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Prepared and filed by St Ives Burrups
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<P align="center"><B><FONT size="3" face="Arial,Bold,Arial,Helvetica,sans-serif">UNITED
      STATES<br>
</FONT></B><B><FONT face="Arial,Bold,Arial,Helvetica,sans-serif">SECURITIES AND
EXCHANGE COMMISSION</FONT></B><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
<P align="center"> <B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">Washington,
      D.C. 20549</FONT></B><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
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    <td align="center"> <b><font size=5 face="Arial,Bold,Arial,Helvetica,sans-serif">FORM 20
    - F</font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
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    <td align="left" valign="top">&nbsp;</td>
    <td colspan="2" align="left" valign="top"><font size=2 face="Arial,Arial,Helvetica,sans-serif">(Mark
    One)</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td width="5%" align="left" valign="top">&nbsp;</td>
    <td width="5%" align="left" valign="top"><img src="emptybox.gif" width="12" height="12"></td>
    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">REGISTRATION STATEMENT
          PURSUANT TO SECTION 12(b) OR (g)</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"><br>
          </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">OF
    THE SECURITIES EXCHANGE ACT OF 1934</font><font size=2
face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
    <td width="5%" align="center">&nbsp;</td>
    <td width="5%" align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">OR</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top"><img src="tickedbox.gif" width="12" height="12"></td>
    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">ANNUAL
        REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif"><br>
      </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">SECURITIES
    EXCHANGE ACT OF 1934</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="center"> <b><font size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">For
    the fiscal year ended 31 March 2006</font></b></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">OR</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top"><img src="emptybox.gif" width="12" height="12"></td>
    <td align="center"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">TRANSITION
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE<br>
    </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">SECURITIES
    EXCHANGE ACT OF 1934</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top">&nbsp;</td>
    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">OR</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="left" valign="top"><img src="emptybox.gif" width="12" height="12"></td>
    <td align="center"> <font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">SHELL
        COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE<br>
    </font><font size=2 face="TimesNewRoman,Times New
Roman,Times,serif">&nbsp; </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">SECURITIES
    EXCHANGE ACT OF 1934</font></td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="center"> <FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Date
    of event requiring this shell company report</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </FONT>................................</td>
    <td align="center">&nbsp;</td>
    <td align="center">&nbsp;</td>
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    <td align="left" valign="top">&nbsp;</td>
    <td align="center"><B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">For
    the transition period from </FONT></B><FONT size=2 face="Arial,Arial,Helvetica,sans-serif">_______________</FONT><B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif"> to </FONT></B><FONT size=2 face="Arial,Arial,Helvetica,sans-serif">_______________</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
    <td align="center">&nbsp;</td>
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    <td colspan="2"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Commission
    File Number: 1-8819 </font></td>
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    <td>&nbsp;</td>
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    <td colspan="2"> <b><font size=5 face="Arial,Bold,Arial,Helvetica,sans-serif">BT
    Group plc</font></b><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
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    <td colspan="2"><font size=2 face="Arial,Arial,Helvetica,sans-serif">(Exact
    name of Registrant as specified in its charter)</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
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    <td align="center"><b><font size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">Not Applicable</font></b></td>
    <td align="center"><b><font size=2
face="Arial,Bold,Arial,Helvetica,sans-serif">England and Wales</font></b></td>
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    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">(Translation of
    Registrant&#146;s name into English)</font></td>
    <td align="center"><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp; </font><font size=2 face="Arial,Arial,Helvetica,sans-serif">(Jurisdiction
    of incorporation or organization)</font><font size=2 face="TimesNewRoman,Times New Roman,Times,serif">&nbsp;</font></td>
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<P align="center"><B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">BT
      Centre<br>
</FONT></B><B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">81 Newgate Street, London, EC1A 7AJ<br>
England<br>
</FONT></B><FONT size=1 face="Arial,Arial,Helvetica,sans-serif">(address of principal executive offices)</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
<P align="center">
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Securities registered or to be registered pursuant to Section 12(b) of the Act:</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
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<B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">Title of each class:</FONT></B></TD>
	<TD width=5%>&nbsp;
	</TD>
	<TD width=40% align=left>
<B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">Name of each exchange
on which</FONT></B> <b><font size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">registered:</font></b></TD>
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	<TD align=left>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">American Depositary Shares</FONT></TD>
	<TD>&nbsp;
	</TD>
	<TD align=left>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">New York Stock Exchange</FONT></TD>
</TR>
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	<TD align=left>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Ordinary shares of 5p each</FONT></TD>
	<TD>&nbsp;
	</TD>
	<TD align=left>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">New York Stock Exchange*</FONT></TD>
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<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">* Not for trading, but only
in connection with the registration of American Depositary Shares representing
these shares, pursuant to the requirements of the Securities and Exchange Commission.</FONT></P>
<hr width="150" size="2" noshade>
<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Securities registered or to be registered pursuant to Section 12(g) of the Act: None</FONT></P>
