BT 2013 Annual Report Download - page 131

Financial statements
129
Financial statements
15. Business combinations
On 17 January 2013, the group acquired 100% of the issued share capital of Tikit Group plc (‘Tikit’ or ‘BT Tikit’) which now forms part of BT Retail’s
Enterprises cash generating unit. The purchase was made for cash consideration of £64m which was settled in the year and the cash acquired with
the business was £10m. Tikit is one of the largest suppliers of technology solutions and services to legal and accounting firms in the UK. The
acquisition will allow the group to combine Tikit’s expertise, portfolio and relationships with BT Retail’s scale and breadth of products. This will
strengthen the group’s position in the provision of ICT and managed services to this sector.
Intangible assets of £37m recognised in respect of this acquisition comprise customer relationships, proprietary technology and brand. The fair
value adjustments relating to this acquisition were provisional at 31 March 2013 and will be finalised during 2013/14. Goodwill of £33m was
recognised on the acquisition which principally comprises the assembled workforce and forecast synergies.
From the date of acquisition, BT Tikit has contributed revenue of £5m and a net profit of £nil to the group’s results. If the acquisition had occurred
on 1 April 2012, the group’s revenue and profit for the year would have been higher by £23m and £3m, respectively. Acquisition related costs of
£1m have been recognised in operating costs in the group income statement.
16. Trade and other receivables
2013 2012
At 31 March £m £m
Non-current
Other assetsa184 169
aOther assets includes costs relating to the initial set up, transition or transformation phase of long-term networked IT services contracts of £86m (2011/12: £85m), and prepayments and
leasing debtors of £98m (2011/12: £84m).
2013 2012
At 31 March £m £m
Current
Trade receivables 1,495 1,747
Prepayments 515 671
Accrued income 683 730
Other receivables 184 159
2,877 3,307
Trade receivables are stated after deducting allowances for doubtful debts, as follows:
2013 2012
£m £m
At 1 April 187 192
Expense 102 104
Utilised (73) (104)
Exchange differences 2 (5)
At 31 March 218 187
Trade receivables are continuously monitored and allowances applied against trade receivables consist of both specific impairments and collective
impairments based on the group’s historical loss experiences for the relevant aged c ategory and taking into account general economic conditions.
Historical loss experience allowances are calculated by line of busine ss in order to reflect the specific nature of the customers relevant to that line of
business.
Note 26 provides further disclosure regarding the credit quality of the group’s gross trade receivables.