BT 1999 Annual Report Download - page 78

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NOTES TO THE FINANCIAL STATEMENTS
77
19. Fixed asset investments (continued)
(e) Airtel Movil SA
Following the clearance in 1998 by the European Commission of the alliance between the company, AirTouch and other investors
in Airtel Movil SA, a leading Spanish mobile telecommunications company, the group’s 15.8% investment in Airtel was reclassified
as a joint venture on 1 April 1998. Airtel is jointly controlled by the company as a consequence of the alliance agreement. During
the year ended 31 March 1999, the group acquired an additional 2% interest in Airtel for £55m.
In summary, the acquisition of the cumulative 17.8% interest in Airtel comprised:
£m
01110000000000001110111
!!!
0111
Group share of original book value of net assets 62
Fair value adjustment to achieve consistency of accounting policies (19)
01110000000000001110111
!!!
0111
Fair value to the group 43
Goodwill 158
01110000000000001110111
!!!
0111
Total cost 201
01110000000000001110111!!!0111
(f) Cegetel
On 24 September 1997, the group completed its acquisition of a 26% interest in Cegetel, a leading French telecommunications
company. Of the cost of the investment in the associated undertaking of £1,029m, goodwill arising of £862m has been written off
against reserves.
The acquisition of the interest in Cegetel comprised:
£m
0111
Group share of original book value of net assets 483
Fair value adjustment to achieve consistency of accounting policies (316)
01§0§511000000000000
!!!
0111
Fair value to the group 167
Goodwill 862
01§0§511000000000000
!!!
0111
Total cost 1,029
01§0§511000000000000!!!0111
(g) Other investments
Other investments include ordinary shares of the company, with a net book value of £18m (1998 – £29m) and a market value of
£70m (1998 – £68m), held in trust for the BT Executive Share Plan, the BT Performance Share Plan and the BT Deferred
Bonus Plan (note 31). Also, in the group balance sheet at 31 March 1999, listed investments were held with a book value of
£132m (1998 – £117m) and a market value of £206m (1998 – £154m).
(h) Subsidiary company acquisition
In February 1997, the group entered into an agreement to purchase from Banco Santander SA its 50% holding in the share capital
of BT Telecomunicaciones SA, a joint venture between a wholly-owned subsidiary of the company and Banco Santander SA, for
the equivalent of £76m. The transaction was completed in July 1997.
(i) Other related party transactions with associates and joint ventures
In the year ended 31 March 1999, the group’s turnover with its other associates and joint ventures amounted to
£129m (1998 – £74m, 1997 – £23m) and the group purchased £1m (1998 – £9m, 1997 – £30m) in services and products from
these undertakings.