<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Indicate the number of outstanding shares of each of the issuer&#146;s classes of capital or common stock as of the close of the period covered by the Annual Report: </FONT></P>
<P align="center">
<B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">8,635,377,801 Ordinary Shares, of 5p each </FONT></B></P>
<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif">
</FONT></P>
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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Yes <img src="tickedbox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">No <img src="emptybox.gif" width="12" height="12"></font></td>
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<P><FONT size=2 face="Arial,Arial,Helvetica,sans-serif"> </FONT><FONT size=2 face="Arial,Arial,Helvetica,sans-serif">If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Yes <img src="emptybox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">No <img src="tickedbox.gif" width="12" height="12"></font></td>
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<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligation under those
Sections.</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.</FONT></P>
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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Yes <img src="tickedbox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">No <img src="emptybox.gif" width="12" height="12"></font></td>
  </tr>
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<P>
<FONT size=2 face="Arial,Arial,Helvetica,sans-serif">Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in
Rule 12b-2 of the Exchange Act (Check one):</FONT></P>
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    <td width="20%" align="right">&nbsp;</td>
    <td width="20%" align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Large<br>
    accelerated<br>
    filer    <img src="tickedbox.gif" width="12" height="12"></font></td>
    <td align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Accelerated filer<br>
    <img src="emptybox.gif" width="12" height="12">    </font></td>
    <td width="20%" align="center"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Non-<br>
    accelerated filer<br>
    <img src="emptybox.gif" width="12" height="12"></font></td>
    <td width="20%">&nbsp;</td>
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<P><FONT size=2 face="Arial,Arial,Helvetica,sans-serif">  </FONT><FONT size=2 face="TimesNewRoman,Times
New Roman,Times,serif"> </FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif">  </FONT><FONT size=2
face="Arial,Arial,Helvetica,sans-serif">Indicate by check mark which financial statement item the Registrant has elected to follow:</FONT></P>
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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Item
    17 <img src="emptybox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Item
    18 <img src="tickedbox.gif" width="12" height="12"></font></td>
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<P><FONT size=2
face="Arial,Arial,Helvetica,sans-serif">  If this is an annual report,
    indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).</FONT></P>

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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Yes <img src="emptybox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">No <img src="tickedbox.gif" width="12" height="12"></font></td>
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<P><FONT size=2 face="Arial,Arial,Helvetica,sans-serif">(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
<P><FONT size=2
face="Arial,Arial,Helvetica,sans-serif">Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of
  securities under a plan confirmed by a court.</FONT><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
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    <td align="right"><font size=2 face="Arial,Arial,Helvetica,sans-serif">Yes <img src="emptybox.gif" width="12" height="12"></font></td>
    <td width="10%">&nbsp;</td>
    <td width="45%"><font size=2 face="Arial,Arial,Helvetica,sans-serif">No <img src="emptybox.gif" width="12" height="12"></font></td>
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<P>
<B><FONT size=2 face="Arial,Bold,Arial,Helvetica,sans-serif">Not Applicable</FONT></B><FONT size=2 face="TimesNewRoman,Times New Roman,Times,serif"> </FONT></P>
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<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
    references in this Form 20-F to &#8220;us&#8221;, &#8220;we&#8221; or &#8220;the
    Company&#8221;, are to BT Group plc.  </font></p>
<p align="center"><font size="2" face="serif"><b>PART I</b></font></p>
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<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 1.</font></td>
<td>
<font size="2" face="serif"><b>IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS </b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
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<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 2.</font></td>
<td>
<font size="2" face="serif"><b>OFFER STATISTICS AND EXPECTED TIMETABLE</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
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<td width="7%">
<font size="2" face="serif">ITEM 3.</font></td>
<td>
<font size="2" face="serif"><b>KEY INFORMATION</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">3.A  Selected Financial Data</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Contents&#8221; on page 1
    (last two paragraphs), &#8220;Selected Financial Data&#8221; on
    page 22 and &#8220;Additional information for shareholders &#9472; Exchange
    rates&#8221; on page 137 of the Annual Report and Form 20-F 2006 as sent
    to shareholders (&#8220;Annual Report 2006&#8221;) contained in the Company&#8217;s
    Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
    The five year financial summary on pages 23 to 24 and discussion of the 2005
    financial year on pages 26 to 43 and the financial statements and supporting
    notes
    on pages
    72 to
    122
    of
    the
    Company&#8217;s
    Annual Report and Form 20-F  2005, dated June 1, 2005 (the &#8220;2005 Data&#8221;), are
    incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">3.B  Capitalization and Indebtedness</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">3.C  Reasons for the Offer and Use of Proceeds</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">3.D  Risk Factors</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Business Review &#9472; Group
    risk
    factors&#8221; on
    page 20 of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
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<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 4.</font></td>
<td>
<font size="2" face="serif"><b>INFORMATION ON THE COMPANY</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">4.A  History and Development of the Company</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
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<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Contents&#8221; on
page 1 (first two paragraphs);</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
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  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">&#8220;Business review &#9472; Introduction&#8221; on
        page 7;</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review &#9472; Introduction &#9472; How
BT operates&#8221; on
