounts falling due within one year | (8,548 | ) | (9,680 | ) |
| Net current assets | 2,002 | 1,876 | ||
| Total assets less current liabilities | 18,070 | 18,537 | ||
| Creditors: amounts falling due after one year | 12,426 | 13,456 | ||
| Provisions for liabilities and charges | 2,504 | 2,376 | ||
| Minority interests | 46 | 63 | ||
| Capital and reserves (c) | 3,094 | 2,642 | ||
| 18,070 | 18,537 | |||
| (c) BT Group plc, the company, had capital and reserves at 31 March 2004 of £10 billion. |
| Summary group cash flow statement | ||||
| for the year ended 31 March 2004 | ||||
| 2004 | 2003 | |||
| £m | £m | |||
| |
||||
| Net cash inflow from operating activities (d) | 5,389 | 6,023 | ||
| Dividends from associates and joint ventures | 3 | 6 | ||
| Returns on investments and servicing of finance (e) | (527 | ) | (1,506 | ) |
| Taxation paid | (317 | ) | (434 | ) |
| Capital expenditure and financial investment | (2,477 | ) | (2,381 | ) |
| Free cash flow | 2,071 | 1,708 | ||
| Acquisitions and disposals | (60 | ) | 2,842 | |
| Equity dividends paid | (645 | ) | (367 | ) |
| Cash inflow before management of liquid resources and financing | 1,366 | 4,183 | ||
| Management of liquid resources | 1,123 | (1,729 | ) | |
| Financing | (2,445 | ) | (2,473 | ) |
| Increase (decrease) in cash in the year | 44 | (19 | ) | |
| Decrease in net debt in the year resulting from cash flows | 1,222 | 4,225 | ||
| (d) | Includes deficiency and special pension contributions of £742 million (2003 – £329 million). |
| (e) | Includes receipt of funds from restructuring the currency swap portfolio of £420 million (2003 – an interest payment of £293 million on closing out £2.6 billion of fixed interest swaps following receipt of the Cegetel sale proceeds). |
Fixed assets
This is mainly exchange and network equipment, property and similar items which we own and use to run our business, goodwill and investments.
Current assets
Principally, amounts which we have billed our customers but not yet received
and short term investments.
Creditors: amounts falling due after one year
Money borrowed on a long term basis to fund our operations.
Provisions for liabilities and charges
Amounts set aside for liabilities that are not yet certain.
Net cash inflow from operating activities
Cash
receipts less payments from the group’s operating activities.
Capital expenditure and financial investment
Cash receipts less payments from the purchase and sale of fixed assets and investments.
Free cash flow
Cash
receipts less payments from the group’s activities before corporate transactions,
dividend payments and financing.
Financing
Cash receipts less payments arising from loan advances or repayments (not interest) and the issue of shares.
Important note
This
summary financial statement does not contain sufficient information to allow
for as full an understanding of the results of the group and state of affairs
of the company or the group and of their policies and arrangements concerning
directors’ remuneration as would be provided by the full Annual Report.
Shareholders who would like more detailed information may obtain a copy of the
full Annual Report for 2004 and/or future years, free of charge, by calling our
Shareholder Helpline on Freefone 0808 100 4141 (+44 121 433 4404 from outside
the UK) or can view it online at www.bt.com/sharesandperformance
Forward-looking statements
Please see the cautionary statement regarding forward-looking statements in the
BT Group plc Annual Report and Form 20-F 2004.
| 18 | Summary report on directors’ remuneration | BT
Annual Review 2004
|
Summary report on directors’ remuneration
Introduction
This
is a summary of the full Report on directors’ remuneration in the Annual
Report and Form 20-F 2004, a copy of which is available on request or at www.bt.com/sharesandperformance.
The full report will be voted on at the 2004 Annual General Meeting.
Remuneration Committee
The
Remuneration Committee sets the remuneration policy and individual packages for
the Chairman, executive directors, members of the Operating Committee and other
senior executives reporting to the Chief Executive. It also approves changes
in the company’s long-term incentive plans, recommends to the Board those
plans which require shareholder approval and oversees their operation.
Remuneration policy for executives
BT’s
executive remuneration policy is to reward employees competitively, taking into
account individual and company performance, market comparisons and the competitive
pressures in the information and communications technology industry.
The
strategy for executive pay, in general terms, is for base salaries to be positioned
around the mid-market, with total direct compensation (basic salary, annual bonus
and the value of any long-term incentives) to be at the upper quartile only for
sustained and excellent performance.
Main components of remuneration
Executive benefits packages comprise a mix of basic salary and performance-related remuneration, as follows:
Basic salary
This is reviewed annually. Basic salaries remained unchanged during the 2003
and 2004 financial years and the Remuneration Committee decided that there should
be no increase in base pay for the 2005 financial year.
Performance-related remuneration
|
annual bonus – the annual bonus plan is designed to reward the achievement of results against set objectives. Targets, set at the beginning of the 2004 financial year for each objective, were based on earnings per share, free cash flow and customer satisfaction. | |
|
deferred bonus – awards in the form of BT shares granted under the Deferred Bonus Plan are directly linked to the value of the executive’s annual bonus and to performance. The shares are held in trust for three years and act as a retention tool. | |
|
long-term incentives – the BT Equity Incentive Portfolio is designed to ensure that equity participation is a significant part of overall remuneration. It comprises: | |
| – | share options – options granted in the 2004 financial year will be exercisable in three years only if a performance target is met. For options granted subject to a total shareholder return (TSR) measure, BT’s TSR at the end of the three-year period must be in the upper quartile of FTSE 100 companies for the options to be fully exercisable. | |
| – | incentive shares – no award of incentive shares was made in the 2004 financial year. | |
| – | retention shares – these are granted in exceptional circumstances to help recruit or retain individuals with critical skills. | |
In the 2005 financial year, the Remuneration Committee has decided to reduce the number of share options granted, but also to grant incentive share awards, to create a better balance of remuneration. The overall value of long-term incentive awards will not change as a result of these proposals. The performance measure for share options and incentive shares will change from relative TSR against the FTSE 100, to relative TSR against the FTSE E300 Telecommunication Services Index as a more appropriate test.
Pension arrangements
Pensions
are based on salary alone – bonuses,
other benefits and long-term incentives are excluded.
Executive directors and most other senior executives who joined the company prior to 1 April 2001 receive pension benefits of one-thirtieth of final salary for each year of service. Those with longer BT service are entitled to pension benefits of two-thirds of final salary payable at normal retirement age.
Retirement
provision for executive directors and other senior executives who joined
BT after 31 March 2001 is generally made on a defined contribution basis – the company agrees to pay a fixed percentage (typically 20-30%) of the executive’s
salary each year towards the provision of retirement benefits.
Other benefits
Other benefits include some or all of: company car, health insurance in the event of permanent incapacity, personal telecommunications facilities, medical and dental cover, and financial counselling.
See
the tables opposite for details of directors’ remuneration and interests
in shares.
