Information for shareholders

Stock exchange listings
The principal listing of BT Group’s ordinary shares is on the London Stock Exchange. American Depositary Shares (ADSs), each representing 10 ordinary shares, have been issued by JPMorgan Chase Bank, as Depositary for the American Depositary Receipts (ADRs) evidencing the ADSs, and are listed on the New York Stock Exchange. ADSs also trade, but are not listed, on the London Stock Exchange. Trading on the New York Stock Exchange is under the symbol ‘BT’.

Share and ADS prices                  
      Pence per ordinary share         US$ per ADS  
               
 
 
 
  High   Low     High   Low  
  pence   pence     US$   US$  
                   
Financial years ended 31 March                  
2004 206.75   162.00     34.97   25.65  
2005 216.25   169.25     40.93   30.34  
2006 235.00   196.50     41.71   35.34  
2007 321.75   209.25     62.96   37.08  
2008 336.75   205.50     68.55   40.86  
 
Financial year ended 31 March 2007                  
1 April – 30 June 2006 239.25   209.25     44.75   37.08  
1 July – 30 September 2006 268.00   226.75     50.57   41.58  
1 October – 31 December 2006 316.50   262.25     62.25   49.09  
1 January – 31 March 2007 321.75   290.00     62.96   55.37  
 
Financial year ended 31 March 2008                  
1 April – 30 June 2007 333.00   306.25     66.58   60.58  
1 July – 30 September 2007 336.75   295.00     68.55   59.92  
1 October – 31 December 2007 327.75   272.75     68.09   53.92  
1 January – 31 March 2008 280.25   205.50     54.55   40.46  
 
Months                  
November 2007 321.00   276.50     67.10   56.72  
December 2007 296.75   273.25     60.13   53.92  
January 2008 280.25   245.75     54.55   49.35  
February 2008 264.50   226.00     52.40   44.66  
March 2008 222.75   205.50     44.42   40.46  
April 2008 233.25   212.50     45.90   42.23  
1 May to 9 May 2008 225.50   220.75     44.28   43.36  
 

The prices are the highest and lowest closing middle market prices for BT ordinary shares, as derived from the Daily Official List of the London Stock Exchange and the highest and lowest closing sales prices of ADSs, as reported on the New York Stock Exchange composite tape.
     Fluctuations in the exchange rate between the pound Sterling and the US dollar affect the dollar equivalent of the pound Sterling price of the company’s ordinary shares on the London Stock Exchange and, as a result, are likely to affect the market price of the ADSs on the New York Stock Exchange.

Capital gains tax (CGT)
The rights issue in June 2001 and the demerger of O2 in November 2001 adjusted the value for capital gains tax purposes of BT shares.

Rights issue
An explanatory note on the effects of the rights issue on the CGT position relating to BT shareholdings is available from the Shareholder Helpline.

Demerger of O2 – capital gains tax calculation
The confirmed official opening prices for BT Group and O2 shares on 19 November 2001 following the demerger were 285.75p and 82.75p, respectively. This means that, of the total (combined) value of 368.50p, 77.544% is attributable to BT Group and 22.456% to O2. Accordingly, for CGT calculations, the base cost of BT Group shares and O2 shares is calculated by multiplying the acquisition cost of a BT shareholding by 77.544% and 22.456%, respectively.

Analysis of shareholdings at 31 March 2008

            Ordinary shares
of 5 pence each		  
           
 
            No of      
    Number of   Percentage   shares held   Percentage  
Range   holdings   of total   millions   of total  
1 – 399   453,479   38.00   95   1.14  
400 – 799   336,517   28.20   189   2.25  
800 – 1,599   235,296   19.72   263   3.13  
1,600 – 9,999   161,406   13.53   471   5.60  
10,000 – 99,999   5,233   0.44   99   1.17  
100,000 – 999,999   736   0.06   262   3.12  
1,000,000 – 4,999,999   328   0.03   725   8.63  
5,000,000 and abovea,b,c,d   204   0.02   6,297   74.96  
 
Totale   1,193,199   100.00   8,401   100.00  
 
a 10.1 million shares were held in trust by Ilford Trustees (Jersey) Limited for allocation to employees under the employee share plans.
b

 Under the BT Group Employee Share Investment Plan, 72.25 million shares were held in trust on behalf of 81,560 participants who were beneficially entitled to the shares. 158 million shares were held in the corporate nominee BT Group EasyShare on behalf of 103,703 beneficial owners.
c 251 million shares were represented by ADSs. Analysis by size of holding is not available for this holding.
d 607 million shares were held as treasury shares.
e 12.2% of the shares were in 1,169,494 individual holdings, of which 92,602 were joint holdings, and 87.8% of the shares were in 23,705 institutional holdings.