page 7;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review &#9472; Acquisitions
and disposals &#9472; Acquisitions
and disposals prior to the 2006 financial year&#8221; on page&nbsp;13; </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review  &#9472; Acquisitions and
disposals &#9472; Acquisitions and disposals in the 2006 financial year&#8221; on
page&nbsp;13;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td width="3%"></td>
  <td width="3%"></td>
  <td width="3%">&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Capital expenditure&#8221; on
page 38; and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Acquisitions&#8221; on
page 38</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">1</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">4.B  Business Overview</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review&#8221; on pages 6 to 25;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Line of business
results&#8221; on pages 31 to 33;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td width="3%"></td>
  <td width="3%"></td>
  <td width="3%">&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Our commitment to society&#8221; on pages 19
and 20;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Operational statistics&#8221; on page 131;
and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Cautionary
statement regarding forward-looking statements&#8221; on page 133</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">4.C  Organizational Structure</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings: &#8220;Business review &#9472; Introduction&#8221; on
    page 7 and &#8220;Subsidiary undertakings and associate&#8221; on
    page 127 of the Annual Report 2006 contained in the Company&#8217;s
    Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">4.D  Property, Plants and Equipment</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Business review &#9472; Resources &#9472;  Property&#8221; on
    page 18 and &#8220;Financial statistics&#8221; on page 130 of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="7%"> <font size="2" face="serif">ITEM 4A.</font></td>
    <td> <font size="2" face="serif"><b>UNRESOLVED STAFF COMMENTS</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">None.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 5.</font></td>
<td>
<font size="2" face="serif"><b>OPERATING AND FINANCIAL REVIEW AND PROSPECTS</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">5.A  Operating Results</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings: </font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review&#8221; on pages 26 to 39;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Accounting
policies&#8221; on pages 65 (except the last paragraph of (I) Basis of Preparation
of the Financial Statements on page 65) to 72; and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Cautionary
statement regarding forward-looking statements&#8221; on page 133</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 and the 2005 Data are incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">5.B  Liquidity and Capital Resources</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review&#8221; on pages 26 to 39;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Loans and other borrowings&#8221; on pages 92
and 93;</font></td>
</tr>
</table>
<p align="center"><font face="serif" size="2">2</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Financial commitments and contingent liabilities&#8221; on
page 97; </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Financial instruments and risk management&#8221; on
pages 105 to 110; and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Cautionary
statement regarding forward-looking statements&#8221; on page 133</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">5.C  Research and Development, Patents and Licenses</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review &#9472; Pursue profitable
growth in new wave markets &#9472; Build
on our networked IT services capacity&#8221; on pages 8 and 9;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review &#9472; Pursue profitable
growth in new wave markets &#9472; Research and development and IT support&#8221; on
page 18; and </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial statistics&#8221; on page 130</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">5.D  Trend Information</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Financial review&#8221; on
    pages 26 to 39 and &#8220;Additional information for shareholders &#9472; Cautionary
    statement regarding forward-looking statements&#8221; on page 133 of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">5.E  Off-Balance Sheet Arrangements</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Financial Review &#9472; Off-balance
    sheet arrangements&#8221; on page 37 of the Annual Report 2006 contained
    in the Company&#8217;s Report on Form 6-K dated May 31, 2006 is incorporated
    herein by reference.</font></p>
<p align="left"><font size="2" face="serif">5.F  Tabular Disclosure of Contractual Obligations</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Financial Review &#9472; Capital
    resources&#8221; on page 37 of the Annual Report 2006 contained in
    the Company&#8217;s Report on Form 6-K dated May 31, 2006 is incorporated
    herein by reference.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 6.</font></td>
<td>
<font size="2" face="serif"><b>DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">6.A  Directors and Senior Management</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Board of directors and Operating
    Committee&#8221; on pages 40 and 41 of the Annual Report 2006
    contained in the Company&#8217;s Report on Form 6-K dated May 31, 2006
    is incorporated herein by reference.</font></p>
<p align="center"><font face="serif" size="2">3</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">6.B  Compensation</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report on directors&#8217; remuneration&#8221; on
pages 50 to 61;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Retirement benefit plans&#8221; on pages
98 to 101;
and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Share based payment plans&#8221; on pages
101 to 104</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">6.C  Board Practices</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Board of directors and Operating Committee&#8221; on
pages 40 and 41;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report of the directors &#9472; The Board
&#9472; Directors&#8221; on
page 42;</font></td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td width="3%"></td>
  <td width="3%"></td>
  <td width="3%">&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report on directors&#8217; remuneration&#8221; on
pages 50 to 61</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">6.D  Employees</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Employees&#8221; on page 101; and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Operational statistics&#8221; on page 131</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">6.E  Share Ownership</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Report on directors&#8217; remuneration&#8221; on
pages 50 to 61 and &#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Share based payment plans&#8221; on page
101
of
the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 7.</font></td>
<td>