BT’s total shareholder
return (TSR)
performance over five financial years to 31 March 2004
1 April 1999 = 100. Source: Datastream
The graph shows our TSR performance
(adjusted for the rights issue and demerger of our mobile business in the 2002
financial year) relative to the FTSE 100.
| 19 | Summary report on directors’ remuneration | BT
Annual Review 2004
|
Directors’ remuneration
The remuneration of the directors for the year ended 31 March 2004 and the benefits received under the long-term incentive plans were, in summary, as follows:
| Total 2004 | Total 2003 | Pensions Sir Christopher Bland is not a member of any of the company’s pension schemes but the company matches his contributions, up to 10% of the earnings cap, to a personal pension plan. B Verwaayen and I Livingston are not members of any of the company’s pension schemes but the company has agreed to pay an amount equal to 20% and 30% of salary, respectively, towards pension provision. The aggregate value of contributions paid, or treated as paid, to defined contribution schemes in the 2004 financial year was £59,400. P Danon, A Green and P Reynolds are members of the BT Pension Scheme. As he is subject to the earnings cap, the company has agreed to increase P Danon’s benefits by means of a non-approved, unfunded arrangement. Additional days of pensionable service are being purchased for A Green and P Reynolds to bring their pensionable service at age 60 up to 40 years. |
|||||
| £’000 | £’000 | ||||||
| Salaries (includes amounts in note (2) below) | 3,150 | 3,212 | |||||
| Performance-related and special bonus | 2,074 | 2,309 | |||||
| Deferred bonus in shares | 1,037 | 1,484 | |||||
| Other benefits | 467 | 644 | |||||
| 6,728 | 7,649 | ||||||
| Payments to non-executive directors | 337 | 294 | |||||
| Total emoluments | 7,065 | 7,943 | |||||
| Gain on the exercise of share options | – | – | |||||
| Value of shares vested under the executive share plans | 412 | 411 | |||||
| Retirement benefits are accruing to three directors under defined contribution arrangements and to three directors under a defined benefit scheme. | |||||||
| Benefits | Basic salary | Annual | excluding | Total | Total | ||||||||||||
| and fees | bonus | pension | Sub-total | Other | (2) | 2004 | 2003 | ||||||||||
| £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | £’000 | |||||||||||
| Sir Christopher Bland | 500 | – | 32 | 532 | – | 532 | 512 | Notes | |||||||||
| (1) | In addition, deferred bonuses payable in shares in three years’ time were awarded to B Verwaayen (£429,500), P Danon (£129,500), A Green (£168,000), I Livingston (£162,500) and P Reynolds (£147,500). | ||||||||||||||||
| B Verwaayen(1)(2) | 700 | 859 | 299 | 1,858 | 110 | 1,968 | 2,174 | ||||||||||
| P Danon(1) | 450 | 259 | 41 | 750 | – | 750 | 829 | ||||||||||
| A Green(1) | 425 | 336 | 30 | 791 | – | 791 | 761 | (2) | Part of the pension allowance of 20% of salary for B Verwaayen (£110,300) and 30% of salary for I Livingston (£115,200) was paid to them direct. | ||||||||
| I Livingston(1)(2) | 450 | 325 | 23 | 798 | 115 | 913 | 1,116 | ||||||||||
| Dr P Reynolds(1) | 400 | 295 | 42 | 737 | – | 737 | 732 | ||||||||||
| Sir Anthony Greener | 96 | – | – | 96 | – | 96 | 90 | ||||||||||
| M van den Bergh | 44 | – | – | 44 | – | 44 | 40 | ||||||||||
| C Brendish | 39 | – | – | 39 | – | 39 | 20 | ||||||||||
| L R Hughes | 40 | – | – | 40 | – | 40 | 37 | ||||||||||
| Baroness Jay | 39 | – | – | 39 | – | 39 | 35 | ||||||||||
| J F Nelson | 39 | – | – | 39 | – | 39 | 35 | ||||||||||
| C G Symon | 40 | – | – | 40 | – | 40 | 37 | ||||||||||
| 3,262 | 2,074 | 467 | 5,803 | 225 | 6,028 | 6,418 | |||||||||||
Summary of directors’ interests
in
shares and share plans
as at 31 March 2004
| Number of | |||||||||||
| shares | Deferred | ||||||||||
| Beneficial | under | Retention | bonus | ||||||||
| shareholdings | (a) | option | (b) | shares | (c) | awards | (d) | ||||
| Sir Christopher Bland | 674,062 | 314,244 | 286,100 | – | Notes | ||||||
| (a) | Beneficial shareholdings include shares held in the director’s own name or by close family members. | ||||||||||
| B Verwaayen | 387,876 | 3,671,083 | 832,869 | 523,421 | |||||||
| P Danon | 93,508 | 1,639,272 | – | 190,271 | (b) | Options granted under the Global Share Option Plan are normally exercisable in full between the third and tenth anniversaries of their date of grant only if a corporate performance target has been met. Option prices range between 187p and 318p. | |||||
| A Green | 92,351 | 1,551,103 | – | 179,457 | |||||||
| I Livingston | 209,637 | 1,646,562 | 468,355 | 88,088 | |||||||
| (c) | Retention shares are used as a recruitment and retention tool. They are held in trust for up to three years and are transferred to participants, if they are still employed by the company. | ||||||||||
| Dr P Reynolds | 46,823 | 1,461,679 | – | 156,687 | |||||||
| Sir Anthony Greener | 34,607 | – | – | – | |||||||
| (d) | Awards of shares are directly linked to the value of annual bonuses. The shares are held in trust for three years and are transferred to participants, if they are still employed by the company. | ||||||||||
| M van den Bergh | 4,800 | – | – | – | |||||||
| C Brendish | 23,920 | – | – | – | |||||||
| L R Hughes | 6,800 | – | – | – | |||||||
| Baroness Jay | 5,572 | – | – | – | |||||||
| J F Nelson | 50,000 | – | – | – | |||||||
| C G Symon | 10,069 | – | – | – | |||||||
| 1,640,025 | 10,283,943 | 1,587,324 | 1,137,924 | ||||||||
| Executive directors are also able to participate in BT’s all-employee share investment plan. | |||||||||||
| 20 | Summary directors’ report and corporate governance | BT Annual Review 2004 |
Summary directors’ report
Principal activities
BT
is one of Europe’s leading providers of telecommunications services. Its
principal activities include local, national and international telecommunications
services, higher-value broadband and internet products and services, and IT
solutions. In the UK, we serve over 20 million business and residential customers
with more than 29 million exchange lines, as well as providing network services
to other licensed operators. BT consists principally of three lines of business:
BT Retail, BT Wholesale and BT Global Services. Details of our businesses and
performance are given at pages 14 and 15 of this Annual Review and summary
financial statement.
Dividends
An interim dividend of 3.2 pence per share (2003: 2.25p) was paid on 9 February 2004. The directors recommend a final dividend of 5.3 pence per share (2003: 4.25p) to be paid on 6 September 2004 to shareholders on the register at the close of business on 6 August 2004. This makes a total dividend for the year of 8.5 pence per share (2003: 6.5p).
Directors
Details of the current members
of the Board are shown on page 21. All served throughout the financial year.
Sir
Christopher Bland, Andy Green, Ian Livingston and John Nelson retire from the
Board by
rotation. Being eligible, they offer themselves for re-election at the Annual
General Meeting. Sir Christopher Bland’s contract is terminable on 12
months’ notice by either the company or Sir Christopher. Andy Green
and Ian Livingston’s contracts are terminable on 12 months’ notice
by the company and six months’ notice by the director. John Nelson’s
contract is for an initial period of three years from 14 January 2002 and
is terminable by either party on three months’ notice.
Annual General
Meeting
The Notice of the Annual General
Meeting to be held at 10.30 am at the Cardiff International Arena, Cardiff on
14 July 2004 is contained in a circular, which is sent to shareholders with this
Review.
BT’s policy is to achieve best practice in our standards of business integrity in all our operations. This includes a commitment to maintaining the highest standards of corporate governance and ethics throughout the group. The directors consider that BT has, throughout the year, complied with the provisions of the June 1998 Combined Code on Corporate Governance. This section also reports on BT’s position in respect of the new Combined Code published in July 2003, which will apply to the company from the 2005 financial year.
