Annual Report Template Download PDF

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Stagecoach
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Group AAnnual
nnual Report
Report
and
and Financial
Financial Statements
Statements 2015
2015
Stagecoach Group overview
Stagecoach Group is a
UK Bus (Regions) UK Bus (London) UK Rail North America
leading international
public transport
company with bus and 20,000 4,000
employees employees
10,000
employees
5,000
employees
rail operations in the UK,
mainland Europe and
North America. We 7,200
buses and coaches
1,300
buses and coaches
2,300
train services a day
2,400
buses and coaches
employ around 39,000
people and run around
13,000 buses and trains.
699m
journeys a year
326m
journeys a year
287m
journeys a year
146m
vehicle miles a year
Note: All figures are approximate.
Operational performance Customer service
UK Rail UK Rail customer UK Bus customer

punctuality satisfaction satisfaction
95% 95% 95%
93.5%
92%
92.5%
92.3%
92.1%
90% 90%
91%
91.6%
91.4%
91.3%
90%
90.9%
90%
90%
90%
89%
89%
90.1%
89.9%
89.7%
89.6%
88%
88%
88%
87%
87%
85% 85%
86%
86%
86%
86%
86%
85%
85%
85%
85.9%
85.8%
83%
83%
84.8%
82%
82%
80% 80%
81%
81%
83.5%
80%
80%
79%
78%
80%
75% 75%
75% 70% 70%

East Midlands South West Virgin Trains National East Midlands South West Virgin Trains National Stagecoach First National Arriva Go-Ahead
Trains Trains West Coast Rail Trains Trains West Coast Rail Group Express
2011/12 2013/14 2011/12 2013/14 2012/13 2014/15

2012/13 2014/15 2012/13 2014/15 2013/14
Source: Network Rail, Public Performance Measure, Moving Source: National Passenger Survey, Spring Wave, 2012, Source: Bus Passenger Survey, Autumn 2012, Autumn
Annual Average. 2013, 2014, 2015. 2013, Autumn 2014.
Note: Figures used refer to the measure of train punctuality – also Note: Data extracted from National passenger Survey, Spring Wave, 2012, Note: Extracted from the Bus Passenger Survey, Autumn 2012, Autumn
known as PPM (public performance measure) – which is commonly used 2013, 2014, 2015. Percentages are for overall satisfaction. The National 2013, Autumn 2014. The survey asks passengers to rate their journey
throughout Europe. For long distance operators, such as East Midlands Passenger Survey (NPS) is conducted twice a year from a representative experience, covering overall journey satisfaction and a range of specific
Trains and Virgin Trains, this shows the percentage of trains arriving within sample of passenger journeys across the UK. It surveys passengers’ overall factors. As a result of the areas selected the proportion of each national
10 minutes of timetabled arrival at the final destination. London and South satisfaction and satisfaction with 30 individual aspects of service for each operator’s services surveyed will vary.
East operators (including South West Trains) and regional operators show individual train operating company (TOC). Passenger ratings are totalled for
the percentage arriving within five minutes of the timetabled arrival. Data all TOCs across the country to provide a National Rail average.
covers each year to 31 March. National Rail average is for all franchised train
operating companies.
Highlights
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North America
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Stagecoach Group plc | page 1

STAGECOACH GROUP PLC COMPANY No. SC100764
YEAR ENDED 30 APRIL 2015
Contents
1 Strategic report 52 Responsibility statement
24 Board of Directors 53 Group independent auditors’ report
26 Directors’ report 58 Consolidated financial statements
29 Corporate governance report 63 Notes to the consolidated financial statements
34 Audit Committee report 117 Company independent auditors’ report
38 Nomination Committee report 119 Separate financial statements of the parent
39 Health, Safety and Environmental 120 Notes to the Company financial statements
Committee report 125 Shareholder information
40 Directors’ remuneration report
Financial summary
Results excluding intangible asset expenses
and exceptional items+ Reported results
Year ended 30 April 2015 2014 2015 2014
Revenue (£m) 3,204.4 2,930.0 3,204.4 2,930.0
Total operating profit (£m) 227.1 223.3 217.9 200.9
Non-operating exceptional items (£m) – – (10.6) (0.3)
Net finance charges (£m) (42.1) (42.6) (42.1) (42.6)
Profit before taxation (£m) 185.0 180.7 165.2 158.0
Earnings per share (pence) 26.7p 26.0p 24.3p 23.1p
Proposed final dividend per share (pence) 7.3p 6.6p 7.3p 6.6p
Full year dividend per share (pence) 10.5p 9.5p 10.5p 9.5p
+ see definitions in note 35 to the consolidated financial statements

1. Strategic report
1.1 Introduction
The Directors are pleased to present their report on the Group for the year ended 30 April 2015.
This section contains the Strategic report, which includes the information that the Group is required to produce to meet the need for a strategic report in
accordance with the Companies Act 2006. Biographies of each director are contained in section 2 of this Annual Report and the Directors’ report is set out in
section 3.
1.2 Cautionary statement

The Strategic report has been prepared for the shareholders of the Company, as a body, and no other persons. Its purpose is to inform shareholders of the
Company and help them assess how the Directors have performed their duty to promote the success of the Company. This Strategic report contains forward-
looking statements that are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in
the countries, sectors and markets in which the Group operates. It is believed that the expectations reflected in these statements are reasonable but they may be
affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. No assurances can be given that the
forward-looking statements in this Strategic report will be realised. The forward-looking statements reflect the knowledge and information available at the date of
preparation.
1.3 Overview of the year ended 30 April 2015

We are pleased to report a solid set of results for the year ended 30 April 2015. Revenue was up 9.4% at £3,204.4m (2014: £2,930.0m). Operating profit (before
intangible asset expenses and exceptional items) was up 1.7% at £227.1m (2014: £223.3m). Earnings per share before intangible asset expenses and exceptional
items were 2.7% higher at 26.7p (2014: 26.0p), in line with expectations.
The Directors are proposing a final dividend for the year of 7.3p per share (2014: 6.6p) which, if approved, would give a total dividend for the year up 10.5% to
10.5p per share (2014: 9.5p). The proposed final dividend would be payable on 30 September 2015 to shareholders on the register at 28 August 2015.
The operating profit of our wholly-owned bus operations fell a little short of the targets we set ourselves at the start of the year but this was offset by a strong
performance in UK Rail and particularly from our Virgin Rail Group joint venture. As a result, we achieved our overall earnings per share target for the year.
The sharp reduction in oil prices during the year resulted in a fall in car operating costs. The increased competitive advantage this gave to cars affected the
profitability of some of our businesses, most notably our megabus.com inter-city coach operations in North America.
We are seeing strong growth in the UK Rail market and are pleased to have strengthened our participation in the rail sector. This follows our Virgin Rail Group
joint venture securing a new West Coast rail franchise to at least 2017 and the Group winning the new East Coast rail franchise due to run to at least 2023. We are
actively involved in seeking to secure several other UK rail franchises.
The strengthening of our rail business has helped to further diversify the Group’s portfolio of activities, enabling our participation in the fast-growing rail market
whilst building on and growing our historically robust bus businesses. We are also expanding geographically through the growth of our megabus.com inter-city
coach operations in continental Europe.
The Group’s ongoing investment in new vehicles, technology and other assets is a key part of sustaining our success. In the year ended 30 April 2015, net capital
expenditure was £140.9m (2014: £118.9m). Across all of its divisions, the Group is investing in initiatives designed to improve our service to customers and
deliver future growth.
Public transport is central to local communities and their aspirations for economic growth. In the UK, we support the devolution of more powers to local level to
allow for tailored local investment and solutions. By working more effectively together, transport operators and regional authorities can achieve even stronger,
more integrated transport systems at better value for taxpayers. In an era of continued limited public spending, commercial operators' access to capital,
operational expertise and customer understanding is critical to delivering affordable and accessible public transport.
We have led our sector in pursuing a low fares strategy to drive modal shift and give communities affordable access to work, education, health and leisure. It is
important that there is visibility of government spending plans for transport. Policy commitments, such as concessionary fares schemes, must be properly funded
for the long-term to avoid increasing the cost and undermining the reach of public transport.
Every day, our people are key to the delivery of our services. The Board extends its thanks to all employees across the Group for their contribution throughout the
year.
Stagecoach has made a satisfactory start to the new 2015/16 financial year and we are in good financial shape. We face a number of challenges but believe that
there are opportunities ahead as we continue to invest for growth.
Revenue by division is summarised below:
REVENUE
Year to 30 April 2015 2014 Functional 2015 2014 Growth
£m £m currency Functional currency (m) %
Continuing Group operations
UK Bus (regional operations) 1,045.5 1,012.8 £ 1,045.5 1,012.8 3.2%
UK Bus (London) 260.6 244.9 £ 260.6 244.9 6.4%
North America 425.4 428.2 US$ 680.1 685.7 (0.8)%
UK Rail 1,478.4 1,252.0 £ 1,478.4 1,252.0 18.1%
Intra-Group revenue (5.5) (7.9) £ (5.5) (7.9)
Group revenue 3,204.4 2,930.0

Strategic report
1.3 Overview of the year ended 30 April 2015 (continued)

Operating profit by division is summarised below:
OPERATING PROFIT
Year to 30 April 2015 2014 Functional 2015 2014
£m % margin £m % margin currency Functional currency (m)
Continuing Group operations
UK Bus (regional operations) 141.1 13.5% 147.4 14.6% £ 141.1 147.4
UK Bus (London) 26.3 10.1% 23.9 9.8% £ 26.3 23.9
North America 22.1 5.2% 23.7 5.5% US$ 35.3 38.0
UK Rail 26.9 1.8% 34.3 2.7% £ 26.9 34.3
Group overheads (13.9) (13.9)
Restructuring costs (0.8) (0.9)
201.7 214.5
Joint ventures – share of profit after tax
Virgin Rail Group 22.3 2.0
Citylink 1.1 1.3
Twin America 2.0 5.5
Total operating profit before intangible
asset expenses and exceptional items 227.1 223.3
Intangible asset expenses (11.9) (14.0)
Exceptional items 2.7 (8.4)
Total operating profit: Group operating
profit and share of joint ventures’ profit
after taxation 217.9 200.9
More details on the financial results for the year are provided in sections 1.5 and 1.6 of this Annual Report.
1.4 The Stagecoach Group

1.4.1 Overview of the Stagecoach Group
Stagecoach Group is a leading international public transportation group, with extensive operations in the UK, continental Europe, the United States and Canada.
The Group employs around 39,000 people, and operates bus, coach, train and tram services. The Group has four main divisions – UK Bus (regional operations), UK
Bus (London), North America and UK Rail.
We are committed to conducting business in a socially responsible way and we believe this to be consistent with our business objectives and strategy. Indeed, by
taking a responsible approach towards the environment and the wider community, we believe we will enhance our objective to deliver organic growth.
Stagecoach Group plc is a public limited company that is incorporated, domiciled and has its registered office in Scotland. Its ordinary shares are publicly traded
and it is not under the control of any single shareholder.
Throughout this Annual Report, Stagecoach Group plc is referred to as “the Company” and the group headed by it is referred to as “Stagecoach” and/or “the
Group”.
In the remaining parts of this section 1.4, we:
Section
Summarise the Group’s business objectives and long-term strategy 1.4.2
Describe each of the Group’s business segments, their regulatory environments, their strategy, the market opportunities,
the competitive position and likely future market developments 1.4.3
Summarise how we aim to create value, by providing an overview of the Group’s business model 1.4.4
Discuss the key resources and relationships, including contractual relationships, that underpin the Group’s business and strategy 1.4.5
Set out the principal risks to the achievement of the Group’s objectives and strategy 1.4.6
Describe how we measure and monitor progress against our objectives and strategy, and how we are performing 1.4.7
1.4.2 What we look to achieve (business objectives and long-term strategy)

Group strategy
The key elements of Stagecoach Group’s business strategy to deliver long-term shareholder value are:
• To deliver organic growth across all of the Group’s operations by providing safe, reliable, good quality, customer-focused transport services that deliver a
positive customer experience at a reasonable price;
• To acquire businesses that are complementary to the Group’s existing operations, in areas where the Group’s management has proven expertise and which
offer prospective returns on capital in excess of the Group’s weighted average cost of capital;
• In addition to organic and acquisition growth, to maintain and grow the business by bidding for selected rail franchises and bus contracts to seek to secure
new franchises and contracts where the risk/return trade-off is acceptable.
page 2 | Stagecoach Group plc

1.4.3 What we do (description and strategy of each business segment)
UK Bus (regional operations)
Description The UK Bus (regional operations) Division connects communities in more than 100 towns and cities across the UK on bus
networks stretching from the Highlands of Scotland to south west England. These include major city bus operations in Liverpool,
Newcastle, Hull, Manchester, Oxford, Sheffield, Cambridge and Exeter.
The UK Bus (regional operations) Division operates a fleet of around 7,200 buses and coaches across a number of regional
operating units. Each regional operating unit is managed independently and is led by a managing director.
In addition to local bus services in towns and cities, Stagecoach operates interurban services linking major towns within its
regional operating company areas. The Group also runs the budget inter-city coach service, megabus.com, and a small
proportion of the Division’s services are megabus.com links to and within continental Europe.
In Scotland, Stagecoach has a joint venture (Scottish Citylink Coaches Limited) with international transport group,
ComfortDelGro, to operate the Scottish Citylink express network and megabus.com branded services to, from and within
Scotland. Stagecoach owns 35% of the share capital of Scottish Citylink Coaches Limited and ComfortDelGro owns the
remaining 65%. The joint venture is the leading provider of express coach services in Scotland. Stagecoach is responsible for the
day-to-day operational management of the business, which is overseen by a joint board.
Regulatory environment The current structure of the bus market in Great Britain (outside London) was established by the Transport Act 1985. This is
essentially a deregulated structure: any holder of a Public Service Vehicle operator’s licence may operate bus services, having first
registered various details with the relevant traffic commissioner. The traffic commissioners are responsible for enforcing
compliance with these registered details, including standards of maintenance, reliability and punctuality.
The UK Bus (regional operations) bus and coach services are operated on a commercial basis in a largely deregulated market. The
Division also operates tendered services, including schools contracts, on behalf of local authorities. Around 11% of the UK Bus
(regional operations) revenue is receivable from local authorities in respect of such tendered and school services. Around 24% of
the UK Bus (regional operations) revenue is earned from statutory concessionary fare schemes, whereby the Group is reimbursed
by public authorities for carrying the elderly and disabled free of charge.
Strategy The strategy of the UK Bus (regional operations) is to deliver value over time driven by organic growth in revenue and passenger
volumes as a result of providing safe, reliable, good quality, customer-focused bus services at a reasonable price to customers. This
may be supplemented by winning new tendered or contract work and/or acquiring businesses where appropriate opportunities arise.
Market opportunity The Group has around 23% of the UK Bus market excluding London. The UK Department for Transport’s National Travel Survey
(“NTS”) is a household survey of personal travel in Great Britain. The NTS found that in 2013, there was an average of 923 trips per
person per year. Trips by car or van accounted for 77% of distance travelled, bus trips accounted for 5%, rail trips accounted for 10%
and walking, cycling and other modes accounted for 8%. There therefore remains significant market opportunity to stimulate
modal shift from car to bus. According to research by independent consultants, TAS, around 25% of UK bus journeys are for
shopping, 21% for leisure, 21% for education and 19% for commuting and business.
Macroeconomic factors The UK Bus (regional operations) have performed well during more challenging macroeconomic conditions. Although revenue is
not immune to macroeconomic changes, it is less exposed than in many other types of business. In addition, the Group can adjust
the pricing and frequency of the majority of its services and is therefore well placed to respond to any changes in demand for
particular services. We estimate that around 70% of the costs vary with operating miles.
Competition The UK Bus (regional operations) face competition for customers not only from other operators of coaches and buses but also
from other modes of transport. The Group regards its primary competitor as the private car and aims to encourage modal shift
from car to public transport. The other major groups that operate buses in the UK outside of London are three other groups
publically quoted on the London Stock Exchange (FirstGroup, National Express Group, and Go-Ahead Group) and Arriva, which is
owned by Deutsche Bahn.
Future market The level of Government investment in the UK Bus Industry has come under pressure in recent years with reductions in Bus
developments Service Operators’ Grant (a rebate of fuel tax) and constraints on the payments made by Government to bus operators for carrying
the elderly and disabled free of charge to the passenger. Funding of tendered services by local government has also reduced. The
Group is therefore gradually becoming less reliant on Government and a greater proportion of its revenue is coming directly from
passengers. The Division does continue to face risks related to regulatory changes and availability of public funding as noted in
section 1.4.6. Technological developments present both opportunities and threats to growing passenger volumes. There are
positive long-term conditions for further growth in demand for UK Bus services created by rising road congestion, supportive
government policy and public concerns for the environment, which augur well for the future of the Division.
UK Bus (London)
Description The Group is the fourth largest operator in the London bus market, with an estimated 15% share of that market. The business
operates from 9 depots and has a fleet of around 1,300 buses serving routes in and around east and south-east London.
Regulatory environment The UK Bus (London) business operates bus services under contract to Transport for London, receiving a fixed fee (subject to
adjustment for certain inflation indices) and taking the cost and capital risk. Bus operators tender to win contracts and each
contract is typically for a five-year period with the potential for it to be extended by two years. The UK Bus (London) Division
currently has over 80 separate contracts to provide bus services on behalf of Transport for London – this spreads the Division’s risk
of financial performance being adversely affected when a contract expires and the business is unsuccessful in winning the
replacement contract.
Strategy Our strategic focus in the London bus market is now on maintaining good operational performance and tight control of costs
while seeking to bid competitively for new contracts.
Market opportunity The Group operates approximately 15% of the bus operating mileage contracted by Transport for London to bus operators. The
Group does not seek to gain market share for its own sake and remains disciplined in ensuring that its bids for new contracts offer
an acceptable trade-off of risk and reward. Transport for London has plans to increase the level of contracted bus services in
coming years, which may present some growth opportunities for the business.

Strategic report
1.4.3 What we do (description and strategy of each business segment) (continued)

UK Bus (London) (continued)
Macroeconomic factors The UK Bus (London) operations are not especially exposed to short-term changes in macroeconomic conditions because the
business receives a fee from Transport for London for operating services irrespective of the passenger volumes on those services.
Its costs and in particular, labour costs, can vary due to macroeconomic changes and also, in the longer term, the level of services
that Transport for London offers for tender might be affected by the macroeconomy.
Competition UK Bus (London) faces competition to win contracts from Transport for London from other bus operators, the largest of which
are Go-Ahead Group, Arriva, Metroline, RATP, Transit Systems and Abellio.
Future market In the short-term, revenue growth could come from inflationary price increases, retaining work on tender but at higher rates
developments and/or winning contracts from other operators. There are longer term opportunities to benefit from Transport for London’s plans
to expand the network over the next five years. Continuing population growth in London and positive government policy on
public transport contribute to a positive long-term outlook for the business.
North America
Description The North America Division provides bus and coach transport services in the United States and Canada. Our businesses include
commuter/transit services, inter-city services, tour, charter and sightseeing operations. The Division also operates megabus.com, a
low cost inter-city coach operator.
The North America business is headed by a chief operating officer. Stagecoach (excluding its joint ventures) currently operates
approximately 2,400 vehicles in the United States and Canada.
In addition to its wholly-owned operations in North America, Stagecoach has a joint venture, Twin America LLC, with CitySights
NY. The joint venture principally operates sightseeing bus services in New York. The Group holds 60% of the economic rights and
50% of the voting rights in the joint venture. Twin America LLC is headed by a chief executive and is overseen by a joint board.
Regulatory environment The North America business operates on a commercial basis in a largely deregulated market. It also operates some tendered
services for local authorities and services contracted by corporations.
Strategy The strategy of the North America Division is to deliver organic growth in revenue and passenger volumes as a result of providing
safe, reliable, good quality, customer-focused services at a reasonable price to customers. This may be supplemented by winning
new contract work and/or acquiring businesses where appropriate opportunities arise.
Market opportunity The Group estimates it has less than 4% of the bus and coach market in North America and is growing this through innovative
services such as megabus.com. The US Department of Transportation’s Bureau of Transportation Statistics show that in 2012
some 86% of transportation to work was by car, compared with only 5% by public transport. The opportunity to stimulate modal
shift from car to bus and coach is substantial and megabus.com has been successful in doing this.
Macroeconomic factors The North American operations are more exposed to macroeconomic factors than the UK Bus operations as a greater proportion
of their revenue is derived from customers using its services for leisure purposes, including its charter, tour and sightseeing
services. It nevertheless has similar flexibility to UK Bus over pricing and supply, enabling it to effectively respond to changes in
macroeconomic conditions.
Competition The business faces competition for customers not only from other operators of coaches and buses but also from other modes of
transport. The Group regards its primary competitor as the private car and aims to encourage modal shift from car to public
transport. Megabus.com faces competition from the car but also from other coach operators, airlines and train operators.
FirstGroup and National Express Group are also major operators of coach and bus services in North America.
Future market The Group has taken a leading role in the development of bus and coach travel in North America through its megabus.com
developments services. The market for inter-city coach travel, such as that provided by megabus.com, has grown rapidly and we expect that to
continue to present significant opportunities to the Group.
UK Rail
Description Stagecoach Group has major rail operations in the UK.
Our principal rail subsidiaries are South West Trains, East Midlands Trains and Virgin Trains East Coast. South West Trains runs train
services in south west England out of London Waterloo railway station, and operates Island Line services on the Isle of Wight. The
South West franchise is contracted to run until February 2017. From 11 November 2007, we have operated the East Midlands
Trains franchise. The franchise comprises main line train services running to London St Pancras, regional rail services in the East
Midlands area and inter-regional services between Norwich and Liverpool. The East Midlands Trains franchise is contracted to run
until October 2015. Stagecoach has a 90% share in the Virgin Trains East Coast business with the Virgin Group of Companies
holding the other 10%. The Virgin Trains East Coast franchise began in March 2015 and is planned to run until 31 March 2023,
with the option for a one-year extension at the discretion of the UK Department for Transport. It provides inter-city train services
between London and a number of locations including Edinburgh, Newcastle, Leeds and York. We also operate Supertram, a 28km
light rail network incorporating three routes in the city of Sheffield, on a concession running until 2024.
Stagecoach Group has a 49% shareholding in a joint venture, Virgin Rail Group, which operates the West Coast Trains rail
franchise. The current West Coast Trains rail franchise runs until March 2017 and the Government has an option to extend it by a
further year. The other shareholder in Virgin Rail Group is the Virgin Group of Companies. South West Trains, East Midlands Trains,
Virgin Trains East Coast and the tram operations each have a managing director, who report to the Chief Executive. Stagecoach’s
Chief Executive is Joint Chairman of Virgin Rail Group. Virgin Rail Group has a managing director, who reports to the Virgin Rail
Group board, which includes Stagecoach Group and Virgin Group representatives.

Strategic report
1.4.3 What we do (description and strategy of each business segment) (continued)

UK Rail (continued)
Regulatory environment The UK rail operating market is split into a number of separate franchises, which are awarded by the Government for set time
periods to a specification set by the Department for Transport on the basis of competitive bids. Train operating companies operate
passenger trains on the UK rail network. The UK railway infrastructure is owned and operated by Network Rail, a “not for dividend”
company that invests any profits into improving the railway. Network Rail runs, maintains and develops tracks, signalling systems,
bridges, tunnels, level crossings and key stations.
Strategy In rail, we seek to deliver organic growth across all of our existing operations and to maintain and grow the business by bidding
for selected new franchises where the risk/return trade-off is acceptable.
Market opportunity The market opportunity in rail arises from the potential to retain existing and/or win new franchises, and also, from the potential
to attract increased use of the Group’s rail services. With a number of franchises expected to be tendered within the next few
years, there is scope to win new franchises.
Macroeconomic factors The Rail operations are exposed to macroeconomic factors with passenger revenue correlated to Gross Domestic Product and
employment levels. The exposure is further increased by the relatively fixed cost base of the business which restricts the scope to
reduce costs in response to reduced demand. The Group’s existing South West Trains and East Midlands Trains franchises have
significant protection against macroeconomic risks due to the receipt of revenue support from Government whereby
Government pays the Group a proportion of the shortfall of actual revenue to the revenue expected when the Group bid for the
franchise. From June 2014, the West Coast Trains franchise operated by the Group’s Virgin Rail Group joint venture, is not entitled
to revenue support in the form received by South West Trains and East Midlands Trains. It does, however, have a “GDP sharing”
agreement that is intended to ensure that the Department for Transport bears most of the risk of variances in West Coast Trains’
revenue resulting from UK GDP differing from that expected at the time of the June 2014 franchise agreement. The Virgin Trains
East Coast franchises has a similar GDP sharing arrangement. On bids for new franchises, the Group’s evaluation of
macroeconomic risks is a key component of the bid process.
Competition The business faces competition for customers not only from other train operators but also from other modes of transport.
The main competitors that bid against the Group for UK rail franchises are FirstGroup, National Express Group, Go-Ahead Group,
Arriva, MTR, Keolis, SNCF, Eurostar, Serco and Abellio.
Future market The UK Department for Transport has a clear schedule in place for re-tendering rail franchises. The Group will assess each
developments opportunity to bid for a new rail franchise on a case-by-case basis.
The UK continues to see strong growth in demand for rail services presenting opportunities for the Group’s existing rail interests
and also in its bids for new franchises.
1.4.4 How we create value (the business model)

The Group’s overall business model is illustrated below.
Stagecoach factors driving demand for public transport
Safe and Advertising Value for Other drivers of

Cost factors Investment Customer-focused
reliable and money growth
in services services
transport marketing pricing
Flexible cost Contract/

base franchise
in bus bids
Economic returns
Strong
Group-wide Acquisitions
cost control
External factors driving demand for public transport
Lower cost Supportive Long-term Increasing Rising Rising car

road environmental Contract
rail business government economic running
congestion awareness management
model policy growth costs
The right environment Decentralised Emphasis on Sustainable, efficient

to underpin the Short chains of Environment to
management operational long-term capital
command support innovation
business model structure performance structure
The business model varies to some extent by division. The business model is intended to deliver the business objectives and long-term strategy explained above in
that it is designed to preserve and add value through organic growth, targeted acquisitions and rail franchise wins. The overall model of the Group is based on a
relatively decentralised management structure with short chains of command and close monitoring and direction from the centre. Across the Group, there is an
emphasis on achieving strong operational performance as an underpin of strong financial performance.
The business model for the Group’s UK Bus (regional operations) and North America Divisions is designed to be sufficiently flexible to respond to developments in
the markets in which they operate and to changes in demand. The key features of this business model are:
• A decentralised management structure enabling local management to quickly identify and respond to developments in each local market;
• An emphasis on lightly regulated bus operations enabling management to vary prices, operating schedules and timetables in response to developments in
each local market without significant hindrance from regulation;
• A flexible cost base whereby operating mileage and operating costs can be flexed in response to changes in demand.
The business model of the UK Bus (London) and UK Rail Divisions is different. The businesses are more highly regulated and their cost base is less flexible so there
is greater management focus on agreeing the right contractual arrangements, including appropriate risk-sharing arrangements, and ensuring these are
appropriately managed for the duration of each contract.

Strategic report
1.4.5 What we need, to do what we do (resources and relationships)

Stagecoach Group has a range of resources and relationships, including contractual relationships, that underpin its business and support its strategy. These assist
in giving the Group a competitive advantage in the markets in which it operates.
Customers
Millions of people use our services and our relationship with our customers is important to us. To deliver organic growth in revenue, a key element of our strategy,
we need to provide services that people want to use.
We conduct customer research to monitor our performance and to determine how we can improve the quality, delivery and accessibility of our services. We are
passionate about providing good customer service and our businesses have regular and ongoing discussions with bus and rail user groups. This includes
presentations from managers on aspects of our service as well as consultation and information sharing on particular issues.
An important element of the Group’s success in growing its customer base lies in its record of product innovation and new ideas on developing effective public
transport systems.
Employees
Human resources are key to the Group’s business and the Group’s relationship with its employees is therefore fundamental to achieving its objectives. We aim to
recruit and retain the best employees in our sector, offering an excellent package of benefits, which allows us to deliver good customer service to our passengers.
The Group’s individual divisions invest significantly in the training and development of our people and we operate a successful graduate training scheme which
provides one source of training for the managers of the future. We have established strong working relationships with trade unions and work in partnership with
them on a range of issues, including training and development, occupational health matters, pensions and other employee benefits. We also communicate with
our people face to face and through a number of internal publications.
The financial community

Our shareholders and lenders are critical to our business success. We have a regular programme of meetings with investors and provide frequent updates to the
markets and financial community on our performance.
We have contractual arrangements with banks and other finance providers for the provision of funds and financial products to the Group.
Government and regulatory bodies

Our managers have ongoing relationships with national and local government in our main countries of operation to ensure the effective delivery of government
transport policy and to assist in meeting wider objectives. We work with local authorities, including passenger transport executives, regional transport committees
and transit authorities, in the delivery and planning of bus and rail services. Many of our businesses have partnership agreements in place to improve the delivery of
public transport in their areas. In the UK, we work closely with the Department for Transport, the Scottish Government, Transport Scotland, the Welsh Government,
and Transport for London.
We contract with local authorities, government bodies and other parties for the supply of bus services on a contracted or tendered basis. We have franchise
agreements with the Department for Transport governing the supply of franchised rail services in the UK.
We have constructive dialogue with organisations such as the Commission for Integrated Transport, which provides advice to the UK Government, and lobbying
groups such as the Campaign for Better Transport.
Suppliers
We rely on a range of suppliers to provide goods and services linked to our bus and rail operations. All of our businesses have various contractual relationships with
suppliers, including purchase contracts with fuel suppliers, vehicle suppliers, IT companies and spare part suppliers.
The operation of our rail franchises depends upon a number of contractual relationships with suppliers, including contracts with Network Rail governing station
and track access arrangements, leases with rolling stock companies for the lease of trains and maintenance contracts for the maintenance of trains.
Information technology is increasingly important to effectively operate our services and to meet our customers’ expectations. Significant investment, internal
management resource and external supplier input is made in developing and operating IT systems.
Corporate reputation, brand strength, and market position

Stagecoach is one of the best-known public transport operators in the UK and is consistently rated highly for the quality of its services in research by independent
organisations. We value our reputation, both as a public transport provider and as a key part of the communities in which we operate. Stagecoach has a strong set
of brands that support our strategy of organic growth in our business and that help maintain our leading market position.
Natural resources and manufacturing technology

Operating our bus and rail services requires considerable use of natural resources, including diesel and electricity. We have arrangements in place to ensure that
these resources are sourced efficiently and that our supplies are maintained to ensure the smooth functioning of our business. A number of experienced
manufacturers supply our buses, coaches, trains and trams, which are produced to detailed specifications relevant to the individual markets in which they are
required.
Licences
Various licences are held by Stagecoach giving authority to operate our public transport services and these are maintained up to date as required.
Transport and industry representation groups

We are active members of industry groups, such as the Confederation of Passenger Transport UK (which covers buses and light rail), the Rail Delivery Group and
the American Bus Association.