As far as the company is aware, the company is not directly or indirectly owned or controlled by another corporation or by the UK Government or any other foreign government or by any other natural or legal person severally or jointly. There are no arrangements known to the company the operation of which may at a subsequent date result in a change in control of the company.
     At 9 May 2008, there were 8,401,227,029 ordinary shares outstanding including 656,913,976 shares held as treasury shares. At the same date, approximately 25 million ADSs (equivalent to 250 million ordinary shares, or approximately 3% of the total number of ordinary shares outstanding on that date) were outstanding and were held by 2,426 record holders of ADRs.
     At 31 March 2008, there were 3,601 shareholders with a US address on the register of shareholders.

Dividends
A final dividend in respect of the year ended 31 March 2007 was paid on 17 September 2007 to shareholders on the register on 24 August 2007, and an interim dividend in respect of the year ended 31 March 2008 was paid on 11 February 2008 to shareholders on the register on 28 December 2007. The final dividend in respect of the year ended 31 March 2008, if approved by shareholders will be paid on 15 September 2008 to shareholders on the register on 22 August 2008.
     The dividends paid or payable on BT shares and ADSs for the last five financial years are shown in the following table. The dividends on the ordinary shares exclude the associated tax credit. The amounts shown are not those that were actually paid to holders of ADSs. For the tax treatment of dividends paid see Taxation of dividends. Dividends have been translated from pounds Sterling into US dollars using exchange rates prevailing on the date the ordinary dividends were paid.

    Per ordinary share   Per ADS   Per ADS  
 
 
 
 
    Interim   Final   Total   Interim   Final   Total   Interim   Final   Total  
Financial years ended 31 March   pence   pence   pence   £   £   £   US$   US$   US$  
2004   3.20   5.30   8.50   0.320   0.530   0.850   0.590   0.938   1.528  
2005   3.90   6.50   10.40   0.390   0.650   1.040   0.724   1.195   1.919  
2006   4.30   7.60   11.90   0.430   0.760   1.190   0.747   1.415   2.162  
2007   5.10   10.00   15.10   0.510   1.000   1.510   0.991   1.972   2.963  
2008   5.40   10.40   15.80   0.540   1.040   1.580   1.030   – a – a
 
a




 Qualifying holders of ADSs on record as of 22 August 2008 are entitled to receive the final dividend which will be paid on 22 September 2008, subject to approval at the AGM. The US dollar amount of the final dividend of 100 pence per ADS to be paid to holders of ADSs will be based on the exchange rate in effect on 15 September 2008, the date of payment to holders of ordinary shares.

As dividends paid by the company are in pounds Sterling, exchange rate fluctuations will affect the US dollar amounts received by holders of ADSs on conversion by the Depositary of such cash dividends.

Dividend mandate
Any shareholder wishing dividends to be paid directly into a bank or building society account should contact the Shareholder Helpline. Dividends paid in this way will be paid through the Bankers Automated Clearing System (BACS). Alternatively, a form may be downloaded from the Dividends page of our website at www.bt.com/investorcentre

Dividend investment plan
Under the Dividend investment plan, cash from participants’ dividends is used to buy further BT shares in the market.
      Shareholders could elect to receive additional shares in lieu of a cash dividend for the following dividends:

  Date paid Price per share pence  
2004 interim 9 February 2004 175.98  
2004 final 6 September 2004 183.69  
2005 interim 7 February 2005 209.95  
2005 final 5 September 2005 220.25  
2006 interim 13 February 2006 214.50  
2006 final 11 September 2006 250.98  
2007 interim 12 February 2007 320.54  
2007 final 17 September 2007 316.21  
2008 interim 11 February 2008 232.08  
 

Global Invest Direct
Details of the direct purchase plan run by the ADR Depositary, JPMorgan Chase Bank, Global Invest Direct, including reinvestment of dividends, are available from JPMorgan Chase Bank on +1 800 634 8366 (toll free within the USA) or +1 201 680 6630 (from outside the USA), or on written request to the ADR Depositary.