Board and committee structure
The Board operates as a single
team, currently made up of the part-time Chairman, the Chief Executive, four
other
executive directors and seven non-executive directors. All of the non-executive
directors are considered by the Board to be independent, meeting the criteria
in the new Combined Code. The Board’s principal focus is the overall strategic direction, development and control of the group. It meets every month, except in August. A formal statement of its role and responsibilities is available on the company’s
website.
The non-executive directors provide a strong, independent element on the Board, bringing experience and independent judgement gained at the most senior levels, of international business operations and strategy, marketing, technology, communications and political and international affairs. The Chairman and the non-executive directors regularly meet without the executive directors. At least annually, the non-executive directors meet, without the Chairman, to review his performance.
During summer
2003 the Board evaluated its performance and board processes, and agreed a number
of actions as a result of this exercise. A further evaluation, including on the
performance of
directors and the Board’s
committees, will be carried out during 2004.
To
meet best corporate governance practice, Audit, Remuneration and Nominating
Committees have long been established by BT. Written terms of reference for
each committee are available on the company’s website. The Audit and Remuneration Committees are made up entirely of independent, non-executive directors. The Audit Committee recommends the appointment, reappointment and remuneration of the company’s external auditors. As a result of regulatory or similar requirements, it is necessary to employ the company’s external auditors for certain non-audit work. The Board has policies determining what non-audit services the company’s
external auditors can provide in order to safeguard their independence and
objectivity. Under those policies, consultancy work will not be offered to
the external auditors unless there are clear efficiencies and value added benefits
to the company.
The Chief Executive, Ben Verwaayen, chairs the Operating Committee, which meets weekly.
Internal control and risk management
The Board is responsible for the
group’s systems of internal control and risk management and for reviewing
the effectiveness of those systems. Such systems are designed to manage, rather
than eliminate, the risk of failure to achieve business objectives; any system
can provide only reasonable and not absolute assurance against material misstatement
or loss.
BT has processes for identifying, evaluating and managing the significant risks faced by the group. These processes have been in place for the whole of the 2004 financial year and have continued up to the date on which this document was approved.
| 21 | Board of directors | BT Annual Review 2004 |
Board of directors
Sir Christopher Bland
Chairman
Appointed to the Board as Chairman on 1 May 2001. Sir Christopher was chairman
of the BBC from 1996 to 2001. He became a non-executive director of LWT Holdings
in 1982 and was chairman from 1983 to 1994, when LWT was acquired by the Granada
Group. Sir Christopher is a former chairman of an NHS hospital trust. Aged 65.
Other appointments:
senior adviser at Warburg Pincus and chairman of the Royal Shakespeare Company.
D* E* F
Ben Verwaayen
Chief Executive
Ben Verwaayen,
a Dutch national, was appointed to the Board on 14 January 2002 and became Chief
Executive on 1 February 2002. He was formerly vice chairman of the management
board of Lucent Technologies in the USA from October 1999. Aged 52.
A*
Dr Paul Reynolds
Chief Executive,
BT Wholesale
Paul Reynolds was appointed to the Board on 19 November 2001. He has held a number
of senior positions in BT, including Director of Multimedia and Managing Director
of Networks and Information Services. Aged 47.
Other appointments:
non-executive
director of E-Access (a Japanese corporation) from June 2004.
A
Andy Green
Chief Executive,
BT Global
Services
Andy Green was appointed to the Board on 19 November 2001. He has held
a number of senior positions in BT, including Chief Executive of BT Openworld
and Group Director of Strategy and Development. Aged 48.
A
Pierre Danon
Chief Executive,
BT Retail
Pierre
Danon, a French national, was appointed to the Board on 19 November 2001. From
1981 to 2000, he worked for Rank Xerox, latterly as president of Xerox Europe.
Aged 48.
Other appointments:
non-executive
director of Emap.
A
Ian Livingston
Group Finance
Director
Ian Livingston, a Chartered Accountant, was appointed Group Finance Director
in April 2002. He was formerly group finance director of Dixons Group and a director
of
Freeserve from its inception. Aged 39.
Other appointments:
non-executive
director of Hilton Group.
A F
Non-executive directors
Sir Anthony Greener
Deputy Chairman
Sir Anthony Greener was appointed to the Board on 1 October 2000. He is Deputy
Chairman and senior independent director. He chairs the Audit and Remuneration
Committees. He was formerly chairman of Diageo. Aged 63.
Other appointments:
chairman of University for Industry (learndirect) and the Qualifications and
Curriculum Authority; non-executive director of Robert Mondavi Corporation.
B* C* D
Louis R Hughes
Louis Hughes, a US national,
joined the Board on 1 January 2000. He is non-executive chairman of Maxager
Technology Inc. (USA). Previous roles include president and chief operating
officer of Lockheed Martin Corporation and executive vice president of General
Motors. Aged 55.
Other appointments:
non-executive
director of AB Electrolux (Sweden), Sulzer AG and ABB Ltd (both Switzerland).
B
C
Maarten van den Bergh
Maarten van den Bergh, a Dutch
national, was appointed to the Board on 1 September 2000. He retired in 2000
as president of the Royal Dutch Petroleum Company and vice chairman of its committee
of managing directors. Aged 62.
Other appointments:
chairman of Lloyds TSB Group; non-executive director of Royal Dutch Petroleum
Company and
British Airways.
B C D F*
John Nelson
John Nelson, a Chartered Accountant,
was appointed to the Board on 14 January 2002. He retired as chairman of Credit
Suisse First Boston Europe (CSFB) on 31 January 2002. Prior to joining CSFB in
January 1999, he was vice chairman of Lazard Brothers from 1990. Aged 56.
Other appointments:
deputy
chairman of Kingfisher and a non-executive director of Hammerson.
B D F
The Rt. Hon. Baroness Jay of Paddington PC
Margaret Jay was appointed to
the Board on 14 January 2002. She was formerly Lord Privy Seal, Leader of the
House of Lords and Minister for Women, and Minister of State at the Department
of Health. Aged 64.
Other appointments:
non-executive
director
of Independent News & Media; chairman of the Overseas Development Institute.
C
E
Carl G Symon
Carl Symon, a US national, was
appointed to the Board on 14 January 2002. He was formerly chairman and chief
executive officer of IBM UK. Aged 58.
Other appointments:
non-executive director of Rolls-Royce and Rexam; chairman of a number of private companies.
B C
Clayton Brendish
Clay Brendish was appointed to the Board on 1 September 2002. He retired in 2001 as executive deputy chairman of CMG, having joined its board when it acquired Admiral, of which he was co-founder and executive chairman. Aged 57.
Other appointments:
non-executive
chairman of Beacon Investment Fund; non-executive director of Elexon and Herald
Investment Trust; trustee of Economist Newspapers and Foundation for Liver
Research.
