The governors and BBC World Service Management Board are responsible for preparing the Annual Review including the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibilities, as independent auditors, are established in the United Kingdom by statute, by the Auditing Practices Board, our profession's ethical guidance and, in accordance with the terms of our appointment, the Companies Act 1985.
 
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 financial review is not consistent with the financial statements, if BBC World Service 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 regarding the BBC World Service Management Board's remuneration and transactions with BBC World Service is not disclosed.
 
We read the other information contained in the Annual Review, including the corporate governance statement, and consider whether it is consistent with the audited financial statements. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.
 
In addition to our audit of the financial statements, the governors and BBC World Service Management Board have instructed us to review their corporate governance statement as if BBC World Service were required to comply with the Rules of the Listing Financial Services Authority in relation to these matters. We review whether the corporate governance statement reflects BBC World Service's compliance with the seven provisions of the Combined Code specified for audit review by those rules, and we report if it does not. We are not required to form an opinion on the effectiveness of BBC World Service's corporate governance procedures or its internal controls.
 

We conducted our audit in accordance with Auditing Standards issued by the Auditing Practices Board. 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 governors and BBC World Service Management Board in the preparation of the financial statements, and of whether the accounting policies are appropriate to BBC World Service'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 BBC World Service at 31 March 2001 and of the surplus of BBC World Service for the year then ended and have been properly prepared in accordance with the provisions of the BBC's Charter and Agreement, the Financial Memorandum and the provisions of the Companies Act 1985 as if those provisions had applied to these financial statements.