2002 £m	2001a £m
Fixed assets
Investment in subsidiary undertakingb	9,971	-
Total fixed assets	9,971	-
Current assets
Debtorsc	174	-
Investmentsd	1	-
Cash at bank and in hand	-	-
Total current assets	175	-
Creditors: amounts falling due within one yeare	173	-
Net current assets	2	-
Total assets less current liabilities	9,973	-
Capital and reserves
Called up share capitalf	434	-
Share premium accountf	2	-
Profit and loss accountf	9,537	-
Total equity shareholders' funds	9,973	-

The financial statements of the company set out in this note, were approved by the board of directors on 21 May 2002 and were signed on its behalf by

Sir Christopher Bland Chairman
Ben Verwaayen Chief Executive
Ian Livingston Group Finance Director

^aThe company was incorporated on 30 March 2001 and at 31 March 2001 the company balance sheet comprised debtors of £2 and share capital of £2 representing two ordinary shares with a nominal value of £1.

^bDuring the year ended 31 March 2002, the company acquired BT Group Investments Limited (BTGI) for £9,971 million (see note 1). BTGI is the intermediary holding company of British Telecommunications plc.

^cDebtors consists of amounts owed by subsidiary undertakings of £173 million and other debtors of £1 million.

^dThe company invested in a listed investment, with a book value and market value of £1 million as at 31 March 2002.

^eCreditors consists of dividends payable of £173 million.

^fCapital and reserves are:

	Share capitali £m		Share  premium accountg £m	Profit  and loss account £m		Total £m
Balances on incorporation at 30 March 2001	-		-	-		-
Balances at 31 March 2001	-		-	-		-
Issue of shares	9,971		-	-		9,971
Capital reduction	(9,537	)	-	9,537		-
Movement relating to BT's employee share ownership trust	-		2	-		2
Profit for the financial yearh	-		-	173		173
Dividend (2.0p per ordinary share)	-		-	(173	)	(173	)
Balance at 31 March 2002	434		2	9,537		9,973

^gThe share premium account, representing the premium on allotment of shares is not available for distribution.

^hThe profit for the financial year, dealt with in the profit and loss account of the company and after taking into account dividends from subsidiary undertakings, was £173 million. As permitted by Section 230 of the Companies Act 1985, no profit and loss account of the company is presented.

ⁱAt 30 March 2001, on incorporation, the authorised share capital of the company of £100 was divided into 100 ordinary shares of £1 each of which two ordinary shares were allotted, called up and fully paid on incorporation. On 10 September 2001, a further £44 of ordinary shares of £1 each were allotted, called up and fully paid, and the authorised share capital was increased to £23,000 million by the creation of 22,999,999,900 further ordinary shares of £1 each and one redeemable preference share of £50,025. The redeemable preference share carried no right to vote and carried the right to receive dividends at a cumulative fixed rate of 0.04% of its nominal value per annum but no other rights to participate in the profits of the company. By ordinary resolution of the shareholders dated 10 September 2001, the 23,000,000,000 ordinary shares of £1 each were consolidated and subdivided into 20,000,000,000 ordinary shares of 115 pence each. On 10 September 2001, by ordinary resolution of the shareholders, the allotted, issued and fully paid ordinary shares were consolidated and subdivided into 40 ordinary shares of 115 pence each.

On 19 November 2001, £9,971 million of further ordinary shares representing 8,670,033,916 shares of 115 pence each were allotted, issued and fully paid. On 20 November 2001, the authorised share capital was by virtue of a Special Resolution and with the sanction of an Order of the High Court of Justice reduced from £23,000 million divided into 20,000,000,000 ordinary shares of 115 pence each and one redeemable preference share of £50,025 to £13,463 million divided into 8,670,033,956 ordinary shares of 5 pence each, 11,329,966,044 ordinary shares of 115 pence each and one redeemable preference share of £50,025. The Special Resolution also subdivided each unissued ordinary share of 115 pence each into 23 ordinary shares of 5 pence each. On 20 November 2001 the authorised share capital of the company was accordingly £13,463 million divided into 269,259,252,968 ordinary shares of 5 pence each and one redeemable preference share of £50,025 of which 8,670,033,956 of the ordinary shares and the redeemable preference share were issued. This capital reduction reduced share capital by £9,537 million resulting in share capital of £434 million representing 8,670,033,956 ordinary shares of 5 pence each.

On 23 November 2001, the redeemable preference share was redeemed and, in accordance with the articles of association of the company, automatically converted into authorised ordinary share capital of 1,000,500 ordinary shares of 5 pence each.

The authorised ordinary share capital of the company at 31 March 2002 was £13,463 million representing 269,260,253,468 ordinary shares of 5 pence each. The allotted, called up and fully paid ordinary share capital of the company at 31 March 2002 was £434 million, representing 8,670,692,996 ordinary shares of 5 pence each.

Of the authorised but unissued share capital at 31 March 2002, 25 million ordinary shares were reserved to meet options granted under employee share option schemes described in note 34.

Ordinary shares allotted during the year were as follows:

	Number	Nominal value £m	Consideration £m
Acquisition of BTGIj	8,670,033,956	434	9,971
Other share option schemes	659,040	-	2
Totals for the year ended 31 March 2002	8,670,692,996	434	9,973

^jReflects nominal value of 5 pence per share following capital reduction from 115 pence per share.