B E
| Key to membership of Board committees | |
| A | Operating |
| B | Audit |
| C | Remuneration |
| D | Nominating |
| E | Community Support |
| F | Pension Scheme Performance Review Group |
| * | Chairs committee |
Information for shareholders
| Electronic communication An increasing number of shareholders now receive all of their BT shareholder communications electronically, and are discovering the convenience of using the internet and email to find out about their shareholdings and about BT. |
|
| ShareholderPlus | |
|
Exclusive online offers on products and services from BT and partner companies. |
|
Available to BT shareholders who choose to receive shareholder communications using the BT e-communication service, and also have dividends paid directly to a bank or building society or join the BT Dividend investment plan. |
| Shareview (in association with
Lloyds TSB Registrars) Online services enabling BT shareholders to: |
|
|
access shareholdings and view any recent sales, purchases or transfers |
|
build and manage a full share portfolio |
|
view dividend information including electronic tax vouchers |
|
update address and/or bank details online |
|
appoint a proxy at company meetings. |
| Registration is free For ShareholderPlus offers and Shareview* visit www.bt.com/signup and follow the on-screen instructions. For Shareview only, visit www.shareview.co.uk. Alternatively, call the Shareholder Helpline (see below). *You will need your unique eight-character shareholder account number (printed below your name on the accompanying Admission Card/Form of Proxy and also on your share certificate(s)). |
|
| Shareholder
enquiries Online www.bt.com/aboutbt has a wealth of constantly updated information about BT, and www.bt.com/sharesandperformance has information of particular interest to our shareholders. |
|
| Telephone Shareholder Helpline – for general enquiries call: Freefone 0808 100 4141 (+44 121 433 4404 from outside the UK) |
|
| Email Please send your enquiries to bt@lloydstsb-registrars.co.uk |
|
| Post Please write (including a daytime telephone number) to: Lloyds TSB Registrars (2450), The Causeway, Worthing, West Sussex BN99 6DA. |
|
| Other
publications BT Group produces a series of reports on its financial, business, social and environmental performance. Most of these can be found on our website. Contact the Shareholder Helpline for printed copies, where available. |
|
| Share price | |
|
Shareline – for the daily 9.00 am BT share price together with recorded news about the company, call: Lo-call 0845 701 0707 (UK callers only) Calls charged as a local call from anywhere in the UK*. |
|
Share price line – for real-time buying and selling prices for BT shares, call: 0906 822 2334 (UK callers only). This service is provided by Teleshare, which is not part of BT Group. Calls are charged at 60p per minute (including VAT)*. |
| *Different rates may apply to calls from non-BT networks. | |
Special needs |
|
| ShareGift The Orr Mackintosh Foundation operates a charity donation scheme for shareholders with small parcels of shares which may be uneconomic to sell. Details of the scheme are available from ShareGift at www.sharegift.org or by telephone on 020 7337 0501. Details can also be obtained from the Shareholder Helpline. |
|
| Unclaimed Assets
Register BT subscribes to this search facility for financial assets that have become separated from their owners. The register donates a proportion of its public search fees to charity via ShareGift. Further information can be found at www.uar.co.uk or telephone 0870 241 1713. |
|
| Capital gains tax
(CGT) The rights issue in June 2001 adjusted the value of your BT shares for CGT purposes. An explanatory leaflet is available from the Shareholder Helpline. The demerger of mmO2 in November 2001 adjusted the value of your BT shares for CGT purposes. For CGT calculations the base cost of the BT Group shares and mmO2 shares is calculated by multiplying the acquisition cost of the BT shareholding by 77.544% for the BT Group shares, and 22.456% for the mmO2 shares. This is in accordance with the confirmed opening prices for BT Group and mmO2 shares following the demerger. |
|
| Consumer services | |
| Further information on consumer services featured in this Annual Review is available as follows: | |
|
BT Broadband – Call 0800 800 060 or visit www.bt.com/getbroadband |
|
BT Together – Call 0800 800 150 or visit www.bt.com/together |
|
BT Mobile Home Plan – Call 0800 0322 111 or visit www.bt.com/btmobile |
|
BT Business services – Call 0800 400 400 or visit www.bt.com/business |
| Information on the services we offer is regularly enclosed with BT phone bills. | |
Delivering today
Investing for tomorrow
Notice of
Annual General
Meeting 2004
10.30 am
14 July
2004
Cardiff International
Arena, Cardiff
Dear Shareholder
I have pleasure in sending you the Notice of this year’s Annual General Meeting for shareholders of BT Group, which will be held in Cardiff on Wednesday 14 July 2004.
We like to give as many shareholders as possible the opportunity to attend the AGM. For that reason, each year we hold the meeting in a different city in the UK. To make the meeting accessible to even more shareholders, we will this year broadcast my speech and the speech of our Chief Executive, Ben Verwaayen, live over the internet. Details of how to view this webcast are on page 6 of this Notice.
Of the directors proposed for re-election this year, one is an independent non-executive director, John Nelson. I am pleased to provide confirmation to shareholders that we continue to regard John as an effective non-executive director. He makes a valuable contribution to the Board and has demonstrated a high level of commitment to the role.
Even if you are not able to come to the meeting in person, your vote is still important. I would urge you, regardless of the number of shares you own, to vote either by completing, signing and returning the enclosed form of proxy, or by registering your proxy appointment and voting instructions over the internet or by telephone or fax.
More than 150,000 shareholders now receive shareholder communications electronically rather than in paper form, resulting in cost savings for your Company. If you have not yet signed up for this facility and wish to do so, details are provided on page 11 of this Notice.
If you intend coming to this year’s meeting, please either return the AGM Intention to Attend card or indicate your intention to attend over the internet or by phone.
I look forward to seeing you in Cardiff.
Yours sincerely
Sir Christopher Bland
Chairman
19 May 2004
| 3 | Notice of Meeting | BT Annual General
Meeting 2004
|
Notice of Meeting
The 2004 Annual General Meeting of BT Group plc will be held at the Cardiff International Arena, Mary Ann Street, Cardiff CF10 2EQ on Wednesday 14 July 2004 at 10.30 am to consider the following:
Ordinary
business
Resolution
1
That the accounts and
reports of the directors and the auditors for the year ended 31 March 2004 be
received.
The directors are required
to present to the meeting the accounts, and reports of the directors and auditors,
for the year ended 31 March 2004. They are contained in the Company’s Annual
Report.
Resolution
2
That the directors’
remuneration report for the year ended 31 March
2004 be approved.
The directors are required
to ask shareholders to vote on the report on directors’ remuneration. A
summary of the report is included in the Annual Review, which accompanies this
Notice. A copy of the full report, contained in the Annual Report, is sent to
shareholders if requested or it can be viewed on the Company’s website
(see “Internet” on page 11).
Resolution
3
That the final dividend
of 5.3 pence per share recommended by the directors be declared payable on 6
September 2004 to holders of ordinary shares registered at the close of business
on 6 August
2004.
The final dividend declared
cannot exceed the amount recommended by the directors.
Resolutions
4-7: re-election of directors
Under the Company’s
articles of association (“articles”), in compliance with the Combined
Code on Corporate Governance, all directors have to retire and be re-elected
every three years at an Annual General Meeting. In the interests of good corporate
governance, the Board has asked four directors to retire by rotation at this
year’s meeting even though Sir Christopher Bland is the only director who
must do so under the articles. This is because all the others were elected directors
within the past two years.
Information
about the four directors who are proposed by the Board for re-election is given
below each resolution.
Resolution
4
That Sir
Christopher Bland be re-elected as a director.
Sir Christopher Bland
was appointed to the Board of British Telecommunications plc as Chairman on
1 May 2001. He became Chairman of the Company at the time of the demerger of
mmO2 in November 2001. He chairs the Nominating and Community Support Committees
and is a member of the Pension Scheme Performance Review Group.