<font size="2" face="serif"><b>MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">7.A  Major Shareholders</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Report of the directors &#9472; Substantial
    shareholdings&#8221; on
page 44 and &#8220;Additional information for shareholders &#9472; Analysis of
shareholdings&#8221; on page 135 of the Annual Report 2006 contained in the
Company&#8217;s Report on Form 6-K dated May 31, 2006 is incorporated herein
by reference.</font></p>
<p align="center"><font face="serif" size="2">4</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">7.B  Related Party Transactions</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report of the directors &#9472; The Board
&#9472; Interest
of
management in certain transactions&#8221; on
page 44;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report on directors&#8217; remuneration&#8221; on
pages 50 to 61; and </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%" height="15"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Related party transactions&#8221; on
page 97</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">7.C Interests of Experts and Counsel</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 8.</font></td>
<td>
<font size="2" face="serif"><b>FINANCIAL INFORMATION</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">8.A  Consolidated Statements and Other Financial Information</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;See Item 18 below.</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the information set forth under the headings: </font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Business review &#9472; Legal proceedings&#8221; on
page&nbsp;17;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Dividends&#8221; on
page 35;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Financial commitments and contingent liabilities&#8221; on
page 97;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Dividends&#8221; on
page 135; </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Dividend
investment plan&#8221; on page 136; and  </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Additional information for shareholders &#9472; Memorandum
and Articles of Association &#9472; Articles &#9472; Dividends&#8221; on page
138</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">8.B  Significant Changes</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Financial review &#9472; Capital
    resources&#8221; on page&nbsp;37 of the Annual Report 2006 contained
    in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 9.</font></td>
<td>
<font size="2" face="serif"><b>THE OFFER AND LISTING</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">9.A  Offer and Listing Details</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Share and ADS prices&#8221; on
page 134 of the Annual Report 2006 contained in the Company&#8217;s Report on
Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="center"><font face="serif" size="2">5</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">9.B  Plan of Distribution</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">9.C  Markets</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Listings&#8221; on
page 134 of the Annual Report 2006 contained in the Company&#8217;s Report on
Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">9.D  Selling Shareholders</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">9.E  Dilution</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">9.F  Expenses of the Issue</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 10.</font></td>
<td>
<font size="2" face="serif"><b>ADDITIONAL INFORMATION</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">10.A  Share Capital</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">10.B  Memorandum and Articles of Association</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Memorandum and Articles of Association&#8221; on
    pages 137 to 140 of
the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">10.C  Material Contracts</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Material contracts&#8221; on
page 140 of the Annual Report 2006 contained in the Company&#8217;s Report
on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">10.D Exchange Controls</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
applicable</font></p>
<p align="left"><font size="2" face="serif">10.E  Taxation</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Taxation (US Holders)&#8221; on
    pages 140 to 142 of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">10.F  Dividends and Paying Agents</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="center"><font face="serif" size="2">6</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>

<p align="left"><font size="2" face="serif">10.G  Statement by Experts</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="left"><font size="2" face="serif">10.H  Documents on Display</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Documents on display&#8221; on page 142 of the Annual
    Report 2006 contained in the Company&#8217;s Report on Form 6-K dated May
    31, 2006 is incorporated herein by reference.</font></p>
<p align="left"><font size="2" face="serif">10.I Subsidiary Information</font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 11.</font></td>
<td>
<font size="2" face="serif"><b>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Treasury policy&#8221; on
page 36;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Financial review &#9472; Financial risk management&#8221; on
page 37; </font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Accounting policies &#9472; Financial instruments&#8221; on
page 68; and</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
to the financial statements &#9472; Financial instruments and risk management&#8221; on
pages&nbsp;105 to 110</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 12.</font></td>
<td>
<font size="2" face="serif"><b>DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<p align="center"><font size="2" face="serif"><b>PART II </b></font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 13.</font></td>
<td>
<font size="2" face="serif"><b>DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 14.</font></td>
<td>
<font size="2" face="serif"><b>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="7%">
<font size="2" face="serif">ITEM 15.</font></td>
<td>
<font size="2" face="serif"><b>CONTROLS AND PROCEDURES</b></font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Report of the directors &#9472; US
    Sarbanes-Oxley Act of 2002&#8221; on page 46 of
the Annual Report 2006 contained in the Company&#8217;s Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.</font></p>
<p align="center"><font face="serif" size="2">7</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 16.A&nbsp;</font></td>
    <td><font size="2" face="serif"><b>AUDIT COMMITTEE FINANCIAL EXPERT</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Report of the directors &#9472; US
    Sarbanes-Oxley Act of 2002&#8221; on page 46 of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 16.B&nbsp;</font></td>
    <td><font size="2" face="serif"><b>CODE OF ETHICS</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Report of the directors &#9472; US
    Sarbanes-Oxley Act of 2002&#8221; on
    page 46 of the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 16.C</font><font size="2" face="serif">&nbsp;</font></td>
    <td><font size="2" face="serif"><b>PRINCIPAL ACCOUNTANTS FEES AND SERVICES </b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the headings &#8220;Report of the  Audit
    Committee&#8221; on