1.4.6 The challenges we face (principal risks and uncertainties)
Like most businesses, there are a range of risks and uncertainties facing the Group and the matters described below are not intended to be an exhaustive list of all
possible risks and uncertainties.
Generally, the Group is subject to risk factors both internal and external to its businesses. External risks include global political and economic conditions,
competitive developments, supply interruption, regulatory changes, foreign exchange, materials and consumables (including fuel) prices, pensions funding,
environmental risks, industrial action, litigation and the risk of terrorism. Internal risks include risks related to capital expenditure, acquisitions, regulatory
compliance and failure of internal controls.
The focus below is on those specific risks and uncertainties that the Directors believe are the most significant to the Group, taking account of the likelihood of
occurrence of each risk and the potential effect on the Group.
Description of risk Management of risk Developments in year ended Section in

30 April 2015 Annual Report
Catastrophic events
There is a risk that the Group is While it is not possible to fully eliminate • No significant matters to report.
involved (directly or indirectly) in a these risks, the Group has a proactive
major operational incident resulting in culture that puts health and safety at the
significant human injuries or damage top of its agenda in order to mitigate the
to property. This could have a potential for major incidents. In the
significant impact on claims against unlikely event that a major incident did
the Group, the reputation of the Group occur, the Group has procedures in place to
and its chances of winning and respond. The Group periodically rehearses
retaining contracts or franchises. In its response to a hypothetical major
extreme cases, services could be incident. The Group has insurance
suspended or structural changes arrangements in place to reduce the
imposed on the Group as a result of financial effect on the Group of certain
regulatory or other action. claims against it.
A series of less severe incidents could
have similar consequences.
Terrorism
There have been multiple acts of terrorism The Group has plans in place designed • No significant matters to report.
on public transport systems and other to reduce the operational and financial
terrorist attacks that whilst not directly impact of a terrorist incident. It also
targeting public transport have has checks in place such as vehicle
discouraged travel. There is a risk that the inspections to reduce the risk.
demand for the Group’s services could be
adversely affected by a significant terrorist
incident. Such a fall in demand would
have a negative effect on the Group’s
revenue and financial performance.
Economy
The economic environment in the Management monitors actual and • During the year ended 30 April 2015,
geographic areas in which the Group projected economic trends in order to the Group’s wholly owned rail
operates affects the demand for the match capacity to demand and where franchises had significant protection
Group’s bus and rail services. In possible, minimise the impact of from macroeconomic changes, with
particular, the revenue of the Group’s adverse economic trends on the both South West Trains and East
UK rail operations is historically Group. External forecasts of economic Midlands Trains having received
correlated with factors such as UK trends form part of the Group’s revenue support from the Department
Gross Domestic Product and Central assessment and management of for Transport, such that the
London Employment. In North economic risk. Department was and is at risk for the
America, a greater proportion of the In bidding for new rail franchises, the majority of any difference between
revenue from bus operations is derived evaluation of macroeconomic risks is a actual and expected revenue.
from tour, charter and sightseeing key element of the bid process. • From June 2014, the West Coast Trains
services than in the UK and these franchise, operated by the Group’s
services tend to be more susceptible to Further information on the relevance
of macroeconomic factors to each Virgin Rail Group joint venture, has a
economic changes. Other factors, such “GDP sharing” agreement that is
as movements in fuel prices, can also business segment is provided in
section 1.4.3. intended to ensure that the
affect revenue, costs and profit. The Department for Transport bears most
revenue and profit of the Group could of the risk of variances in West Coast
therefore be positively or negatively Trains’ revenue resulting from UK GDP
affected by changes in the economy. differing from that expected at the
time of the June 2014 franchise
agreement. Up to June 2014, the
franchise operated under a
management contract meaning that
the Department for Transport bore
virtually all of the risk of revenue and
costs being significantly different from
those expected.
• The Virgin Trains East Coast franchise,
which commenced in March 2015, also
operates with a “GDP sharing”
agreement similar to the West Coast
Trains franchise.

Strategic report
1.4.6 The challenges we face (principal risks and uncertainties) (continued)

Rail cost base
A substantial element of the cost base in The Group looks to achieve sensible • No significant matters to report. • 2.5.4
the Group’s UK Rail Division is essentially risk sharing arrangements in its rail
fixed because under its UK rail franchise franchise agreements. The Group’s
agreements, the Group is obliged to franchise bids are designed to deliver
provide a minimum level of train services an acceptable risk-reward trade-off. As
and is therefore unable to flex supply in described above, economic and
response to short-term changes in terrorism risks are closely managed. In • 2.5.4
demand. In addition, a significant part of addition, the Group remains focused
the cost base is comprised of payments to on controlling costs in the UK Rail
the infrastructure provider, Network Rail, Division.
and payments under train operating • 2.5.4
leases which are committed and do not
vary with revenue. Accordingly, a
significant proportion of any change in
revenue (for example, arising as a result
of the risks described above in respect of
terrorism and the economy) will impact
profit from the UK Rail Division.
Sustainability of rail profit
A significant element of the Group’s In order to manage the risks, the • The Group commenced operating the Virgin • 1.5.4
revenue and profit is generated by UK Group has devoted significant Trains East Coast franchise in March 2015.
rail franchises, which have a finite management resource and financial The franchise is planned to run until at least
duration. There is a risk that the investment to bidding for new rail March 2023, with the option for a one-year
Group’s revenue and profit could be franchises. extension at the Department for Transport’s
significantly affected (either positively Appropriately experienced personnel discretion.
or negatively) as a result of the Group are retained to work on rail bids and • The Group is discussing with the Department • 1.5.4
winning new franchises or failing to third party consultants are engaged to for Transport planned, new “Direct Award”
retain its existing franchises. provide additional expertise. The franchises at both East Midlands Trains and
Board approves the overall rail bidding South West Trains.
strategy and the key parameters for • New commercial terms were agreed and • 1.5.5.1
each bid. applied from June 2014 to Virgin Rail Group’s
West Coast Trains franchise, which is now
expected to run until at least March 2017.
• The Group is shortlisted as one of three • 1.5.4
bidders for the TransPennine Express rail
franchise. The Group submitted its bid in
May 2015.
• The Group’s joint venture with Abellio was • 1.5.4
shortlisted in June 2015 as one of three
bidders for a new East Anglia rail franchise.
• Further rail franchises are expected to be • 1.5.4
tendered over the next few years.
Breach of franchise
The Group is required to comply with Our UK Rail businesses are subject to • No significant matters to report.
certain conditions as part of its rail complex contractual arrangements.
franchise agreements. If it fails to Contractual management is an
comply with these conditions, it may be important part of our rail activities
liable to penalties including the because the way in which contracts are
potential termination of one or more of managed can be a significant
the rail franchise agreements. This determinant of financial performance.
would result in the Group losing the Compliance with franchise conditions is
right to continue operating the affected closely managed and monitored and
operations and consequently, the procedures are in place to minimise the
related revenues and cash flows. risk of non-compliance.
The Group may also lose some or all of The Group maintains an overview of
the amounts set aside as security for the Virgin Rail Group’s business risk
shareholder loan facilities, the management process through
performance bonds and the season representation on its board and audit
ticket bonds. The Group can do more to committee.
prevent breaches of franchise where it
has control than where it has joint
control. As the holder of a 49% joint
venture interest in Virgin Rail Group, the
Group has less control over the joint
venture’s operations and that means the
Group’s management may be less able
to prevent a breach of the Virgin Rail
Group franchise agreement.


Pension scheme funding
The Group participates in a number of Decisions on pension scheme funding, • Pension scheme liabilities have • 1.6.10
defined benefit pension schemes. There is asset allocation and benefit promises moved during the year due to
a risk that the reported net pension are taken by management and/or market changes.
asset/liability and/or the cash contributions pension scheme trustees in • The Pensions Regulator has an
required to these schemes increases or consultation with trade unions and ongoing review of the valuation
decreases due to changes in factors such as suitably qualified advisors. A Pensions basis applied by the Group’s main
investment performance, the rates used to Oversight Committee has been defined benefits pension scheme.
discount liabilities and life expectancies. established comprising the Finance This is consistent with reviews the
Intervention by regulators could also affect Director, a Non-Executive Director and Regulator has undertaken of other
the contributions required. Any increase in other senior executives, to oversee the pension schemes as part of its
contributions will reduce the Group’s cash Group’s overall pensions strategy. The remit.
flows. Any significant increase in pension Board participates in major decisions
liabilities could affect the Group’s credit on the funding and design of pension
ratings. schemes.
Insurance and claims environment
The Group receives claims in respect of The Group has a proactive culture that • Adjustments were required as at • 1.5.2 and
traffic incidents and employee claims. puts health and safety at the top of its 30 April 2015 to the provisions 1.5.3
The Group protects itself against the agenda and this helps mitigate the held in respect of historic claims
cost of such claims through third party potential for claims arising. Where relating to the UK Bus (London) and
insurance policies. An element of the claims do arise, they are managed by Division and the North America
claims is not insured as a result of the dedicated insurance and claims Division. The net effect of these 2.5.3
“excess” on insurance policies. specialists in order to minimise the adjustments on the Group’s
There is a risk that the number or cost to the Group. Where appropriate, overall profit for the year ended
magnitude of claims are not as legal advice is obtained from 30 April 2015 was not material
expected and that the cost to the appropriately qualified advisors. The and the effect on each division is
Group of settling these claims is balance between insured and retained explained in section 1.5 of this
significantly higher or lower than risks is re-evaluated at least once a report.
expected. In the US, in particular, there year and insurance and claims activity
is a risk that given the size of the is monitored closely.
“excess”, that a small number of large-
value claims could have a material
impact on the Group’s financial
performance and/or financial position.
Regulatory changes and availability of public funding

Public transport is subject to varying Management closely monitors • Growth in concessionary revenue • 1.5.1
degrees of regulation across the relevant proposals for changes in the in the UK Bus (regional
locations in which the Group operates. regulatory environment and operations) is expected to be low
There is a risk that changes to the communicates the Group’s views to in the short-term.
regulatory environment could impact key decision makers and bodies. The • The local government in the • 1.5.1
the Group’s prospects. Group actively participates in various North East of England continues
Similarly, many of the Group’s industry and national trade bodies to promote proposals to replace
businesses benefit from government along with domestic and international the current commercialised
investment in bus and train services, government forums. The Group seeks market for bus services with a
including tax rebates, the provision of to maintain good, co-operative contracting system.
equipment, contracted services and relationships with all levels of
concessionary travel schemes for government, by developing and • The current UK Government’s • 1.5.1
promoting ideas that offer cost plans for greater devolution of
passengers. There is a risk that the powers within the UK could see
availability of government finances effective ways of improving public
transport. the introduction of franchised bus
changes due to regulatory or other networks in areas which vote to
reasons. Where changes are known or introduce metro mayors, which
reasonably likely, the Group develops could affect our commercialised
plans to seek to mitigate any adverse bus operations.
effects on it.
Management and Board succession

The Group values the continued Succession planning for the Directors • During the year ended 30 April
services of its senior employees, and senior management is an 2015, we have initiated a North
including its directors and important issue and as such is American graduate recruitment
management who have skills that are considered by the Nomination programme, based on our
important to the operation of the Committee (as described in section successful UK graduate
Group’s business. The success of the 6.5) and the Board. The appropriate programme.
Group could be adversely affected if level of management deals with
effective succession planning is not in recruitment and retention of other
place. staff.

Strategic report

Disease
There have been concerns in recent The Group has plans in place to • No significant matters to report.
years about the risk of a swine flu respond to any significant outbreak of
pandemic, which follows previous disease.
concerns over bird flu and SARS. More
recently, there has been a heightened
risk of an outbreak of Ebola. There is a
risk that demand for the Group’s
services could be adversely affected by
a significant outbreak of disease. Such
a fall in demand would have a
negative impact on the Group’s
revenue and financial performance.
Information technology
The Group is reliant on information The Group is continually investing in its • No significant matters to report.
technology for sales, operations and information technology systems, people
back office functions. Information and suppliers to ensure the robustness
technology failures or interruptions of its information technology. It is
could adversely affect the Group. developing new digital platforms and
An increasing proportion of the Group’s continues to look to ensure that it
sales are made digitally. There is a risk secures reliable service provision.
that the Group’s capability to make sales An Information Security Board oversees
digitally either fails or cannot meet the management of cyber risks, and
levels of demand and the time taken to takes appropriate advice from suitably
implement restorative actions is experienced third party consultants.
unacceptably long due to insufficient
resource being available and/or over
reliance on a small number of service
providers. This risk could result in
significant levels of lost revenue at a
time when the Group is investing in
megabus.com coach operations, of
which Internet sales is a fundamental
part. A significant and ongoing
megabus.com website failure could
severely affect the megabus.com brand
and also give a competitor an advantage
during the time of the failure.
There are cyber risks relating to • 5.1
unauthorised access to or disclosure of
data, disruption to IT systems and
disruption to business operations as a
result of a malicious attack.
Litigation
The Group is exposed to the risk of The Group has compliance programmes • A settlement has been agreed in • 1.5.5.2
commercial and consumer litigation in order to reduce the risk of material principle with the US Department of
arising from the legal environment in litigation against the Group. Justice and the New York Attorney
some markets, particularly the United and
General’s office in respect of the
States. previously reported Twin America 2.5.3
joint venture anti-trust litigation.
Competition
Loss of business to existing competitors We work with local authorities, including • Revenue growth has slowed in our
or new entrants to the markets in which passenger transport executives, regional North America Division, reflecting the
we operate could have a significant transport committees and transit effect of the significant fall in fuel
impact on our business. We face authorities, in the delivery and planning prices on demand for our services,
competition for customers not only of bus and rail services. particularly inter-city coach services on
from other operators of trains, trams, Our bus businesses are built on a our megabus.com network.
coaches and buses but also from other successful commercial formula of low • We have experienced continued strong
modes of transport. The Group regards fares, investment and high customer competition in a number of markets.
its primary competitor as the private car service which, in the UK Bus (regional
and aims to encourage modal shift from operations) Division, has delivered
car to public transport. Developments in continued passenger volume growth • 1.5.1 2.5.3
new technology and/or new business nearly every year for more than ten years.
models could affect the competitive
environment in which the Group • 1.5.3 &
operates. Section 1.4.3 of this Annual
Report includes comments on 1.5.5.2
competition in the context of each of
the Group’s key divisions.
Details of the Group’s treasury risks are discussed in note 26 to the consolidated financial statements, and include the risks arising from movements in fuel prices.

1.4.7 How we measure our performance (key performance indicators)
The Group uses a wide range of key performance indicators (“KPIs”) across its various businesses and at a Group level to measure the Group’s progress in achieving
its objectives. The most important of these KPIs at a Group level focus on four key areas:
• Profitability
• Organic growth
• Safety
• Service delivery
KPI 1 – profitability
The overall strategy of the Group is intended to promote the success of the Group and create long-term value to shareholders. In the shorter term, we measure
progress towards this overall aspiration by monitoring growth in adjusted earnings per share.
KPI 2 – organic growth

To create long-term value, we aim to deliver organic growth in revenue. We measure progress on this by division, looking at like-for-like growth in passenger
volumes and/or revenue as we consider most appropriate for the particular division.
KPIs 3 and 4 – safety and service delivery

To deliver organic growth in revenue, we aim to provide safe and reliable transport services that people want to use. We measure safety and service delivery by
division using a range of measures appropriate for each business.
Further details on how we calculate these key performance indicators, our targets and our recent performance is summarised below.
Profitability
Adjusted earnings per share is earnings per share before exceptional items and intangible asset expenses (“Adjusted EPS”). Adjusted EPS is calculated based on the
profit attributable to equity shareholders (adjusted to exclude exceptional items and intangible asset expenses) divided by the weighted average number of
ordinary shares ranking for dividend during the relevant period.
Adjusted EPS was as follows:
Year ended 30 April

2015 2014 2013
Target pence pence pence
Adjusted EPS To increase in excess of inflation 26.7p 26.0p 24.6p
Organic growth
The following measures of organic growth are monitored:
• UK Bus (regional operations) – growth in passenger journeys measured as the percentage increase in the number of passenger journeys relative to the
equivalent period in the previous year.
• Rail – growth in passenger miles measured as the percentage increase in the number of miles travelled by passengers relative to the equivalent period in the
previous year.
• UK Bus (London) and North America – growth in constant currency revenue from continuing operations measured as the percentage increase in revenue
relative to the equivalent period in the previous year.
The measures vary by division reflecting differences in the underlying businesses – for example, a significant proportion of the revenue in North America and all
of the revenue in UK Bus (London) is not determined on a “per passenger” basis.
Throughout this Annual Report, references to passenger volume growth for UK Bus or Rail businesses mean growth determined on the basis set out here.
Certain of these growth KPIs involve a degree of estimation in respect of passenger volumes. All of the organic growth KPIs are normalised to exclude businesses
that have not been held by the Group for the whole of the relevant year and the preceding year.
Year ended Year ended Year ended

30 April 2015 30 April 2014 30 April 2013
Target Growth % Growth % Growth %
UK Bus (regional operations) passenger journeys 0.1% 1.3% (0.4)%
UK Bus (London) revenue 6.4% 5.2% 1.0%
UK Rail passenger miles
– South West Trains Positive
ultimate growth
target is zero 3.9% 3.4% 1.8%
– East Midlands Trains each year 6.3% (0.8)% 2.7%
– Virgin Rail Group – West Coast Trains 10.2% 4.5% 0.9%
North America revenue 0.9% 3.9% 8.9%
The increase in passenger journeys at UK Bus (regional operations) in the year ended 30 April 2014 is partly due to more journeys by concessionary passengers that
we believe is largely attributable to better weather (in contrast to the more severe winter weather affecting South West Trains and North America that year), reversing
the weather-related decline in passenger journeys reported for the year ended 30 April 2013. Journeys by fare-paying passengers increased during both years.
The increase in passenger miles at South West Trains during the year ended 30 April 2014 is artificially inflated by changes in travelcard factors used to determine
cross-industry passenger volumes in the London area. The decline in passenger miles at East Midlands Trains during the year ended 30 April 2014 includes the
disruptive effect of engineering works on the rail network, which reversed in the year ended 30 April 2015.

Strategic report
1.4.7 How we measure our performance (key performance indicators) (continued)

Safety
Safety is monitored in various ways, including through a range of KPIs. Businesses acquired or disposed of in the year are excluded from the safety KPIs.
Six of the more important safety KPIs are reported below:
Year ended Year ended Year ended
Target 30 April 2015 30 April 2014 30 April 2013
UK Bus (regional operations) – number of blameworthy

accidents per 1 million miles travelled 19.7 19.1 19.3
UK Bus (London) – number of blameworthy
accidents per 1 million miles travelled ultimate target is zero 28.5 26.2 27.9
US – number of blameworthy accidents per To decrease each year –
1 million miles travelled To decrease
ultimate eachisyear
target zero– 4.4 4.9 4.8
ultimate target is zero
South West Trains – workforce lost time injuries
per 1,000 staff 1.5 1.4 1.5
East Midlands Trains – workforce lost time injuries
per 1,000 staff 1.1 1.3 1.4
Virgin Rail Group – West Coast – workforce lost time

injuries per 1,000 staff 1.8 1.3 1.4
An increased proportion of newer, less experienced bus drivers has contributed to the increased rate of blameworthy accidents in the two UK Bus Divisions
during the year ended 30 April 2015. While the increase tends to be mostly low speed manoeuvring incidents, each incident is investigated and health and
safety remains our top priority. We continue to review our accident prevention and management processes including our training, mentoring and
management of new drivers in order to minimise accident rates.
Service delivery
Our measures of service delivery include:
• UK Bus (regional operations) and UK Bus (London) – reliability measured as the percentage of planned miles to be operated that were operated.
• Rail – punctuality measured on the basis of the Department for Transport’s Public Performance Measure (moving annual average) being the percentage of
trains that arrive at their final destination within 5 minutes (or 10 minutes for inter-city services) of their scheduled arrival time having called at all scheduled
stations. References to rail punctuality throughout this Annual Report refer to punctuality calculated on this basis.
Due to the nature of the North American business, there is no single measure of service delivery for the North American Division as a whole. Service delivery
KPIs are not reported for businesses acquired or disposed of in the year.
The service delivery KPIs were as follows:
Year ended 30 April
2015 2014 2013
Target % % %
UK Bus (regional operations) reliability >99.0% 99.5% 99.5% 99.3%
UK Bus (London) reliability >99.0% 97.2% 98.0% 97.8%
UK Rail punctuality
– South West Trains >90.0% 90.1% 89.5% 91.5%
– East Midlands Trains >85.0% 92.3% 91.2% 92.3%
– Virgin Rail Group – West Coast Trains >85.0% 84.4% 86.1% 83.5%
The deterioration in UK Bus (London) reliability in the year ended 30 April 2015 reflects services not being operated during two days of strike action by bus
drivers and to a lesser extent, increased traffic disruption in London.

1.5 Divisional Performance compensate us for fulfilling our legal obligation to provide free travel to
pensioners and people with disabilities. The rate of concessionary revenue we
1.5.1 UK Bus (regional operations)
receive per passenger journey across the UK has grown by proportionately less
Financial performance than the increase in our cost base. We continue to press the relevant
The financial performance of the UK Bus (regional operations) Division for the authorities to ensure we are properly reimbursed for the bus services we
year ended 30 April 2015 is summarised below: provide.
Revenue from tendered and school services, provided under contract to local
Year to 30 April 2015 2014
authorities, increased for the year as a whole but fell in the second half of the
£m £m Change
year. This was a result of local authorities reducing spending on supported
Revenue 1,045.5 1,012.8 3.2% services due to budget constraints.
Like-for-like* revenue 1,034.4 1,010.0 2.4% As expected, there was a decrease in revenue from contracts to provide bus
Operating profit* 141.1 147.4 (4.3)% services because the previous year’s figure included revenue from specific
Operating margin 13.5% 14.6% (110)bp contract work undertaken to provide buses to replace rail services that were
affected by major engineering work.
Our regional UK Bus operations have grown both like-for-like passenger The decrease in operating margin was built up as follows:
volumes and revenue year-on-year. This has been achieved against a Operating margin – 2013/14 14.6%
background of tight government spending, a variable economy across the
country, and increased competition to public transport from the private car as a Effect of megabus.com (0.7)%
consequence of lower fuel prices. Change in:
The slight decline in the Division’s operating profit includes the effects of our Staff costs (1.1)%
expanding megabus.com inter-city coach services in continental Europe. The Other operating income 0.4%
operating loss from the European business increased by around £4m year-on- Other 0.3%
year reflecting the investment in developing this exciting growth opportunity.
Operating margin – 2014/15 13.5%
The profit for the year is also after taking account of a significant reduction in
the operating profit of our Manchester bus business (principally as a result of The main changes in the operating margin shown above are:
increased competition), and the ongoing legal and other costs related to the • As already explained, the profit for the year reflects the investment in
proposals to implement a bus contracting system in Tyne and Wear, described expanding our megabus.com inter-city coach services in continental
further below. Europe.
We offer the lowest fares of any major bus operator in Britain. Our fuel costs • Staff costs, including pension costs, rose at a faster rate than revenue.
are forecast to fall in the year ending 30 April 2016 and this has enabled us to Even excluding megabus.com, vehicle miles operated increased year-on-
keep fare increases for the year ahead to a minimum, consistent with our long- year, partly due to new development mileage. This resulted in staff costs
term organic growth strategy. increasing by more than inflation but revenue per mile increased by a lower
We have continued to invest in improving the quality of our services, resulting rate. Pensions costs increased by over £5m year-on-year. We will continue
in high levels of customer satisfaction. Our focus remains on building and to review the services and mileage we operate and make appropriate
maintaining sustainable bus networks through constructive partnerships with adjustments to reflect customer demand and the long-term interests of the
local authorities. At the same time, we believe action is needed to address the Group.
worsening effects of traffic congestion in our towns and cities to deliver more • Other operating income increased in the year due to a reassessment and
reliable public transport and ensure buses can fully support the growth strategy reduction of the provision held for token redemptions.
for our regional economies.
Customer experience
Like-for-like revenue, which excludes the revenue earned from contracts to We announced in March 2015 that our passengers are to benefit from an
provide transport for the Commonwealth Games in Glasgow, was built up as investment of more than £80m in around 470 new buses and coaches for
follows: services in the UK and mainland Europe during 2015/16. Many of these
vehicles will be equipped with free wi-fi as we recognise the added value this
provides to customers over travelling by car.
£m £m Change
Independent research published by Transport Focus in March 2015 found that
Commercial on and off bus revenue 628.9 605.9 3.8%
bus passengers rated Stagecoach the best value major bus operator in Britain.
Concessionary revenue 246.6 243.1 1.4%
The Group’s overall satisfaction rating of 88% was amongst the highest in the
Tendered and school revenue 113.5 112.0 1.3%
industry. Our own research has confirmed that catching the bus remains
Contract revenue 41.4 45.5 (9.0)%
significantly cheaper than commuting to work by car despite the fall in fuel
Hires and excursions 4.0 3.5 14.3%
prices. “At the pump” fuel prices fell to their lowest level for four years, but a
Like-for-like revenue 1,034.4 1,010.0 2.4% Stagecoach survey of around 40 key commuter corridors in England, Scotland
and Wales found that the bus was still cheaper than the combined cost of fuel
The Division’s good like-for-like revenue growth continues to come principally and car parking.
from commercial on and off bus revenue, which is revenue that we receive This summer we are planning to launch a package of new digital tools for our
directly from passengers for travel on our bus services. While we have seen a customers, which we believe will provide a strong platform for future growth in
slightly lower rate of growth in commercial revenue in the second half of the bus use. This investment is part of our £11m three-year digital project to
financial year, reflecting a slowing in the rate of growth in the number of transform how we engage with our customers. Passengers will benefit from a
passenger journeys, commercial revenue is still the main driver of revenue range of easy-to-use digital tools to find and buy tickets, search for journeys
growth for the Division. and stops, access comprehensive real-time information about journeys and
Growth in concessionary revenue continues to be modest. Concessionary receive personalised alerts. A unified experience will be provided across all types
revenue is received from local authorities and devolved governments to of devices offering a more personalised service for customers.
* See definitions in note 35 to the consolidated financial statements

Strategic report
The commitment by Stagecoach and the UK’s other biggest bus operators to service in France in March 2015, with a link between Paris and Toulouse, and are
introduce multi-operator smart ticketing in key city regions in England during pleased at plans by the French government to fully deregulate inter-city coach
2015 is progressing well. Initial schemes are already live in Tyne and Wear and journeys over 200km. Most recently, earlier in June 2015, we launched a
Merseyside, with planning also well advanced in Greater Manchester and South domestic megabus.com network in Italy. In the short-term, as we continue the
Yorkshire. This transformational initiative will also benefit West Yorkshire along expansion of our promising megabus.com business, we would expect operating
with the city regions of Birmingham, Nottingham, Leicester and Bristol. We are losses to increase from around £4m in 2014/15 to around £10m in 2015/16.
investigating similar opportunities in city areas across the UK. This is based on our previous experience of megabus.com start-up operations,
where we invested in expanding the business in the early years of megabus.com
Political developments in each of the UK and North America, which are now strong, profitable
Buses provide important transport services to many people across the UK. As businesses.
part of a wider network of public transport, bus services help address
challenges such as road congestion and threats to the natural environment. Outlook
There has always been a range of views on what the balance of public sector The long-term outlook for our commercialised regional bus operations in the UK
and private sector involvement in providing bus services should be and remains positive. We operate in a competitive market and so we look to
debates on that will undoubtedly continue. We firmly believe that the key to continue to differentiate ourselves through low fares and a positive customer
securing the future of Britain's buses is for operators, government and local experience. By working in partnership with government and others, and
authorities to work together to deliver properly planned and sustainable supported by our ongoing investment, we believe we are well placed to grow the
networks. business in the context of rising population, concern for the natural
In recent times, there have been renewed calls for the commercialised bus environment and increased road congestion. In addition to this positive outlook
market in parts of the UK other than London to be replaced by a system of bus in the UK, we are excited by the opportunities we see to develop a substantial
contracts, whereby bus operators bid to operate contracts for the provision of inter-city coach business in continental Europe and we are continuing to invest
bus services let by a local authority. We strongly believe that a stronger, more in growing that business.
integrated transport system can be achieved best and at lower cost to Growth in concessionary and tendered revenue is likely to be minimal in the
taxpayers within the current regulatory framework than would result from short-term as government bodies seek to manage budget constraints, including
franchising of bus services. We would tend to agree that the devolution of minimising the amounts paid to bus operators under concessionary fare
powers within the UK can enhance local decision-making on transport matters schemes for the free travel we provide. We are pleased that the forecast
but in doing so, it is unnecessary to introduce bus contracting or franchising to reduction in our fuel costs in the year ending 30 April 2016 has enabled us to
meet local objectives for bus services. We are already developing new keep fare increases for the year ahead to a minimum, consistent with our long-
proposals that will meet the aspirations of city regions such as Greater term objective to grow passenger volumes through our value fares strategy and
Manchester for stronger bus networks, while retaining the clear benefits of the notwithstanding increases to staff and other costs.
commercial approach to delivering services.
We understand that the recently elected UK Government is generally
1.5.2 UK Bus (London)
supportive of the current regulatory framework for UK bus services outside of Financial performance
London. However, local authorities might still seek to introduce bus
The financial performance of the UK Bus (London) Division for the year ended
contracting using existing legislation or by securing greater power over bus
30 April 2015 is summarised below:
services through devolution of powers from central government. The devolved
governments in Scotland and Wales already have devolved powers over bus Year to 30 April 2015 2014
services. We continue to make the case at both national and local level for £m £m Change
partnership working within the existing commercialised markets.
Revenue and like-for-like revenue 260.6 244.9 6.4%
Proposals to implement a bus contracting system in Tyne and Wear using Operating profit 26.3 23.9 10.0%
existing legislation were referred to a Quality Contracts Review Board by the
North East Combined Authority in October 2014. The Review Board will shortly Operating margin 10.1% 9.8% 30bp
hold hearings as part of its duty to determine whether the proposals meet the
five statutory public interest criteria required to support the introduction of the The Division continues to perform well and we are satisfied with the rates of
contracting scheme. The Review Board expects to issue its opinion in October return that we achieve in London. Our focus is on keeping costs under control
2015. We do not believe the statutory tests have been met and we continue to and aiming to retain and win contracts on acceptable terms.
present robust evidence to the Review Board to demonstrate this. We are clear The operating profit of £26.3m is higher than our recent expectations. That
that a system where bus operators provide the capital and retain the reflects the outcome of our normal year-end review of our insurance
commercial risks would be far more effective at delivering further customer provisions. Although the review did not result in a material change to the
service improvements at lower cost for the public sector while leaving the overall insurance provision for the Group, a re-assessment of the level of
region’s taxpayers free from the huge financial uncertainty of the proposed provision held in respect of historic claims for the UK Bus (London) Division
contracting scheme. resulted in a release from the provision of £3.0m. This was offset by
adjustments to the insurance provisions of other divisions, notably North
Inter-city coach services America. These adjustments are not forecast to recur.
The Group has been pleased with the progress of the megabus.com inter-city Revenue growth has generally been good during the year. As previously
coach operations in mainland Europe. megabus.com now has a fleet of more reported, from 1 October 2013 the Division has no longer received BSOG. This
than 130 coaches covering over 100 destinations in the UK, France, Belgium, the is offset by a corresponding uplift in the contract prices paid to the business by
Netherlands, Luxembourg, Germany, Italy and Spain. We believe we have a Transport for London. Excluding the contract prices uplift, revenue increased
strong brand in a European market with significant opportunities. by 5.1% during the year. Also as previously reported, traffic disruption from
The Group has ordered more than £20m of new coaches to support the road works has adversely affected our quality incentive income, which has
development of megabus.com services in mainland Europe. We have recently moderated overall revenue growth. In light of this, we have implemented
commenced domestic megabus.com coach services within Germany, service performance measures in conjunction with Transport for London and
establishing a network, which now covers 16 destinations. In May 2015, we also we are continuing to discuss with Transport for London how service
started a new Cologne-Lyon-Barcelona service. We launched our first domestic performance can be further improved.