He
was chairman of the BBC Board of Governors from 1 April 1996 until 30 September
2001. From 1972 to 1979, Sir Christopher was deputy chairman of the Independent
Broadcasting Authority and chairman of its Complaints Review Board. In 1982,
he became a non-executive director of LWT Holdings and was chairman from 1983
to 1994, when LWT was acquired by Granada Group. From December 1994 to May 2000,
he was chairman of NFC. From 1977 to 1985, he was chairman of Sir Joseph Causton
& Sons.
Sir Christopher,
who was chairman of the Hammersmith and Queen
Charlotte’s Hospitals Special Health Authority from 1982 to 1994 and of
Hammersmith Hospital’s NHS Trust from 1994 to February 1997, was knighted
for his work in the NHS in 1993. He was chairman of the Private Finance Panel
from 1995 to 1996 and a member of the Prime Minister’s Advisory Panel on
the Citizens’ Charter. He is senior adviser at Warburg Pincus and chairman
of the Royal Shakespeare Company. Aged 65.
Resolution
5
That Andy Green be
re-elected as a director.
Andy Green was appointed
to the Board on 19 November 2001. He is a member of the Operating Committee.
In October 2001 Andy Green was appointed as Chief Executive of BT Global Services,
BT’s managed services and solutions provider, serving multi-site organisations
worldwide. Since joining the Company in 1986, he has held a number of positions,
including Chief Executive of BT Openworld and Group Director of Strategy and
Development. Andy Green was a member of the former Executive Committee from
February 1995. Aged 48.
Resolution
6
That Ian Livingston
be re-elected as a director.
Ian Livingston was appointed
Group Finance Director in April 2002. He is a member of the Operating Committee
and the Pension Scheme Performance Review Group. Before joining the Company
he was group finance director of Dixons Group, a position he held from 1997.
He joined Dixons in 1991 after working for 3i Group and Bank of America International.
His experience at Dixons spanned a number of operational and financial roles,
both in the UK and overseas. He was also a director of Freeserve from its inception.
Ian Livingston is a Chartered Accountant. He is a non-executive director of
Hilton Group. Aged 39.
Resolution
7
That John Nelson be
re-elected as a director.
John Nelson was appointed
to the Board on 14 January 2002. He is a member of the Audit and Nominating
Committees and the Pension Scheme Performance Review Group. A Chartered Accountant,
he retired as chairman of Credit Suisse First Boston Europe (CSFB) on 31 January
2002. He was a member of the executive board and chairman of the European executive
committee of CSFB.
Prior to joining CSFB
in January 1999, John Nelson spent 13 years with Lazard Brothers. He was appointed
vice chairman of Lazard Brothers in 1990. He was also a chairman of Lazard S.p.A.
in Italy and a managing director of Lazard Freres, New York. He is deputy chairman
of Kingfisher and a non-executive director of Hammerson. Aged 56.
Resolution
8
That PricewaterhouseCoopers
LLP be reappointed auditors of the Company, to hold office until the conclusion
of the next general meeting at which accounts are laid before the Company and
that their remuneration be fixed by the directors.
The resolution proposes
the reappointment of PricewaterhouseCoopers
LLP as the Company’s auditors. In accordance with standard practice, it
gives authority to the directors to decide how much they should be paid.
| 4 | Notice of Meeting | BT Annual General
Meeting 2004
|
Special
business
The following resolution
will be proposed as an ordinary resolution.
Resolution
9
That the authority
and power conferred on the directors in relation to the Section 80 Amount by
Article 74 of the Company’s articles of association be renewed until 13
October 2005 and for that period the Section 80 Amount shall be £142 million.
Under the Companies
Act 1985 (Section 80), the directors of a company may allot unissued shares
only if authorised to do so. The articles give a general authority to the directors
to allot unissued shares, but that authority is subject to renewal by shareholders.
Passing this resolution will continue the directors’ flexibility to act
in the best interests of shareholders, when opportunities arise, by issuing
new shares.
The
directors will be able to issue new shares up to a nominal value of £142
million (the Section 80 Amount), which is equal to approximately 33% of the
issued share capital (excluding treasury shares) of the Company as at the date
of this Notice.
As
at 14 May 2004, the Company held 44.2 million treasury shares which is equal
to 0.5% of the issued share capital of the Company (excluding treasury shares)
in issue as at that date.
The following two resolutions will be proposed as special resolutions.
Resolution
10
That the authority
and power conferred on the directors by Article 74 of the Company’s articles
of association be:
|
extended to any sale of shares which the Company may hold as treasury shares; and |
|
renewed until 13 October 2005; |
| and for that period the Section 89 Amount shall be £22 million. | |
| If shares are to be allotted for cash, the Companies Act 1985 (Section 89) requires those shares to be offered first to existing shareholders in proportion to the number of shares they hold at the time of the offer. However, it may sometimes be in the interests of the Company for the directors to allot shares other than to shareholders in proportion to their existing holdings. | |
All
references to allotment in this note include the sale of treasury shares.
(Treasury shares are explained more fully in the notes to Resolution 11). |
|
The articles give
the following general authorities to the Board, which are subject to renewal
by shareholders, to allot shares: |
|
|
in connection with a rights issue – defined (in summary) as an offer of equity securities to shareholders which is open for a period decided by the Board, subject to any limits or restrictions which the Board thinks are necessary or appropriate; and |
|
not in connection with a rights issue – so that the pre-emption requirement does not apply to allotments of shares for cash up to a specific amount. |
| This resolution would allow the directors to allot shares for cash only: | |
|
up to a nominal value of £22 million (the Section 89 Amount), which is approximately 5% of the Company’s issued share capital (including treasury shares) as at the date of this Notice; or |
|
in a rights issue as defined in the articles (see above). |
This
means that the interests of existing shareholders are protected. If a
share issue is not a rights issue, the proportionate interest of existing
shareholders could not, without their agreement, be reduced by more than
5% by the allotment of new shares for cash to new shareholders by reference
to the issued share capital at the date of this Notice. |
|
There
are no current plans to allot shares except in connection with the Company’s
employee share plans. |
|
The
authorities sought by Resolutions 9 and 10 will last for 15 months until
13 October 2005, although the directors intend to seek renewal of these
powers at each Annual General Meeting. |
|
| Resolution 11 | |
| That the Company be generally and unconditionally authorised to make market purchases (within the meaning of Section 163(3) of the Companies Act 1985) of shares of 5p each in the Company, subject to the following conditions: | |
| (a) | the maximum number of shares which may be purchased is 859 million shares; |
| (b) | the minimum price which may be paid for each share is 5p; |
| (c) | the maximum price which may be paid for each share is an amount equal to 105% of the average of the middle market quotations of a share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which the share is contracted to be purchased; and |
| (d) | this authority will expire at the close of the Annual General Meeting of the Company held in 2005, or if earlier, 13 October 2005 (except in relation to the purchase of shares, the contract for which was concluded before the expiry of this authority and which might be executed wholly or partly after that expiry). |
| The directors believe that it is helpful for the Company to continue to have the flexibility to buy its own shares and this resolution seeks authority from shareholders to do so. | |
This
resolution would renew the 2003 authority, which was in similar terms,
and would be limited to 859 million ordinary shares, representing 10%
of the issued share capital (excluding treasury shares) at the date of
this Notice. |
|
The
minimum and maximum prices to be paid for the shares are stated in the
resolution. The directors would only exercise this authority after considering
the benefits for shareholders generally. The purchase of shares by the
Company under this authority would be a purchase in the market. It should
not be confused with any share dealing facilities that may be offered
to shareholders by the Company. |
|
The
Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003
(the “Regulations”), which came into effect on 1
December 2003, allow shares purchased by the Company out of distributable
profits to be held as treasury shares, which may then be cancelled, sold
for cash or used to meet the Company’s obligations under its employee
share plans. |
|
During
the 2004 financial year, 80.6 million shares were purchased (1% of the
share capital) for a total consideration of £144 million, at an
average price of £1.77 per share. 36.2 million shares were cancelled
and 44.4 million shares were retained as treasury shares. As at 14 May
2004, 0.2 million treasury shares had been transferred to meet the Company’s
obligations under its employee share plans. |
|
The
Company’s current intention is to hold any shares purchased as
treasury shares but retains the flexibility to cancel them if it
considers this to be in the best interests of the Company.
