BT 2003 Annual Report Download - page 103

18. Acquisitions and disposals continued
The book value of the assets contributed by the group to the joint venture comprised:
£m
Intangible assets 568
Tangible fixed assets 870
Total fixed assets 1,438
Current assets 123
Current liabilities (183)
Net current liabilities (60)
Provisions for liabilities and charges (13)
Long-term debt owed to the BT group (1,169)
Net assets contributed 196
The acquisition of the group’s 50% interest in Concert comprised:
£m
Group’s share of Concert’s opening net assets (US GAAP) 631
Group’s share of US to UK GAAP adjustments (180)
Group’s share of Concert’s opening net assets (UK GAAP) 451
Net assets contributed by the group to the joint venture (196)
Transition costs (96)
Unrealised gain on the contribution 159
The gain on the transfer of the assets is unrealised since the group continues to maintain a 50% interest in
the assets contributed. This gain has been taken to a non-distributable reserve and is shown in the statement
of total recognised gains and losses for the year ended 31 March 2000. There is no tax charge on the gain.
During the year ended 31 March 2001, the group’s share of Concert’s opening net assets was amended,
due to certain true up contributions, reducing the unrealised gain by £49 million. This is shown in the statement
of total recognised gains and losses for the year ended 31 March 2001.
Acquisition of associates and joint ventures
Year ended 31 March 2002
Blu
i
£m
Group share of original book value of net assets and fair value to the group 16
Goodwill 50
Total cost 66
Year ended 31 March 2001
Telenordia
j
£m
J-Phone
k
£m
Group share of original book value of net assets and fair value to the group 10 5
Goodwill 84 –
Total cost 94 5
i
On 31 January 2002, one of the venture partners in Blu exercised a put option for BT to purchase a 9% interest
for £66 million. The cost of £66 million arising on this purchase was written off. In addition in the year ended
31 March 2002 the value of BT’s investment was reviewed and provision was made for the associated impairment
and exit costs. In December 2002 the group sold its interest in Blu (note 7).
j
On 8 September 2000, BT increased its existing 33% interest in Telenordia, based in Sweden, to 50% for
£94 million. Goodwill was being amortised over 20 years until its disposal in October 2001.
k
On 8 May 2000, the group acquired a 40% interest in a company, with Japan Telecom owning the other 60%
interest, which holds a 74% interest in J-Phone Communications Co. Limited (JPC). JPC in turn acquired
controlling interests, averaging 51%, in nine regional Japanese mobile phone J-Phone companies. These J-Phone
companies merged into three larger regional companies during the year ended 31 March 2001. Japan Telecom
also held a direct 18% interest in the J-Phone companies.
During the year ended 31 March 2001, the group held an effective 23% interest in J-Phone. The impact
of the combined J-Phone/Japan Telecom ownership structure, however, led the group to reflect 63% of the
J-Phone results at the turnover and operating profit levels and all items below including interest and taxation,
in accordance with the requirements of FRS 9. In June 2001, the group sold this interest (note 7).
Notes to the financial statements
102 BT Annual Report and Form 20-F 2003