Total shareholder return
Total shareholder return (TSR) is the measure of the returns that a company has provided for its shareholders, reflecting share price movements and assuming reinvestment of dividends. Over the last five years (as shown in the first TSR chart below), BT’s TSR is positive 75.7% compared with the FTSE 100 TSR of positive 87.4%. In the second half of 2008, BT shares gave up much of the strong performance from the previous year, having fallen from a five-year high of 336.75p in July 2007. This has fed through to BT’s TSR, which for the 2008 financial year was negative 24.8%, compared with the FTSE 100 TSR which was negative 6.3% and the FTSEurofirst 300 Telco Index TSR which was negative 5.6%. In the period between the demerger on 19 November 2001 and 31 March 2008, BT’s TSR was positive 1.7%, compared with negative 7.0% for the FTSEurofirst 300 Telco Index. The FTSE 100 TSR over the same period was positive 33.8%.

BT's total shareholder return (TSR) performance vs the FTSE 100
over the five financial years to 31 March 2008
BT's total shareholder return (TSR) performance vs the FTSE 100
1 April 2003 = 100
Source: Datastream
The graph shows the relative TSR performance of BT and the FTSE 100 over the last five years.

BT's TSR performance vs the FTSEurofirst 300 Telco Index
since demerger
BT's TSR performance vs the FTSEurofirst 300 Telco Index
19 November 2001 = 100
Source: Datastream
The graph shows the relative TSR performance of BT and the FTSEurofirst 300 Telco Index since demerger.

Results announcements
Expected announcements of results:

Results   Datea  
1st quarter   31 July 2008  
2nd quarter and half year   13 November 2008  
3rd quarter and nine months   February 2009  
4th quarter and full year   May 2009  
2009 Annual Report and accounts published   May 2009  
 
a Date may be subject to change.

Individual savings accounts (ISAs)
Information about investing in BT shares through an ISA may be obtained from Halifax Share Dealing Limited, Trinity Road, Halifax, W.Yorkshire HX1 2RG (telephone 0870 242 5588). ISAs are also offered by other organisations.

Sharegift
The Orr Mackintosh Foundation operates a charity share donation scheme for shareholders with small parcels of shares whose value makes it uneconomic to sell them. Details of the scheme are available from ShareGift at www.sharegift.org or telephone 020 7930 3737, or can be obtained from the Shareholder Helpline.

Unclaimed Assets Register
BT, along with many other leading UK companies, subscribes to Experian’s Unclaimed Assets Register (UAR), a register of individuals owed unclaimed financial assets such as shareholdings and dividends. UAR provides members of the public with a search device to trace lost assets. UAR donates a proportion of its income to charity. For further information visit www.uar.co.uk or telephone 0870 241 1713.

Exchange rates
BT publishes its consolidated financial statements expressed in pounds Sterling. The following tables detail certain information concerning the exchange rates between pounds Sterling and US dollars based on the noon buying rate in New York City for cable transfers in pounds Sterling as certified for customs purposes by the Federal Reserve Bank of New York (the Noon Buying Rate).

Year ended 31 March   2008   2007   2006   2005   2004  
Period end   1.96   1.97   1.74   1.89   1.84  
Averagea   1.99   1.91   1.78   1.85   1.71  
High   2.03   1.99   1.92   1.95   1.90  
Low   1.94   1.74   1.71   1.75   1.55  
 
a The average of the Noon Buying Rates in effect on the last day of each month during the relevant period.
       
    Month  
   
 
    April   March   February   January   December   November  
    2008   2008   2008   2008   2007   2007  
High   2.00   2.03   1.99   1.99   2.07   2.11  
Low   1.96   1.98   1.94   1.95   1.98   2.05  
 

On 9 May 2008, the most recent practicable date for this annual report, the Noon Buying Rate was US$1.95 to £1.00.

Share buy back
The following table gives details of the purchase by BT of its own shares during 2008.