Any treasury shares used to meet the obligations under the Company’s
employee share plans will, so long as required under institutional
investor guidelines, be counted towards the limits in the plans on
the number of new shares which may be issued under them. |
|
| 5 | Notice of Meeting | BT Annual General
Meeting 2004
|
The authority sought by this resolution will end by 13 October 2005, although the directors intend to seek renewal of this power at each Annual General Meeting.
As
at 14 May 2004, there were options outstanding over 427 million shares
(of which options over 233 million shares were in respect of options granted
under the savings-related share option plans), representing 2.7% of the
Company’s issued share capital (excluding treasury shares). If the authority given by this resolution were to be fully used, these would represent 3% of the Company’s
issued share capital (excluding treasury shares). There are no warrants
outstanding.
The following resolution will be proposed as an ordinary resolution.
Resolution 12
That British Telecommunications
plc, a wholly owned subsidiary of the Company, be authorised to make donations
to EU (European Union) political organisations, not exceeding £100,000
in total, during the period beginning with the date of the 2004 Annual General
Meeting and ending at the conclusion of the day on which the 2005 Annual General
Meeting is held.
The Companies Act 1985
requires companies to obtain shareholder authority before they can make donations
to EU political organisations (which include UK political parties). The definition
of political donations used in the Act is very broad and, as a result, it covers
activities that form part of normal relationships between British Telecommunications
plc (BT) and the political machinery. These activities are not designed to
support any political party nor to influence public support for a particular
party and would not be thought of as political donations in the ordinary sense
of those words. They are entirely non-political in nature and are designed
so that BT can make MPs and others aware of key industry issues and matters
affecting the Company. In the year to 31 March 2004 BT spent £25,690.
BT
Group’s policy is that it does not, directly or through BT or any other
subsidiary, make what are commonly regarded as donations to any political party.
The authority we are requesting from shareholders is not designed to change that
policy. It will, however, ensure that BT acts within the provisions and definitions
of the current UK law when carrying out the above activities.
Only
shareholders on the Register of Members at 6.00 pm on
12 July 2004 are entitled to attend and vote.
A shareholder
entitled to attend and vote is entitled to appoint a proxy or proxies to vote
on his or her behalf.
A proxy
need not be a shareholder of the Company.
On a poll, the number of shares held
by each shareholder at 6.00 pm on 12 July 2004 will decide the number of votes
that the shareholder may cast.
By order of the Board
Larry Stone
Secretary
81 Newgate Street
London EC1A 7AJ
19 May 2004
| Documents | |
| The following documentation, which is available for inspection during business hours at the registered office of the Company on any weekday (public holidays excluded), will also be available for inspection at the place of the Annual General Meeting from 9.30 am on the day of the meeting until the conclusion of the meeting: | |
| (a) | the register of interests of directors (and their families) in the share capital of the Company; |
| (b) | copies of all service contracts and contracts of appointment between the directors and the Company; and |
| (c) | printed copies of this Notice and the documentation made available to shareholders using electronic communication, including the Annual Report and Form 20-F 2004 and the Annual Review 2004. |
Your directors believe that the proposals in Resolutions 1 to 12 are in the best interests of both the Company and its shareholders. Accordingly, the directors unanimously recommend that you vote in favour of all these resolutions, as they intend to do in respect of their own beneficial holdings.
| 6 | AGM Information | BT Annual General
Meeting 2004
|
AGM Information
You have the right to attend, speak and vote at the Annual General Meeting if you are on the BT Group share register at 6.00 pm on 12 July 2004.
If
you are not attending the meeting, you may appoint someone else as your “proxy” to
attend the meeting and/or vote on your behalf, by post, fax, over the internet
or by telephone. The number of shares you hold as at the above register deadline
will decide how many votes you or your proxy will have if there is a poll.
Time of meeting
10.30 am on 14 July 2004. Doors open at 9.30 am to the shareholder helpdesk, for questions and queries, and to the reception area.
Place of meeting
Cardiff International Arena, Mary Ann Street, Cardiff, CF10 2EQ. A map and travel instructions are included on page 9 of this Notice.
If you are coming to the meeting
If you were sent an AGM Intention to Attend Card, please sign and return it. No stamp is required if posting within the UK, even if you use an envelope. You can also register your intention to attend over the internet (see Internet Proxy Appointment on page 7), or by calling the telephone number given for appointing proxies on page 7.
Admission Card/Form of Proxy
Please bring your Admission Card/Form of Proxy. It authenticates your right to attend, speak and vote and will speed your admission. You will need to keep it until the meeting ends. You may also find it helpful to bring with you this Notice and the BT Annual Review 2004, so that you can refer to them at the meeting.
Joint shareholders
All joint shareholders may attend and speak at the meeting. However, only the first shareholder listed on the Register of Members is entitled to vote.
Questions
Before voting on each resolution, shareholders will have the opportunity to ask questions. If you wish to ask a question, please make your way to a question point where there will be someone to help you.
If you are not coming to the meeting
Webcast
For the first time this year, the speeches by the Chairman, Sir Christopher Bland, and the Chief Executive, Ben Verwaayen, will be broadcast live on the internet at www.bt.com/btagm2004. Questions and voting on the business of the meeting will not be broadcast.
If you intend to view the webcast, you should
visit this site before the meeting to check that you will be able to view it
on your computer, and also whether you need any additional software.
Appointing a proxy
Whoever you appoint as proxy can vote, or abstain from voting, as he or she decides on any other business which may validly come before the meeting. This would include a proxy appointed using the CREST service (see below).
The proxy appointment and instructions (together with any authority – see notes 1.4 and 1.5 below), however submitted, must be received by Lloyds TSB Registrars by 10.30 am on Monday 12 July 2004 to be valid.
1. By post or fax
1.1 Appointing the Chairman as your
proxy.
For convenience, the appointment of the Chairman has already been included.
1.2 Appointing someone other than the
Chairman as your proxy.
You should delete
the words “the Chairman of the meeting or” on the form, initial the
alteration, and insert the name and address of your proxy in the space provided.
A special admission card, together with a copy of this Notice, will be sent direct
to the person you appoint.
1.3 Instructing your proxy how to vote.
If you have appointed the Chairman as
your proxy, you can tell him how to vote on the resolutions to be proposed at
the AGM by placing a cross in the appropriate box to indicate whether you wish
your votes to be cast “For” or “Against” that resolution, or if you wish to “Abstain”.
Unless you give specific instructions on how to vote on a particular resolution,
the Chairman will have the discretion as to whether, and if so how, he votes.
If you have appointed someone else as your proxy, it is your responsibility to tell him or her how you want your votes cast. It is a good idea to fill in the form beforehand, otherwise he or she may vote (or abstain from voting) as he or she decides.
1.4 Completing the Form of Proxy
Before returning the Form of Proxy, please check that it has been signed and dated. In the case of joint holders, any one of you may sign. If someone signs on your behalf, the authority under which it is signed, (or a copy of the authority certified by a solicitor or notary), must be returned with the Form of Proxy.