The improvement in operating margin was built up as follows: The operating profit of US$35.3m (£22.1m) is lower than our recent
Operating margin – 2013/14 9.8% expectations. That reflects the outcome of our normal year-end review of our
Effect of change in Bus Service Operators’ Grant (0.2)% insurance provisions. Although the review did not result in a material change
Change in: to the overall insurance provision for the Group, a re-assessment of the level of
Staff costs (1.5)% provision held in respect of historic claims for the North America Division
Fuel costs 1.3% resulted in an adjustment to increase the provision by £3.1m. This was offset
Lease costs (0.8)% by adjustments to the insurance provisions of other divisions, notably UK Bus
Insurance and claims costs 1.1% (London). These adjustments are not forecast to recur.
Gain on sale of property 0.6% Even excluding the year-end insurance provision adjustment, revenue growth
Other (0.2)% and operating profit fell short of the target we had at the start of the financial
year. The sharp fall in fuel prices adversely affected demand for our
Operating margin – 2014/15 10.1% megabus.com inter-city coach services. Megabus.com competes with private
cars, as well as other public transport operators, for inter-city journeys and the
The reduction in quality incentive income referred to earlier has affected
fall in fuel prices made cars more cost-competitive. Nevertheless,
operating margin. Certain costs, such as staff costs, that increase with the
megabus.com remains profitable and over the longer term, we see
vehicle miles operated have increased at a faster rate than revenue as a result of
opportunities to further grow that business.
the reduced quality incentive income.
The BSOG change explained above reduced operating margin by 20 basis points Like-for-like revenue was built up as follows:
year-on-year because although it did not significantly affect reported profit, Year to 30 April 2015 2014 Change
both revenue and operating costs increased by similar amounts as a result of the US$m US$m %
change, meaning profit fell as a percentage of revenue.
Megabus 191.4 177.9 7.6%
Fuel costs reduced relative to last year, reflecting market fuel prices and our fuel
Scheduled service and commuter 246.6 253.1 (2.6)%
hedging programme.
Charter 129.2 128.8 0.3%
Lease costs further increased as a percentage of revenue as we continued our Sightseeing and tour 31.8 33.3 (4.5)%
policy in London of obtaining most new vehicles on operating lease rather than
School bus and contract 86.6 86.6 –
purchasing them outright.
The change in insurance and claims costs reflects the re-assessment of the Like-for-like revenue 685.6 679.7 0.9%
insurance provisions referred to earlier.
Like-for-like revenue growth for the Division was 0.9%, which includes 7.6%
Following the restructuring of the London bus business we acquired in 2010, for megabus.com. In April 2015, we completed the successful introduction of
one of the acquired depots was mothballed. This depot was later made available our megabus.com seat reservation system, which has delivered an additional
to our UK Bus (regional operations) Division to support the delivery of its revenue stream for the business and offers increased flexibility for passengers,
contract work for the London 2012 Olympics. In November 2014, we and we will look for other opportunities which will deliver additional value to
completed the sale of the depot for £5m. our customers and the business.
Bus drivers across London took strike action in February 2015 as part of seeking Overall, the financial performance of the non-megabus businesses was
harmonisation of pay rates across London bus operators. Although no further satisfactory. We continue to focus on good cost control and in April 2015 we
strike action has taken place, the dispute has not been formally resolved, and started the roll-out of GreenRoad eco-driving technology across our vehicle
any further industrial action could affect the financial performance of the UK Bus fleet in North America, following the success of the system in reducing fuel
(London) Division, as well as that of other London bus operators. consumption in our UK operations.
The decrease in operating margin was built up as follows:
Outlook Operating margin – 2013/14 5.5%
The outlook for the London Bus operations is positive with continuing good Change in:
profitability expected from our portfolio of contracts with Transport for London.
Fuel costs 0.6%
We continue to expect some decline in operating margins following the
particularly strong margins of the last few years but still aim to deliver long-term Insurance and claim costs (1.2)%
operating margins in excess of 7%. Other 0.3%
The decline in fuel prices is not forecast to significantly affect the Division’s Operating margin – 2014/15 5.2%
profit in the year to 30 April 2016 due to the broadly offsetting effects on fuel
costs and contract revenue, with changes in revenue being partly linked The Division has benefited from reduced fuel costs in the year, reflecting
contractually to changes in fuel prices. That also means that revenue growth market prices and the Group’s fuel hedging programme.
for year to 30 April 2016 is likely to be modest. The change in insurance and claims costs reflects the re-assessment of the
Looking further ahead, we believe there may be opportunities from Transport insurance provisions referred to earlier.
for London's plans to increase London bus mileage by around 5% between now
and 2020/21 and we welcome this planned, further development of London Outlook
bus services. Revenue growth in North America has slowed in recent months and we remain
cautious on the short-term prospects for megabus.com revenue growth as the
year-on-year fuel price drop persists. We will, however, also see cost savings in
1.5.3 North America
each of the years ending 30 April 2016 and 30 April 2017 from lower fuel
Financial performance
prices. We are not planning any significant expansion of our North America
The financial performance of the North America Division for the year ended megabus.com operations in the coming months but will re-assess the further
30 April 2015 is summarised below: growth opportunities for the business in the second half of the year ending
Year to 30 April 2015 2014 Change 30 April 2016.
US$m US$m % The performance of the non-megabus business across its various service types
Revenue 680.1 685.7 (0.8)% remains steady. The non-megabus business does face a number of trading
Like-for-like revenue 685.6 679.7 0.9% challenges including the impact of the lower fuel prices referred to above on the
Operating profit 35.3 38.0 (7.1)% demand for some services, strong competition in US sightseeing markets, and
the effect of the strong US dollar on the number of European visitors to the US
Operating margin 5.2% 5.5% (30)bp and spending by those visitors. However, overall North America operating

Strategic report
profit for May 2015 was satisfactory and so, at this early stage in the financial CMA Review of Virgin Trains East Coast
year, trading is as expected. A continued focus on a positive experience and The Competition and Markets Authority (“CMA”) is required to review all
value for money for customers will be crucial as we seek to mitigate trading awards of new rail franchises in the UK and so, undertook a review of the award
challenges over the coming months. of the Virgin Trains East Coast franchise. The CMA has now accepted the
undertakings that we offered on the pricing of certain bus and train services to
1.5.4 UK Rail address the limited issues identified by the CMA in respect of the franchise. This
Financial performance brings the review to a close.
The financial performance of the UK Rail Division for the year ended 30 April East Coast open access applications
2015 is summarised below:
Other train operators have applied to the Office of Rail and Road to operate
Year to 30 April 2015 2014 train services on parts of the railway network where the Virgin Trains East Coast
£m £m Change franchise operates. If permission for some or all of these services is granted,
Revenue 1,478.4 1,252.0 18.1% then Virgin Trains East Coast might not be able to operate all of its planned
Like-for-like revenue 1,360.4 1,252.0 8.7% train services and/or its financial performance could be adversely affected. To
Operating profit 26.9 34.3 (21.6)% the extent that from May 2020 Virgin Trains East Coast is unable to operate the
services that the Department for Transport specified as part of the franchise
Operating margin 1.8% 2.7% (90)bp bidding process, then the business would be financially compensated under the
terms of its contractual arrangements with the Department. The business
We were delighted to begin operating the new Virgin Trains East Coast rail
would not necessarily be compensated for being unable to operate services
franchise from 1 March 2015 and we are pleased with its progress so far. The
prior to May 2020, for being unable to operate services that it planned to
reported revenue and operating profit above includes 100% of the new Virgin
provide over and above the minimum specified by the Department and/or for
Trains East Coast franchise from 1 March. Virgin’s 10% minority interest in the
the effects of any increased competition on the services it is able to operate.
profit after tax of the franchise is separately reported in the consolidated
We do not consider that the proposed open access services meet the criteria for
income statement.
approval and at this stage, while acknowledging the risk, we have not materially
The Group’s other two major rail franchises, South West Trains and East changed our forecasts for the business as a result of the progress of the open
Midlands Trains, have performed in line with our expectations. This reflects our access applications.
focus on growing revenue and controlling costs to mitigate the substantial
increases in premia payments we have committed to deliver to the Department Franchising programme
for Transport. There is encouraging momentum in the UK rail sector, with a number of UK
Revenue growth in UK Rail has been strong with like-for-like revenue up 8.7%. franchises having been awarded over the last two years and several due to be
This partly reflects the recovery of revenue foregone at East Midlands Trains in open for competition over the next few years.
the prior year as a result of major engineering work in the Nottingham area but We recently submitted our bid for the new TransPennine Express franchise
also reflects good growth in underlying passenger volumes. where we are one of three bidders shortlisted for the contract. An
As expected, the operating margin fell in the year. This is consistent with announcement of the successful bidder is expected later in 2015, with the
comments we have made in previous years that as we approach the end of the contract expected to start in February 2016.
existing period of our two wholly-owned franchises, the financial performance Earlier this month, June 2015, the Group’s joint venture with Abellio was
of the businesses becomes more challenging compared to that forecast in the shortlisted by the Department for Transport to bid for the new East Anglia
original bids for the franchises. This reflects substantial increases in the like-for- franchise. The current Greater Anglia franchise has been operated by Abellio
like amounts payable to the Department for Transport. since February 2012. Abellio East Anglia Limited (“AEAL”) is one of three
bidders shortlisted for the franchise. Stagecoach holds a 40% share of Anglia
Customer experience Rail Holdings Limited (“ARHL”), the 100% parent company of AEAL, with
In March 2015, the Group’s South West Trains business agreed a Deed of Abellio holding 60% of ARHL. Shortlisted bidders are expected to be invited to
Amendment to its franchise with the Department for Transport. The Deed of submit detailed proposals later this year and the new operator is expected to
Amendment provides for accelerated investment of around £50m to deliver take over managing the franchise in October 2016.
passenger improvement initiatives between now and February 2017. It means
The Group has also submitted proposals to the Department for Transport as part
customers do not have to wait for a new franchise to benefit from these
of previously announced government plans for direct awards at East Midlands
initiatives, while taxpayers will gain better value from public investment.
Trains and South West Trains. Our proposals for both franchises seek to build on
Further details of the benefits for customers were set out in our announcement
the improvements delivered to date, providing more benefits for customers,
of 25 March 2015.
good value for taxpayers and an appropriate return for investors. The East
Our East Midlands Trains business launched a new improved timetable between Midlands Trains franchise is due to end in October 2015 and negotiations are
Lincoln and Nottingham in May 2015 in partnership with the Department for continuing in respect of a direct award of a new franchise to at least October
Transport, local authorities, business clubs and two local enterprise 2017. The current South West Trains franchise is due to end in February 2017
partnerships. The new timetable provides faster journey times and more and as long ago as March 2013, the Department for Transport announced its
services. We have launched a new complimentary breakfast offer at our five plans for the direct award of a new franchise to April 2019. Progress in agreeing
main First Class Lounges at stations and also introduced a new passenger that direct award has been disappointingly slow. We are still not close to
shuttle service linking East Midlands Parkway railway station with East Midlands concluding an agreement and indeed, there is no certainty that an agreement
Airport. A new £60m transport hub has been opened at Nottingham Station, will be reached.
providing an interchange with different forms of transport, connecting trains, a
We will continue to evaluate opportunities to bid for UK rail franchises on a
950-space multi-storey car park and Nottingham’s tram network.
case-by-case basis. We seek new opportunities that offer the right balance of
Work has started to deliver a transformation of the customer experience at risk and reward, provide scope for us to improve services to customers, and
Virgin Trains East Coast as part of a £140m investment programme for the which are compatible with maintaining an acceptable balance of the Group’s
franchise. We have already implemented a 10% cut in Standard Anytime fares portfolio between bus and rail businesses.
on long-distance journeys to and from London and work is underway on a
£21m refresh of the existing train fleet. Recently we launched a pilot of Alliance with Network Rail
paperless mobile ticketing, allowing passengers to travel using a barcode held South West Trains and Network Rail have pioneered over the past three years
on a smartphone or tablet, and we have plans to expand the system to more the first deep alliance on the UK rail network, which has sought to deliver
routes if successful. We look forward to delivering further benefits as the greater integration between train operations and infrastructure management.
franchise develops, including more seats, new connections, new trains and The close working relationship between the two parties has enabled an
faster journey times. improved, more customer-focused railway as well as some efficiency savings.

Based on what both parties have learned over this period, South West Trains revenue and cost risk. The business has achieved good passenger revenue
and Network Rail are now re-shaping their relationship. The objective is to growth and taxpayers benefit through profit share payments to the
continue to work closely and collaboratively in the areas that most benefit the Department for Transport. Under the temporary management contract
railway and its customers, while discontinuing aspects of the current Alliance arrangement, Virgin Rail Group contractually earned a management fee
where the benefits are less clear. The existing formal Alliance governance equivalent to 1% of revenue from the West Coast rail franchise. As a result,
structures, including the Alliance Governance Board and the single joint prior year profitability was unusually low. Profit in the current year is more
management team, will shortly be replaced with new arrangements in the consistent with other commercial rail franchises.
specific areas which we and Network Rail believe will continue to deliver the
The Group’s share of the results of Virgin Rail Group is based on the
most benefits. Under the previous financial arrangements, variances relative to
management accounts of Virgin Rail Group to the period end that falls closest
agreed financial baselines were shared between the parties. Moving forward,
to the Group’s balance sheet date of 30 April. The Group’s results for the year
new appropriate commercial arrangements will be put in place to reflect the re-
ended 30 April 2015 incorporate its share of Virgin Rail Group’s results for the
shaped relationship. The new arrangements reflect the current regulatory
period from 27 April 2014 to 2 May 2015. The impact on the Group’s share
framework that applies to UK railways and the different operating models of the
of Virgin Rail Group’s profit and net assets of using this period rather than the
two parties. We are confident that these changes will prioritise the right areas,
reduce unnecessary bureaucracy and allow South West Trains and Network Rail year ended 30 April 2015 is not material. However, the revenue figure
to focus on working together on the matters that are most likely to offer the reported above includes the benefit of an extra week in Virgin Rail Group’s
greatest benefits to customers. results for 2014/15 versus 2013/14. Excluding this, the estimated revenue
growth was 7.7%.
Outlook
Business developments
We have participated in the UK Rail market and reported a profit every year
since the market was privatised in the 1990s. We expect to continue to play a During the year, Virgin Rail Group has delivered further improvements for
major part in UK rail over the long-term notwithstanding the potential for passengers. This has included the launch of two new direct Virgin Trains
individual rail franchises to be won and lost. Following the agreement of the services between London and Blackpool, and London and Shrewsbury. Work
new Virgin Trains East Coast franchise, we now have a substantial rail business is also well underway on a programme to convert one first class carriage in
in place for at least the next eight years. The new franchise is expected to make each of 21 nine-carriage Pendolino trains to Standard Class. The project,
a significant operating profit contribution in the year ending 30 April 2016, which is expected to be completed in September 2015 and includes a major
reflecting our programme of investment to grow the business by transforming interior refresh and deep clean of the trains, will create significant additional
the customer experience. standard class seating capacity for customers.
As explained earlier, we are negotiating with the Department for Transport to The upgrade to onboard wi-fi is almost complete and is already providing a
finalise a new East Midlands Trains franchise for the period through to at least significantly improved service to passengers. In addition, Virgin Rail Group
October 2017. continues to pursue the possibility of trackside wi-fi infrastructure which
We have previously reported that as we approach the end of the existing period would provide free and fast wi-fi to all customers.
of our South West Trains franchise, the financial performance of the business Passengers booking via the Virgin Trains website or mobile app now earn
becomes more challenging. We remain focused on growing revenue and Nectar points on their purchases, and more than £20m is being spent on
controlling costs to offset increased premia payments, to the extent possible. station improvements such as refreshed waiting rooms, more passenger
The new Virgin Trains East Coast franchise, as well as the potential direct award information help points and an improved website.
of new East Midlands Trains and South West Trains franchises, present
Outlook
profitable opportunities to further enhance the customer experience and deliver
We expect Virgin Rail Group to continue to perform strongly and we will see the
value for money to Government. We will, in addition, assess the opportunity to
full-year effect of the new franchise in the year ending 30 April 2016.
bid for other franchises as these are tendered over the coming years.
1.5.5.2 Twin America

1.5.5 Joint Ventures Financial performance
1.5.5.1 Virgin Rail Group The financial performance of the Group’s Twin America joint venture
Financial performance (excluding exceptional items) for the year ended 30 April 2015 is summarised
The financial performance of the Group’s Virgin Rail Group joint venture below:
(excluding exceptional items) for the year ended 30 April 2015 is summarised Year to 30 April 2015 2014
below: 60% share US$m US$m Change
Year to 30 April 2015 2014 Revenue 74.7 81.6 (8.5)%

49% share £m £m Change Operating profit 3.4 9.1 (62.6)%
Revenue 510.3 465.6 9.6% Finance costs (net) (0.2) – –%
Operating profit 28.0 2.6 976.9% Taxation – (0.3) (100.0)%
Net finance income – 0.3 (100.0)% Profit after tax 3.2 8.8 (63.6)%
Taxation (5.7) (0.9) 533.3%
Operating margin 4.6% 11.2% (660)bp
Profit after tax 22.3 2.0 1,015.0%
Twin America has faced tough trading conditions as a result of a competitive
Operating margin 5.5% 0.6% 490bp
New York sightseeing market, among other factors, and that is reflected in
Virgin Rail Group is seeing a continuing strong performance from its West the decline in profit reported above.
Coast rail franchise. The new commercial franchise commenced in June 2014
and is planned to run until at least 31 March 2017. Furthermore, we continue Litigation
to believe there is a compelling case for the Department for Transport to In December 2012, the United States Department of Justice and the Attorney
exercise the discretion that it has to extend the contract, on pre-agreed terms, General of the State of New York initiated legal proceedings against Twin
by an additional year to 31 March 2018. The commercial franchise replaced a America and others alleging that the formation of Twin in 2009 was
management contract, which was in place from December 2012 to June anticompetitive. Several private actions were also filed in relation to this
2014. Under the commercial franchise, Virgin Rail Group takes the majority of matter.

Strategic report
In March 2014, Twin America and lawyers for the private plaintiffs reached 1.6.3 Net finance costs
agreement on a settlement of US$19m (without any admission of liability by Net finance costs for the year ended 30 April 2015 were £42.1m (2014:
Twin America). The court has approved this settlement. The settlement binds £42.6m) and can be further analysed as follows:
all claimants except those that expressly opted out of the class of plaintiffs.
The deadline for opt-outs and for objections to the settlement has passed. Year to 30 April 2015 2014
Four individuals opted out, and there were no objections. £m £m
We are pleased that a settlement has now also been agreed in principle with Finance costs
the US Department of Justice and the New York Attorney General's office. That Interest payable and other facility costs on bank loans,
settlement is subject to court approval. The settlement envisages cash loan notes, overdrafts and trade finance 7.9 7.2
payments by the defendants of US$7.5m and the relinquishment of certain Hire purchase and finance lease interest payable 2.5 3.5
bus stop rights. We have previously recognised costs associated with the Interest payable and other finance costs on bonds 27.3 28.0
litigation as exceptional items. We have recognised an exceptional pre-tax Unwinding of discount on provisions 3.8 3.9
charge of £2.5m in the second half of the year ended 30 April 2015 in respect Interest charge on defined benefit pension schemes 3.3 4.6
of the Group's share of the additional costs associated with this litigation. For
the year as a whole, the Group has recorded exceptional pre-tax charges of 44.8 47.2
£5.8m in respect of litigation related to Twin America. Related to the Twin Finance income
America litigation involving the Group’s North America Division, the Interest receivable on cash (1.5) (3.2)
Department of Justice is continuing to investigate the conduct of company Effect of interest rate swaps (1.2) (1.4)
personnel in responding to discovery obligations in the investigation and (2.7) (4.6)
litigation. The Department of Justice has not taken any enforcement action
related to these issues, and the Group is co-operating with the investigation. Net finance costs 42.1 42.6
Trading remains challenging in the highly competitive New York tourism and
sightseeing market and Twin America’s management will now focus on 1.6.4 Taxation
seeking to re-build the business. The effective tax rate for the year ended 30 April 2015, excluding exceptional
items, was 19.0% (2014: 16.8%).
1.6 Other financial matters The prior year effective tax rate was depressed by adjustments in respect of
1.6.1 EBITDA, depreciation and intangible asset expenses the utilisation of previously unrecognised tax losses and the impact of the
Earnings from continuing operations before interest, taxation, depreciation, reduction in the rate at which deferred tax is calculated. As a result, the
intangible asset expenses and exceptional items (pre-exceptional EBITDA) effective tax rate increases in the year to closer to the new standard rate of UK
amounted to £353.3m (2014: £340.2m). Pre-exceptional EBITDA can be corporation tax of 20.0%.
reconciled to the consolidated financial statements as follows: The tax charge can be analysed as follows:
Year to 30 April 2015 2014 Year to 30 April 2015 Pre-tax profit Tax Rate
£m £m £m £m %
Total operating profit before Excluding intangible asset expenses 191.0 (37.1) 19.4%
intangible asset expenses and and exceptional items
exceptional items 227.1 223.3 Intangible asset expenses (11.9) 3.1 26.1%
Depreciation 120.1 115.7 179.1 (34.0) 19.0%
Add back joint venture
finance income & tax 6.1 1.2 Exceptional items (7.9) 2.3 29.1%
Pre-exceptional EBITDA 353.3 340.2 171.2 (31.7) 18.5%
Reclassify joint venture taxation for
The income statement charge for intangible assets decreased from £14.0m to
reporting purposes (6.0) 6.0
£11.9m, principally due to certain intangible assets becoming fully amortised
during the year, partly offset by the amortisation of intangible assets in respect of Reported in income statement 165.2 (25.7) 15.6%
the new Virgin Trains East Coast franchise.
1.6.5 Fuel costs

1.6.2 Exceptional items The Group’s operations as at 30 April 2015 consume approximately 406.0m
The following exceptional items were recognised in the year ended 30 April litres of diesel fuel per annum. As a result, the Group’s profit is exposed to
2015: movements in the underlying price of fuel. The Group’s fuel costs include the
• One of our US businesses failed to retain certain contracts to operate bus costs of delivery and duty as well as the costs of the underlying product.
services on behalf of a local authority when those contracts were re- Accordingly, not all of the cost varies with movements in oil prices.
tendered. As a result, it ceased operations at one of its depots, which is Following the sharp fall in fuel prices, the Group has hedged a greater
leased. A provision of £2.1m has been recorded in respect of the leased proportion of its projected fuel usage beyond the next twelve months than it
depot as, following the cessation of operations at the depot, the lease was would ordinarily do. The proportion of the Group’s projected fuel usage that
determined to be onerous because the forecast, unavoidable costs of is now hedged using fuel swaps is as follows:
meeting the Group’s obligations under the lease exceeded the forecast
Year ending 30 April 2016 2017 2018 2019 2020
economic benefits forecast to be received as a result of the lease.
• We expensed amounts in previous years as exceptional items in respect of Total Group 88% 82% 43% 2% <1%
the anticipated legal costs and settlement amounts related to the Twin
The Group has no fuel hedges in place for periods beyond 30 April 2020.
America litigation explained in section 1.5.5.2. As a result of the prolonged
nature of the litigation process, we incurred or expect to incur further legal
costs in excess of those previously expensed. In addition, as explained in 1.6.6 Cash flows and net debt
section 1.5.5.2, we have now reached a settlement agreement in principle Net debt (as analysed in note 30(c) to the consolidated financial statements)
with the US Department of Justice and the New York Attorney General's decreased from £461.6m at 30 April 2014 to £381.3m at 30 April 2015, due to
office. Additional pre-tax expenses of £5.8m have therefore been the Group’s continued strong cash generation and the timing of rail cash flows.
recognised in the Group’s consolidated income statement for the year The cash held by the train operating companies at any point in time is
ended 30 April 2015. affected by the timing of rail industry cash flows, which can be individually

substantial. As a result of that, the consolidated net debt as at 30 April 2015 The Group’s net debt at 30 April 2015 is further analysed below:
is lower than a “normalised” level of net debt. In the first few days of May Fixed Floating Total
2015, the train operating companies made cash payments of approximately rate rate
£100m. £m £m £m
Net cash from operating activities before tax for the year ended 30 April 2015 Unrestricted cash – 95.8 95.8
was £346.4m (2014: £268.5m) and can be further analysed as follows: Cash held within train operating
Year to 30 April 2015 2014 companies – 281.0 281.0
£m £m Restricted cash – 18.8 18.8
EBITDA of Group companies before Total cash and cash equivalents – 395.6 395.6
exceptional items 321.8 330.2 US Notes – (97.3) (97.3)
(Gain)/loss on disposal of property, plant and equipment (2.3) 2.1 Sterling bond (400.0) – (400.0)
Equity-settled share based payment expense 2.2 2.2 Sterling hire purchase
Working capital movements 46.0 (40.7) and finance leases (3.6) (50.4) (54.0)
Net interest paid (35.8) (33.5) US dollar hire purchase and
Dividends from joint ventures 14.5 8.2 finance leases (34.0) – (34.0)
Net cash flows from operating activities before taxation 346.4 268.5 Loan notes – (19.5) (19.5)
Bank loans – (172.1) (172.1)
Net cash from operating activities before tax was £346.4m (2014: £268.5m) Net debt (437.6) 56.3 (381.3)
and after tax was £315.5m (2014: £248.3m). Net cash outflows from
investing activities were £151.5m (2014: £121.8m), which included £Nil The split between fixed and floating rate debt shown above takes account of
(2014: £5.5m) in relation to the acquisition of businesses. Net cash used in the effect of interest rate swaps in place as at 30 April 2015.
financing activities was £11.5m (2014: £146.3m).
1.6.7 Liquidity
The net impact of purchases of property, plant and equipment for the year on
The Group’s financial position remains strong and is evidenced by:
net debt was £188.8m (2014: £160.9m). This primarily related to
expenditure on passenger service vehicles, and comprised cash outflows of • The ratio of net debt at 30 April 2015 to pre-exceptional EBITDA for the
£182.4m (2014: £154.2m) and new hire purchase and finance lease debt of year ended 30 April 2015 was 1.1 times (2014: 1.4 times).
£6.4m (2014: £6.7m). In addition, £47.9m (2014: £42.0m) cash was received • Pre-exceptional EBITDA for the year ended 30 April 2015 was 8.4 times
from disposals of property, plant and equipment. (2014: 8.0 times) net finance charges (including joint venture finance
The net impact of purchases and disposals of property, plant and equipment income and finance costs).
on net debt, split by division, was: • Undrawn, committed bank facilities of £298.8m at 30 April 2015 (2014:
£342.1m) were available to be drawn as bank loans with further amounts
£m £m available only for non-cash utilisation. In addition, the Group continues to
have available asset finance lines.
UK Bus (regional operations) 119.1 85.5
UK Bus (London) (2.1) 3.0
• The three main credit rating agencies continue to assign investment grade
credit ratings to the Group.
North America 27.3 30.4
UK Rail (3.4) –
1.6.8 Major financing transactions
140.9 118.9 During the year, the Group entered into various hire purchase and finance
The purchases in the UK Bus (regional operations) Division includes £14.4m lease arrangements for new assets as described in note 30(d) to the
spent on vehicles for the expanding megabus.com inter-city operations in consolidated financial statements.
continental Europe. The Group entered into £535m of new bank facilities in October 2014. The
The movement in net debt, showing train operating companies separately, was: new facilities have been committed for a period of five years to October 2019
with the potential for them to be extended by up to a further two years.
Year to 30 April 2015 Train operating
These facilities replace previous bank facilities that were due to expire in
companies Other Total
February 2016.
£m £m £m
The Group’s is already progressing plans to re-finance its £400m bonds due
EBITDA of Group companies
to mature in December 2016.
before exceptional items 49.4 272.4 321.8
(Gain)/loss on disposal of property, plant The following other new financing arrangements were put in place during the
and equipment – (2.3) (2.3) year ended 30 April 2015 and subsequently:
Equity-settled share based payment • In November 2014, a new c.£20m three-year rail performance bond
expense 0.4 1.8 2.2 arrangement and a new c.£83m bank guarantee of a “parent company
Working capital movements 68.8 (22.8) 46.0 support” inter-company loan commitment were entered into in
Net interest paid 0.6 (36.4) (35.8) connection with the new Virgin Trains East Coast franchise.
Dividends from joint ventures – 14.5 14.5 • In February 2015, two new one-year rail bonding arrangements of c.£74m
Net cash flows from operating and c.£6m were entered into to replace two arrangements that were due
activities before taxation 119.2 227.2 346.4 to expire in March 2015.
Inter-company movements 1.1 (1.1) – • In May 2015, a US$85m bank facility, used for issuing US$ letters of credit,
Tax paid (10.8) (20.1) (30.9)
was increased in size to US$90m.
Investing activities 0.7 (158.6) (157.9)
Financing activities – (63.0) (63.0) • The Group entered into new operating lease commitments totalling
Foreign exchange/other – (14.3) (14.3) £382.9m in the year ended 30 April 2015 in respect of rolling stock and
new vehicles.
Movement in net debt 110.2 (29.9) 80.3
Opening net debt 170.8 (632.4) (461.6)
1.6.9 Net assets
Closing net debt 281.0 (662.3) (381.3) Net assets at 30 April 2015 were £95.0m (2014: £79.3m).

