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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. We have also
audited the disclosures required by Part 3 of Schedule
7A to the Companies Act 1985 contained in the directors’
remuneration report (‘‘the audited part’’).
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responsibilities of directors and auditors
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The
directors’ responsibilities for preparing the annual
report, the directors’ remuneration report and
the financial statements in accordance with applicable
United Kingdom law and accounting standards and the
requirements of the US Securities and Exchange Commission
are set out in the statement of directors’ responsibilities.
Our
responsibility is to audit the financial statements
and the audited part of the directors’ remuneration
report 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 whether the
financial statements and the audited part of the directors’
remuneration report have been 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 procedures.
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 and the audited part of
the directors’ remuneration report. 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 give a true and
fair view of the state of affairs of the company and
the group at 31 March 2003 and of the profit and cash
flows of the group for the year then ended; the financial
statements have been properly prepared in accordance
with the Companies Act 1985; and those parts of the
directors’ remuneration report required by Part
3 of Schedule 7A of the Companies Act 1985 have been
properly prepared in accordance with the Companies Act
1985.
In
our opinion, the financial statements present fairly,
in all material respects, the consolidated financial
position of the group as at 31 March 2003 and 31 March
2002, and the results of its operations and its cash
flows for the years ended 31 March 2003, 31 March 2002
and 31 March 2001 in conformity with accounting principles
generally accepted in the United Kingdom.
Accounting
principles generally accepted in the United Kingdom
vary in certain respects from accounting principles
generally accepted in the United States. The application
of the latter would have affected the determination
of consolidated net income for the three years ended
31 March 2003, 31 March 2002 and 31 March 2001 and the
consolidated shareholders’ equity at 31 March 2003
and 31 March 2002 as shown in the summary of differences
between United Kingdom and United States generally accepted
accounting principles set out in the United States Generally
Accepted Accounting Principles section.
PricewaterhouseCoopers
LLP
Chartered
Accountants and Registered Auditors
1
Embankment Place
London WC2N 6RH
21 May 2003
Notes:
(a)
The maintenance and integrity of the BT Group 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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