1.5 Corporate appointment of proxy
Where the person appointing the proxy is a company, the Form of Proxy must either be sealed or signed by an officer of the company or an authorised attorney, and returned together with the appropriate authority or power of attorney.
| 7 | AGM Information | BT Annual General Meeting 2004 |
1.6 Posting details
The FREEPOST return address is printed on the back of the Form of Proxy.
If you do not wish the Form of Proxy to be seen by anyone except the Company and the Registrar, you should post it in an envelope to:
Lloyds TSB Registrars (2450)
FREEPOST (KE7700)
The Causeway
Worthing
West Sussex BN99 6BU
There is no postage to pay if posted in the UK.
1.7 Shareholders
outside the UK
Shareholders outside the UK should reply using the return-addressed envelope provided. If you live in a country covered by the International Business Reply Service, postage on the envelope has been prepaid.
1.8 Fax
You can fax the Form of Proxy to Freefone 0808 100 4142 (+44 1903 702341 from outside the UK).
2. Internet
Proxy Appointment
You may appoint a proxy and/or indicate your intention to attend the meeting by logging on to www.sharevote.co.uk and following the instructions on the screen. You will need your Reference Number (the 24-digit number printed below your name and address on the accompanying Admission Card/Form of Proxy). Alternatively, if you are registered for the BT e-communication service, you can go to www.shareview.co.uk and
click on “Company Meetings”.
Any electronic communication that is found to contain a computer virus will not be accepted.
This
internet service is governed by Lloyds TSB Registrars’ conditions
of use, which can be seen at www.sharevote.co.uk.
3. Telephone
Proxy Appointment
You may appoint a
proxy and/or indicate your intention to attend the meeting using the Lloyds
TSB Registrars’ telephone proxy appointment and voting instruction service (“Telephone Service”)
by calling Freefone 0808 100 4141 (or +44 1903 702892 from outside the UK) before 10.30 am on 12 July 2004.
Lines will be open from 8.30 am to 5.30 pm, Monday to Friday.
You should read the Conditions of the Telephone Service carefully before calling.
| 3.1 | Information needed for the Telephone Service: |
|
your Reference Number – the 24-digit number printed below your name and address on the Admission Card/Form of Proxy; |
|
your Card ID and Account Numbers – printed alongside your Reference Number on the Admission Card/Form of Proxy; |
|
the name of the person you wish to appoint as your proxy, if not the Chairman; and |
|
your instructions on how you wish to vote on each resolution at the AGM. |
3.2 Conditions
of the Telephone
Service
The use of the Telephone
Service by the Company’s shareholders, and participants in the BT Employee Share Ownership Scheme and BT Group EasyShare, is governed by Lloyds TSB Registrars’ conditions
of use of the service.
These conditions are legally binding and should be read carefully before using the Telephone Service.
| 3.3 | Confirmations |
| Use of the Reference Number will be treated as confirming that the user: | |
|
is registering to use the Telephone Service; |
|
has the right to vote their shares and/or give instructions; and |
|
has read, understood and agreed to be bound by these conditions of use. |
3.4 Reference Number
and security
Your Reference Number should be disclosed to someone else only if you want that person to access the Telephone Service on your behalf, and you have given that person power of attorney to do so. Corporate shareholders should note that revealing their Reference Number to a client may enable that client to use the Telephone Service in respect of the entire position.
3.5 Authority given by
use of the Reference Number
Lloyds TSB Registrars
and/or Lloyds TSB Registrars Corporate Nominee Limited and/or BT Employee Shares
Trustees Limited and/or the Company (“Recipient Companies”) will be
entitled to act on instructions received via the Telephone Service by the use
of a Reference Number without obtaining any further written or other confirmation,
even if those instructions are not actually given or authorised by the shareholder,
participant or duly authorised attorney. However, written confirmation of appointments
may be insisted upon and additional security checks may be made where it is reasonably
believed they are justified.
3.6 Availability of
Telephone Service
Lloyds TSB Registrars will make all reasonable efforts to ensure that the Telephone Service is available during the times specified in the voting documentation, but circumstances beyond their control may mean that this is not possible.
3.7 Limitation of liability
None of the Recipient
Companies is liable for any direct loss or damage resulting from making the Telephone
Service available, unless directly caused by its negligence, fraud or deliberate
default. Each of the Recipient Companies’ liability for consequential and
indirect losses is excluded (except in the case of fraud). None of the Recipient
Companies will have any liability for instructions accepted via the Telephone
Service in good faith.
3.8 Record keeping
Lloyds TSB Registrars may record all telephone conversations in connection with the Telephone Service and will keep all records of proxy appointments and other instructions given via the Telephone Service for up to one year.
| 8 | AGM Information | BT Annual General Meeting 2004 |
3.9 Law
English law will govern these conditions of use and users of the service submit to the jurisdiction of the English Courts in connection with any dispute.
4. CREST
Electronic Proxy Appointment
CREST
members wishing to appoint a proxy using the CREST electronic proxy appointment
service may do
so by using the procedures set out in the CREST manual. If you are a CREST personal
member, a CREST sponsored member, or a CREST member who has appointed a voting
service provider (collectively known as “appointor members”), you should
refer to your CREST sponsor or voting service provider(s), who can take the appropriate
action for you.
So
that a CREST proxy appointment or instruction to a proxy can be valid,
the appropriate CREST message (a “CREST Proxy Instruction”) must be properly authenticated in compliance with CRESTCo’s specifications and must contain the necessary information, described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so that Lloyds TSB Registrars (ID 7RA01) receive it by 10.30 am on 12 July 2004. The time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the issuer’s
agent is able to retrieve the message by asking CREST in the way CREST
require.
CRESTCo does not make available special procedures in CREST for any particular messages, so normal system timings and limitations apply to the input of CREST Proxy Instructions. CREST members (or appointor members) are responsible for taking (or arranging for their CREST sponsor or voting service provider(s) to take) any necessary action to ensure that a message is transmitted by means of the CREST system by any particular time. There are practical limitations of the CREST system and timings which you and your CREST sponsors or voting service provider(s) need to consider.
The Company can treat as invalid a CREST Proxy Instruction in the circumstances permitted by legislation (Regulation 35(5) (a) of the Uncertificated Securities Regulations 2001).
BT Employee Share Ownership Scheme (“ESOS”) participants
You do not have the right to attend the AGM, but may instruct the ESOS Trustees how to vote the shares they hold on your behalf by placing a cross in the relevant box on the enclosed Voting Instruction Card. If you do not wish the Trustees to vote on a particular resolution please leave the relevant boxes blank. You should then sign and date the card and return it to the Trustees (see posting details at 1.6 above) to be received by the Trustees no later than 10.30 am on 12 July 2004.
You may also give your voting instructions to the Trustees over the internet, by telephone or by fax (see above).
ESOS participants who are also shareholders
Where possible, you have been sent a Form of Proxy/Admission Card and a Voting Instruction Card together with only one copy of the BT Annual Review and this Notice.
You may have received separate sets of documents as it was not possible to combine your records e.g. as different dividend payment instructions apply.
To avoid additional mailings please contact Lloyds TSB Registrars to combine your records.
BT Group EasyShare (“EasyShare”) participants
You have been sent a separate Form of Proxy/Admission Card.
You are able to attend the AGM and speak and vote your shares at the meeting.
Because these shares are held through Lloyds TSB Registrars Corporate Nominee
Limited (“NomineeCo”), it has been agreed that you may attend the AGM as NomineeCo’s
corporate representative. Attendance at the meeting will be taken as acceptance
of this arrangement. This also applies to joint holders, who may attend and speak
at the meeting in the same capacity.
