To the Board of Instituto das Comunicações de Portugal
We have audited the financial statements of the "Instituto das Comunicações de Portugal" (ICP) as at December 31st 2000 and 1999. Our audit was conducted in accordance with International Auditing Standards.
Responsibility of the Board and the Auditors
Drawing up the financial statements is the responsibility of the Board. Ours is to express an opinion on those financial statements, based on our audit.
Basis of Opinion
International Audit Standards require that the audit be planned and carried out in such a manner so as to obtain a reasonable level of certainty as to whether the financial statements contain or not materially relevant distortions. An audit comprises checking, on the basis of a sampling, the proof of the sums and the information figuring in the financial statements and evaluation the estimates and significant judgements used by the Board in preparing and presenting the same. An audit also comprises appreciating whether the accounting principles adopted are appropriate, in view of the circumstances, as well as the rationale behind the presentation of the financial statements. Except for the reservation due to the limitation mentioned in the paragraph on reservation, we believe that the audit provides us with a reasonable basis upon which we can express our opinion on the financial statements mentioned.
Reservation
As mentioned in Notes 3 and 31, Art. 28 of Decree Law nº 283/89, of August 23rd, a legal text approving the statutes of ICP, lays down the assumption of responsibility for Retirement and Survival Pensions of workers co-opted from the former CTT who now are staff of ICP. On these grounds ICP has taken responsibility for the payment of Retirement Pensions of workers transferred from the former CTT for the services rendered as of August 1991, date at which most of them became ICP staff, with the CTT taking responsibility for services rendered prior to that date, which in accordance with the actuarial study carried out by the Pension Fund company, related to December 31st 2000, rises to PTE 1,719,600,000.
Owing to the lack of financial capacity expressed by the CTT during the negotiations going on with a view to regularizing the inadequate Pension Fund and the lack of any definition as to the CTT agreement on the actuarial suppositions used in the actuarial study, we are not in a position to express any opinion as to whether the sum of PTE 1,719,600,000posted on the assets and liabilities sides under items debts owed to third parties and debts owed by third parties.
Opinion with reservation
In our opinion, except for the possible adjustments due to the subject mentioned in the paragraph of reservation, the said financial statements appropriately represent, in all materially relevant ways, the financial situation of the "Instituto das Comunicações de Portugal" as at December 31st 2000 and 1999, as well as the result of its operations and the cash flows for the fiscal years ending at those dates, according to the accounting principles generally accepted in Portugal.