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|We have audited the financial statements which comprise the group
profit and loss account, group and company balance sheets, group
cash flow statement, group statement of total recognised gains and
losses and the related notes which have been prepared under the
historic cost convention and the accounting policies set out in
the Accounting Policies section and the United States generally
accepted accounting principles section.
Respective responsibilities of directors and auditors
The directors’ responsibilities for preparing the annual report
and the financial statements in accordance with applicable United
Kingdom law and accounting standards are set out in the statement
of directors’ responsibilities.
Our responsibility is to audit the financial statements in accordance
with relevant legal and regulatory requirements, United Kingdom
Auditing Standards issued by the Auditing Practices Board and the
Listing Rules of the Financial Services Authority.
We report to you our opinion as to whether the financial statements
give a true and fair view and are properly prepared in accordance
with the Companies Act 1985. We also report to you if, in our opinion,
the directors’ report is not consistent with the financial
statements, if the company has not kept proper accounting records,
if we have not received all the information and explanations we
require for our audit, or if information specified by law or the
Listing Rules regarding directors’ remuneration and transactions
is not disclosed.
We read the other information contained in the annual report and
consider the implications for our report if we become aware of any
apparent misstatements or material inconsistencies with the financial
statements. The other information comprises only those sections
set out in the table of contents including Financial headlines,
Chairman’s message, Chief Executive’s statement, Business
and Financial reviews, Five-year financial summary, Report of the
directors, Corporate governance and Risk factors.
We review whether the corporate governance statement reflects the
company’s compliance with the seven provisions of the Combined
Code specified for our review by the Listing Rules, and we report
if it does not. We are not required to consider whether the board’s
statements on internal control cover all risks and controls, or
to form an opinion on the effectiveness of the company’s or
group’s corporate governance procedures or its risk and control
Basis of audit opinion
We conducted our audit in accordance with auditing standards issued
by the Auditing Practices Board and in accordance with auditing
standards generally accepted in the United States. An audit includes
examination, on a test basis, of evidence relevant to the amounts
and disclosures in the financial statements. It also includes an
assessment of the significant estimates and judgements made by the
directors in the preparation of the financial statements, and of
whether the accounting policies are appropriate to the company’s
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information
and explanations which we considered necessary in order to provide
us with sufficient evidence to give reasonable assurance that the
financial statements are free from material misstatement, whether
caused by fraud or other irregularity or error. In forming our opinion
we also evaluated the overall adequacy of the presentation of information
in the financial statements.
In our opinion the financial statements:
a true and fair view of the state of affairs of the company and
the group at 31 March 2001 and of the loss and cash flows of the
group for the year then ended and have been properly prepared in
accordance with the Companies Act 1985.
fairly, in all material respects, the consolidated financial position
of the group as at 31 March 2001 and 31 March 2000, and the results
of its operations and its cash flows for the years ended 31 March
2001, 31 March 2000 and 31 March 1999 in conformity with accounting
principles generally accepted in the United Kingdom. These principles
differ in certain respects from accounting principles generally
accepted in the United States. The effect of the differences in
the determination of net income, shareholders’ equity and
cash flows is shown in the United States generally accepted accounting
Chartered Accountants and Registered Auditors
22 May 2001
(a) The maintenance and integrity of the British Telecommunications
plc website is the responsibility of the directors; the work carried
out by the auditors does not involve consideration of these matters
and, accordingly, the auditors accept no responsibility for any
changes that may have occurred to the financial statements since
they were initially presented on the website.
(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
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