    pages 48 and 49 and &#8220;Consolidated financial statements &#9472; Notes
    to the financial statements &#9472; Audit services&#8221; on page 104 of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 16.E&nbsp;</font></td>
    <td><font size="2" face="serif"><b>PURCHASES OF EQUITY SECURITIES BY THE
          ISSUER AND AFFILIATED PURCHASERS</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
    information set forth under the heading &#8220;Additional information for
    shareholders &#9472; Share buy back&#8221; on
    page 137 of the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.</font></p>
<p align="center"><font size="2" face="serif"><b>PART III</b></font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 17</font><font size="2" face="serif">.&nbsp;</font></td>
    <td><font size="2" face="serif"><b>FINANCIAL STATEMENTS</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
applicable</font></p>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="7%"><font size="2" face="serif">ITEM 18.</font></td>
    <td><font size="2" face="serif"><b>FINANCIAL STATEMENTS</b></font></td>
  </tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
financial information concerning the Company set forth under the headings:</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Report of the independent auditors &#8212; United
States opinion&#8221; on
page 63;</font></td>
</tr>
<tr valign="top">
  <td></td>
  <td></td>
  <td>&nbsp;</td>
  <td>&nbsp;</td>
</tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">&#8220;Consolidated financial statements&#8221; on
        pages 64 to 122 (except the last paragraph of (I) Basis of preparation
        of the Financial Statements on page 65);</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
  <tr valign="top">
    <td width="3%"></td>
    <td width="3%"></td>
    <td width="3%"> <font size="2" face="serif">&#149;</font></td>
    <td> <font size="2" face="serif">&#8220;Consolidated financial statements &#9472; Notes
        to the consolidated financial statements &#9472; United States Generally
        Accepted Accounting Principles&#8221; on pages 114 to 121; and</font></td>
  </tr>
  <tr valign="top">
    <td></td>
    <td></td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
<td width="3%"></td>
<td width="3%"></td>
<td width="3%">
<font size="2" face="serif">&#149;</font></td>
<td>
<font size="2" face="serif">&#8220;Quarterly analysis of revenue and profit&#8221; on
page 128</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;of
    the Annual Report 2006 contained in the Company&#8217;s
Report on Form 6-K dated May 31, 2006 and the 2005 Data are incorporated herein
    by reference.</font></p>
<p align="center"><font face="serif" size="2">8</font></p>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<P>
<FONT size=2 face="serif">ITEM 19.&nbsp;&nbsp;&nbsp;</FONT><B><FONT size=2 face="serif">EXHIBITS</FONT></B><FONT size=2 face="serif"> </FONT></P>
<div style="text-indent:3%"><P>
<FONT size=2 face="serif">The following exhibits are filed as part of this annual report:</FONT></P></div>
<TABLE width="100%" border=0 cellpadding=0 cellspacing=0>
  <TR align="left" valign="top">
    <TD width="5%"> <FONT size=2 face="serif">1.1</FONT></TD>
    <TD> <FONT size=2 face="serif">Memorandum and
        Articles of Association, incorporated by reference to Exhibit 4.1 to
        the Company&#146;s Registration Statement on Form S-8 (File No. 333 </FONT><FONT size=2 face="serif">&#8212; 130371)
        dated December 16, 2005.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=2 face="serif">4.1</FONT></TD>
    <TD> <FONT size=2 face="serif">Director&#146;s
        Service Contract between BT Group plc and Hanif Lalani, dated February
        2, 2005, incorporated by reference to Exhibit 4.1 to the Company's Annual
        Report on Form 20-F dated June 1, 2005.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=2 face="serif">4.2</FONT></TD>
    <TD> <FONT size=2 face="serif">Letter of extension
        of appointment of Margaret Jay, dated November 10, 2004, incorporated
        by reference to Exhibit 4.2 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=2 face="serif">4.3</FONT></TD>
    <TD> <FONT size=2 face="serif">Letter of extension
        of appointment of John Nelson, dated November 10, 2004, incorporated
        by reference to Exhibit 4.3 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=2 face="serif">4.4</FONT></TD>
    <TD> <FONT size=2 face="serif">Letter of extension
        of appointment of Carl Symon, dated November 10, 2004, incorporated by
        reference to Exhibit 4.4 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-5.htm"><FONT size=2 face="serif">4.5</FONT></a></TD>
    <TD><a href="b823537ex4-5.htm"> <FONT size=2 face="serif">Letter of appointment
          of Matti Alahuhta as non-executive director, dated 11 January 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-6.htm"><FONT size=2 face="serif">4.6</FONT></a></TD>
    <TD><a href="b823537ex4-6.htm"> <FONT size=2 face="serif">Letter of amendment to service contract of
        Sir Christopher Bland, dated 3 April 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-7.htm"><FONT size=2 face="serif">4.7</FONT></a></TD>
    <TD><a href="b823537ex4-7.htm"> <FONT size=2 face="serif">Letter of extension of appointment of Clay
        Brendish, dated 27 June 2005.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-8.htm"><FONT size=2 face="serif">4.8</FONT></a></TD>
    <TD><a href="b823537ex4-8.htm"> <FONT size=2 face="serif">Letter of appointment
          of Phil Hodkinson as non-executive director, dated 11 January 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-9.htm"><FONT size=2 face="serif">4.9</FONT></a></TD>
    <TD><a href="b823537ex4-9.htm"> <FONT size=2 face="serif">Letter of extension of appointment of Lou
        Hughes, dated 10 January 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-10.htm"><FONT size=2 face="serif">4.10</FONT></a></TD>
    <TD><a href="b823537ex4-10.htm"> <FONT size=2 face="serif">Letter of amendment to service contract of
        Hanif Lalani, dated 17 October 2005.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-11.htm"><FONT size=2 face="serif">4.11</FONT></a></TD>
    <TD><a href="b823537ex4-11.htm"> <FONT size=2 face="serif">Letter of (further) amendment to service contract
        of Hanif Lalani, dated 19 April 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex4-12.htm"><FONT size=2 face="serif">4.12</FONT></a></TD>
    <TD><a href="b823537ex4-12.htm"> <FONT size=2 face="serif">Letter of amendment to service contract of
        Dr Paul Reynolds, dated 15 May 2006.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD> <FONT size=2 face="serif">8.1</FONT></TD>
    <TD> <FONT size=2 face="serif">Significant subsidiaries
        as of March 31, 2006, see &#147;Subsidiary undertakings and associate&#148; on
        page 127 of the Company's Annual Report and Form 20-F as sent to shareholders
        contained in the Company's Report on Form 6-K dated May 31, 2006.</FONT></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex12-1.htm"> <FONT size=2 face="serif">12.1</FONT></a></TD>
    <TD><a href="b823537ex12-1.htm"> <FONT size=2 face="serif">Section
          302 Certification of Chief Executive Officer.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex12-2.htm"> <FONT size=2 face="serif">12.2</FONT></a></TD>
    <TD><a href="b823537ex12-2.htm"> <FONT size=2 face="serif">Section
          302 Certification of Group Finance Director.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex13-1.htm"> <FONT size=2 face="serif">13.1</FONT></a></TD>