If you are not attending the meeting, you (or any other person named jointly with you on the Form of Proxy) may use the Form of Proxy to instruct NomineeCo to appoint the proxy of your choice to attend the meeting and vote on your behalf.
You may give your voting instructions over the internet, by telephone or fax, and can register your intention to attend over the internet or by telephone (see above).
BT Group Employee Share Investment Plan participants (allshare and directshare)
You do not have the right to attend the AGM, but may instruct the Trustee of the Plan, Halifax Corporate Trustees Limited, to vote shares held on your behalf. Halifax Corporate Trustees Limited have advised participants separately how they may give instructions for their shares to be voted.
| 9 | AGM Venue | BT Annual General
Meeting 2004
|
AGM Venue
Venue arrangements
Admission
For security reasons and to speed up admission, it would be helpful if you did not bring suitcases or large bags, a camera, laptop computer or tape recorder. You may otherwise be required to deposit them in a secure property store for collection after the meeting.
Language
The proceedings of the meeting will be conducted in English. However, translation facilities will be available for those shareholders who wish to participate in Welsh. In addition, Welsh speaking personnel will be available to provide assistance.
Smoking
Smoking will not be permitted in the
auditorium.
Mobile phones
Please ensure mobile phones or pagers
are switched off for the duration of the meeting.
Refreshments
Tea and coffee will be available in
the reception area before the meeting. Light refreshments will be served after
the meeting.
| Shareholders with disabilities | |
| The following facilities will be available: | |
|
sound amplification |
|
induction loop |
|
sign language interpretation, and |
|
wheelchair facilities. |
Anyone accompanying a shareholder in need of assistance will be admitted to the meeting.
How to get there
The Cardiff International Arena (CIA) is located at Mary Ann Street, Cardiff CF10 2EQ.
If you travel by train
Cardiff Central
railway station is 4 minutes’ walk.
For further information please contact National Rail Enquiries on 08457 48 49 50 or visit www.thetrainline.com.
If you travel by bus or coach
Cardiff Bus and Coach
Station, where most local buses start and terminate their journeys, is 4 minutes’ walk.
If you travel by car
Directions for approaching the CIA
| From the east: | M4 junction 29, A48 (M), A4232, A4161, Newport Road, Station Terrace, Guildford Street, Bridge Street, Mary Ann Street. |
| There is a toll charge for vehicles travelling Westbound on the M4 at the Severn Bridge. | |
| From the west: | M4 junction 33, A4234, Bute Terrace, Mary Ann Street. |
Car parking
There are a number of NCP car parks within walking distance.
| 10 | Shareholder Information | BT Annual General
Meeting 2004
|
Calendar of Key Dates
14 July 2004
Annual General Meeting. Details are in this Notice.
29 July 2004
First quarter results announced.*
6 September 2004
Proposed final dividend of 5.3 pence per share paid to shareholders who are on the register on 6 August 2004.*
11 November 2004
Second quarter and half year results announced.*
February 2005
Third quarter and nine months results announced.*
Payment of 2005 interim dividend.*
May 2005
Fourth quarter and full year results announced.*
June 2005
2005 annual report and accounts published.*
*Dates are based on present expectations.
The results announcements and financial highlights will all be available on our website at www.bt.com/sharesandperformance.
Recorded highlights of each results announcement will be featured on Shareline on Lo-call 0845 701 0707.
When you use one of BT’s Lo-call numbers from anywhere within the UK, you pay only the price of a local call. Different rates may apply to calls from non-BT networks.
| 11 | Electronic Communication | BT Annual General Meeting 2004 |
Electronic communication
Internet
There’s a wealth of constantly updated information about the Company at
www.bt.com/aboutbt.
Our Services for Shareholders pages at www.bt.com/sharesandperformance provide services of particular interest to our shareholders.
Shareholders can receive all BT shareholder communications
electronically by using the BT e-communication service.
ShareholderPlus
ShareholderPlus is an exclusive range of online shareholder offers on products and services from BT and partner companies. It is available to BT shareholders who choose to receive shareholder communications using the BT e-communication service, and also have dividends paid directly to a bank or building society or join the BT Dividend investment plan.
Shareview
| ShareholderPlus is provided to the Company’s shareholders in association with the Lloyds TSB Registrars’ Shareview service. Shareview enables you to: | |
|
access your shareholdings and view any recent sales, purchases or transfers |
|
build and manage a full portfolio of your shares online |
|
see all your dividend information including electronic tax vouchers |
|
update address and/or bank details online |
|
appoint a proxy to represent you at company meetings. |
If you want to take advantage of ShareholderPlus offers and Shareview services, please go to www.bt.com/signup and follow the on-screen instructions (to take advantage of Shareview services only, you can go to www.shareview.co.uk), or call Freefone 0808 100 4141 (+44 121 433 4404 from outside the UK) and talk to one of our helpline operators.
Registration for ShareholderPlus and Shareview is free.
You will need your unique 8-character shareholder account number, (printed below your name on the accompanying Admission Card/Form of Proxy). You will be asked to choose a secret PIN, and once you have registered you will be sent a User ID by post. You can then use your User ID and PIN to get secure access to ShareholderPlus and/or Shareview whenever you like.
Shareholder Information
Report and accounts
| The Company publishes two reports annually: | |
|
Annual Report and Form 20-F (“annual report”) – the Company’s full report and accounts; and |
|
Annual Review (“annual review”) – a shorter report, including a summary financial statement, designed to meet the needs of our private shareholders. |
You will be sent
only the annual review unless you notify us that you wish to receive
the annual report. |
|
The annual report
for 2004 is also available on our website at www.bt.com/sharesandperformance. |
|
Alternatively,
you can request a printed copy of the annual report for 2004 and/or future
years, free of charge, by calling the Shareholder Helpline or contacting
Lloyds TSB Registrars (see “Enquiries” below). |
|
Enquiries
Lloyds TSB Registrars maintain the Company’s share register and, separately, the registers for the BT Employee Share Ownership Scheme (ESOS) and BT Group EasyShare. They also provide a telephone helpline service.
By telephone to the BT Group Shareholder Helpline
| Freefone: | 0808 100 4141 |
| Fax: | 01903 833371 |
| Textphone: | Freefone 0800 169 6907 |
| Email: | bt@lloydstsb-registrars.co.uk |
| From outside the UK | |
| Tel: | +44 121 433 4404 |
| Fax: | +44 1903 833371 |
| Textphone: | +44 121 415 7004 |
| Or in writing, remembering to include a daytime telephone number, to: | |
| Lloyds TSB Registrars (2450) | |
| The Causeway | |
| Worthing | |
| West Sussex BN99 6DA. | |
Data Protection Statement
Your personal data include all data provided by you, or on your behalf, which relates to you as an individual shareholder or as a participant in ESOS or EasyShare or other “participant”, including your name and contact details, the votes you cast and your Reference Number (attributed to you by the Company (all references to the Company include BT Group plc and British Telecommunications plc)). The Company determines the purposes for which, and the manner in which, your personal data are to be processed. The Company and any third party to which it discloses the data (including Lloyds TSB Registrars) may process your personal data for the purposes of compiling and updating the Company records, fulfilling the Company’s legal obligations and processing the shareholder rights you exercise.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BT Group plc | |||
| By: /s/ Patricia Day | |||
| Name: Patricia Day | |||
Date: June 2, 2004 |
Title: Assistant Secretary | ||