Strategic report
1.6.10 Retirement benefits See note 26 to the consolidated financial statements, for details of
The reported net assets of £95.0m (2014: £79.3m) that are shown on the • the Group’s exposure to financial risks;
consolidated balance sheet are after taking account of net pre-tax retirement • the Group’s treasury risk management;
benefit liabilities of £160.5m (2014: £115.8m), and associated deferred tax • the Group’s management of interest rate risk;
assets of £35.3m (2014: £23.1m). • the Group’s fuel hedging;
The Group recognised net pre-tax actuarial losses of £65.5m in the year • the Group’s management of foreign currency risk; and
ended 30 April 2015 (2014: £Nil) on Group defined benefit schemes. • the Group’s management of credit risk.
The actuarial losses and the increase in net pre-tax retirement benefit
liabilities principally reflects the fall in corporate bond yields in the year, which 1.6.13 Critical accounting policies and estimates
in turn affect the discount rate used to discount pension scheme liabilities. The Group’s material accounting policies are set out in note 1 to the
The return on pension scheme assets for the year was good but not sufficient consolidated financial statements.
to fully offset the impact of the reduced discount rate. Preparation of the consolidated financial statements in accordance with
International Financial Reporting Standards (“IFRS”) as adopted by the
1.6.11 Capital European Union requires directors to make estimates and assumptions that
The Group regards its capital as comprising its equity, cash, gross debt and affect the reported amounts in the consolidated financial statements and
any similar items. As at 30 April 2015, the Group’s capital comprised: accompanying notes. Actual outcomes could differ from those estimated.
The Directors believe that the accounting policies and estimation techniques
As at 30 April 2015 2014 discussed below represent those that require the greatest exercise of
£m £m judgement. The Directors have used their best judgement in determining the
Market value of ordinary shares in issue estimates and assumptions used in these areas but a different set of
(excluding shares held in treasury) 2,086.8 2,134.6 judgements could result in material changes to the Group's reported financial
performance and/or financial position. The discussion below should be read
Cash 395.6 240.3 in conjunction with the full statement of accounting policies.
Gross debt (776.9) (701.9)
Pensions
Net debt (see section 1.6.6) (381.3) (461.6)
The determination of the Group’s pension benefit obligation and expense for
defined benefit pension schemes is dependent on the selection by the
The Group manages its capital centrally. Its objective in managing capital is to
Directors of certain assumptions used by actuaries in calculating such
optimise the returns to its shareholders whilst safeguarding the Group’s
amounts. Those assumptions include the discount rate, the annual rate of
ability to continue as a going concern and as such its ability to continue to
increase in future salary levels and mortality rates. The Directors’ assumptions
generate returns for its shareholders. The Group also takes account of the
are based on actual historical experience and external data. While we believe
interests of other stakeholders when making decisions on its capital structure.
that the assumptions are appropriate, significant differences in actual
The capital structure of the Group is kept under regular review and will be experience or significant changes in assumptions may materially affect the
adjusted from time to time to take account of changes in the size or structure pension obligation and future expense.
of the Group, economic developments and other changes in the Group’s risk
profile. The Group will adjust its capital structure from time to time by any of Insurance
the following: issue of new shares, dividends, return of value to shareholders The Group receives claims in respect of traffic incidents and employee
and borrowing/repayment of debt. There are a number of factors that the incidents. The Group protects against the cost of such claims through third
Group considers in evaluating capital structure. The Directors’ principal focus party insurance policies. An element of the claims is not insured as a result of
is on maintaining an investment grade credit rating. As well as considering the “excess” or “deductible” on insurance policies. Provision is made for the
the measures applied by credit rating agencies, the other principal ratios that estimated cost to the Group (net of insurance recoveries) to settle claims for
the Directors consider are (1) Net Debt to EBITDA, (2) EBITDA to interest and incidents occurring prior to the balance sheet date. The estimation of the
(3) Net Debt to market capitalisation. It is a matter of judgement as to what balance sheet insurance provisions is based on an assessment of the expected
the optimal levels are for these ratios. settlement on known claims together with an estimate of settlements that
will be made in respect of incidents occurring prior to the balance sheet date
It is the Group’s objective to maintain an investment grade credit rating. The
but for which claims have not been reported to the Group. The eventual
Group is currently rated investment grade by three major, independent credit
settlements on such claims may differ from the amounts provided for at the
rating agencies. That enhances our ability to access cost-effective funding on
balance sheet date. This is generally of greater risk in (a) “younger” operations
a timely basis and enables us to demonstrate financial strength when bidding
with a shorter claims history from which to make informed estimates of
for UK rail franchises and other contracts. The financial standing of interested
provisions and (b) operations, notably the United States, where the
parties is considered by government in determining the short list of bidders
deductible levels are generally higher than for the UK operations.
for a UK rail franchise.
The Group has no current plan to return additional funds to shareholders. It Taxation
keeps its capital structure under review and has increased the proposed The Group’s tax charge is based on the pre-tax profit for the year and tax rates
dividend for the year by over 10%. in force. Estimation of the tax charge requires an assessment to be made of
the potential tax consequences of certain items that will only be resolved
1.6.12 Treasury policies and objectives when agreed by the relevant tax authorities. Assessment of the likely
outcome is based on historical experience, professional advice from external
Risk management is carried out by a treasury committee and a central
advisors, and the current status of any judgmental issues. However, the final
treasury department (“Group Treasury”) under policies approved by the
tax cost to the Group may differ from the estimates.
Board. Group Treasury identifies, evaluates and hedges financial risks in co-
operation with the Group’s operating units. The Board provides written Litigation
principles for overall treasury risk management, as well as written policies The Group is from time to time party to litigation. The nature of litigation is
covering specific areas, such as foreign exchange risk, interest rate risk, credit such that there can be uncertainty in estimating the amounts that the Group
risk, use of derivative financial instruments and investing excess liquidity. will ultimately receive or pay. Assessment of the likely outcomes is based on
The funding policy is to finance the Group through a mixture of bank, lease legal advice and past experience. However, the final outcomes may differ from
and hire purchase debt, capital markets issues and cash generated by the those reflected in the financial statements. Contingent liabilities are disclosed
business. in the financial statements to the extent required by accounting standards.

Acquired customer contracts and onerous contracts 1.7 Current trading and outlook
The Group has a number of contractual commitments most significantly in The Group has had a satisfactory good start to its financial year ending 30 April
respect of its rail franchises and its London bus business. In certain 2016, and while it is still early in the financial year, overall trading for the
circumstances, IFRS requires a provision to be recorded for a contract that is financial year to date is consistent with our expectations. We have commented
“onerous” or when acquired as part of a business combination, that is on the outlook for each of our key divisions in sections 1.5.1 to 1.5.5.
unfavourable to market terms. A contract is considered onerous where it is
probable that the future economic benefits to be derived from the contract are The long-term outlook for public transport remains positive. Increasing public
less than the unavoidable costs under the contract. Determining the amount transport use can help address challenges such as rising road congestion and
of any contract provision necessitates forecasting future cash flows and the impact of transport on the natural environment. That is all consistent
applying an appropriate discount rate to determine a net present value. There with our strategy of seeking to deliver further organic growth in our
is uncertainty over future cash flows. Forecasts of cash flows for this purpose passenger volumes, including through offering high quality, value for money,
are consistent with management’s plans and forecasts. The forecast of future bus and rail services as alternatives to travelling by car.
cash flows and the estimation of the discount rate involves a significant degree
of judgment. Actual results can differ from those assumed and there can be no 1.8 Corporate Social Responsibility
absolute assurance that the assumptions used will hold true. Our business and our people make a significant contribution to society. On
average, more than three million journeys a day are made on our transport
Goodwill and impairment
services and in enabling those journeys, we:
In certain circumstances, IFRS requires property, plant, equipment and
intangible assets to be reviewed for impairment. When a review for • Connect people, families and communities
impairment is conducted, the recoverable amount is assessed by reference to • Help individuals access health, education, employment and leisure
the net present value of the expected future cash flows of the relevant cash • Support jobs, the skills base and economic growth
generating unit (“CGU”) or net realisable value, if higher. The discount rate • Play our part in tackling climate change
applied in determining the present value of future cash flows is based on the Like all businesses, we want to generate value for our employees and our
Group’s estimated weighted average cost of capital with appropriate shareholders, but we want to do that responsibly and in partnership with all
adjustments made to reflect the specific risks associated with the CGU. our stakeholders. Our responsible approach to business includes taking an
Forecasts of cash flows for this purpose are consistent with management’s appropriate approach to our people and our customers; safety and security;
plans and forecasts. The forecast of future cash flows and the estimation of the the accessibility and affordability of our transport services; environmental
discount rate involves a significant degree of judgement. Actual results can stewardship and performance; good governance; and building community
differ from those assumed and there can be no absolute assurance that the relationships. Our strong customer focus, commitment to sustainability, and
assumptions used will hold true. sector-leading reputation has been independently recognised by a range of
organisations. Right across our global operations, we will continue to work
Property, plant and equipment with our stakeholders to become a better employer, a stronger business and a
Property, plant and equipment, other than land, are depreciated on a straight- more effective community partner.
line basis to write off the cost or valuation less estimated residual value of
We have published separate documents setting out our approach to
each asset over their estimated useful lives. Useful lives are estimated based
corporate social responsibility. These documents and comprehensive
on a number of factors, including the expected usage of the asset, expected
information on our initiatives can be found on our website at the following
deterioration and technological obsolescence. If another depreciation
link: http://www.stagecoach.com/sustainability.aspx.
method (for example, reducing balance) was used or different useful lives or
residual values were applied, this could have a material effect on the Group’s This section includes just a small number of examples of our work to
depreciation charge and net profit. demonstrate the steps we are taking to meet our responsibilities.
The estimates currently applied in respect of the useful lives and residual
values of property, plant and equipment at the Group’s two wholly-owned 1.8.1 Living our values
train operating companies would result in a residual net book value of the Stagecoach Group has a set of core values and policies, which are detailed in
assets at the end of the applicable, current rail franchises. To the extent that our Group Code of Conduct. Stagecoach promotes a culture of openness
the planned awards of further two-year franchises to each of the train across all its businesses and our objective is to ensure the highest standards of
operating companies occur then the assets will be further depreciated during probity and accountability. The Code, which was updated in 2015, sets out
the period of those new franchises. The net book values of the assets might key principles and provides practical examples and guidance to help shape
be recovered through a sale of the assets to a new train operator appointed employees’ corporate behaviour across all levels of the business. The Board of
by the Department for Transport to operate the train services covered by the Directors remains committed to ensuring appropriate processes, controls,
relevant franchise. Such a sale of assets could occur either at the end of the governance and culture exists to support the maintenance of these values
current franchises or at the end of the planned additional two-year franchises. and behaviours. The Code of Conduct is subject to periodic review by the
The estimates regarding useful lives and residual values involve making Group Compliance Committee and the Audit Committee. A copy of our Code
assumptions on the likelihood of the new franchises and on the likely sales of Conduct can be found at the following link:
values negotiated for assets with successor train operators and so involve an http://www.stagecoach.com/code-of-conduct.pdf.
increased level of judgement. In addition, we have a Speaking Up policy, also updated in 2015, which is
designed to ensure that employees can raise serious concerns without fear of
Rail contractual positions victimisation, discrimination or disadvantage. A copy of the document is
The UK Rail industry is subject to a complex matrix of contractual available at http://www.stagecoach.com/speakingup.pdf.
relationships. The Group’s train operating companies are party to contractual
relationships with, amongst others, the UK Department for Transport,
Network Rail and rolling stock lessors. The nature of these contracts is such
that there can be uncertainty and/or disagreement as to amounts receivable
or payable by the Group in accordance with the contracts. The Group makes
estimates of the amounts receivable or payable taking account of the
available, relevant information. Actual outcomes can differ from the
estimates made by the Group and there can be no absolute assurance that
the assumptions made by the Group will hold true.

Strategic report
1.8.2 Supporting and recognising our people The equivalent figures as at 30 April 2014 were:
Our employees are fundamental to the success of the Group and we
encourage diversity across our business. We believe in empowering and Population Male Female Total % %
engaging with our people, promoting a positive culture where employees Male Female
are treated with respect and given equal opportunity to develop. This means Board 8 2 10 80.0% 20.0%
that we are able to provide a better service to our customers. Senior management 91 17 108 84.3% 15.7%
We have initiatives in place designed to nurture the next generation of Whole workforce 30,413 5,057 35,470 85.7% 14.3%
talent to support the business and help our people achieve their potential.
We have strong vocational training programmes in our bus and rail 1.8.5 Promoting safety
businesses and we continue to invest in developing our people. This year, Safety is at the heart of our business and our overall approach is given
our UK Bus business was named Large Employer of the Year at the People 1st direction through the Group’s Strategic Safety Framework. At our bus and
Apprenticeship Awards. Our Group-wide graduate development initiative rail operations we have a strong focus on employee training, accident
continues to produce directors, senior managers and experts in operations reduction, regulatory compliance and security preparedness. Health and
and engineering. We also have programmes in place to promote the health safety processes and performance are monitored and reported on across the
and well-being of our people. Our annual Stagecoach Champions Awards, Group with action taken should there be a need to address issues within our
which are open to all employees, recognise excellence in the areas of safety, procedures. Our Health, Safety and Environmental Committee, chaired by a
community, health, customer service, environment and innovation. Further non-executive director, considers this area of the business and monitors a
information is available here: http://www.stagecoach.com/sustainability/our- range of performance indicators, reporting to the Board on these matters.
people.aspx. We expect our suppliers and contractors to have the same commitment as
our employees to complying with appropriate health and safety regulations
1.8.3 Employment policies and policies.
We aim to have a motivated team of people that will meet the expectations Each of our divisions and operating companies has policies which are
of our customers, improve our business and be rewarded for their appropriate to the transport modes they deliver. We are focused on meeting
commitment. Equality of opportunity is one of our key values, regardless of and in many cases exceeding regulatory requirements and performance
disability, gender, sexual orientation, religion, belief, age, nationality, race or standards. Detailed policies, risk assessments and safe working procedures
ethnic origin. The Group gives full consideration to applications for are in place covering various aspects of our activities including noise,
employment from people with disabilities. vibration, display screen equipment and the Working Time Directive.
Where existing employees become affected by a disability and where Performance is measured and reviewed at operating company and Group
practicable, our Group policy is, to provide continuing employment under level. This is supported by analysis of audit results and review of civil
normal terms and conditions. We also provide training, career development liabilities claims to address any issues around policies and working
and equal consideration for promotion. The Group is committed to procedures. A core part of our approach is encouraging employees to report
employee participation and we use a variety of methods to inform, consult any concerns.
and involve its employees. Employees participate directly in the success of We work with local communities to encourage a safe environment around
the business through the Group’s bonus and other remuneration schemes our transport networks and use of our services, particularly with young
and are encouraged to invest through participation in share schemes. We are people. Across the Group, we invest in technologies which can make our
also committed to a continuing dialogue with trade unions, who represent services safer for customers, our employees and other people. Further
the vast majority of the Group’s employees, on a wide range of issues. A information and examples of our initiatives are available at:
wide range of communications channels are used to keep our people http://www.stagecoach.com/sustainability/safety-health.aspx.
informed and engaged.
1.8.6 Accessible and affordable travel
1.8.4 Diversity We believe that providing accessible and affordable travel is central to
The Group recognises and values the individuality and diversity that each encouraging modal shift from the private car to greener, smarter public
employee brings to the business. We value diversity in its wider sense. This transport. Stagecoach has regularly been independently assessed as having
year, for example, we partnered with Transport for London to introduce the the lowest bus fares of any major operator in the UK. Recent research by
Rainbow Bus to support and promote diversity in the city. We are particularly Transport Focus (formerly, Passenger Focus) found that bus passengers
focused on promoting gender diversity. The table below shows the gender rated Stagecoach as the best national UK bus operator for value for money.
split at different levels within the organisation, as at 30 April 2015. The Stagecoach is the only UK bus operator to operate a long-term nationwide
Group’s workforce is around 83.5% male and that high proportion is discounted travel scheme for jobseekers and we have a range of discounted
common in the ground transportation industry. However, the composition ticketing options for young people. Our inter-city coach business,
of our teams is becoming more diverse. The figures as at 30 April 2015 megabus.com, has improved social inclusion and connectivity in the UK,
include the employees of the Virgin Trains East Coast rail franchise – the mainland Europe and North America by offering low fares and good quality
Group began operating the franchise on 1 March 2015 and so its employees services.
were not included in the prior year figures as at 30 April 2014. We are committed to improving accessibility of our buses, trains and
stations. In the past eight years, we have invested £630m in new accessible
Population Male Female Total % %
buses and coaches for the UK and Europe. We are also investing in
Male Female
automated vehicle location systems to provide a technology platform to
Board 8 2 10 80.0% 20.0% deliver audio visual next stop information via smartphones. On our rail
Senior management * 95 19 114 83.3% 16.7% networks, we are working with government to introduce easier disabled
Whole workforce 32,860 6,501 39,361 83.5% 16.5% access at stations. For further information, please go to
http://www.stagecoach.com/sustainability/accessibility-affordability.aspx.
* Senior management is defined as those employees who receive awards under the
Group’s Executive Participation Plan and individuals who are statutory directors of the
corporate entities whose financial information is included in the Group’s 2015
consolidated financial statements in the Annual Report. This satisfies the definition set
out in the Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013.

1.8.7 Environmental stewardship All of these sources fall within businesses that are included in our consolidated
Stagecoach Group has launched a new sustainability strategy covering the financial statements. The Group is the majority shareholder of the Virgin Trains
five years to 30 April 2019. It follows a 30% reduction in Stagecoach Group’s East Coast franchise, which it has operated since 1 March 2015. Since this
carbon intensity since 2007/08 and the achievement of previous targets 12 franchise has not been operated for the full financial year, it has not been
months ahead of schedule. By April 2019, the Group is aiming to reduce included in the Group’s greenhouse gas emissions shown above for the year
buildings carbon emissions by 7%; cut like-for-like fleet transport carbon ended 30 April 2015.
emissions by 2%; lower water consumption by 9% and achieve a waste
recycling rate of 83%. The Group has already been awarded the Carbon Trust Group Metrics 2014/15 2013/14
Standard for measuring, managing and reducing its global carbon footprint, Revenue (£m) 3,086.4 2,930.0
becoming the first public transport operator to have its boundaries certified
outside of Europe. A copy of the Group’s sustainability strategy and further Total Scope 1 & 2 emissions
information about our initiatives and performance is available at tonnes (tCO2e) 1,266,526 1,264,913
http://www.stagecoach.com/sustainability.aspx Intensity ratio
Part of the Group’s approach to sustainability is the ongoing review of its Scope 1 & 2 emissions per £ of
plans, performance and targets. Policy information and annual performance revenue (Kg CO2e/£) 0.41 0.43
data is provided on the Group’s website. Stagecoach also makes an annual
submission to the Carbon Disclosure Project (“CDP”), an organisation
focused on carbon disclosure which collates environmental information and 1.8.8 Supporting our communities and the economy
works with thousands of companies and investors to tackle climate change. Stagecoach Group is a major employer, supporting direct employment for
The data below shows our greenhouse gas emissions for the year ended around 39,000 people. Our investment in improving our transport services
30 April 2015 (excluding Virgin Trains East Coast) with comparative data for also supports thousands of other jobs through the supply chain. Further
the year ended 30 April 2014. information is available at:
http://www.stagecoach.com/sustainability/economic-contribution.aspx
2014/15
We also share our success with local people and communities by investing
Greenhouse Gas Emission Source tonnes CO2e Kg CO2e/£ part of our profits in good causes. During the year ended 30 April 2015,
of revenue £0.9m (2014: £0.7m) was donated by Stagecoach Group to help a number
Scope 1 of charities and to support fundraising events and vital services. Significant
additional in-kind support, such as complimentary bus and rail travel, is
Fuel combustion (natural gas, diesel, provided by the Group to good causes. We have a number of initiatives in
petrol and heating oil) 962,997 0.31 place to help young people, including mentoring and internship
Operation of facilities (refrigerants) 32,704 0.01 programmes to help students gain a better understanding of the skills and
routes to enter work, further and higher education and training. More
Total Scope 1 995,701 0.32
information on our community support and programmes is available at:
Scope 2 http://www.stagecoach.com/sustainability/community.aspx
Purchased electricity 270,825 0.09
Statutory total (Scope 1 & 2)* 1,266,526 0.41 1.8.9 Human rights
The Group does not see human rights matters as presenting material issues
2013/14
or risks for the Group and therefore the Group does not have specific,
Greenhouse Gas Emission Source tonnes CO2e Kg CO2e/£ detailed policies in respect of human rights. However, in the Group’s code of
of revenue conduct (see section 1.8.1), the Group recognises the fundamental civil,
political, economic and social human rights and freedoms of every individual
Scope 1
and strives to reflect this in its business. A respect for human rights is
Fuel combustion (natural gas, diesel, reflected in our wider policies and in how we do business with customers,
petrol and heating oil) 1,030,488 0.35 suppliers, employees and other stakeholders.
Operation of facilities (refrigerants) 16,798 0.01
Total Scope 1 1,047,286 0.36 1.8.10 Conclusion
Scope 2 Our responsible approach to business is reflected in the policies and
examples set out in this section 1.8. We continue to believe that corporate
Purchased electricity 217,627 0.07
social responsibility and good financial returns go hand in hand, reflecting
Statutory total (Scope 1 & 2)* 1,264,913 0.43 consideration of all stakeholders.
* Statutory carbon reporting disclosures required by the Companies Act 2006
(Strategic Report and Directors’ Report) Regulations 2013. Approved by the Board of Directors and signed on its behalf by:
The Group has used the UK Government Environmental Reporting Guidance
methodology in reporting its greenhouse gas emissions, together with emissions
factors from the DEFRA/DECC Greenhouse Gas Conversion Factors for Company
Reporting 2014.
We define our organisational boundary using the financial control approach and
Mike Vaux
use a materiality threshold for the Group of 5% of estimated Greenhouse Gas
Emissions. We have reported on all the emissions sources required under the Company Secretary
Companies Act 2006 (Strategic Report and Directors’ Reports) Regulations 2013. 24 June 2015

2. B
2. oard o
Board off Directors
Directors
DDetails
etails of
of corporate
corporate governance,
governance, including
including tthehe operation
operation of
of tthe Board
he Bo ard of of DDirectors,
irectors, aare
re given
given
iin
n ssection
ection 4 of
of this Annual
this Annual Report.
Report. A bbrief
rief bbiography
iography of
of eeach
ach director
director iiss ggiven below.
iven below.
Executive Directors Non-Executive Directors
Martin
Martin Griffiths
Griffiths Ross
Ross Paterson
Paterson SSir
ir B
Brian
rian SSouter
outer G
Garry
arry Watts
Watts M
MBE
BE Gregor
Gregor Alexander
Alexander
Chief Executive
Chief Executive FFinance
inance D
Director
irector Chairman
Chairman D eputy Chairman
Deputy Chairman an
and
d Non-Executive Director
Non-Executive Director
SSenior
enior Independent
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NNon-Executive
on-Executive D
Director
irector
AAppointment
ppointment to
to tthe
he Board:
Board: Appointment
Appointment to
to tthe
he B
Board:
oard: Appointment
Appointment to to tthe
he B
Board:
oard: Appointment
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to tthe
he B
Board:
oard: Appointment
Appointment to
to tthe
he Board:
Board:
22000
000 22013
013 nn/a
/a ((co-founder)
co-founder) 2007
20 07 22013
013
Age:
Ag 49
e: 49 Age:
Age: 43 Age:
Age: 61 Age:
Age: 58 Age:
Age: 52
Committee membership:
Committee membership:
H
Health,
ealth, Safety
Safety and
and Environmental.
Environmental. Pensions
Pensions Oversight.
Oversight. None.
N one. Nomination
Nomination (Chair)
(Chair) AAudit
udit ((Chair) andd
Chair) an
andd RRemuneration.
an emuneration. RRemuneration.
emuneration.
EExternal
xternal appointments:
appointments:
Virgin
Virgin RRail
ail G
Group
roup H
Holdings
oldings LLimited
imited Director
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nd Chairman
Chairman ooff AAudit
udit Chairman,
Chairman, Souter
Souter IInvestments.
nvestments. SSpire
pire Healthcare Group
Healthcare Group plc
plc Finance
Finance Director
Director of
of SSSE
SE plc.
plc.
((Co-Chairman),
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G Barr
Barr pplc
lc CCommittee,
ommittee, V Virgin
irgin RRail
ail Group
Group Vice-President
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the IInstitute
nstitute (N on-Executive Ch
(Non-Executive Chairman),
airman), BTG
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of Scotia
Scotia GGas Networks,
as N etworks,
((Non-Executive
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ail Holdings
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imited. Member
Member of of tthe
he of
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Chartered Accountants
Accountants pplclc ((Chairman),
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Group pplc
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wned bbyy SSE
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elivery Group
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(Chairman). Business
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he of Scotland.
of Scotland. ((Chairman),
Chairman), Coca-Cola
Coca-Cola Enterprises,
Enterprises,
Institute
Institute ooff C
Chartered
hartered Accountants
Accountants IInc
nc ((Non-Executive
Non-Executive Director).
Director).
Scotland.
ooff Scotland.
EExecutive
xecutive rresponsibilities:
esponsibilities:
Previously
Previously thethe GGroup’s
roup’s Finance
Finance RRoss
oss PPaterson
aterson iiss responsible
responsible ffor
or
Director,
Director, M Martin
artin GGriffiths
riffiths was
was tthe
he G roup’s ooverall
Group’s verall ffinancial
inancial ppolicy,
olicy,
appointed
appointed Chief
Chief Executive
Executive from
from ttaxation,
axation, treasury,
treasury, corporate
corporate
1 May
May 2013.
2013. M Martin
artin G Griffiths
riffiths is
is ffinance,
inance, City
City relations,
relations, financial
financial
responsible
responsible for for tthe
he Group’s
Group’s ooverall
verall rreporting,
eporting, iinformation
nformation ttechnology
echnology
sstrategy
trategy an andd management
management of of aallll an andd em ployee bbenefits.
employee enefits. He
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ooff tthe
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roup’s ooperations.
perations. ssupports
upports tthe
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xecutive
iinn th
thee management
management ooff the the
G roup’s ooperations
Group’s perations aand nd nnew
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bbusiness
usiness development.
development.
Previous
Previous experience:
experience:
AC Chartered
hartered Accountant,
Accountant, AC Chartered
hartered A Accountant,
ccountant, RRossoss AC Chartered
ccountant, AC Chartered
ccountant, Gregor hhas
Gregor as worked
worked iinn the
the eenergy
nergy
M artin G
Martin riffiths is
Griffiths is a former
former D irector
Director Paterson
Paterson jjoined
oined Stagecoach
Stagecoach iinn SSirir Brian co-founded
Brian co-founded SStagecoach,
tagecoach, G arry W
Garry atts iiss a former
Watts former Chief
Chief industry since
industry since 11990,
990, wwhenhen hehe
ooff Robert
Robert Walters
Walters pplc lc aand
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Troy 11999
999 aandnd has
has since
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held various
various SScottish
cottish Business
Business AwardsAwards SScottish
cottish EExecutive
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SL International
International plc,
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joined Scottish Hydro
Hydro EElectric.
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He
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plc. ssenior
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company ccompany
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012. N on-Executive Director
Non-Executive Director ooff was aappointed
was ppointed FFinance
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Director
HHee w as yyoung
was oung SScottish
cottish FFinance
inance ssecretarial
ecretarial roles.
roles. H Hee bbecame
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Brian
rian was
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named UK UK Master
Master M edicines aand
Medicines nd H ealthcare PProducts
Healthcare roducts aand
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oined the
the B oard ooff SSSE
Board SE in
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ear iinn 22004.
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007, with
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wards aand, nd, iinn 22012,
012, Ce lltech pplc.
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ormer Finance
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ccorporate
orporate finance,
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relations, bbecame
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irst ppublic
ublic ttransport
ransport D irector ooff Medeva
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and
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nternal aaudit
udit eentrepreneur
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nducted into into artner w
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with KPMG.
aand nd tthe
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company ssecretariat.
ecretariat. He
He iiss tthe he B British
ritish TTravel
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all ooff FFame.
ame.
Audit and
Audit and Assurance
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Brian
rian isis tthe
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strategy aand nd pphilosophy
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until 1 M Mayay 2013.
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pag e 2
page 244 | Stagecoach
Stagecoach Group
Group pplc
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unning of of tthe
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Board.
Sir
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rown C
CBE
BE Ann
Ann Gloag
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Helen Mahy
Mahy C
CBE
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Phil W
White
hite CBE
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Will W
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hitehorn
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and RRemuneration,
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and NNomination.
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and EEnvironmental.
nvironmental. Health, Safety
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and EEnvironmental.
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Stagecoach Group
Stagecoach Group pplc
lc | p ag e 2
page 255