    <TD><a href="b823537ex13-1.htm"> <FONT size=2 face="serif">Section
          906 Certifications.</FONT></a></TD>
  </TR>
  <TR align="left" valign="top">
    <TD><a href="b823537ex15-1.htm"> <FONT size=2 face="serif">15.1</FONT></a></TD>
    <TD><a href="b823537ex15-1.htm"> <FONT size=2 face="serif">Consent
          of PricewaterhouseCoopers LLP, independent auditors of BT Group plc.</FONT></a></TD>
  </TR>
</TABLE>
<P align="center">&nbsp;</P>
<hr noshade align="center" width="100%" size="2">
<div style="page-break-before:always"></div>
<page>
<a name="p?"></a>
<p align="center"><font size="2" face="serif"><b>SIGNATURES</b></font></p>
<p align="left"><font size="2" face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.</font></p>
<table width="100%" cellspacing="0" cellpadding="0" border="0">
<tr valign="top">
  <td>&nbsp;</td>
  <td colspan="2"><font size="2" face="serif"><b>BT GROUP plc</b></font></td>
  </tr>
<tr valign="top">
  <td>&nbsp;</td>
  <td>&nbsp;</td>
  <td align="left">&nbsp;</td>
</tr>
<tr valign="top">
  <td>&nbsp;</td>
  <td colspan="2"><font size="2" face="serif">By: /s/ Hanif Lalani</font></td>
  </tr>
<tr valign="top">
  <td>&nbsp;</td>
  <td colspan="2"><hr align="left" width="250" size="1" noshade></td>
  </tr>
<tr valign="top">
<td width="50%"><font size="2" face="serif">&nbsp;</font></td>
<td width="5%"><font size="2" face="serif">Name:&nbsp;</font></td>
<td align="left"><font size="2" face="serif">  Hanif Lalani</font></td>
</tr>
<tr valign="top">
  <td>&nbsp;</td>
  <td><font size="2" face="serif">Title:</font></td>
  <td align="left"><font size="2" face="serif">Group Finance Director</font></td>
</tr>
</table>
<p align="left"><font size="2" face="serif">Date:   May 31, 2006</font></p>
<hr noshade align="center" width="100%" size="2">

<p>&nbsp;</p>
</body>
</html>
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{"company-data": {"conformed-name": "BT GROUP PLC", "cik": "0000756620", "assigned-sic": "4813", "irs-number": "133235162", "fiscal-year-end": "0331"}, "filing-values": {"form-type": "20-F", "act": "34", "file-number": "001-08819", "film-number": "06875633"}, "business-address": {"street1": "BT CENTRE - 81 NEWGATE ST", "city": "LONDON ENGLAND", "state": "X0", "zip": "EC1A 7AJ", "phone": "4402073566372"}, "mail-address": {"street1": "BT CENTRE", "street2": "81 NEWGATE ST", "city": "LONDON ENGLAND", "state": "X0", "zip": "EC1A7AJ"}, "former-company": {"former-conformed-name": "BRITISH TELECOMMUNICATIONS PLC", "date-changed": "19941005"}}
Prepared and filed by St Ives Burrups
UNITED
      STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington,
      D.C. 20549
FORM 20
    - F
(Mark
    One)
REGISTRATION STATEMENT
          PURSUANT TO SECTION 12(b) OR (g)
OF
    THE SECURITIES EXCHANGE ACT OF 1934
OR
ANNUAL
        REPORT PURSUANT TO SECTION 13 OR 15(d)
      OF THE
SECURITIES
    EXCHANGE ACT OF 1934
For
    the fiscal year ended 31 March 2006
OR
TRANSITION
        REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
    EXCHANGE ACT OF 1934
OR
SHELL
        COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
    EXCHANGE ACT OF 1934
Date
    of event requiring this shell company report
................................
For
    the transition period from
_______________
to
_______________
Commission
    File Number: 1-8819
BT
    Group plc
(Exact
    name of Registrant as specified in its charter)
Not Applicable
England and Wales
(Translation of
    Registrant's name into English)
(Jurisdiction
    of incorporation or organization)
BT
      Centre
81 Newgate Street, London, EC1A 7AJ
England
(address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class:
Name of each exchange
on which
registered:
American Depositary Shares
New York Stock Exchange
Ordinary shares of 5p each
New York Stock Exchange*
* Not for trading, but only
in connection with the registration of American Depositary Shares representing
these shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the Annual Report:
8,635,377,801 Ordinary Shares, of 5p each
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934.
Yes
No
Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligation under those
Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in
Rule 12b-2 of the Exchange Act (Check one):
Large
accelerated
filer
Accelerated filer
Non-
accelerated filer
Indicate by check mark which financial statement item the Registrant has elected to follow:
Item
    17
Item
    18
If this is an annual report,
    indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes
No
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of
  securities under a plan confirmed by a court.
Yes
No
Not Applicable
All
    references in this Form 20-F to "us", "we" or "the
    Company", are to BT Group plc.
PART I
ITEM 1.
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable
ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable
ITEM 3.
KEY INFORMATION
3.A  Selected Financial Data
The
    information set forth under the headings "Contents" on page 1
    (last two paragraphs), "Selected Financial Data" on
    page 22 and "Additional information for shareholders ─ Exchange
    rates" on page 137 of the Annual Report and Form 20-F 2006 as sent
    to shareholders ("Annual Report 2006") contained in the Company's
    Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
    The five year financial summary on pages 23 to 24 and discussion of the 2005
    financial year on pages 26 to 43 and the financial statements and supporting
    notes
    on pages
    72 to
    122
    of
    the
    Company's
    Annual Report and Form 20-F  2005, dated June 1, 2005 (the "2005 Data"), are
    incorporated herein by reference.
3.B  Capitalization and Indebtedness
Not applicable
3.C  Reasons for the Offer and Use of Proceeds
Not applicable
3.D  Risk Factors
The
    information set forth under the heading "Business Review ─ Group
    risk
    factors" on
    page 20 of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
ITEM 4.
INFORMATION ON THE COMPANY
4.A  History and Development of the Company
The information set forth under the headings:
•
"Contents" on
page 1 (first two paragraphs);
•
"Business review ─ Introduction" on
        page 7;
•
"Business review ─ Introduction ─ How
BT operates" on
page 7;
•
"Business review ─ Acquisitions
and disposals ─ Acquisitions
and disposals prior to the 2006 financial year" on page 13;
•
"Business review  ─ Acquisitions and
disposals ─ Acquisitions and disposals in the 2006 financial year" on
page 13;
•
"Financial review ─ Capital expenditure" on
page 38; and
•
"Financial review ─ Acquisitions" on
page 38
1
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
4.B  Business Overview
The information set forth under the headings:
•
"Business review" on pages 6 to 25;
•
"Financial review ─ Line of business
results" on pages 31 to 33;
•
"Our commitment to society" on pages 19
and 20;
•
"Operational statistics" on page 131;
and
•
"Additional information for shareholders ─ Cautionary
statement regarding forward-looking statements" on page 133
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
4.C  Organizational Structure
The
    information set forth under the headings: "Business review ─ Introduction" on
    page 7 and "Subsidiary undertakings and associate" on
    page 127 of the Annual Report 2006 contained in the Company's
    Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
4.D  Property, Plants and Equipment
The
    information set forth under the headings "Business review ─ Resources ─  Property" on
    page 18 and "Financial statistics" on page 130 of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
ITEM 4A.
