The net assets attributable to mmO2 at the date of demerger totalled £19,490 million, including £16,193 million of goodwill, mobile licences and other intangible assets, and £4,216 million of tangible fixed assets. These net assets were distributed by way of a demerger distribution which is the main cause of the reduction in group shareholders' funds from £12,054 million at 31 March 2001 to a deficit of £358 million at 31 March 2002. The reduction has been mitigated by the impact of the June 2001 rights issue which increased shareholders' funds by £5,876 million.

BT Group plc, the parent company, has reserves of £9,537 million, although the consolidated reserves are showing a deficiency of £794 million.

BT's fixed assets totalled £17,551 million of which £16,078 million were tangible assets, principally forming the UK fixed network. Provisions for liabilities and charges include a deferred tax provision of £2,140 million for our full exposure to deferred tax as required under FRS 19. Although we have chosen not to discount our liability, we only expect to settle a small part of this amount in the foreseeable future.