3. Directors’ report
3.1 Strategic report executive director had an interest in share based awards at 30 April 2014, 24
June 2014, 30 April 2015 and 23 June 2015.
The Group is required to produce a strategic report complying with the
requirements of the Companies Act 2006. The Group has complied with these In addition to their individual interests in shares, Sir Brian Souter, Ann Gloag,
requirements as part of the Strategic report in section 1. Martin Griffiths and Ross Paterson are potential beneficiaries of the
Stagecoach Group Employee Benefit Trust 2003, which held 891,396
3.2 Group results and dividends ordinary shares as at 30 April 2015 (2014: 725,821). Martin Griffiths and Ross
Paterson are also potential beneficiaries of the Stagecoach Group Qualifying
The results for the year are set out in the consolidated income statement on
Employee Share Trust (“QUEST”), which held 300,634 ordinary shares as at
page 58.
30 April 2015 (2014: 300,634).
An interim dividend of 3.2p per ordinary share was paid on 4 March 2015.
No director had a material interest in the loan stock or share capital of any
The Directors recommend a final dividend of 7.3p per share, making a total
subsidiary company.
dividend of 10.5p per share in respect of the year ended 30 April 2015.
Subject to approval by shareholders, the final dividend will be paid on 30
September 2015 to those shareholders on the register on 28 August 2015.
3.4 Indemnification of directors and officers
The Company maintains Directors’ and Officers’ Liability Insurance in respect
of legal action that might be brought against its directors and officers. In
3.3 Directors and their interests accordance with the Company’s Articles of Association, and to the fullest
The names, responsibilities and biographical details of the current members
extent permitted by law, the Company has indemnified each of its directors
of the Board of Directors appear in section 2 of this Annual Report. Table A
and other officers of the Group against certain liabilities that may be incurred
shows the Directors’ interests in the Company’s shares. The interests of each
as a result of their positions with the Group.
director shown includes those of their “connected persons”.
The Board reviews its development plans at least annually as part of its 3.5 Substantial shareholdings
performance evaluation. The assessment involves a consideration of the As at 30 April 2015 and 23 June 2015 (being the latest practical date prior to
balance of skills, knowledge and experience of the Directors. The Board also the date of this report), the Company had been notified of the following major
considers whether the Directors have sufficient time to discharge their duties interests in voting rights in the Company (other than certain Directors’
properly which includes a consideration of any other appointments that each shareholdings details of which are set out in section 3.3 of this report):
director has. The Board believes that the performance of each director
continues to be effective and that they continue to demonstrate 23 June 2015 30 April 2015
commitment to their respective roles. The Chairman will therefore propose
Ameriprise Financial, Inc. 5.0% 5.0%
that each of the Directors be re-elected at the 2015 Annual General Meeting.
Massachusetts Financial Services Company 5.1% 5.1%
Number of ordinary shares (including those held
TABLE A under BAYE scheme)
Standard Life Investments (Holdings) Ltd 4.9% 4.9%
23 June 30 April 24 June 30 April
2015 2015 2014 2014 3.6 Statement of Directors’ responsibilities in
respect of the Annual Report, the Directors’
Sir Brian Souter 86,900,445 86,900,445 86,900,445 86,900,445 remuneration report and the financial
Martin Griffiths 437,316 437,229 397,164 397,091 statements
Ross Paterson 213,726 213,639 198,808 198,735 The Directors are responsible for preparing the Annual Report, the Directors’
Gregor Alexander 10,406 10,406 10,406 10,406 remuneration report and the consolidated and parent company financial
Sir Ewan Brown See below See below See below See below statements in accordance with applicable law and regulations.
Ann Gloag 62,501,721 62,501,721 62,501,721 62,501,721 Company law requires the Directors to prepare financial statements for each
Helen Mahy 8,971 8,971 8,834 8,834 financial year. Under that law, the Directors have elected to prepare the
consolidated financial statements in accordance with International Financial
Garry Watts 16,000 16,000 16,000 16,000
Reporting Standards (“IFRSs”) as adopted by the European Union, and the
Phil White 4,070 4,070 4,070 4,070 parent company financial statements and the Directors’ remuneration report in
Will Whitehorn 72,288 72,288 72,288 72,288 accordance with applicable law and United Kingdom Accounting Standards
(United Kingdom Generally Accepted Accounting Practice). Under company
Sir Ewan Brown has an indirect interest in the share capital of the Company.
law, the Directors must not approve the financial statements unless they are
He and his connected parties own approximately 18% (2014: 18%) of the
satisfied that they give a true and fair view of the state of affairs of the Company
ordinary shares of Noble Grossart Holdings Limited, which in turn through its
and the Group and of the profit or loss of the Group for the relevant period.
subsidiary, Noble Grossart Investments Limited, held 3,267,999 ordinary
shares in the Company at 30 April and 23 June 2015 (2014: 3,267,999). In preparing those financial statements, the Directors are required to:
The Listing Rules of the Financial Conduct Authority (LR 9.8.6 R(1)) require • select suitable accounting policies and then apply them consistently;
listed companies to disclose in their Annual Reports the interests of each • make judgements and estimates that are reasonable and prudent;
director. The Directors’ interests set out in Table A have been determined on • state whether IFRSs as adopted by the European Union, and applicable UK
the same basis as in previous years and are intended to comply with the Accounting Standards have been followed, subject to any material
requirements of LR 9.8.6 R(1), which is not the basis used to determine departures disclosed and explained in the consolidated and parent
voting rights for the purposes of notifying major interests in shares in company financial statements respectively; and
accordance with the Disclosure and Transparency Rules of the Financial • prepare the consolidated and parent company financial statements on the
Conduct Authority. The voting rights of Sir Brian Souter and Ann Gloag going concern basis unless it is inappropriate to presume that the Group or
determined in accordance with the Disclosure and Transparency Rules as at as the case may be, the Company, will continue in business.
30 April 2015 were 86,952,175 ordinary shares (2014: 87,055,636) and The Directors also confirm that they consider the Annual Report and
62,501,721 ordinary shares (2014: 62,501,721) respectively, of which consolidated financial statements, taken as a whole, are fair, balanced and
86,896,009 are held via HGT Finance B Limited and 62,501,721 are held via understandable and provide the information necessary for shareholders to
HGT Finance A Limited. assess the Group’s performance, business model and strategy. The approach
Full details of share based awards held by the Directors at 30 April 2015 are taken in reaching this conclusion is explained in the Audit Committee report in
contained in the Directors’ remuneration report in section 8 of this Annual section 5.4.7 of this Annual Report.
Report. From 1 May 2013, Sir Brian Souter is Chairman but is no longer an The Directors are responsible for keeping adequate accounting records that
executive director of the Company. Details of share based awards held by Sir are sufficient to show and explain the Company’s transactions and disclose
Brian are set out in the Directors’ remuneration report. No other non- with reasonable accuracy at any time the financial position of the Company

and the Group and enable them to ensure that the financial statements and the existing authority, the Company may therefore repurchase up to a further
the Directors’ remuneration report comply with the Companies Act 2006 and, 57,537,526 ordinary shares. This authority will expire at the conclusion of the
as regards the Group financial statements, Article 4 of the IAS Regulation. They 2015 Annual General Meeting unless revoked, varied or renewed prior to this
are also responsible for safeguarding the assets of the Company and the Group date.
and hence for taking reasonable steps for the prevention and detection of A resolution will be proposed at the next Annual General Meeting that the
fraud and other irregularities. Company be authorised to repurchase up to approximately 10% of its ordinary
The Directors are responsible for the maintenance and integrity of financial shares at the Directors’ discretion. If passed, the resolution will replace the
information on the Company’s corporate website, www.stagecoach.com. authority granted at the 2014 Annual General Meeting and will lapse at the
Legislation in the United Kingdom governing the preparation and conclusion of the 2016 Annual General Meeting.
dissemination of financial statements may differ from legislation in other
jurisdictions. 3.11 Shareholder and control structure
Each of the Directors, whose names and functions are listed in section 2 of this As at 30 April 2015, there were 576,099,960 ordinary shares (2014:
annual report, confirms that, to the best of their knowledge: 576,099,960) in issue with a nominal value of 125/228th pence each. The
• the consolidated financial statements, which have been prepared in ordinary shares are admitted to trading on the London Stock Exchange.
accordance with IFRSs as adopted by the EU, give a true and fair view of On a show of hands at a general meeting of the Company, every holder (and
the assets, liabilities, financial position and profit of the Group; and proxy) of ordinary shares present in person and entitled to vote shall have one
• the Strategic report and Directors’ report contained in sections 1 and 3 of vote (except that in certain circumstances a proxy may have one vote “for” and
this Annual Report include a fair review of the development and one vote “against”) and on a poll, every member present in person or by proxy
performance of the business and the position of the Group, together with and entitled to vote shall have one vote for every ordinary share held. The
a description of the principal risks and uncertainties that the Group faces. notice of a general meeting will specify any deadlines for exercising voting
rights in respect of the meeting concerned. As at 30 April 2015, 1,371,639
3.7 Conflicts of interest (2014: 724,693) ordinary shares representing 0.2% (2014: 0.1%) of the
Under the Companies Act 2006, a director has a statutory duty to avoid a Company’s called-up share capital (excluding treasury shares) were held in
situation where he or she has, or can have, a direct or indirect interest that treasury and carried no voting rights.
conflicts, or may possibly conflict, with the relevant company’s interests. The The holders of ordinary shares are entitled to be paid the profits of the
Companies Act 2006 allows directors of public companies to authorise Company available for distribution and determined to be distributed pro-rata
conflicts and potential conflicts where appropriate, if the relevant company’s to the number of ordinary shares held.
articles of association contain a provision to this effect. The Company’s
Articles of Association give the Directors authority to approve conflict There are no restrictions on the transfer of ordinary shares other than:
situations including other directorships held by a director of the Company. • certain restrictions may from time to time be imposed by laws and
regulations (for example, insider trading laws);
There are safeguards in place that apply when the Directors decide whether to
authorise a conflict or potential conflict. Firstly, only the Directors who have • pursuant to the Listing Rules of the Financial Conduct Authority whereby
no interest in the matter being considered are able to take the relevant certain employees of the Group require the approval of the Company to
decision and secondly, in taking any decision, the Directors must act in a way deal in the Company’s securities; and
that they consider, in good faith, will be most likely to promote the • shares held by employee benefit trusts may only be transferred by those
Company’s success. The Directors are able to impose limits or conditions trusts in accordance with the relevant trust deeds.
when giving authorisation if they think that is appropriate. None of the ordinary shares in issue provide the holders with special control
From the period from 1 May 2014 until the date of this report, the Board rights.
considers that the Directors’ powers of authorisation of conflicts have Section 3.5 of this Directors’ report gives details of any shareholders (other
operated effectively and those procedures set out above have been properly than the Directors) that hold major interests in the voting rights in the
followed. Company.
3.8 Financial risk management Details of each director’s interests in the share capital of the Company are
Information regarding the Group’s use of financial instruments, financial risk given in section 3.3 of this Directors’ report. Two directors of the Company, Sir
management objectives and policies and exposure to price, credit, liquidity and Brian Souter and Ann Gloag, who are siblings, were interested in 26.0% of the
cash flow risks can be found in note 26 to the consolidated financial ordinary shares in issue as at 30 April 2015, excluding shares held by the
statements. Company in treasury (2014: 26.0%). The other directors of the Company held
0.1% of the ordinary shares in issue as at 30 April 2015 (2014: 0.1%).
3.9 Political donations In addition to the Directors’ individual interests in shares, two employee
It is the Group’s policy not to make political contributions and accordingly benefit trusts held a further 0.2% of the ordinary shares in issue as at 30 April
there were no material contributions for political purposes during the year or 2015 (2014: 0.2%). The shares held by the trusts are for the benefit of
in the prior year. employees of the Group. The voting rights are exercised by the trustees.
The Group operates a Buy as You Earn scheme, in connection with which the
3.10 Authority for company to purchase its participants’ shares are held in trust. The Trustees vote only where directed to
own shares do so by participants in the plan.
At the 2013 Annual General Meeting, the Company was granted authority by The Company is not aware of any agreements between shareholders that may
its shareholders to repurchase up to 57,609,996 of its ordinary shares. result in restrictions on the transfer of securities and/or voting rights.
Between 25 June 2014 and 9 July 2014, the Company acquired 654,536 of its
own ordinary shares and held these in treasury. The aggregate amount paid for Directors are elected by ordinary resolution at a general meeting of holders of
the repurchased shares was £2.5m (excluding fees). This represented 0.1% of ordinary shares. The Directors have the power to appoint a director but any
the Company’s called up share capital (excluding treasury shares) on 9 July person so appointed by the Directors shall hold office only until the next
2014. The shares were purchased to satisfy awards made under the Group’s annual general meeting and shall then be eligible for election by ordinary
employee shares schemes. During the year ended 30 April 2015, the Company resolution at that meeting.
transferred 7,590 of the shares held in treasury for nil consideration to an The Company’s Articles of Association may only be amended by special
employee to satisfy an award made under the Group’s 2013 Executive resolution at a general meeting of holders of ordinary shares.
Participation Plan. This represented less than 0.1% of the Company’s called up The powers of the Directors to issue or repurchase ordinary shares are set by a
share capital (excluding treasury shares) on the date of transfer. resolution at a general meeting of holders of ordinary shares. The current
At the 2014 Annual General Meeting, the Company was granted authority by authority for the Company to purchase its own shares is explained in section
its shareholders to repurchase up to 57,537,526 of its ordinary shares. Under 3.10 of this Annual Report.

Directors’ report
There are a number of agreements that take effect, alter or terminate on a 3.15 Table of cross references required for Listing
change of control of the Company such as commercial contracts, bank loan
agreements and employee share plans. The most significant of these are:
Rule 9.8.4 of the UK Listing Rules
• The Group operates the Virgin Trains East Coast, South West Trains and East Listing Rule Required disclosure Location in Annual
Midlands Trains rail franchises. The Group’s joint venture, Virgin Rail Group, 9.8.4 Report
operates the West Coast Trains franchise. The franchise agreements in (1) A statement of the amount of interest capitalised by the Not applicable
respect of these four franchises each contain provisions that would enable Group during the period under review with an indication
the Department for Transport to terminate the franchises on a change of of the amount and treatment of any tax relief.
control of the franchise. (2) Any information required by Listing Rule 9.2.18R relating Not applicable
to any unaudited financial information in a class 1 circular
• Each of the four rail franchises referred to above leases trains. The leases or a prospectus; or any profit forecast or profit estimate.
generally contain termination rights for the benefit of the lessor on a (3) Listing Rule deleted. Not applicable
change of control of the Group. (4) Details of long-term incentive schemes as required by Not applicable
• Certain of the Group’s bank facilities (including asset finance) contain Listing Rule 9.4.3R, being any arrangement where the
provisions that would require repayment of outstanding borrowings and only participant is a director of the Company (or an
individual whose appointment as a director of the
other drawings under the facilities following a change of control of the Company is being contemplated) and the arrangement is
Group. established specifically to facilitate, in unusual
• The Group’s arrangements with surety companies for the issue of rail circumstances, the recruitment or retention of the
relevant individual.
performance bonds and season ticket bonds could terminate following a
change of control of the Group. (5) Details of any arrangements under which a director of the Section 8.5.9 of this
Company has waived or agreed to waive any emoluments Annual Report explains
• The Company’s £400m 5.750% Guaranteed Bonds due 2016 contain from the Company or any subsidiary undertaking. arrangements under
provisions that would require repayment of the outstanding bonds which Sir Brian Souter,
following a change of control of the Group that was accompanied by a Chairman, waived
emoluments in prior
specified downgrade of certain of the Company’s credit ratings. financial years.
• The Company’s US$150m 10-year notes contain provisions that would (6) Details of any agreements by a director to waive future Not applicable
require the Company to offer to prepay those notes following a change of emoluments.
control of the Group that was accompanied by a specified downgrade of (7) Details of any allotment for cash of equity securities made Not applicable
certain of the Company’s credit ratings. during the period under review otherwise than to the
holders of the Company's equity shares in proportion to
The impact of a change of control of the Group on remuneration their holdings of such equity shares and which has not
arrangements is determined by the Directors’ remuneration policy. been specifically authorised by the Company's
shareholders.
3.12 Going concern (8) The information required in item (7) above for any Not applicable
unlisted major subsidiary undertaking of the Company.
On the basis of current financial projections and the funding facilities available,
(9) Details of any share placing where the Company is a Not applicable
the Directors are satisfied that it is reasonable to assume that the Group has
subsidiary undertaking of another Company.
adequate resources to continue for the foreseeable future and, accordingly,
(10) Details of any contract of significance subsisting during Details of related party
consider it appropriate to adopt the going concern basis in preparing the the period under review: transactions, including
financial statements. As part of the assessment of going concern, executive those where a director is
(a) to which the Company, or one of its subsidiary
management provided a paper to the Audit Committee covering matters such undertakings, is a party and in which a director of the materially interested, are
as financial projections, sensitivity analysis, available debt facilities, credit Company is or was materially interested; and provided in note 33 to the
ratings, financial risk management and bank covenants. The Board’s consolidated financial
(b) between the Company or one of its subsidiary statements.
assessment of going concern takes account of its view of the principal business undertakings, and a controlling shareholder;
The Company has no
risks facing the Group. Liquidity is a key component of the Directors’
controlling shareholders.
assessment of going concern and information on liquidity is provided in
(11) Details of any contract for the provision of services to the Not applicable
section 1.6.7 of this Annual Report. Company or any of its subsidiary undertakings by a
controlling shareholder.
3.13 Auditors (12) Details of any arrangement under which a shareholder has Note 27 to the
In the case of each of the persons who were directors of the Company at the waived or agreed to waive any dividends. consolidated financial
statements provides
date when this report was approved: information on employee
• so far as each of the Directors is aware, there is no relevant audit benefit trusts that have
information (as defined in section 418 of the Companies Act 2006) of waived and agreed to
waive dividends. Shares
which the Company’s auditors are unaware; and held in treasury do not
• each of the Directors has taken all the steps that he/she ought to have taken qualify for dividends.
as a director to make himself/herself aware of any relevant audit (13) Details of agreements by shareholders to waive future Note 27 to the
information (as defined) and to establish that the Company’s auditors are dividends. consolidated financial
aware of that information. statements provides
information on employee
A resolution to re-appoint PricewaterhouseCoopers LLP as auditors of the benefit trusts that have
Company will be proposed at the next Annual General Meeting. A resolution agreed to waive future
will also be proposed that the Audit Committee be authorised to fix the dividends.
remuneration of the auditors. (14) A statement made by the Board in respect of matters Not applicable
relating to a controlling shareholder.
3.14 Material included in the Strategic report
The Strategic report in section 1 includes information on the following By order of the Board
matters that would otherwise be required to be presented in the Directors’
report:
• Employment policies;
• Future developments in the business; and Mike Vaux
Company Secretary
• Greenhouse Gas Emissions
24 June 2015

4. Corporate governance report
4.1 Introduction from Garry Watts, 4.2 Corporate governance and compliance
Deputy Chairman with the Code
The Stagecoach Group is committed to ensuring that it operates with the The Stagecoach Board is accountable to shareholders for the Group’s activities
high standards of corporate governance that are expected of a group with and is responsible for the effectiveness of corporate governance practices
shares traded on the London Stock Exchange. This introduction to the within the Group. This section 4 of the Annual Report sets out Stagecoach
Group’s corporate governance report is an opportunity to look back at the Group’s corporate governance arrangements. Taken together with the
year 2014/15, at the progress that has been made with the governance of the Directors’ Report, it includes the disclosures recommended by the Financial
Group and to look forward to the governance challenges for the future. Reporting Council (“FRC”) UK Corporate Governance Code (the “Code”), and
The current board structure has been in place since May 2013. During the describes how the principles of good corporate governance that are set out in
year, Martin Griffiths and Ross Paterson have driven the Group in the strategic the Code have been applied. In line with best practice, separate reports are
direction agreed by the Board. In particular, the Group has extended the reach provided from each of the Audit, Nomination, Health, Safety and
of its inter-city megabus.com business into mainland Europe, consolidated Environmental and Remuneration Committees.
the recent expansion in North America and has successfully bid for the East The Code issued in September 2012 applied to the Company’s financial year
Coast rail franchise. from 1 May 2014 to 30 April 2015. The Directors believe that throughout the
A formal division of responsibilities is in place, which requires me, as the year ended 30 April 2015 the Group complied with all of the provisions of the
Deputy Chairman, to promote the highest standards of corporate governance Code. A copy of the Code is available at
throughout the Group and particularly at Board level. https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-
Sir Brian Souter continues as the Group’s Chairman and is responsible for the Corporate-Governance-Code-September-2012.pdf
conduct of the Board as a whole. I believe that the Board remains balanced The FRC issued a new edition of the Code in September 2014 (the
and effective. In his position as Chairman, the Board is able to draw on the “September 2014 Code”), which applies to accounting periods beginning on
depth of experience of Sir Brian while he has ensured that the executive or after 1 October 2014. The Group will report on its compliance with the
directors have been given the space to manage the business. I am satisfied provisions of the September 2014 Code in its Annual Report for the year
that the views of all of the Directors are heard and given due weight and that ending 30 April 2016. In applying the September 2014 Code, we expect to:
our corporate governance procedures are appropriate for the Group.
• Provide a “viability statement” that states, with qualifications if
The Board focuses on the Group’s strategy and seeks to understand the risks
appropriate, that the Directors have a reasonable expectation that the
to the Group and the markets that it operates in. We aim to achieve
Group will continue in operation and meet its liabilities as they fall due
appropriate returns for our shareholders, balanced against an appropriate
over a specified period. We expect to explain in the annual report how we
level of risk and to look ahead to where we believe opportunities are going to
have assessed the prospects of the Group, over what period we have done
arise and to anticipate and address the challenges that the business faces. I
so and why we consider that period appropriate.
believe that good governance is central to achieving these aims for the
business as a whole and to ensure that our management team is properly • Explain any actions that have been or are being taken to remedy any
challenged to meet the Group’s objectives. significant failings or weaknesses identified in reviewing risk management
In the past year, the Board has discussed the franchise opportunities available and internal control.
in the rail sector and the balance of the Group between its rail and bus • Review our assessment and description of principal risks facing the Group
businesses. The Board recognises and has discussed in some detail the risks to to ensure consistency with the recommendations of the September 2014
the business in the changing political landscape. In this more uncertain Code.
political environment, the executive members of the Board have been The Group also complies with the corporate governance requirements of the
challenged to anticipate and plan for potential changes. I am confident that Financial Conduct Authority’s Listing Rules, and Disclosure and Transparency
the corporate governance structure of the Board provides a sound platform Rules.
for this kind of robust discussion.
4.3 Composition of the Board
The composition of the Board is as follows:
Date of Independent
appointment Non-
if later than Executive Other
Garry Watts 1 May 2010 Chairman Director Director
Deputy Chairman
24 June 2015 Sir Brian Souter
Chairman ✓
Gregor Alexander
Non-Executive Director ✓
Sir Ewan Brown
Helen Mahy
Garry Watts
Senior Independent Director &
Deputy Chairman ✓
Phil White
Will Whitehorn
Ann Gloag
Martin Griffiths
Chief Executive ✓
Ross Paterson
Finance Director ✓

Corporate governance report
4.4 Division of responsibilities treated as independent, the balance of the Executive and Non-Executive
Directors complies with the recommendations of the Code.
Sir Brian Souter was the Chief Executive of the Group until 1 May 2013. When
In recognition of the factors suggested by the Code for determining
Sir Brian became the Chairman of the Group the Board appointed Garry Watts
independence, Sir Ewan Brown does not serve on the Remuneration
to the role of Deputy Chairman. The split of the Chairman’s, Deputy Chairman’s
Committee or the Audit Committee.
and Chief Executive’s responsibilities has been agreed in writing and has been
approved by the Board. The Deputy Chairman reports to the Chairman and to All of the Directors stand for election or re-election at each annual general
the Board and has responsibility for ensuring proper corporate governance. meeting of the Company.
The Deputy Chairman’s role includes ensuring that the Board’s consideration of
matters is in the best interests of the Group and unaffected by conflicts of 4.6 Operation of the Board
interest. No executives report directly to the Deputy Chairman. The Board generally meets six times each year. Additional meetings of the
The Chairman is responsible for the running of the Board and for ensuring that Board are held to consider matters arising between scheduled Board meetings,
the Board as a whole plays a full and constructive part in the development and where a decision of the Board is required prior to the next scheduled meeting.
determination of the Group’s strategy and overall commercial objectives. The In addition to the formal meetings of the Board and its Committees, the
Deputy Chairman is responsible for ensuring that the Board determines the Directors are in more frequent but less formal contact with each other and with
Group’s strategy and overall commercial objectives with the overall success of the Group’s management on a range of matters.
the Group in mind and to provide guidance in this regard to the Chairman. The The Chairman and the Non-Executive Directors periodically meet without the
Chief Executive is responsible for proposing and developing that strategy with Executive Directors being present. In addition, the Non-Executive Directors, led
support and guidance from the Chairman. The Chief Executive is responsible by the Deputy Chairman, meet without the Chairman at least annually.
for the running of the Group’s business and reports to the Chairman and to the
Board directly. All other members of the executive management team report All the Directors meet regularly with other senior management and staff of the
either directly or indirectly to the Chief Executive. Group, have access to confidential advice from the Company Secretary and may
take independent legal or other professional advice at the Group’s expense
Garry Watts, as well as being Deputy Chairman, is the Group’s Senior where it is considered necessary for the proper discharge of their duties as
Independent Director and is available to shareholders if they have concerns directors. The Company Secretary, whose appointment and removal is a matter
which contact through the Chairman, Chief Executive or Finance Director has for the Board as a whole, is responsible to the Board for ensuring the Board
failed to resolve or for which such contact is inappropriate. procedures are complied with.
4.5 Board independence and balance Each director receives induction training on appointment and subsequently
The Directors’ biographies appear in section 2 of this Annual Report and such training, briefings and site visits as are considered necessary to keep
illustrate the Directors’ range of experience, which ensures an effective Board abreast of matters affecting their roles as directors. The Chairman reviews the
to lead and control the Group. The Board delegates the operational Directors’ training and development needs in conjunction with the Company
management of the Group to the Chief Executive and Finance Director Secretary. Training can encompass health, safety, environmental, social and
(“Executive Directors”). The Non-Executive Directors bring an independent governance matters.
viewpoint and create an overall balance. The Executive and Non-Executive The number of full Board meetings during the year was six. The full Board
Directors have a complementary range of experience that ensures no one typically meets once a year at an operational location. Regular communication
director or viewpoint is dominant in the decision-making process. is maintained by the Chairman with other directors between meetings to
The Code suggests that independent non-executive directors should make up ensure all directors are well informed on strategic and operational issues. The
at least half of the Board (excluding the Chairman). Throughout the period Board met at the Group’s Northampton bus depot in October 2014, giving the
from 1 May 2014 to 30 April 2015, the Board considers that it complied with Board the opportunity to meet the local management team and to receive
this Code requirement. The current position is that two thirds of the Board briefings on recent operational changes in the area. The April 2015 Board
members (excluding the Chairman) are independent. meeting was combined with a Group management conference, allowing the
Board members to gain a greater insight into the strategies being pursued by
In determining the independence of non-executive directors, the Board the Group’s businesses and to meet a wide range of managers from throughout
considers a number of factors. In particular the Board satisfies itself on the the Group. In December 2014, the Health, Safety and Environmental
following questions: Committee of the Board visited the Group’s bus operations in West Scotland,
• Does the director provide a robust and effective challenge to executive where they were able to see the UK Bus division training and safety processes in
management? operation. The visit also included a briefing on the bio fuel project at Kilmarnock
• Is the director prepared to challenge others’ beliefs, assumptions and bus depot and gave the members of the Committee the opportunity to discuss
viewpoints for the overall good of the Group and its shareholders? alternative fuel technologies in development across the Group and the wider
bus industry with the management team.
• Does the director effectively contribute to constructive debate by the Board
and its Committees? The Board has a number of matters reserved for its consideration, with principal
• Is the director willing to defend his or her own beliefs and viewpoints for the responsibilities being to agree the overall strategy and investment policy, to
overall good of the Group and its shareholders? approve major capital expenditure, to monitor performance and risk
management procedures of senior management, to ensure that there are
• Does the director have a sufficiently sound and detailed knowledge of the proper internal controls in place and to consider major acquisitions or disposals.
Group’s business that enables him or her to effectively question strategy and The Directors have full and timely access to information with Board papers
executive management’s running of the business? distributed in advance of meetings. Notable matters that the Board considered
Sir Ewan Brown, one of the six independent Non-Executive Directors, has during the year ended 30 April 2015 included:
served on the Board since 1988 and is a non-executive director of Noble
Grossart, which has from time to time provided advice to the Company. The
• The outcome of the Group’s bids for the operation of the Docklands Light
Railway, and Thameslink, Southern and Great Northern franchises and the
Company recognises and understands investor concerns over longer-serving
submission of the bid to operate the East Coast Main Line franchise
non-executive directors but continues to regard Sir Ewan Brown as
independent. Sir Ewan Brown’s long association with the Group and the sound • Planning for provision of transport services to the 2014 Commonwealth
and detailed knowledge of the Group’s business that he has developed enables Games
him to provide a robust and effective challenge to management. The Board • Development of megabus.com services in mainland Europe
believes that Sir Ewan Brown’s length of service enhances his effectiveness as a • Group strategy and development opportunities
non-executive director and that he remains independent in character and • Political and regulatory developments and potential developments, including
judgement. Six of the nine members of the Board, excluding the Chairman, are the Quality Contract proposals in North East England and proposed
considered by the Board to be independent. Even were Sir Ewan Brown not devolution of transport regulatory powers to regional authorities

• Impact of reduction in global oil prices 4.9 Composition of Committees
• Amendment to the terms for the operation of the South West Trains The current composition of the various Board Committees is summarised
franchise below:
The Board keeps the roles and contribution made by each director under review
Audit Committee
and changes in responsibilities are made where necessary to improve the
Board’s effectiveness. To provide a more manageable process and better Number of members of Committee: 3
control, certain of the Board’s powers have been delegated to committees. All members are independent non-executive directors.
Chairman and designated member with recent
Minutes are taken of each meeting of the Board and its Committees. Where any
and relevant financial experience
director has significant concerns that cannot be resolved about the running of
Gregor Alexander
the Group or a proposed action, these concerns are recorded in the minutes. It
is also the Group’s policy that where a director resigns, the director is asked to Other members
provide a written statement to the Chairman of any concerns leading to his or Helen Mahy
her resignation. Phil White
4.7 Operational management of the Group Nomination Committee

The Executive Directors maintain day-to-day contact and meet regularly face- Number of members of Committee: 4
to-face or in video conferences with non-board senior management. There are All members are independent non-executive directors.
four principal operating divisions:
Chairman
• UK Bus (London): headed by a managing director Garry Watts
• UK Bus (regional operations): headed by a managing director Other members
• North America: headed by a chief operating officer Sir Ewan Brown
• UK Rail: headed by the Group Chief Executive Helen Mahy
Will Whitehorn
Each division comprises a number of autonomous business units, each headed
by a chairman or managing director who is responsible for the day-to- day Remuneration Committee
performance of the business unit. Each chairman or managing director is Number of members of Committee: 4
supported by his or her own management teams. All members are independent non-executive directors.
Two of the joint ventures in which the Group has an interest, Virgin Rail Group Chairman
and Twin America LLC, are managed independently of the Group. Each is Phil White
headed by its own chief executive or managing director. The Group has two
Other members
representatives on the Board of Virgin Rail Group and three representatives on
Gregor Alexander
the Board of Twin America LLC. The other trading joint venture in which the
Group has an interest, Scottish Citylink Coaches Limited, has a joint board. The Garry Watts
Group is responsible for the day-to-day management of that business. Will Whitehorn
4.8 Performance evaluation Health, Safety and Environmental Committee
The Board assesses its own performance and the performance of each Number of members of Committee: 5
individual Board member; this assessment is co-ordinated and directed by the Chairman
Chairman with the support of the Company Secretary. The Board’s Helen Mahy
assessment of the performance of the Chairman is co-ordinated by the Other members
Deputy Chairman. As part of the assessment process, the Non-Executive Martin Griffiths
Directors meet without the Executive Directors being present. The Non-
Ann Gloag
Executive Directors also meet without the Chairman being present. The
Phil White
Chairman obtains feedback from each individual Director on the performance
Will Whitehorn
of the Board and other Board members. The Deputy Chairman obtains
feedback from each individual director on the performance of the Chairman.
A questionnaire-based process is undertaken to assess the performance of 4.10 Reports from the Committees
each of the Board’s committees. Reports from each of the Committees of the Board are set out in sections
The Directors have reviewed the effectiveness of the Board as a whole and its 5 to 8 of this Annual Report.
committees. The Code recommends board performance evaluation should be
externally facilitated at least every three years. The Board appointed Margaret
Exley of SCT Consultants to facilitate its evaluation in the year ended 30 April
2014 and details of the review were included in the 2014 Annual Report. The
2015 evaluation was not externally facilitated but the Board intends to
continue to use external facilitation of its performance evaluation no less
frequently than every third year.
The Board has considered the results of these assessments and has concluded
that overall the Board and its committees continue to operate in an effective
and constructive manner.