UNRESOLVED STAFF COMMENTS
None.
ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
5.A  Operating Results
The information set forth under the headings:
•
"Financial review" on pages 26 to 39;
•
"Consolidated financial statements ─ Accounting
policies" on pages 65 (except the last paragraph of (I) Basis of Preparation
of the Financial Statements on page 65) to 72; and
•
"Additional information for shareholders ─ Cautionary
statement regarding forward-looking statements" on page 133
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 and the 2005 Data are incorporated herein by reference.
5.B  Liquidity and Capital Resources
The information set forth under the headings:
•
"Financial review" on pages 26 to 39;
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Loans and other borrowings" on pages 92
and 93;
2
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Financial commitments and contingent liabilities" on
page 97;
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Financial instruments and risk management" on
pages 105 to 110; and
•
"Additional information for shareholders ─ Cautionary
statement regarding forward-looking statements" on page 133
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
5.C  Research and Development, Patents and Licenses
The information set forth under the headings:
•
"Business review ─ Pursue profitable
growth in new wave markets ─ Build
on our networked IT services capacity" on pages 8 and 9;
•
"Business review ─ Pursue profitable
growth in new wave markets ─ Research and development and IT support" on
page 18; and
•
"Financial statistics" on page 130
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
5.D  Trend Information
The
    information set forth under the headings "Financial review" on
    pages 26 to 39 and "Additional information for shareholders ─ Cautionary
    statement regarding forward-looking statements" on page 133 of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
5.E  Off-Balance Sheet Arrangements
The
    information set forth under the heading "Financial Review ─ Off-balance
    sheet arrangements" on page 37 of the Annual Report 2006 contained
    in the Company's Report on Form 6-K dated May 31, 2006 is incorporated
    herein by reference.
5.F  Tabular Disclosure of Contractual Obligations
The
    information set forth under the heading "Financial Review ─ Capital
    resources" on page 37 of the Annual Report 2006 contained in
    the Company's Report on Form 6-K dated May 31, 2006 is incorporated
    herein by reference.
ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A  Directors and Senior Management
The
    information set forth under the heading "Board of directors and Operating
    Committee" on pages 40 and 41 of the Annual Report 2006
    contained in the Company's Report on Form 6-K dated May 31, 2006
    is incorporated herein by reference.
3
6.B  Compensation
The information set forth under the headings:
•
"Report on directors' remuneration" on
pages 50 to 61;
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Retirement benefit plans" on pages
98 to 101;
and
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Share based payment plans" on pages
101 to 104
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
6.C  Board Practices
The information set forth under the headings:
•
"Board of directors and Operating Committee" on
pages 40 and 41;
•
"Report of the directors ─ The Board
─ Directors" on
page 42;
•
"Report on directors' remuneration" on
pages 50 to 61
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
6.D  Employees
The information set forth under the headings:
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Employees" on page 101; and
•
"Operational statistics" on page 131
of
    the Annual Report 2006 contained in the Company's Report on Form 6-K
    dated May 31, 2006 is incorporated herein by reference.
6.E  Share Ownership
The
    information set forth under the headings "Report on directors' remuneration" on
pages 50 to 61 and "Consolidated financial statements ─ Notes
to the financial statements ─ Share based payment plans" on page
101
of
the Annual Report 2006 contained in the Company's Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.
ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A  Major Shareholders
The
    information set forth under the headings "Report of the directors ─ Substantial
    shareholdings" on
page 44 and "Additional information for shareholders ─ Analysis of
shareholdings" on page 135 of the Annual Report 2006 contained in the
Company's Report on Form 6-K dated May 31, 2006 is incorporated herein
by reference.
4
7.B  Related Party Transactions
The information set forth under the headings:
•
"Report of the directors ─ The Board
─ Interest
of
management in certain transactions" on
page 44;
•
"Report on directors' remuneration" on
pages 50 to 61; and
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Related party transactions" on
page 97
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
7.C Interests of Experts and Counsel
Not applicable
ITEM 8.
FINANCIAL INFORMATION
8.A  Consolidated Statements and Other Financial Information
See Item 18 below.
In addition, the information set forth under the headings:
•
"Business review ─ Legal proceedings" on
page 17;
•
"Financial review ─ Dividends" on
page 35;
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Financial commitments and contingent liabilities" on
page 97;
•
"Additional information for shareholders ─ Dividends" on
page 135;
•
"Additional information for shareholders ─ Dividend
investment plan" on page 136; and
•
"Additional information for shareholders ─ Memorandum
and Articles of Association ─ Articles ─ Dividends" on page
138
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
8.B  Significant Changes
The
    information set forth under the heading "Financial review ─ Capital
    resources" on page 37 of the Annual Report 2006 contained
    in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
ITEM 9.
THE OFFER AND LISTING
9.A  Offer and Listing Details
The
    information set forth under the heading "Additional information for
    shareholders ─ Share and ADS prices" on
page 134 of the Annual Report 2006 contained in the Company's Report on
Form 6-K dated May 31, 2006 is incorporated herein by reference.
5
9.B  Plan of Distribution
Not applicable
9.C  Markets
The
    information set forth under the heading "Additional information for
    shareholders ─ Listings" on
page 134 of the Annual Report 2006 contained in the Company's Report on
Form 6-K dated May 31, 2006 is incorporated herein by reference.
9.D  Selling Shareholders
Not applicable
9.E  Dilution
Not applicable
9.F  Expenses of the Issue
Not applicable
ITEM 10.
ADDITIONAL INFORMATION
10.A  Share Capital
Not applicable
10.B  Memorandum and Articles of Association
The
    information set forth under the heading "Additional information for
    shareholders ─ Memorandum and Articles of Association" on
    pages 137 to 140 of
the Annual Report 2006 contained in the Company's Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.