               
               
             
           
Calendar montha   Total number of
shares purchased		      Average price paid
per share (pence – net
of dealing costs)		       Total number of
shares purchased as
part of publicly
announced plans or
programmes		       Maximum number of
shares that may yet
be purchased under
the plans or
programmes 		b
April 2007   nil   N/A   nil   708,300,000  
May   81,000,000   322   81,000,000   627,300,000  
June   32,250,000   324   32,250,000   595,050,000  
July   38,400,000   322   38,400,000   807,700,000 c 
August   57,770,000   310   57,770,000   749,930,000  
September   19,100,000   306   19,100,000   730,830,000  
October   16,650,000   310   16,650,000   714,180,000  
November   52,500,000   287   52,500,000   661,680,000  
December   27,075,000   284   27,075,000   634,605,000  
January 2008   27,093,711   264   27,093,711   607,511,289  
February   98,323,621   232   98,323,621   509,187,668  
March   89,495,359   215   89,495,359   419,692,309  
 
    539,657,691   277.51   539,657,691   419,692,309  
 
a

Purchases from April 2007 to 19 July 2007 were made in accordance with a resolution passed at the AGM held on 12 July 2006. Purchases from 20 July 2007 to March 2008 were made in accordance with a resolution passed at the AGM on 19 July 2007.
b There are no plans or programmes BT has determined to terminate prior to expiration, or under which BT does not intend to make further purchases.
c Authority was given to purchase up to 834 million shares on 12 July 2006 and 827 million shares on 19 July 2007. These authorities expire at the close of the following AGM, or 15 months following the date of approval, if earlier. The authority given in July 2006 expired on 19 July 2007.

Memorandum and Articles of Association
The following is a summary of the principal provisions of BT’s memorandum and articles of association (‘Memorandum’ and ‘Articles’), a copy of which has been filed with the Registrar of Companies.

Memorandum
The Memorandum provides that the company’s principal objects are, among other things, to carry on any business of running, operating, managing and supplying telecommunication systems and systems of any kind for conveying, receiving, storing, processing or transmitting sounds, visual images, signals, messages and communications of any kind.

Articles
In the following description of the rights attaching to the shares in the company, a ‘holder of shares’ and a ‘shareholder’ is, in either case, the person entered on the company’s register of members as the holder of the relevant shares. Shareholders can choose whether their shares are to be evidenced by share certificates (i.e. in certificated form) or held in electronic (i.e. uncertificated) form in CREST (the electronic settlement system in the UK).

(a) Voting rights
Subject to the restrictions described below, on a show of hands, every shareholder present in person or by proxy at any general meeting has one vote and, on a poll, every shareholder present in person or by proxy has one vote for each share which they hold.
     Voting at any meeting of shareholders is by a show of hands unless a poll is demanded by the chairman of the meeting or by at least five shareholders at the meeting who are entitled to vote (or their proxies), or by one or more shareholders at the meeting who are entitled to vote (or their proxies) and who have, between them, at least 10% of the total votes of all shareholders who have the right to vote at the meeting.
     No person is, unless the Board decide otherwise, entitled to attend or vote at any general meeting or to exercise any other right conferred by being a shareholder if they or any person appearing to be interested in those shares has been sent a notice under section 793 of the Companies Act 2006 (which confers upon public companies the power to require information with respect to interests in their voting shares) and they or any interested person has failed to supply to the company the information requested within 14 days after delivery of that notice. These restrictions end seven days after the earlier of the date the shareholder complies with the request satisfactorily or the company receives notice that there has been an approved transfer of the shares.

(b) Variation of rights
Whenever the share capital of the company is split into different classes of shares, the special rights attached to any of those classes can be varied or withdrawn either:

(i) with the sanction of an extraordinary resolution passed at a separate meeting of the holders of the shares of that class; or
(ii) with the consent in writing of the holders of at least 75% in nominal value of the issued shares of that class.
At any separate meeting, the necessary quorum is two persons holding or representing by proxy not less than one-third in nominal amount of the issued shares of the class in question (but at any adjourned meeting, any person holding shares of the class or his proxy is a quorum).
      The company can issue new shares and attach any rights and restrictions to them, as long as this is not restricted by special rights previously given to holders of any existing shares. Subject to this, the rights of new shares can take priority over the rights of existing shares, or existing shares can take priority over them, or the new shares and the existing shares can rank equally.
 
(c) Changes in capital
The company may by ordinary resolution:
(i) consolidate and divide all or any of its share capital into shares of a larger amount;
(ii) divide all or part of its share capital into shares of a smaller amount;
(iii)  cancel any shares which have not, at the date of the ordinary resolution, been taken or agreed to be taken by any person and reduce the amount of its share capital by the amount of the shares cancelled; and
(iv) increase its share capital.
The company may also:
(i) buy back its own shares; and
(ii) by special resolution reduce its share capital, any capital redemption reserve and any share premium account.
   
(d)  Dividends