Corporate governance report
4.11 Individual director participation at a separate resolution at the Annual General Meeting for each substantially
separate issue. Details of all proxy votes lodged for and against, or withheld,
meetings in respect of each resolution of the 2014 Annual General Meeting were
The following is a table of participation in full Board meetings, meetings of published on the Group’s website at
committees and the Annual General Meeting by directors during the year http://www.stagecoach.com/investors/shareholder-services/agm.aspx
ended 30 April 2015:
The Group intends to undertake a poll (as opposed to a show of hands) on
PARTICIPATION Full Board Audit Remuneration each resolution put to the 2015 Annual General Meeting. All votes cast for or
IN MEETINGS meetings Committee Committee against each resolution, whether by proxy or in person at the meeting, will be
Actual Possible Actual Possible Actual Possible aggregated and the results will be reported on the Group’s website.
Sir Brian Souter 6 6 n/a n/a n/a n/a The Company and its registrars have established procedures to ensure that
votes cast are properly received and recorded.
Martin Griffiths 6 6 n/a n/a n/a n/a
Gregor Alexander 6 6 3 3 3 3 4.13 Risk management
Sir Ewan Brown 6 6 n/a n/a n/a n/a The Group has an ongoing process for identifying, evaluating and managing
the significant risks that it faces. The Board regularly reviews the process.
Ann Gloag 6 6 n/a n/a n/a n/a
The principal risks and uncertainties facing the Group are summarised in
Helen Mahy 6 6 3 3 n/a n/a section 1.4.6 of this Annual Report.
Ross Paterson 6 6 n/a n/a n/a n/a The Board considers acceptance of appropriate risks to be an integral part of
business and unacceptable levels of risk are avoided or reduced and, in some
Garry Watts 6 6 n/a n/a 3 3 cases, transferred to third parties. Internal controls are used to identify and
Phil White 6 6 3 3 3 3 manage risk. The Directors acknowledge their responsibility for establishing
and maintaining the Group’s system of internal control, and for reviewing its
Will Whitehorn 6 6 n/a n/a 3 3
effectiveness. The Group’s system cannot provide absolute assurance but is
designed to provide the Directors with reasonable assurance that any
Health, Safety
PARTICIPATION and Environmental Nomination Annual General significant risks or problems are identified on a timely basis and dealt with
IN MEETINGS Committee Committee Meeting appropriately. The Group has established an ongoing process of risk review and
certification by the business heads of each operating unit.
Actual Possible Actual Possible Actual Possible
Certain of the Group’s businesses are subject to significant risk. Each identified
Sir Brian Souter n/a n/a n/a n/a 1 1 business risk is assessed for its probability of occurrence and its potential
Martin Griffiths 4 4 n/a n/a 1 1 severity of occurrence. Where necessary, the Board considers whether it is
appropriate to accept certain risks that cannot be fully controlled or mitigated
Gregor Alexander n/a n/a n/a n/a 1 1
by the Group.
Sir Ewan Brown n/a n/a 1 1 1 1 For those businesses that have been part of the Group for the whole of the
Ann Gloag 4 4 n/a n/a 1 1 financial year ended 30 April 2015, the Group’s risk management process was
embedded throughout the businesses for that year and up to the date of the
Helen Mahy 4 4 1 1 1 1 approval of this report. The Group begun operating the Virgin Trains East Coast
Ross Paterson n/a n/a n/a n/a 1 1 rail franchise on 1 March 2015 and acquired the train operating company, East
Coast Main Line Company Limited, at that time. The Group is continuing its
Garry Watts n/a n/a 1 1 1 1
review of the risk management and internal control environment at East Coast
Phil White 3 4 n/a n/a 1 1 Main Line Company Limited and is embedding the Group’s own risk
Will Whitehorn 4 4 1 1 1 1 management process within that business.
The Board has carried out a review of the effectiveness of the Group’s risk
management and internal control environment and such reviews are
4.12 Relations with shareholders supported on an ongoing basis by the work of the Audit Committee. The
The Board endeavours to present a fair, balanced and understandable Board is satisfied that processes are in place to ensure that risks are
assessment of the Group’s position and prospects in communications with appropriately managed.
shareholders. The Group holds periodic meetings with representatives of The Board has designated specific individuals to oversee the internal control
major institutional shareholders, other fund managers and representatives of and risk management processes, while recognising that it retains ultimate
the financial media. responsibility for these. The Board believes that it is important that these
The programme of investor relations includes presentations in London of the processes remain rooted throughout the business and the managing director
full-year and interim results and meetings with institutional investors in the of each operating unit is responsible for the internal control framework within
UK and overseas. Investor and analyst feedback is sought after presentations that unit.
to ensure key strategies, market trends and actions being taken are being Self-assessment of risk conducted by the Directors and senior management is
effectively communicated and shareholder objectives are known. Written ongoing and has been considered at several levels, with each division
responses are given to letters or e-mails received from shareholders. The maintaining a separate risk profile.
annual report is published in hard copy and on the Group’s website.
The Group Risk Assurance (or internal audit) function, which is outsourced to
The Board receives regular updates on the views of shareholders through and managed by Deloitte LLP, reports to the Audit Committee and is utilised in
briefings from the Chairman and the Executive Directors, reports from the monitoring risk management processes to determine whether internal
Company’s brokers and reports from the Company’s Financial PR consultants. controls are effectively designed and properly implemented. A risk-based
All shareholders are welcome to attend and participate at the Annual General approach is applied to the implementation and monitoring of controls. The
Meeting and any other general meetings. The Group aims to ensure that all monitoring process also forms the basis for maintaining the integrity and
the Directors are available at the Annual General Meeting to answer improving, where possible, the Group’s risk management process in the
questions. The Annual General Meeting provides an opportunity for context of the Group’s overall goals.
shareholders to question the Chairman and other directors on a variety of The Audit Committee reviews Group Risk Assurance plans, as well as external
topics and further information is provided at the Annual General Meeting on audit plans and any business improvement opportunities that are
the Group’s principal business activities. It is the Company’s policy to propose recommended by the external auditors.

The Group’s risk management process does not specifically cover joint statements. Appropriate briefings and/or training are provided to key
ventures, but the Group maintains an overview of joint ventures' business risk finance personnel on relevant developments in accounting and financial
management processes through representation on the boards and in the case reporting. The Audit Committee is also kept appraised of such
of Virgin Rail Group, its audit committee. Stagecoach management developments.
representatives also meet regularly with representatives of joint ventures to • A written certificate is provided annually by the management of each
ensure that they follow appropriate risk management procedures. business unit confirming that the internal financial controls have been
reviewed and highlighting any departures from the controls system that
4.14 Internal control the Group has determined to be appropriate practice.
The wider process described above and the key procedures noted below, • The financial statements of each business unit are subject to review by a
enable the Directors to confirm that they have reviewed the effectiveness of local finance manager prior to being submitted to the Group Finance
the system of risk management and internal control of the Group during the function.
year. The key procedures, which the Directors have established, are as follows: • The financial statements of each business unit are subject to review by the
• an annual budgeting process with periodic re-forecasting of out-turn, Group Finance function for unusual items, unexplained trends and
identifying key risks and opportunities. All budgets are presented to a panel completeness. Any unexplained items are referred back to local
consisting of executive directors and/or senior managers by each business management to explain.
unit’s management team, before the overall Group budget is approved by
the Board.
• The Group Finance function compares the financial statements of each
business unit to the management accounts received during the year and
• reporting of financial information to the Board encompassing income obtains explanations for any material differences.
statement, cash flow, balance sheet and key performance indicators. Group
management monitors the results throughout each financial year.
• The Group’s consolidation, which consolidates the results of each business
unit and makes appropriate adjustments, is subject to various levels of
• a Risk Assurance function which reviews key business processes and review by the Group Finance function.
business controls, reporting directly to the Audit Committee.
• The draft consolidated financial statements are reviewed by an individual
• third party reviews commissioned periodically by the Group of areas where independent from those individuals who were responsible for preparing
significant inherent risks have been identified, such as health and safety, the financial statements. The review includes checking internal
treasury management, insurance provisioning, pensions strategy and consistency, consistency with other statements, consistency with internal
competition policy. accounting records and arithmetical accuracy.
• a decentralised organisational structure with clearly defined limits of • The Audit Committee and the Board review the draft consolidated
responsibility and authority to promote effective and efficient operations.
financial statements. The Audit Committee receives reports from
• joint control over the activities of joint ventures through Stagecoach management and the external auditors on significant judgements,
representation on the boards of the entities together with regular contact changes in accounting policies, changes in accounting estimates and other
between Stagecoach management and the management of the relevant pertinent matters relating to the consolidated financial statements.
entities.
• The financial statements of all material business units are subject to
• a performance management appraisal system, which covers the Group’s external audit.
senior management based on agreed financial and other performance
The Group uses the same firm of auditors to audit all Group companies. The
objectives, many of which incorporate managing risk.
Group auditors review the audit work papers for material joint ventures that
• significant emphasis on cash flow management. Bank balances are are audited by a different firm of auditors.
reviewed on a daily basis and cash flows are compared to budget on a four-
weekly basis.
4.16 Pension schemes
• reporting to the Board and/or its Committees on specific matters including The assets of the Group’s pension schemes are held under trust, separate
updated key risks, taxation, pensions, insurance, treasury management,
from the assets of the Group and are invested with a number of independent
foreign exchange, interest and commodity exposures. The Board regulates
fund managers. There are ten trustees for the principal UK scheme of whom
treasury management policies and procedures.
two are employee representatives nominated by the members on a regional
• defined capital expenditure and other investment approval procedures, basis and three are pensioner trustees. The chairman of the trustees of the
including due diligence requirements where material businesses are being principal UK scheme is a professional trustee who served for eight years as a
acquired or divested. fund member elected representative on the National Association of Pension
• each operating unit maintains internal controls and procedures appropriate Funds’ investment council. He also sits independently as an elected
to the business. A written certificate is provided at least annually by the representative of all railway employers on the Board of the Railways Pension
management of each business confirming that they have reviewed the Scheme and is a past Trustee Chairman of the Railways Pension Scheme
effectiveness of the system of internal control during the year. trustees. The other trustees of the principal UK scheme include senior Group
• a competition compliance programme, which the Board has approved and and UK Bus executives.
which is subject to regular monitoring. A Pensions Oversight Committee was in operation throughout the year. This
• an anti-bribery and anti-corruption policy with training and compliance Committee is chaired by a non-executive director, Sir Ewan Brown, and also
monitoring. comprises one executive director and other members of senior management.
Any control weaknesses that these procedures identify are monitored and The Committee operates at a strategic level and its remit covers all matters
addressed in the normal course of business. None of the weaknesses affecting the Group’s pension schemes from the perspective of the Group’s
identified in the year to 30 April 2015 have resulted in any material losses, shareholders and other stakeholders, and it will consider, develop and
contingencies or uncertainties that would require disclosure in the Group’s propose recommendations to the Board in respect of such issues as may
Annual Report. arise. The Committee reviews pension scheme funding, investment strategy,
risk management, internal controls surrounding pension matters and the
related administration for each of the employee pension schemes of the
4.15 Process for preparing consolidated financial Group.
statements
The Group has established internal control and risk management systems in
relation to the process for preparing consolidated financial statements. The
key features of these internal control and risk management systems are: By order of the Board
• The Risk Assurance function and management conducts various checks on

internal financial controls periodically.
• Management regularly monitors and considers developments in Mike Vaux
accounting regulations and best practice in financial reporting, and where Company Secretary
appropriate, reflects developments in the consolidated financial 24 June 2015

5. Audit Committee report
5.1 Introduction from Gregor Alexander, 5.4.1 Financial Reporting
Chairman of the Audit Committee The Group’s interim and preliminary financial results, as well as its Annual
As Chair of the Audit Committee, I am pleased to present our Audit Report, were reviewed and revised by the Audit Committee before
Committee report for the financial year ended 30 April 2015 in accordance recommending their publication to the Board. At each meeting, the
with the UK Corporate Governance Code. The report describes how we have Committee discussed with management how they had applied critical
discharged our responsibilities under the Code and monitored the accounting policies and judgements to these documents, having considered
effectiveness of the Group’s financial reporting, internal control systems and reports from both the Group’s management and the external auditors. The
risk management. external auditors attended all meetings of the Committee and presented
audit plans and findings, amongst other matters.
The revised UK Corporate Governance Code was issued in September 2014
and will apply to next year’s Audit Committee report. In the year ahead, the The Committee considered a number of issues and accounting judgements
Committee will consider the changes relevant to risk management and in respect of the financial statements for the year ended 30 April 2015, of
internal control arising from the revised Code, in particular reviewing the which it considered the most significant to be set out in the table on the
processes in place to support the new viability statement. Other areas of following page.
focus will include overseeing the tenders of the external audit and Risk In addition to the significant accounting judgements set out in the table, the
Assurance function, which we intend to complete by April 2016. Committee also considered other accounting and reporting matters in
respect of the year ended 30 April 2015, including the following:
• Exceptional items – The Committee considered the appropriateness of the
amounts disclosed as exceptional items in the financial statements and the
adequacy of the disclosure related to such items. In respect of the year
Gregor Alexander
ended 30 April 2015, the Committee considered the Financial Reporting
Chairman of the Audit Committee
Council’s recommendations to companies around the consistency of
24 June 2015
reporting exceptional items, and is satisfied that the Group’s approach is
appropriate in this area.
5.2 Composition of the Audit Committee • East Coast Main Line - The Group begun operating the Virgin Trains East
The membership of the Audit Committee is summarised in section 4.9 of this Coast rail franchise on 1 March 2015 and acquired the train operating
Annual Report. Gregor Alexander is the current Chairman of the Audit company, East Coast Main Line Company Limited, at that time. The
Committee and is a Chartered Accountant. Gregor is the Finance Director of Committee considered the accounting for the franchise commencement
SSE plc, a FTSE 100 company, and is the designated Committee member with and the purchase of the train operating company. The Committee
recent and relevant financial experience. Phil White is a former Finance considered whether a business combination (in an accounting sense) had
Director and former Chief Executive of a FTSE 350 company and is also a occurred but concluded that the purchase of the train operating company
Chartered Accountant. Helen Mahy qualified as a Barrister, was an Associate should be accounted for as an asset purchase, with the cost of the
of the Chartered Insurance Institute and was the Company Secretary and purchase allocated to the assets acquired and liabilities assumed based on
General Counsel of a FTSE 100 company. their fair values at the date of purchase. The difference between the cost
of the purchase and the values recorded for the assets acquired and
liabilities assumed was recorded as an intangible asset to be amortised
5.3 Operation of the Audit Committee over the expected life of the franchise.
The Audit Committee met three times during the year. The Committee • Rail franchise opportunities – In light of the range of opportunities facing
retains discretion as to who from outside the Committee should attend its
the Group’s UK Rail Division, the Committee considered whether any
meetings but generally invites the following to attend:
actual or anticipated changes in the commercial terms or duration of rail
• The Group Finance Director; franchises resulted in any changes in accounting estimates. The
• The Group Financial Controller; Committee also considered the accounting for any costs incurred in
• The Company Secretary, who is Secretary to the Committee; pursuing rail franchise opportunities. The Committee concluded that the
• Representatives from the external auditors; accounting estimates in the consolidated financial statements had been
appropriately updated for such franchise changes and that any costs
• Representatives from the Risk Assurance Function. incurred in pursuing rail franchise opportunities had been appropriately
In addition, the Group Tax Director and Group Treasurer are expected to accounted for.
present to the Committee at least annually. • Impairment and onerous contracts – In addition to considering whether
The Committee may also invite other directors of the Company to attend the carrying value of the Group’s investment in Twin America was
meetings of the Committee and does so from time to time. impaired, the Committee also considered whether any adjustments were
required to the consolidated financial statements for impairments of any
other assets and/or onerous contracts. The Committee concluded that no
5.4 Activities of the Audit Committee material impairment losses or provisions for onerous contracts ought to be
The Committee receives reports from major business functions including the recorded in the consolidated financial statements that were not already
Risk Assurance Function (internal audit), which is outsourced and managed recorded.
by Deloitte. It also receives reports from the external auditors. It considers the
scope and results of the audit, the half-year and annual financial statements
• Other liabilities – The Committee considered the judgments made in
respect of certain other liabilities, including the token provision, and
and the accounting and internal control systems in place throughout the
considered them to be appropriate.
Group. The Audit Committee reviews the cost effectiveness, independence
and objectivity of the internal and external auditors. The Audit Committee also reviewed the evidence that supported the
The terms of reference of the Audit Committee are available on the Group’s conclusion that the Group remained a going concern, noting it was
website at consistent with the disclosure given in section 3.12 of this Annual Report.
http://www.stagecoach.com/Terms-of-reference-of-the-Audit-
Committee.pdf
The sections that follow set out the areas that the Committee focused on
during and in respect of the year ended 30 April 2015.

Significant issues or judgements Work and conclusion of Audit Quantification Relevant notes to the
considered by Audit Committee Committee consolidated financial
statements
Pensions
The determination of the Group’s The Committee considered the appropriateness of The total pensions expense 6, 25
pension benefit obligation and pension assumptions by receiving reports from recognised in the
expense for defined benefit pension management outlining the basis of the consolidated income
schemes is dependent on the selection assumptions used, comparing these assumptions statement for the year
by the Directors of certain to those applied by other companies operating in ended 30 April 2015 was
assumptions used by actuaries in the same sector as the Group as well as by listed £84.2m (2014: £74.2m)
calculating such amounts. Those companies more generally, considering advice and the net retirement
assumptions include the discount rate, from external actuaries and considering analysis benefit liability as at 30 April
annual rate of increase in future salary undertaken by the external auditors. The 2015 was £160.5m (2014:
levels and mortality rates. Committee noted that there was a range of £115.8m).
acceptable assumptions but concluded that the
assumptions applied were appropriate.
Insurance
The estimation of the insurance The Committee discussed with management the The insurance provision in 24
provision in respect of traffic accidents key judgements made in determining the the consolidated balance
and employee incidents is based on an insurance provision, challenging the methodology sheet as at 30 April 2015
assessment of the expected settlement used, and understanding the extent to which was £150.7m (2014:
on known claims together with an estimates are supported by third party actuarial £140.9m).
estimate of settlements that will be advice and analysis provided by the external
made in respect of incidents occurring auditors. The Committee noted that there was a
prior to the balance sheet but for which range of acceptable estimates for the year-end
claims have not been reported to the insurance provision and after challenge, concluded
Group. that the amount of the insurance provision was at
an appropriate point within that range.
Taxation
Estimation of the tax charge requires The Committee considered the judgements made The consolidated tax charge 7, 23
an assessment to be made of the in respect of tax by reviewing reports from for the year ended 30 April
potential tax consequences of certain management outlining the basis of the 2015 was £25.7m (2014:
items that will only be resolved when assumptions, challenging the estimates formed £25.5m).
agreed by the relevant tax authorities. and considering the extent to which third party The net consolidated tax
professional advice and/or historical experience liability as at 30 April 2015
informed the judgements. The Committee met was £63.2m (2014:
with the Group’s Tax Director, the Group Tax £82.9m).
Manager and a tax partner from the external
auditors in April 2015. The specific judgements
considered by the Committee included the
accounting for the tax effect of fuel derivatives,
transfer pricing and the financing of foreign
operations. The Committee concluded that
appropriate judgements had been made in
determining the tax amounts recorded in the
financial statements.
Twin America Litigation

Certain of the Group’s subsidiaries and The Committee considered the appropriateness of The carrying value of the 13, 31
one of its joint ventures, Twin liabilities held by the Group and its joint venture in Group’s interest in Twin
America, are party to litigation as respect of the Twin America litigation. It America as at 30 April 2015
explained in note 31 to the considered this through discussion with was £35.9m (2014:
consolidated financial statements. management and consideration of relevant legal £28.5m), after deducting
The ultimate cost to the Group in advice. It evaluated the range of possible outcomes £2.6m (2014: £11.6m) in
respect of this matter is uncertain but and concluded that appropriate liabilities had been respect of the Group’s share
the Audit Committee is pleased that recorded in the consolidated financial statements. of liabilities related to the
position is now less uncertain as a litigation.
result of progress made during the The Committee also assessed whether the carrying
year ended 30 April 2015 towards value of the Group’s interest in Twin America was A further £4.1m was held in
settling the litigation. impaired, and concluded that no impairment loss accruals in the Group’s
had arisen. consolidated balance sheet
as at 30 April 2015 in respect
of liabilities related to the
litigation.

Audit Committee report
of the Group’s financial statements for the year ending 30 April 2017. The
Audit Committee does not necessarily intend that there will be a change of
5.4.2 External auditors auditors as a result of the planned tender.
The external auditors presented a detailed audit plan to the Committee, The Committee intends to issue an initial Request for Information (“RFI”) in
setting out their analysis of significant audit risks and key judgemental August 2015 to parties wishing to tender for the Group’s external audit
accounting matters, which would inform their planned scope and approach and/or internal audit. Further information can be obtained from the
to the current year audit. For the year ended 30 April 2015, the most Company Secretary‚
significant risks identified were in relation to provisioning for insurance
The Group is not aware of any restrictions that would limit its choice of
claims, taxation, pensions accounting and the Twin America impairment
external auditors.
assessment, based on the inherent level of management judgement required
in these areas. These risks are monitored through the year and the The Audit Committee, having considered the external auditors’ performance
Committee challenged the work done by the auditors to test management’s during their period in office, has recommended to the Board that a proposal be
assumptions and estimates. put to shareholders at the 2015 Annual General Meeting for the re-
appointment of PricewaterhouseCoopers LLP. The Committee considered the
Private meetings were held with the external auditors at each Committee
audit fee of £0.8m (2014: £0.8m) for PricewaterhouseCoopers LLP appropriate
meeting without the presence of management. The Committee Chairman
and concluded that an effective audit can be conducted for such a fee.
also holds meetings with the external auditors between Committee meetings.
The Audit Committee has responsibility delegated from the Board for making 5.4.3 Non-Audit services
recommendations on the appointment, reappointment, removal and Procedures in respect of other services provided by the auditors are in place to
remuneration of the external auditors. There have been no instances of safeguard audit objectivity and independence. The Group’s current policies on
disagreements between the Board and the Audit Committee relating to the non-audit services are:
external auditors. • Audit related services – These are services that the auditors must undertake
Subject to the annual appointment of auditors by the shareholders, the Audit or are best placed to undertake by virtue of their role as auditors. Such
Committee conducts a continuous review of the relationship between the services include formalities relating to bank financing, regulatory reports,
Group and the auditors. This review includes: and certain shareholder circulars. The auditors would generally provide all
• the consideration of audit fees that should be paid and advance approval such services.
of any other fees in excess of £50,000 per annum which are payable to • Tax consulting – It is the Group’s policy to select the advisor for each
auditors or affiliated firms in respect of non-audit activities; specific piece of tax consulting work who has the most appropriate skills
• the consideration of the auditors’ independence and objectivity; and experience for the work required. The Group uses a range of advisors
for tax consulting, including the auditors where they are best suited to the
• the nature and scope of the external audit and the arrangements which work being undertaken.
have been made to ensure co-ordination where more than one audit firm
or offices of the same firm are involved; and • General consulting – For other consulting work, the Group will select an
• discussions on such issues as compliance with accounting standards. advisor after taking account of the skills and experience required and the
expected cost of the work. The Group uses a range of advisors for general
The Committee formally assesses the effectiveness of the external audit
consulting, including the auditors where they are best suited to the work
process on an annual basis in the context of the wider assurance processes
being undertaken.
across the Group. As well as undertaking its own assessment of the audit
effectiveness, the Committee also considers the views of a number of finance • The auditors are only permitted to provide non-audit services to the Group
managers from various parts of the Group. The auditor assessment when the Audit Committee and the auditors are satisfied that there are no
questionnaire is completed on an annual basis and examines three main circumstances that would lead to a threat to the audit team’s independence
performance criteria – robustness of the audit process, quality of delivery and or a conflict of interest that could not be effectively safeguarded.
quality of people and service. This assessment also includes consideration of In addition to the audit fee, PricewaterhouseCoopers LLP received non-audit
the auditors’ independence and objectivity, taking into account relevant laws, related fees of £0.1m (2014: £0.1m), which equate to 12.5% (2014: 12.5%) of
regulations and professional requirements. The assessment involves the audit fee and further details of which can be found in note 3 of the
considering all relationships between the Group and the auditors, including consolidated financial statements.
the nature and quantum of non-audit services. Assurances are obtained from The Committee believes that the level and scope of non-audit services does
the auditors that they and their staff have no financial, business, not impair the objectivity of the auditors and that there is a clear benefit
employment, family or other personal relationship with the Group that could obtained from using professional advisors who have a good understanding of
affect the auditor’s independence and objectivity, taking account of relevant the Group’s operations. Other accounting or consulting firms have been used
ethical standards. The auditors explain to the Audit Committee their policies where the Group recognises them as having particular areas of expertise or
and processes for maintaining independence and monitoring compliance where potential conflicts of interest for the auditors are identified. The
with relevant requirements. Committee will, however, of course review its policy on non-audit services
The Committee considers the reappointment of the external auditor each year from time to time, to ensure continued compliance with laws and regulations,
before making a recommendation to the Board and shareholders. The including European Union legislation.
Committee assesses the independence and effectiveness of the external In May 2014, the European Commission published a directive amending the
auditor on an ongoing basis and the ethical standards require that, other than Statutory Audit Directive and a new Audit Regulation. The new Audit
in exceptional circumstances, the individual audit partner responsible for the Regulation has the direct effect of law and European Union member states,
Group audit may not undertake the role for a period of more than five years. including the UK, are required to adopt provisions to ensure its effective
The current lead partner has been in place for four years. The current auditors application. The new Audit Regulation stipulates that a statutory auditor of a
have been in place since 2002 and this was the last year an audit tender was public-interest entity, which would include the Company, shall not provide
conducted. certain non-audit services to that entity, its parent undertaking and/or its
The Committee recognises the current requirements in relation to audit subsidiary undertakings within the European Union. The Company’s auditors
tendering, which were published by the European Union during the year and will therefore be prohibited from providing certain non-audit services to the
have been reflected in a final order published by the UK’s Competition and Group that are not currently prohibited. The new requirements come into
Markets Authority, effective on 1 January 2015. Transitional arrangements effect on 17 June 2016 and shall first apply to the Group in respect of its
require a change in the Group’s external auditors by 2023. At its April 2015 financial year ending 30 April 2017. The Financial Reporting Council is
meeting, the Committee confirmed its intention to conduct a formal tender consulting on the implementation of the Statutory Audit Directive and the new
process prior to 1 May 2016, such that a change of auditors, if any, occurs Audit Regulation in the UK. The Audit Committee will continue to oversee the
following the end of the five-year term of the current lead audit partner in Group’s compliance with laws and regulations in this area and will update its
2016. We currently expect that any new auditors would undertake the audit policies to reflect developments in laws and regulations.