10.C  Material Contracts
The
    information set forth under the heading "Additional information for
    shareholders ─ Material contracts" on
page 140 of the Annual Report 2006 contained in the Company's Report
on Form 6-K dated May 31, 2006 is incorporated herein by reference.
10.D Exchange Controls
Not
applicable
10.E  Taxation
The
    information set forth under the heading "Additional information for
    shareholders ─ Taxation (US Holders)" on
    pages 140 to 142 of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
10.F  Dividends and Paying Agents
Not applicable
6
10.G  Statement by Experts
Not applicable
10.H  Documents on Display
The
    information set forth under the heading "Additional information for
    shareholders ─ Documents on display" on page 142 of the Annual
    Report 2006 contained in the Company's Report on Form 6-K dated May
    31, 2006 is incorporated herein by reference.
10.I Subsidiary Information
Not applicable
ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information set forth under the headings:
•
"Financial review ─ Treasury policy" on
page 36;
•
"Financial review ─ Financial risk management" on
page 37;
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Accounting policies ─ Financial instruments" on
page 68; and
•
"Consolidated financial statements ─ Notes
to the financial statements ─ Financial instruments and risk management" on
pages 105 to 110
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
Not applicable
PART II
ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not applicable
ITEM 15.
CONTROLS AND PROCEDURES
The
    information set forth under the heading "Report of the directors ─ US
    Sarbanes-Oxley Act of 2002" on page 46 of
the Annual Report 2006 contained in the Company's Report on Form 6-K dated
May 31, 2006 is incorporated herein by reference.
7
ITEM 16.A
AUDIT COMMITTEE FINANCIAL EXPERT
The
    information set forth under the heading "Report of the directors ─ US
    Sarbanes-Oxley Act of 2002" on page 46 of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
ITEM 16.B
CODE OF ETHICS
The
    information set forth under the heading "Report of the directors ─ US
    Sarbanes-Oxley Act of 2002" on
    page 46 of the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
ITEM 16.C
PRINCIPAL ACCOUNTANTS FEES AND SERVICES
The
    information set forth under the headings "Report of the  Audit
    Committee" on
    pages 48 and 49 and "Consolidated financial statements ─ Notes
    to the financial statements ─ Audit services" on page 104 of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
ITEM 16.E
PURCHASES OF EQUITY SECURITIES BY THE
          ISSUER AND AFFILIATED PURCHASERS
The
    information set forth under the heading "Additional information for
    shareholders ─ Share buy back" on
    page 137 of the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 is incorporated herein by reference.
PART III
ITEM 17
.
FINANCIAL STATEMENTS
Not
applicable
ITEM 18.
FINANCIAL STATEMENTS
The
financial information concerning the Company set forth under the headings:
•
"Report of the independent auditors — United
States opinion" on
page 63;
•
"Consolidated financial statements" on
        pages 64 to 122 (except the last paragraph of (I) Basis of preparation
        of the Financial Statements on page 65);
•
"Consolidated financial statements ─ Notes
        to the consolidated financial statements ─ United States Generally
        Accepted Accounting Principles" on pages 114 to 121; and
•
"Quarterly analysis of revenue and profit" on
page 128
of
    the Annual Report 2006 contained in the Company's
Report on Form 6-K dated May 31, 2006 and the 2005 Data are incorporated herein
    by reference.
8
ITEM 19.
EXHIBITS
The following exhibits are filed as part of this annual report:
1.1
Memorandum and
        Articles of Association, incorporated by reference to Exhibit 4.1 to
        the Company's Registration Statement on Form S-8 (File No. 333
— 130371)
        dated December 16, 2005.
4.1
Director's
        Service Contract between BT Group plc and Hanif Lalani, dated February
        2, 2005, incorporated by reference to Exhibit 4.1 to the Company's Annual
        Report on Form 20-F dated June 1, 2005.
4.2
Letter of extension
        of appointment of Margaret Jay, dated November 10, 2004, incorporated
        by reference to Exhibit 4.2 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.
4.3
Letter of extension
        of appointment of John Nelson, dated November 10, 2004, incorporated
        by reference to Exhibit 4.3 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.
4.4
Letter of extension
        of appointment of Carl Symon, dated November 10, 2004, incorporated by
        reference to Exhibit 4.4 to the Company's Annual Report on Form 20-F
        dated June 1, 2005.
4.5
Letter of appointment
          of Matti Alahuhta as non-executive director, dated 11 January 2006.
4.6
Letter of amendment to service contract of
        Sir Christopher Bland, dated 3 April 2006.
4.7
Letter of extension of appointment of Clay
        Brendish, dated 27 June 2005.
4.8
Letter of appointment
          of Phil Hodkinson as non-executive director, dated 11 January 2006.
4.9
Letter of extension of appointment of Lou
        Hughes, dated 10 January 2006.
4.10
Letter of amendment to service contract of
        Hanif Lalani, dated 17 October 2005.
4.11
Letter of (further) amendment to service contract
        of Hanif Lalani, dated 19 April 2006.
4.12
Letter of amendment to service contract of
        Dr Paul Reynolds, dated 15 May 2006.
8.1
Significant subsidiaries
        as of March 31, 2006, see "Subsidiary undertakings and associate" on
        page 127 of the Company's Annual Report and Form 20-F as sent to shareholders
        contained in the Company's Report on Form 6-K dated May 31, 2006.
12.1
Section
          302 Certification of Chief Executive Officer.
12.2
Section
          302 Certification of Group Finance Director.
13.1
Section
          906 Certifications.
15.1
Consent
          of PricewaterhouseCoopers LLP, independent auditors of BT Group plc.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
BT GROUP plc
By: /s/ Hanif Lalani
Name:
Hanif Lalani
Title:
Group Finance Director
Date:   May 31, 2006