5.4.4 Internal auditors production of the Annual Report and financial statements as operating
The Committee has received several reports from Deloitte, which manages the effectively during the year, and was able to provide positive assurance to the
outsourced Risk Assurance Function (internal auditors), detailing the planned Board on the fair, balanced and understandable conclusion.
schedule of audits as well as tracking key findings and any related material In advising the Board, the Audit Committee noted that:
actions to address unsatisfactory results. Deloitte attended all meetings of the • The Board considers the key risks facing the Group and the Audit Committee
Committee, in addition to meeting privately with the Committee without the considered how these link to the description of principal risks and
presence of management. uncertainties in the Annual Report;
The Audit Committee has the responsibility for making recommendations on • The Board considers the strategy of the Group and its short and long-term
the appointment, reappointment, removal and remuneration of the Group Risk objectives;
Assurance Function. There have been no instances of disagreements between • The Board receives four-weekly updates on the actual financial performance
the Board and the Audit Committee relating to the Risk Assurance Function. of the Group and significant developments affecting the Group;
The Committee formally assesses the effectiveness of the risk assurance • The Board receives summaries of significant media coverage relevant to the
function on an annual basis. This assessment includes a consideration of Group;
independence and objectivity, the overall level of fees, the quality of the risk • The Board annually reviews and approves the Group’s budget and is updated
assurance process, and the role of the function in the context of the broader at least twice a year on an updated forecast of financial performance for the
sources of risk assurance. Deloitte has managed the Risk Assurance Function year;
since 2002, and as a matter of good corporate governance practice, the
Committee intends to formally tender this function in conjunction with the
• The Audit Committee receives updates on developments in accounting
standards and other relevant laws and regulations;
planned external audit tender noted in section 5.4.2.
• The Audit Committee receives updates on key areas such as treasury,
5.4.5 Code of Conduct and “Speaking Up” Policy taxation and audit;
The Audit Committee reviews compliance with the Group’s Code of Conduct • The Audit Committee and the Board generally have the opportunity to
and use of the Group’s “Speaking Up” policy, which provides a mechanism for consider, comment and request changes to the Annual Report and other
employees with serious concerns about the conduct of the Group or its price-sensitive documents prior to publication;
employees to report those concerns. The Committee ensures that appropriate • The preparation of the “front end” of the Annual Report includes the
arrangements are in place to receive and act proportionately upon a complaint Corporate Communications team, the Company Secretariat, and Group
about malpractice. The Committee takes a particular interest in any reports of Finance as well as Divisional management validating the appropriateness of
possible improprieties in financial reporting. the material relating to the relevant division. The involvement of these
All known instances of fraud, theft or similar irregularities affecting the Group various groups helps ensure the balance, completeness and accuracy of the
were reported to and considered by the Committee, although there were no “front end”;
such matters that were sufficiently material to merit disclosure in the Annual • The Audit Committee receives reports from the external auditors, the
Report. The Committee also received and considered updates on litigation internal auditors and management in respect of various matters including
involving the Group, although other than the Twin America litigation referred the financial statements;
to in section 5.4.1 above, there were no such matters that were sufficiently • The external auditors report on whether the “fair, balanced and
material to merit separate disclosure in the Annual Report. understandable” statement is materially consistent with their knowledge of
the Group acquired in the course of performing their audit.
5.4.6 Other activities
The Committee has considered a range of other matters at its three meetings The Audit Committee’s assessment considered whether:
over the last year and received various reports and presentations as follows: • Appropriate weight had been given to “bad news” as well as “good news” in
• A presentation was received from the Group Tax Director on the Group’s tax the Annual Report;
affairs, significant tax accounting judgements and tax risks. The Group • The description of the business, principal risks and uncertainties, strategy and
Treasury team gave a presentation on the Group’s treasury affairs and objectives in the Annual Report was consistent with the Board’s
management of treasury risks. understanding;
• The Committee considered reports on the planned external audit and Risk • The principal risks and uncertainties were consistent with the Group risk
Assurance Function tenders. register;
• As part of the Committee’s ongoing training and development, both • The Annual Report was presented in an “understandable” way.
management and the external auditors updated the Committee on The Audit Committee also noted the established internal control and risk
developments in accounting standards, auditing standards, guidance for management systems in relation to the process for preparing consolidated
audit committees, the Financial Reporting Council UK Corporate Governance financial statements.
Code, legislation affecting the Group more generally and other relevant
regulatory developments and guidance. 5.5 Committee evaluation
• The Committee considered reports from the Audit Committee of Virgin Rail The Committee’s activities formed part of the internal review of Board
Group on matters relevant to that joint venture. The Group’s Finance effectiveness performed in the year. Details of this review are provided in
Director is Chairman of the Virgin Rail Group Audit Committee. section 4.8. Overall, the Committee considers that it has continued to
• Minutes of the Treasury Committee meetings (comprising members of operate effectively during the year.
management) were shared with the Audit Committee.
• The Committee reviewed a summary of the Directors’ expense claims.
5.4.7 Fair, Balanced and Understandable

The Audit Committee advised the Board on whether it considers the Annual
Report and financial statements, taken as a whole, to be fair, balanced and
understandable and to provide the information necessary for shareholders to
assess the Company’s performance, business model and strategy. The
Committee assessed the controls and processes in place in respect of the

6. Nomination Committee report
6.1 Introduction from Garry Watts, Stagecoach 6.4 Board diversity
Group Deputy Chairman and Chairman of the The Company believes strongly that its Board benefits from comprising
Nomination Committee talented people with a range of perspectives and from differing backgrounds.
The Nomination Committee has an important place in the governance The terms of reference of the Committee reflect this in the criteria for
structure of the Stagecoach Group. To be effective a board needs to maintain identifying suitable candidates for nomination to the Board.
balance over time, taking account of planned and unplanned changes to the The Company was co-founded by Ann Gloag and throughout its life as a listed
membership of the Board. As Chairman of the Committee, I ensure that we company it has had at least one woman on its Board and since May 2001, at
regularly review our Board composition and ensure that the mix of skills least two. There are currently ten directors of the Company.
available is appropriate. We are aware that talented individuals can come from The percentage of women on the Board is 20% and the Board aspires to
diverse backgrounds and aim to promote greater diversity in the maintain at least this percentage in the future. In addition to board diversity,
recommendations that we make to the Board. the Company believes in promoting diversity at all levels of the organisation,
We have reviewed the performance and length of service of our executive and further detail of which is provided in section 1.8.4 of the Strategic report.
non-executive directors and are pleased to be able to recommend all of our
board for re-election at the 2015 Annual General Meeting.
6.5 Succession planning arrangements
The Board and the Nomination Committee recognise the importance of
succession planning to ensure that the Group continues to prosper in the
longer term. The Group operates a decentralised organisational structure with
clearly defined limits of responsibility and authority, and oversight from head
office. This structure provides the opportunity for managers to develop in
Garry Watts
some of the Group’s smaller business units before progressing to wider and
Chairman of the Nomination Committee
more responsible roles. The Group has a history of developing good managers
24 June 2015 who have progressed to take on senior positions within the Group. The Group
operates a graduate recruitment programme, and some of the graduates
recruited have gone on to become managing directors of individual business
6.2 Composition of the Nomination units, both in the UK and North America.
Committee The Nomination Committee ensures that appropriate succession
The composition of the Nomination Committee is summarised in section arrangements are in place for the Directors. The Nomination Committee and
4.9. The Committee also invites other non-executive directors to attend its the Board seeks to identify new directors and senior managers to ensure
meetings from time to time. succession of directors is conducted in a managed way, without significant
disruption to the ongoing business of the Group. The Committee believes that
6.3 Operation of the Nomination Committee it is important to develop and promote existing talent from within the
organisation.
The Nomination Committee keeps under review the overall structure, size and
composition of the Board, and is responsible for evaluating the balance of The Chief Executive has established a talent group involving human resources,
skills, knowledge and experience of the Board and its committees. Where training and other professionals from within the Group. The talent group is
appropriate the Committee will suggest adjustments to achieve that balance. taking a lead role to further enhance the recruitment, retention and
For a proposed appointment, the Committee will prepare a description of the development of talented employees throughout the Group.
role and the attributes required of the candidates, which will include a job Given the importance of succession planning, the views of all directors are
specification and the estimate of the time commitment expected. In making considered and not just the views of the members of the Committee.
any appointment, the Group’s policy on directors having other significant
commitments will be taken into account and potential candidates will be
asked to disclose their other commitments and confirm that they will have
sufficient time to meet what is expected of them. The Directors are also
required to report any significant changes in their other commitments as they
arise. The Committee identifies and evaluates suitable candidates and makes
proposals for each appointment, although final appointments are the
responsibility of the Board as a whole. The appointments process takes
account of the benefits of diversity of the Board, including gender diversity and
in identifying suitable candidates the Committee considers candidates from a
range of backgrounds.
When seeking to appoint a new non-executive director, the Nomination
Committee compiles a shortlist of potential new non-executive directors by
taking account of known candidates and candidates suggested by the Group’s
advisors.
Non-executive directors receive a letter of appointment. For any new
appointments, the expected time commitment is agreed with the director and
included in the letter of appointment.
No director of the Company is currently a chairman of a FTSE 100 company.
The terms of reference of the Nomination Committee are available on the
Group’s website at
http://www.stagecoach.com/Terms-of-reference-of-the-Nomination-
Committee.pdf

7. Health, Safety and Environmental Committee report
7.1 Introduction from Helen Mahy, Chairman Chairman visited the Group’s operations in Aberdeen to see the preparations
being made for the roll-out of the new hydrogen powered bus fleet and to
of the Health, Safety and Environmental discuss the expected challenges of operating vehicles on hydrogen fuel.
Committee The UK Bus management team in West Scotland hosted a site visit and
The Health, Safety and Environmental Committee assists the Board to fulfil its Committee meeting in December 2014. The visit focused in particular on the
responsibilities by recommending Group policy in these areas and monitoring environmental initiatives being undertaken in West Scotland, including the
compliance with the Group policy. challenges of operating vehicles on 100% bio fuel and the alternative fuel
In order to formulate and monitor the Group’s policies, I believe that it is technologies being tested by the Group and elsewhere. The Committee was
important to involve a range of contributors from the Group’s businesses and briefed on route planning and technology initiatives to help to ensure the
to ensure that the members of the Committee actively engage with those safe operation of new long distance inter-city coach services in Europe under
businesses to help the Group to evolve its health, safety and environmental the megabus.com brand.
strategy over time. By bringing contributors together at its meetings, the The Committee Chairman spent time with the North America management
Committee aims to share knowledge between the Group’s businesses and to team, viewing the new vehicle maintenance facility in Chester, New York,
challenge its business managers and safety advisers to promote sustained visiting Megabus operations in Washington and Atlanta, and seeing the
improvement over time. facilities and operations of Dillons, Baltimore and American Coach Lines of
The safety and security of our customers, our people and others is Atlanta.
fundamental to our business. Public transport is the safest way to travel and In the Committee’s 2014 evaluation of its performance, Committee members
health and safety is at the top of our agenda. agreed that it would assist the Committee to bring an external view point in
to the meeting from time to time. We invited one of our external legal
advisers who had advised on a recent incident to use it as a case study on the
operation of the Committee. The presentation gave an opportunity to
examine in detail the way in which the Group management team had
responded to the incident and to discuss the ways in which the Group as a
Helen Mahy whole learns from incidents arising from its operations.
Chairman of the Health, Safety and Environmental Committee In their 2015 evaluation of the performance of the Committee, Committee
24 June 2015 members indicated that they would like to explore further the potential for
emerging road safety technology to enhance the safety of the Group’s road
vehicles and would like to receive a briefing on the new Virgin Trains East
Coast franchise. These briefings and suggestions made by Committee
7.2 Composition of the Health, Safety and members for improvements to the agenda and reports to the Committee will
Environmental Committee form part of the work of the Committee and executive management team
over the new financial year.
The membership of the Health, Safety and Environmental Committee is
summarised in section 4.9. Committee members attend meetings of the Safety Committees of
individual business units from time to time. The Committee allocates time in
The terms of reference of the Health, Safety and Environmental Committee its agendas to receive detailed briefings on areas of specific interest or
are available on the Group’s website at concern to it. During the year, presentations were received on a range of
http://www.stagecoach.com/Terms-of-reference-of-the-HSE-Committee.pdf topics, including how safety risk analysis is applied by the UK Rail Division, the
development of rail safety plans, alternative fuel technologies for road
vehicles and megabus.com route safety planning. The Committee was briefed
on road safety technology solutions being introduced on new Group vehicles
7.3 Operation of the Health, Safety and and technologies that are in development. In order to gain a greater
Environmental Committee understanding of the challenges of driving a rail vehicle on the South Western
The Committee considers health, safety and environmental risks, mitigations area rail infrastructure, members of the Committee were given the
and issues across the Group and reports to the Board on these matters. The opportunity to drive a train simulator at the South West Trains driver training
Committee also approves the Group’s overall strategic safety framework. It facility.
has access to internal safety executives and also external consultants, where The Committee reviews the Group’s analysis of health, safety and
required. environmental risks and its strategies to address those risks. The Committee
Executive management is responsible for ensuring that local health and receives reports on trends in health and safety indicators across the Group as
safety policies and procedures are consistent with the overall framework. well as information on significant incidents involving the Group. Key
Managers from each of the Group’s key divisions attend meetings of the performance indicators are provided and reviewed in respect of each major
Committee, providing the Committee with an opportunity to question and operating division. Training, where relevant, is provided to the Committee on
challenge management on health, safety and environmental matters. As health, safety and environmental matters. The Committee liaises with the
incidents occur, the Committee, aided by the safety management teams, is Remuneration Committee in determining any health and safety objectives to
able to analyse those incidents and learn lessons to further improve the form part of the Executive Directors’ personal objectives.
Group’s safety processes. Members of the Committee review entries for the annual Stagecoach
The Committee and its members visit operational locations to observe Champions Awards, which reward employees for excellence in the areas of
health, safety and environmental management in practice. During the year, safety, environmental, community, health, customer service and innovation.
the members of the Committee visited the Group’s UK Bus operations in
Northampton and Bedford, seeing the benefits of the recent re-development
of the Northampton bus station and relocation of the depot, and were
briefed on proposed re-development work in Bedford. The Committee

8. Directors’ remuneration report
8.1 A statement to shareholders from the • Reviewed and approved the vesting of the 2011 awards under the EPP.
Chairman of the Remuneration Committee • Decided on levels of pay and benefit increases in the annual salary review
for the Executive Directors and made recommendations to the Board in
On behalf of the Remuneration Committee, I am pleased to present the
respect of the remuneration of the Chairman and Deputy Chairman.
Directors’ remuneration report for the year ended 30 April 2015, prepared in
compliance with UK reporting regulations. The report includes a summary of • Reviewed the remuneration for senior non-Board managers.
the Directors’ remuneration policy, which was approved at the 2014 Annual • Consulted with major shareholders on matters of remuneration policy,
General Meeting on 29 August 2014, and the Annual Report on including proposals to introduce a second performance condition for the
Remuneration. A complete copy of the approved remuneration policy is Long Term Incentive Plan based on targets for growth in earnings per
available on our website at: share.
http://www.stagecoach.com/Remunerationpolicy29August-2014.pdf • Obtained approval from shareholders in a binding vote at the 2014
In line with UK legislation, we do not intend to seek further approval of the Annual General Meeting for the Directors’ remuneration policy, including
policy at the 2015 Annual General Meeting because no changes are proposed the introduction of a second performance condition for the Long Term
to the approved policy. Incentive Plan based on targets for growth in earnings per share.
Our approach to remuneration is to ensure that the key components are Remuneration for 2014/15
consistent and easily understood, that overall remuneration is not excessive
As regards the results for the year and payouts under the annual bonus plan, I
and that the share based incentives and other elements of variable
am pleased to say that the Group has delivered another set of good financial
remuneration provide an alignment between the objectives of executive
results and has made progress against its financial and strategic objectives.
management and shareholders. The Group has delivered a strong financial
Both the Executive Directors, together with the senior management team,
performance over a sustained period and we consider this has been supported
provided strong leadership throughout the year. We continue to be well
by the clear direction provided by the remuneration policy.
positioned to take advantage of rail franchise opportunities, noting the
We consider that the elements of variable pay, comprising the annual bonus successful start to the new Virgin Trains East Coast rail franchise. Both of the
awards, Deferred Shares, and a long-term incentive plan should provide Executive Directors were able to meet all of their personal objectives
meaningful but not excessive incentives designed to provide a clear alignment accounting for 30% potential bonus award. The Committee set three
with the corporate strategy and shareholders’ long-term objectives. challenging financial targets for the year ended 30 April 2015 for the purposes
Our approach to executive pay and our remuneration policy has, therefore, of determining bonus payments. Of the three targets, the consolidated profit
remained unchanged during 2014/15 and the implementation has been before interest and taxation (“PBIT”) from Group companies was not achieved,
consistent with previous years. Annual bonus potentials are retained at a principally because the operating profit from the UK Bus (regional operations)
maximum of 100% of basic pay (allocated 50% in cash and 50% in Deferred Division and the North America Division did not reach the target levels as
Shares) and with a maximum value on award under the Long Term Incentive explained in section 1.3 of this Annual Report. However, a strong performance
Plan (“LTIP”) of 150% of basic pay. from the Group’s rail interests and in particular its Virgin Rail Group joint
venture meant that consolidated adjusted earnings per share (“EPS”) were
As explained in section 4.2 of this Annual Report, the UK’s Financial Reporting better than target. Consolidated net debt (“Net Debt”) was also better than
Council issued a new version of the UK Corporate Governance Code (“the target. The performance against the financial targets is consistent with the
Code”) in September 2014. The new version of the Code will first apply to our trading updates published by the Company during the year. This has meant
year ending 30 April 2016. It recommends that performance-related that annual bonus levels of 35% out of a maximum of the 70% available for
remuneration schemes for executive directors should include provisions that financial performance has been achieved, resulting in total bonus awards of
would enable the Company to recover sums paid or withhold the payment of 65% of basic salary for both directors.
any sum, and specify the circumstances in which it would be appropriate to do
so. The Group had already updated its Executive Participation Plan (“EPP”) and The Committee remains committed to ensuring there is a strong linkage
Long Term Incentive Plan (“LTIP”) to enable the Company to withhold the between pay and performance and that pay remains aligned with the interests
payment of any sum under these schemes – these provisions may be referred of shareholders and other major stakeholders.
to as “malus” provisions. The current arrangements do not include provisions We are grateful for the work undertaken by the Group and our remuneration
which enable the Company to recover sums already paid under the EPP or LTIP advisers and for the support we have received from our major shareholders
- such provisions may be referred to as “clawback” provisions. As a Committee, and their representative bodies. We continue to value shareholders’ views on
we will monitor developments in corporate remuneration practice and our remuneration arrangements and I can be contacted via the Company
consider what, if any, changes to malus and clawback provisions should be Secretary.
introduced when the Directors’ remuneration policy is next due for
At the Group’s Annual General Meeting on 28 August 2015 shareholders will
consideration by shareholders. The malus provisions referred to above, the
be invited to approve this statement and the Annual Report on Remuneration
deferral of 50% of annual bonus in shares under the EPP and the interests in
together in an advisory vote.
shares that the Executive Directors are expected to maintain (see section 8.5.8
of this Annual Report) are intended to ensure that the Executive Directors have It is my hope that all of our shareholders, whether they are large institutional
a meaningful interest in the shares of the Company and take a longer term shareholders or individual shareholders, will find value in this report.
perspective on the success of the Company.
Activities of the Remuneration Committee

The main tasks and decisions of the Committee during the year ended 30 April
2015 were:
Phil White
• Reviewed the performance and approved the Executive Directors’
Chairman of the Remuneration Committee
bonuses for the year ended 30 April 2014.
• Set annual performance targets for the Executive Directors’ bonuses. 24 June 2015
• Reviewed performance and approved the vesting of the 2011 awards
under the LTIP, in June and December 2014.
• Reviewed and approved targets for LTIP awards made in the year ended
30 April 2015.

8.2 Compliance statement 8.4.1 Key principles of the remuneration policy
This Directors’ remuneration report covers the period from 1 May 2014 to 30 In determining appropriate levels of remuneration for the Executive Directors,
April 2015 and provides details of the Remuneration Committee’s role and the the Remuneration Committee aims to provide overall packages of terms and
remuneration policy we apply in decisions on executive remuneration. conditions that are competitive in the UK and will attract, retain and motivate
This report has been prepared in accordance with the Large & Medium-sized high quality executives capable of achieving the Group’s objectives and to
Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013. ensure that they are fairly rewarded for their individual responsibilities and
In accordance with Sections 439 and 439A of the Companies Act 2006, an contributions to the Group’s overall performance.
advisory ordinary resolution to approve the statement by the Chairman of the The Remuneration Committee believes that packages for the Executive
Remuneration Committee and the Annual Report on Remuneration will be Directors should contain meaningful performance-related elements and that
proposed at the 2015 Annual General Meeting. the performance-related elements should be designed to align the interests of
Remuneration payments and payments for loss of office can only be made to the Executive Directors and other senior managers with the interests of
directors if they are consistent with the approved Directors' remuneration policy shareholders. The Remuneration Committee is able to consider all relevant
or otherwise approved by ordinary resolution of the shareholders. factors when setting the Executive Directors’ remuneration, including
Those sections in the remuneration report that have been audited have been environmental, social and governance matters. Performance targets are
highlighted as such. The remaining sections of the remuneration report are not established to achieve consistency with the interests of shareholders, with an
subject to audit. appropriate balance between short-term and long-term targets. Performance
targets include financial measures as well as non-financial targets, such as
8.3 Remuneration Committee environmental and safety objectives. The incentive arrangements for the
The Committee’s principal function is to determine Stagecoach Group’s policy Executive Directors are structured so as not to unduly increase environmental,
on executive remuneration and to approve specific remuneration packages and social and governance risks by inadvertently motivating irresponsible
service contracts for the Group’s Executive Directors and such senior members of behaviour.
the executive management as it is asked by the Board to consider. The The Remuneration Committee regularly reviews the existing remuneration of
Committee also has responsibility for making a recommendation to the Board the Executive Directors, making comparisons with peer companies of similar
in respect of the remuneration of the Chairman and Deputy Chairman. size and complexity and with other companies in the public transport industry.
The terms of reference of the Committee are available on our website at: Proposals for the forthcoming year are then discussed in the light of the
http://www.stagecoach.com/Terms-of-reference-of-the-Remuneration- prospects for the Group as a whole. The Remuneration Committee is also kept
Committee.pdf informed of the salary levels of other senior executives employed by the Group.
The approach is consistent with that applied for the workforce in that we look
8.4 Directors’ remuneration policy to pay competitively with reference to the market rate for a job. With regard to
This section sets out the remuneration policy for executive directors and non- pensions, the Remuneration Committee has access to reports from pension
executive directors. The policy was approved by a binding vote of shareholders scheme trustees and scheme actuaries regarding the cost of pension
on 29 August 2014 and took effect from that date. obligations.
We also consult our major shareholders in developing policy.
A complete copy of the approved remuneration policy is available on the Group’s
website at: http://www.stagecoach.com/Remunerationpolicy29August-2014.pdf
8.4.2 Summary of remuneration policy for the Executive Directors

This section of our report sets out in tabular form a summary of each of the components of the remuneration package for the Executive Directors. The components
reflect the policy that applied in the year ended 30 April 2015.
8.4.2.1 Fixed elements of pay

BASIC SALARY
Purpose and link to strategy objectives Maximum value
To attract, retain and motivate executives ensuring basic salaries are competitive Basic salary increases are applied in line with the outcome of the annual review.
in the market. Whilst there is no maximum salary or maximum increase in salary, the
Committee would only set a salary which exceeded the top quartile of salaries
Operation applicable in FTSE 250 companies in unforeseen and exceptional
Basic salaries are generally reviewed as at 1 May each year but the Remuneration circumstances.
Committee also has discretion to adjust them at other times of the year. Account is
taken of changes in individual responsibilities that may have occurred and the Performance metrics
salaries for similar roles in comparable companies. The Committee also considers
the published salary data for FTSE 250 companies. Account is also taken of pay Basic salary levels are predicated on continued good performance by the
conditions throughout the Group. director.
Salary levels set effective from 1 May 2015 are set out in section 8.5.3.1.1 of
this Annual Report.
PENSIONS AND LIFE ASSURANCE ARRANGEMENTS

To provide relevant life assurance and pension benefits that are competitive in Final salary elements are related to basic salary, and any element satisfied by an
the market. employer cash allowance would be limited to a third of basic salary.
Operation Performance metrics

Pension obligations for the Executive Directors are met through a combination of Pensions and life assurance arrangements are predicated on continued good
approved defined benefit schemes, unfunded pension arrangements, and cash performance by the director.
allowances, designed to provide pension benefits on retirement of up to two thirds
of final pensionable pay. Her Majesty’s Revenue and Customs (“HMRC”) and
Scheme rules provide that defined benefit pension benefits may not be drawn
before age 55.

Directors’ remuneration report
8.4.2.1 Fixed Pay (continued)

BENEFITS IN KIND AND OTHER ALLOWANCES
Designed to be competitive in the market. Benefits vary by role, and are reviewed periodically to ensure they are reasonable
relative to market. There is no maximum value of a core benefit package as this
Operation is dependent on the cost to the employing company and the individual’s
Benefits in kind and other allowances can include: circumstances.
• Health-care benefits, life assurance cover, company car allowance, and Participation in the BAYE scheme is subject to HMRC limits.
telephone costs.
• Opportunities to join the Buy As You Earn (“BAYE”) scheme. Performance metrics
• Relocation assistance upon appointment if/when applicable. Benefits in kind and other allowances are predicated on continued good
Business related travel and subsistence costs will be met or reimbursed including performance by the director.
directors’ partners attending corporate events or management conferences. Where BAYE limits were increased in line with increases in HMRC limits from 6 April
the Committee considers it appropriate other benefits may be provided, including 2014.
on recruitment or relocation.
8.4.2.2 Variable Pay

PERFORMANCE-RELATED ANNUAL CASH BONUSES
Aims to focus the Executive Directors on achieving demanding annual targets The maximum annual bonus is up to 100% of basic salary, of which 50% of any
relating to Group performance. bonus award in the year will be settled in cash.

At the start of each financial year, the Committee agrees specific objectives for each 70% of the maximum annual bonus is subject to meeting demanding key financial
executive director. At the end of each financial year, the Remuneration Committee objectives, and 30% is for meeting individual business related objectives. In accordance
determines the performance-related annual bonus for each executive director for with the rules of the EPP, at least 50% of any actual bonus will be deferred as shares
the year just ended. This is based on each director’s performance in achieving the under the EPP.
set objectives, and affordability for the Group. A number of discrete objectives are set and the bonus potential is specified for each.
No payment is made if none of the specific objectives are met. The minimum level of performance required to be met for payout for each of the
discrete objectives is that specified in the objectives.
Further details of the performance measures used for the 2015 bonus are set out in the
Annual Report on Remuneration in section 8.5.3.
EXECUTIVE PARTICIPATION PLAN (“EPP”)

Aims to align the interests of managers and shareholders by purchasing At least 50% of any actual bonus earned in the year will be deferred as shares
interests in shares out of the annual bonus award. under the EPP.
It is also designed to provide an incentive for managers to remain with the Additional shares are allocated in respect of dividends payable during the
Group and forms a core part of the Group’s succession and management relevant period. By agreement with the Remuneration Committee, more than
development plans. 50% may be deferred.
The actual value of the awards at vesting will reflect the face value of the
Operation Deferred Shares at the time of award but also subsequent movements in the
Participants are awarded Deferred Shares, which have been conditionally Company’s share price and dividends paid by the Company.
awarded, with an initial market value approximately equal to the amount of the
actual cash bonus forgone. Performance metrics
Unvested awards granted after 30 August 2013 are subject to malus. The EPP is an effective retention programme in that participants would lose their
entitlement to the Deferred Shares if, save for “good leaver” provisions, they left
of their own volition during the three-year deferral period. It also increases
participants’ effective equity interests in the Group and so better aligns their
interests with shareholders.
There are no specific performance conditions attaching to the release of Deferred
Shares because the annual bonus is already subject to performance conditions.

8.4.2.2 Variable Pay (continued)
LONG TERM INCENTIVE PLAN (“LTIP”)
Purpose and link to strategy objectives Performance metrics

Aims to align the interests of shareholders and management in growing the Awards made prior to 1 May 2014 are subject to a stringent performance condition
return to shareholders and the value of the business over the long-term. related to total shareholder return (‘‘TSR’’) over a three-year assessment period.
TSR is calculated as the movement in share value after taking account of re-
Operation invested dividends. TSR is measured relative to an appropriate comparator group
Participants are awarded Incentive Units, which have a nominal value equal to of FTSE 250 companies.
one of the Group’s ordinary shares. Incentive Units can be in the form of a Such awards will vest as follows:
conditional award, a cash award or a nil-cost option. • If the TSR does not exceed the median of the comparator group, then none of
Unvested awards granted after 30 August 2013 are subject to malus. the relevant available Incentive Units awarded will vest and they will lapse;
The Committee may adjust and amend awards only in accordance with the rules • If the TSR exceeds the median of the comparator group (which is the
of the LTIP. “threshold” performance level), then one-sixth (16.67%) of the available
Incentive Units awarded will vest and the remainder will lapse;
Maximum value • If the TSR is in the top decile of the comparator group, then all of the available
The maximum awards granted in relation to any financial year for an Incentive Units awarded will vest;
individual is limited to Incentive Units with an aggregate face value at the time • If the TSR is higher than the median but less than the top decile of the
of award, not exceeding 150% of basic salary. comparator group, then the proportion of the available Incentive Units that will
The actual value of the awards at vesting will reflect the face value of the vest would be between 16.67% and 100% of the available Incentive Units
Incentive Units at the time of award but also subsequent movements in the awarded depending on the actual ranking against the comparator group.
Company’s share price, dividends paid by the Company and actual For awards under the LTIP from 1 May 2014, a second performance condition applies,
performance relative to the performance metrics. with one half of annual awards being made based on relative total shareholder return,
and the other half based on targets set for a measure of earnings per share (“EPS”)
over the three year period. In setting stretching targets for the EPS based performance
condition the Committee will take into account factors such as:
• The long-term expectations for the Group
• Analysts’ consensus expectations
• Market norms and the approach of peer group companies
• The level of expected underlying inflation, such that any growth target must be
positive and exceed inflation.
For the Incentive Units awarded that are subject to the TSR condition, vesting will
be as follows:
• If the TSR does not exceed the median of the comparator group, then none of
the relevant Incentive Units awarded will vest and they will lapse;
• If the TSR exceeds the median of the comparator group (which is the
“threshold” performance level), then one-quarter (25%) of the available
Incentive Units will vest and the remainder will lapse;
• If the TSR is in the top quartile of the comparator group, then all of the available
Incentive Units will vest;
• If the TSR is higher than the median but less than the top quartile of the
comparator group, then the proportion of the Incentive Units that will vest
would be between 25% and 100% of the available Incentive Units depending on
the actual ranking against the comparator group.
For the Incentive Units awarded that are subject to the EPS condition, vesting will
be as follows:
• If the EPS is below the target set by the Remuneration Committee, then none
of the relevant available Incentive Units will vest and they will all lapse;
• If the EPS equals the target for threshold vesting set by the Remuneration
Committee (which is the “threshold” performance level), then one-quarter
(25%) of the available Incentive Units will vest and the remainder will lapse;
• If the EPS equals or exceeds the target for maximum vesting set by the
Remuneration Committee then all of the available Incentive Units will vest;
• If the EPS is higher than the threshold vesting target but less than the maximum
vesting target, then the proportion of the Incentive Units that will vest would be
between 25% and 100% of the available Incentive Units adjusted on a straight
line basis depending on the EPS achieved.
For awards under the LTIP from 1 May 2014, the performance conditions will be
tested over a three-year period, being the three years commencing on or around the
1 May or 1 November immediately preceding the date of the relevant award.
The Committee is satisfied that the remuneration policy is in the best interests of shareholders and does not promote excessive risk-taking. As part of the
Director’s remuneration policy, the Committee reserves the right to make minor amendments to the policies set out above for regulatory, exchange control,
administrative or tax purposes.

8.4.3 Summary of remuneration policy for the Non-Executive Directors

The table below summarises our policy on the remuneration paid to our Non-Executive Directors.
BASIC SALARY
To attract and retain non-executive directors with an appropriate degree of skills, Any fee increases are applied in line with the outcome of the annual review.
experience, independence and knowledge of the Company and its business. Non-executive directors’ fees are subject to an aggregate maximum cap which
To attract and retain a Chairman and Deputy Chairman to provide effective is stated in the Company’s Articles of Association as £800,000 or such larger
leadership for the Board. amount as the Company may decide by ordinary resolution.

Fee levels for non-executive directors are generally reviewed by the Board annually, Continued good performance.
with any adjustments effective 1 May in the year following review. Remuneration
comprises an annual fee for acting as a non-executive director.
Remuneration for the Chairman comprises an annual fee.
Account is taken of fees for similar roles in comparable companies. The Board also
considers the published data for FTSE 250 companies.
Non-executive directors do not participate in pensions or incentive schemes, or
receive other remuneration in addition to their fees. Business related travel and
accommodation expenses will be met or reimbursed including for partners to
corporate events or management conferences and in the case of the Chairman,
home telephone costs may be met or reimbursed.
8.5 Annual Remuneration Report

This section of the remuneration report provides details of how the remuneration policy was implemented during the year ended 30 April 2015.
8.5.1 Committee members
The Remuneration Committee is currently composed of four independent non-executive directors. The Committee met three times during the year. The Group
Director of Tax and Employee Benefits is Secretary to the Committee. Attendance at meetings by individual members is detailed in section 4.11. No director was
involved in decisions as to their own remuneration.
The members of the Committee during the year ended 30 April 2015 and at the date of this report were:
• Phil White (Chairman)
• Garry Watts
• Gregor Alexander
• Will Whitehorn
The remuneration of executive directors was not considered by any other Committee or group of directors during the year.
8.5.2 Advisers
The Committee retained Addleshaw Goddard LLP as its remuneration consultant to provide access to independent research and advice. Addleshaw Goddard LLP
has no other connection to the Group. Addleshaw Goddard LLP received £9,826 (2014: £28,250) in respect of work it carried out in the year ended 30 April
2015. The fees payable were determined by Addleshaw Goddard LLP with reference to time spent and applicable hourly rates. We do not consider the level of
fees paid or the nature of the work performed would prejudice the objectivity or independence of Addleshaw Goddard LLP.
8.5.3 Remuneration of the Executive Directors and Non-Executive Directors (audited)
The remuneration of the Executive Directors and Non-Executive Directors may comprise a number of elements, as described in the Directors’ remuneration
policy.
Directors’ remuneration and the single figure total for the year ended 30 April 2015 are shown in Table 1 below. Each of the elements of remuneration is
discussed further below.
TABLE 1 – DIRECTORS’ REMUNERATION Short Term Long Term
Basic Benefits Incentives Incentives Pension
(amounts in £000) Salary/Fees in (performance vested related Total
kind related bonus) (LTIP) benefits
2015 2014 2015 2014 2015 2014 2015 2014 2014

2015 2014 2015
(restated) (restated)
Executive directors
Martin Griffiths 614 600 23 24 399 600 99 582 316 406 1,451 2,212
Ross Paterson 410 400 23 23 267 400 49 283 196 233 945 1,339
Non-executive directors
Gregor Alexander 58 51 – – – – – – – – 58 51
Sir Ewan Brown 53 51 – – – – – – – – 53 51
Ann Gloag 53 51 – – – – – – – – 53 51
Helen Mahy 58 51 – – – – – – – – 58 51
Sir Brian Souter 205 200 – 1 – – – – – – 205 201
Garry Watts 128 125 – – – – – – – – 128 125
Phil White 58 51 – – – – – – – – 58 51
Will Whitehorn 53 51 – – – – – – – – 53 51
Total 1,690 1,631 46 48 666 1,000 148 865 512 639 3,062 4,183

Notes to Table 1:
i. Basic Salary/fees
The basic salary/fees in Table 1 correspond to the amounts payable in respect of the financial year ended 30 April. Salary is paid monthly and all salaries shown
above were effective from 1 May at the start of the relevant financial year. Both of the Executive Directors participated in pension salary sacrifice arrangements
during the year and the basic salary amounts are shown gross before any salary sacrifice arrangements.
ii. Benefits in kind and other allowances

The benefits in kind shown in Table 1 are made up as follows:
TABLE 2 – BENEFITS IN KIND Reimbursement Employer

Cash allowance in lieu Healthcare of home BAYE Total
of company car benefits telephone expenses contributions
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
£ £ £ £ £ £ £ £ £ £
Martin Griffiths 22,000 22,000 866 982 405 445 177 197 23,448 23,624
Ross Paterson 22,000 22,000 866 982 – – 177 197 23,043 23,179
Sir Brian Souter – – – – 25 577 – – 25 577
During the year, both of the Executive Directors participated in the Buy As You Earn (“BAYE”) Plan. We believe that the BAYE plan aligns the interests of
employees and shareholders by allowing all UK employees of the Group to purchase shares out of salary. It is designed to aid staff motivation and retention. The
maximum employee purchase is governed by HMRC limits. The Group provides two matching shares for every share purchased on the first £10 of each
employee’s monthly investment. The amounts shown in Table 2 are the values of such matching shares allocated to directors as at the dates of allocation.
Additional shares are allocated in respect of dividends payable during the relevant period. Details of the shares held under the BAYE plan are shown in Table 10.
iii. Performance related bonus

Around the start of each financial year, the Committee agrees specific objectives for each executive director. Following the end of each financial year, the
Committee determines the annual bonus for each executive director for the year just ended. This is based on each director’s performance in achieving the set
objectives. The objectives comprise both financial objectives for the Group and individual business related objectives for each director. For each executive
director, the Group financial objectives for the year ended 30 April 2015 were to meet financial targets with respect to measures of profit before interest and
taxation, earnings per share, and net debt.
For the year ended 30 April 2015, Martin Griffiths and Ross Paterson each had a maximum potential bonus of up to 100% of basic salary, with 70% allocated
over a range of financial objectives and 30% for meeting individual business related objectives. Details of the financial objectives applicable for 2014/15 are
shown below.
TABLE 3 – DIRECTORS’ OBJECTIVES Target Achieved Potential Bonus Bonus Awarded

(% of basic salary) (% of basic salary)
Consolidated profit before interest and

taxation (“PBIT”) from Group companies £218.6m £201.7m 35.0% –
Consolidated adjusted earnings per
share (“EPS”) 26.6p 26.7p 17.5% 17.5%
Consolidated net debt (“Net Debt”) £509.2m £381.3m 17.5% 17.5%
Element of bonus related to Group
financial objectives 70.0% 35.0%
The PBIT and EPS measures shown above are determined in accordance with International Financial Reporting Standards but adjusted to exclude intangible
asset expenses and exceptional items. The PBIT measure also excludes any share of profit or loss from joint ventures. The Net Debt measure shown above is
determined in accordance with the definition of net debt given in note 35 to the consolidated financial statements. The actual values achieved in respect of each
of the three measures are adjusted to exclude the impact of any acquisitions and disposals that were not included in determining the target values.
The detailed individual business related targets are considered to be commercially sensitive and it is the Committee’s intention that a summary of these
objectives may be disclosed when they are no longer considered commercially sensitive.
For the year ended 30 April 2015, the Chief Executive had personal objectives relating to:
• Health and safety performance across all business units;
• Strategy and value creation from rail activities;
• The development of inter-city coach operations in North America and Europe and;
• Management succession and development.
For the year ended 30 April 2015, the Finance Director had personal objectives relating to:
• The Group’s investment grade credit ratings;
• The re-financing of debt;
• The financial structure of rail franchise bids and rail “direct awards”;
• Key commercial, technology projects.
The Committee intends to provide information on the Executive Directors’ personal objectives for the year ending 30 April 2016 when it considers such
disclosure to be no longer commercially sensitive.

In making its judgement of performance for the last financial year, the Remuneration Committee had particular regard to the results as recorded elsewhere in
the Annual Report, and relative total return to shareholders over the year, as well as other strategic developments and operating performance. Performance
related bonuses awarded to the Executive Directors in respect of the year ended 30 April 2015 are shown below.
TABLE 4 – DIRECTORS’ BONUSES AWARDED Actual bonus as a percentage of Maximum potential bonus as a percentage of
basic salary basic salary
Director Cash Deferred Shares under EPP Cash Deferred Shares under EPP
Martin Griffiths 32.5% 32.5% 50% 50%

Ross Paterson 32.5% 32.5% 50% 50%
iv. LTIP
The amounts shown in Table 1 in respect of the LTIP vestings for the year ended 30 April 2015 represents the actual market value of the vesting of the
December 2011 award in December 2014. No amount is included for the June 2012 amount as it is not expected to deliver a payment.
The December 2011 award vested achieving a ranking of 113 out of the 237 companies in the comparator group throughout the performance period, resulting
in a pay-out percentage of 21.1% of the relevant Incentive Units.
Details of LTIP awards that are treated in Table 1 as having vested during the year ended 30 April 2015 are shown below:
TABLE 5 – LTIP AWARDS Amounts Pure per
treated as vested for As at 30 April Dividends Lapsed Vested As at 30 April included in incentive
inclusion in Table 1 2014 in year during year during year 2015 Table 1 including unit achieved
(Incentive (Incentive (Incentive (Incentive (Incentive dividend amounts on vesting Vesting
Grant date Units) Units) Units) Units) Units) £ £ Vesting Date %
Martin Griffiths
08 Dec 11 121,273 2,180 (97,405) (26,048) – £98,774 3.7920 11 Dec 14 21.10%
27 Jun 12 135,939 3,755 – – 139,694 – – 27 Jun 15 Nil
£98,774
Ross Paterson
08 Dec 11 60,018 1,079 (48,206) (12,891) – £48,883 3.7920 11 Dec 14 21.10%
27 Jun 12 63,437 1,752 – – 65,189 – – 27 Jun 15 Nil
£48,883
LTIP awards vested in June 2014

A forecast of the vesting value of the June 2011 LTIP awards which vested in June 2014 was shown in the 2014 Annual Report. The forecast amounts used were
£290,474 for Martin Griffiths and £143,756 for Ross Paterson. The actual amounts paid out on vesting were £275,465 for Martin Griffiths and £136,330 for
Ross Paterson based on the actual ranking of 75 out of the FTSE250 comparator group delivering a vesting percentage of 58.34% on a share price on 30 June
2014 of £3.76. The 2014 amounts shown in Table 1 have been restated accordingly.
v. Pension related benefits
The pension amounts shown in Table 1 for each director represents 20 times the increase (excluding inflation) in the accrued annual pension entitlement plus the
increase (excluding inflation) in the accrued cash lump sum entitlement, less contributions paid by the relevant director.
vi. External Appointments
Martin Griffiths is a non-executive director of AG Barr plc, and was permitted to retain the £52,777 fees received from this position in the year ended 30 April 2015
(2014: £46,500). In the year ended 30 April 2014 he also received fees of £15,600 from a directorship of Robert Walters plc, having stepped down from that position
in July 2013.
8.5.4 Pensions (audited)

Under the terms of their service agreements, the Executive Directors are entitled to become members of one of the Group’s defined benefit pension schemes or,
if preferred, to receive payment of a proportion of salary for personal pension arrangements. Defined benefit pensions may be accrued either under the HMRC
approved pension scheme or the Group’s unfunded pension arrangements. For pension purposes, the Executive Directors have a normal retirement age of 60
and in accordance with HMRC rules accrued defined benefits may not be drawn before age 55.
Martin Griffiths accrued benefits in the year ended 30 April 2015 under the Group unfunded pension arrangements. Other than adjustments for inflation, no
further benefits accrued under the HMRC approved Group defined benefit pension scheme during the year.
Ross Paterson accrued benefits in the year ended 30 April 2015 under a combination of a HMRC approved Group defined benefit pension scheme and the
Group unfunded pension arrangements until 31 March 2015 and thereafter accrued benefits only under the Group unfunded pension arrangements.
Life assurance of four times basic annual salary is provided under the arrangements for pension benefits.
Table 6 below provides the pensions information required by Schedule 8 of the Large & Medium-sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013 and gives details of benefits accruing during the year under the Group’s pension arrangements.
TABLE 6 – DIRECTORS’ PENSION Contributions paid Accrued Accrued

BENEFITS Normal by the director Accrued cash annual pension Accrued cash annual pension
Retirement for the year ended entitlement at entitlement at entitlement at entitlement at
date 30 April 2015 30 April 2014 30 April 2014 30 April 2015 30 April 2015
£’000 £’000 £’000 £’000 £’000
Martin Griffiths 31 March 2026 54 166 92 168 112

Ross Paterson 29 July 2031 35 127 52 137 64
The totals above include pension benefits accrued for service prior to appointment as a director of the Company.
Directors’ contributions to pension schemes as shown in Table 6 above are made by way of salary sacrifice arrangements.
No non-executive directors accrued benefits in the year under money purchase schemes or defined benefits schemes in connection with their roles with the Group.

8.5.5 EPP and LTIP awards during the financial year (audited)
Tables 7 and 8 set out the awards to the Executive Directors under the Company’s share schemes during the year ended 30 April 2015.
TABLE 7 – LTIP AWARDS IN YEAR Expected Maximum
Type of Share price at total value at total value at
interest time of award Basis Awards time of grant time of grant Vesting Performance
awarded £ of award granted in year £ £ Date period
Martin Griffiths
26 Jun 14 Incentive 3.8000 75% of 121,263 315,271 460,799 26 Jun 17 1 May 2014 -
Units basic salary 30 April 2017
11 Dec 14 Incentive 3.7920 75% of 121,518 315,269 460,796 11 Dec 17 1 Nov 2014 -
Units basic salary 31 Oct 2017
Ross Paterson
26 Jun 14 Incentive 3.8000 75% of 80,842 210,181 307,200 26 Jun 17 1 May 2014 -
Units basic salary 30 April 2017
11 Dec 14 Incentive 3.7920 75% of 81,012 210,180 307,198 11 Dec 17 1 Nov 2014 -
Units basic salary 31 Oct 2017
Each Incentive Unit shown in Table 7 has a notional face value equal to one of the Company’s ordinary shares and was granted as a cash-settled award.
The maximum and expected values shown above ignore non-market vesting conditions and do not include any assumed share price appreciation or dividends
paid. The actual number of Incentive Units (if any) which vest will depend on the performance conditions being achieved.
TABLE 8 – EPP AWARDS IN YEAR Awards Maximum & expected

Type of Share price at granted in year total value at
interest time of award Basis (deferred time of grant Vesting Performance
awarded £ of award shares) £ Date period
Martin Griffiths
26 Jun 14 Deferred 3.7825 50% of 79,312 299,998 26 Jun 17 n/a
Shares annual bonus
Ross Paterson
26 Jun 14 Deferred 3.7825 50% of 52,875 200,000 26 Jun 17 n/a
Shares annual bonus
Each Deferred Share shown in Table 8 has a notional face value equal to one of the Company’s ordinary shares.
The maximum and total expected values ignore non-market vesting conditions and do not include any assumed share price appreciation or dividends paid.
There are no specific performance conditions attaching to the release of these Deferred Shares because the annual bonus is already subject to performance
conditions.
8.5.6 Payments to past directors (audited)

There have been no payments in excess of the de minimis threshold to former directors during the year ended 30 April 2015 (2014: £Nil) in respect of their
former roles as directors. The Company has set a de minimis threshold of £10,000 under which it would not report such payments.
8.5.7 Payments for loss of office (audited)

There have been no payments for loss of office to directors during the year ended 30 April 2015 (2014: £Nil).

8.5.8 Statement of directors’ shareholdings and share interests (audited)

The Executive Directors and certain other senior executives are expected to accumulate significant shareholdings in the Company. In the case of the Executive
Directors, they are each expected to accumulate an effective interest in shares in the Group with a value of at least 200% of basic salary. A target of 100% was
first introduced in 2005 and was amended to 200% in June 2014 following feedback from shareholders. The Executive Directors are allowed five years from the
date of appointment to accumulate the appropriate level of shares. For these purposes, EPP Deferred Shares will be counted on a post-tax basis only and all
interests in shares will be counted at current value as at the 30 April year end. LTIP Incentive Units are not included in this measure. At 30 April 2015, Martin
Griffiths had an interest in shares equivalent to 332% (2014: 327%) of his basic salary and Ross Paterson an interest in shares equivalent to 240% (2014: 230%)
of his basic salary. Both directors therefore met the shareholding guideline.
The effective interests of the Directors (including those of connected persons) as at 30 April 2015 were:
TABLE 9 – DIRECTORS’ INTERESTS IN SHARES OF THE GROUP Scheme interests vested

Interests as at during year ended
AS AT 30 APRIL 2015
30 April 2015 30 April 2015
LTIP Incentive EPP Shares BAYE Shares LTIP Incentive EPP Shares
Units (subject (not subject (not subject Units (subject (not subject
Shares held to performance to performance to performance to performance to performance
outright conditions) conditions) conditions) conditions) conditions)
Executive directors
Martin Griffiths 435,240 777,337 234,471 1,989 99,310 73,085
Ross Paterson 211,650 467,283 107,210 1,989 49,149 27,081
Non-executive directors
Gregor Alexander 10,406 – – – – –
Sir Ewan Brown see note below
Ann Gloag 62,501,721 – – – – –
Helen Mahy 8,971 – – – – –
Sir Brian Souter 86,900,445 – 55,762 – – 54,758
Garry Watts 16,000 – – – – –
Phil White 4,070 – – – – –
Will Whitehorn 72,288 – – – – –
Sir Ewan Brown has an indirect interest in the share capital of the Company. He and his connected parties own approximately 18% (2014: 18%) of
the ordinary shares of Noble Grossart Holdings Limited, which in turn through its subsidiary, Noble Grossart Investments Limited, held 3,267,999
ordinary shares in the Company at 30 April 2015 (2014: 3,267,999).
Although Sir Brian Souter retired as an executive director of the Company on 30 April 2013, retirement is not a vesting event for the EPP and so he
retains awards of EPP Deferred Shares that are expected to vest on their original planned vesting dates.

Further details of directors’ interests in the LTIP, EPP and BAYE schemes are shown in Table 10 below.
TABLE 10 – SUMMARY OF INTERESTS IN THE LTIP, As at Granted in Dividends Lapsed Vested As at Vesting
EPP AND BAYE SCHEMES 30 April 2014 year in year during year during year 30 April 2015 Date
Long Term Investment Plan

Martin Griffiths 125,579 – – (52,317) (73,262) – 30 Jun 14
121,273 – 2,180 (97,405) (26,048) – 11 Dec 14
135,939 – 3,755 – – 139,694 27 Jun 15
111,895 – 3,090 – – 114,985 06 Dec 15
146,104 – 4,035 – – 150,139 27 Jun 16
121,871 – 3,366 – – 125,237 12 Dec 16
– 121,263 3,350 – – 124,613 26 Jun 17
– 121,518 1,151 – – 122,669 11 Dec 17
762,661 242,781 20,927 (149,722) (99,310) 777,337
Ross Paterson 62,150 – – (25,892) (36,258) – 30 Jun 14

60,018 – 1,079 (48,206) (12,891) – 11 Dec 14
63,437 – 1,752 – – 65,189 27 Jun 15
52,217 – 1,441 – – 53,658 06 Dec 15
97,402 – 2,690 – – 100,092 27 Jun 16
81,247 – 2,243 – – 83,490 12 Dec 16
– 80,842 2,233 – – 83,075 26 Jun 17
– 81,012 767 – – 81,779 11 Dec 17
416,471 161,854 12,205 (74,098) (49,149) 467,283
Executive Participation Plan

Martin Griffiths 73,085 – – – (73,085) – 30 Jun 14
74,424 – 2,059 – – 76,483 27 Jun 15
74,423 – 2,059 – – 76,482 27 Jun 16
– 79,312 2,194 – – 81,506 26 Jun 17
221,932 79,312 6,312 – (73,085) 234,471
Ross Paterson 27,081 – – – (27,081) – 30 Jun 14

27,140 – 750 – – 27,890 27 Jun 15
24,310 – 672 – – 24,982 27 Jun 16
– 52,875 1,463 – – 54,338 26 Jun 17
78,531 52,875 2,885 – (27,081) 107,210
Sir Brian Souter 54,758 – – – (54,758) – 30 Jun 14

54,261 – 1,501 – – 55,762 27 Jun 15
109,019 – 1,501 – (54,758) 55,762
Buy as you Earn Scheme
Martin Griffiths 1,406 537 46 – – 1,989 n/a
Ross Paterson 1,406 537 46 – – 1,989 n/a
8.5.9 Performance graph

The graph below charts the performance of the total shareholder return (‘‘TSR’’) (share value movement plus reinvested dividends) from the Company’s ordinary
shares over the six years to 30 April 2015 compared with that of the FTSE Travel and Leisure All-Share Index, and the FTSE 250 Index. The FTSE 250 Index has
been selected for this comparison because it is the index used by the Company for the TSR based performance criterion for the LTIP Scheme, while the FTSE
Travel and Leisure All-Share Index is shown as the Company and a number of its peers make up a significant element of that index.
Stagecoach 6-Year TSR Comparative Performance to 30 April 2015:

400
Stagecoach TSR FTSE 350 Travel & Leisure TSR FTSE 250 TSR
350
300
250
200
150
100
50
May 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Apr 14 Jul 14 Oct 14 Jan 15 Apr 15

For comparative purposes, the pay for the role of Chief Executive over time is shown in Table 11 below.
TABLE 11 – PAY FOR THE ROLE OF CHIEF EXECUTIVE Sir Brian Souter Martin Griffiths
Year ended 30 April: 2010 2011 2012 2013 2014 2015
Bonus (percentage of maximum)* 35% 46% 47% 64% 100% 65%

LTIP vesting rates against maximum opportunity 100% 0% n/a 61% 56% 10%
Single figure of total remuneration (£000) 2,491 1,269 1,227 3,443 2,212 1,451
* Sir Brian Souter waived entitlement to part of his cash bonus, with the amounts waived being used to support funding of medical screening in the UK Bus Divisions. Therefore
the bonus percentages shown in Table 11 above reflect the amounts awarded to Sir Brian net of the waivers. For information, the full bonus percentage entitlements based on
performance and before the waivers are shown in Table 12 below.
TABLE 12 – BONUS AWARDED TO CHIEF EXECUTIVE Sir Brian Souter

(before waivers) Year ended 30 April: 2010 2011 2012 2013
Bonus (percentage of maximum)* 80% 90.0% 90.0% 90.0%
The total remuneration figure is calculated on the same basis as the single total figure of remuneration for directors shown in Table 1 in section 8.5.3.
8.5.10 Percentage change in Chief Executive Remuneration (audited)

The change in the Chief Executive’s remuneration from 2013/14 to 2014/15 in comparison to a comparator group of employees is shown in Table 13 below.
TABLE 13 – PERCENTAGE CHANGE IN REMUNERATION FOR THE ROLE OF CHIEF EXECUTIVE Percentage change of Chief Executive Percentage change per capita of employees in
the comparator group throughout both years
Salary 2.4% 3.7%

Benefits -0.7% 4.7%
Bonus -33.4% -9.7%
The comparator group used comprises over 300 employees including the corporate head office employees, the management teams of each of the Group’s divisions
and their administrative support staff. This comparator group was used because the Committee believes it provides a sufficiently large and relative comparator
group to give a reasonable understanding of underlying increases, based on similar annual bonus performance measures utilised by Group management and
support functions. The Group seeks to ensure that the basis for pay increases for Group management support functions are generally consistent with the pay rises at
UK Bus and Rail operations.
8.5.11 Relative Importance of spend on pay (audited)

The table below shows the expenditure of the Group on employee remuneration costs in the year ended 30 April 2015 and the year ended 30 April 2014. In
addition, it details the disbursements from profit made by way of dividend payments during the same periods.
TABLE 14 – SPEND ON PAY RELATIVE TO DIVIDENDS 2015 2014 Percentage
AND STAFF COSTS £m £m change
Profit distributed by way of dividend 56.3 51.0 10.4%

Overall spend on pay for employees 1,203.8 1,133.9 6.2%
Fees are effective from 1 May each year.
8.5.12 Consideration of shareholder views (audited)

The following table shows the results of the votes on remuneration matters at the 2014 Annual General Meeting.
TABLE 15 – SHAREHOLDER VOTE Directors’ Remuneration Policy Directors’ Remuneration Report
Total number % of votes Total number % of votes
of votes cast of votes cast
For+ 442,971,273 95.53% 463,064,227 99.67%
Against 20,747,438 4.47% 1,542,873 0.33%
Total votes cast (excluding withheld votes) 463,718,711 100.00% 464,607,100 100.00%
Votes withheld* 1,370,407 482,018
Total votes cast (including withheld votes) 465,089,118 465,089,118
+the number of votes “for” the resolution includes those cast at the Chairman’s discretion.
*A withheld vote is not a vote in law and is not counted in the calculation of the proportion of votes cast for and against a resolution.
8.5.13 Implementation of remuneration policy in the financial year ending 30 April 2016
In the year ending 30 April 2016, the Executive Directors’ and Non-Executive Directors’ remuneration policies will be implemented as follows.
8.5.13.1 Implementation of executive directors’ remuneration policy
8.5.13.1.1 Fixed elements – basic salary
The Committee made the following 2015/16 basic salary decisions which are in line with the Directors’ remuneration policy.
TABLE 16 – INCREASES IN BASIC SALARY 2015/16 2014/15
salary salary Percentage
£ £ change
Martin Griffiths 626,700 614,400 2.0%
Ross Paterson 417,800 409,600 2.0%
Salaries are effective from 1 May each year. The Committee has considered the broader employee context in determining salaries.

8.5.13.1.2 Other elements
The implementation of policy in relation to other elements of remuneration is in line with the Directors’ remuneration policy, and there are no changes in the
maximum bonus or LTIP potential amounts as a percentage of basic salary.
Short-term incentives – Annual Bonus
The implementation of policy in relation to annual bonus is in line with the Directors’ remuneration policy.
Targets are approved by the Remuneration Committee around the beginning of the year. Each executive director has a maximum potential bonus of up to
100% of basic salary, with 70% allocated over a range of financial objectives and 30% for meeting individual business related objectives.
The Committee has determined that the element of the potential bonus related to financial objectives will be allocated as follows for 2015/16:
TABLE 17 – FINANCIAL OBJECTIVES FOR 2015/16 BONUS Potential bonus

(% of the basic salary)
Consolidated profit before interest and taxation (“PBIT”) from Group companies 23.4
Consolidated adjusted earnings per share (“EPS”) 23.3
Consolidated net debt (“Net Debt”) 23.3
Element of bonus related to Group financial objectives 70.0
The three measures listed in Table 17 will be defined consistently with 2014/15 (see note iii to Table 1).
The Committee is of the view that the values of the performance targets for the financial element under the annual bonus are commercially sensitive and that it
would be detrimental to the interests of the Company to disclose these before the end of the financial year. The targets and achievements in respect of the year
ending 30 April 2016 will be disclosed in the 2016 Annual Report. The Committee is of the view that the performance targets for the personal element are
commercially sensitive as they relate to internal management projects, strategic objectives and personal goals and it is not intended that these will be disclosed
in advance. The Committee’s intention is that a summary of these objectives will be disclosed when they are no longer considered commercially sensitive.
50% of any actual bonus earned in the year will be deferred as shares under the EPP.
Long-term incentives – LTIP awards
LTIP awards vest after three years subject to performance conditions. A summary of the intended awards during the year ending 30 April 2016 and the nature
of the performance conditions are provided in Table 18 below.
TABLE 18 – INTENDED LTIP AWARDS Face value of award Percentage of award Length of
Award Performance at maximum vesting vesting for threshold Performance
Type metric (% of 2015/16 salary) achievement period
Martin Griffiths Incentive Units TSR relative against 75% 25% 3 years
FTSE 250
Incentive Units EPS growth objectives 75% 25% 3 years
Ross Paterson Incentive Units TSR relative against 75% 25% 3 years
FTSE 250
Incentive Units EPS growth objectives 75% 25% 3 years
In all cases, awards will only vest subject to the achievement of the performance conditions and if the Committee determines that the underlying performance
of the Company is sufficient to justify the vesting of awards.
Awards are generally made twice a year following the announcement of the Annual Results in June, and in December following the issue of the results for the
half-year. The maximum level of awards granted for an individual in relation to any financial year is limited to Incentive Units with an aggregate face value at the
time of award not exceeding 150% of basic salary.
The 2015/16 awards will be split one half based on TSR performance against a comparator group of the list of FTSE 250 companies at the date of award, and
the other half based on a measure of earnings per share. For the TSR based awards, the TSR must exceed the median of the comparator group and the amount
of Incentive Units awarded which are released will range from 25% to 100% of the available Incentive Units depending on the actual ranking. A top quartile
ranking is required to achieve 100% release of units.
Demanding targets for the growth in earnings per share will be set for the other half of the awards based on relevant market factors and expectations for the
Group as at the date of award. The portion of the award that is EPS based will attract a threshold payout level of 25% if the EPS growth over the three-year
performance period is at least 15%, and a 100% payout only if the EPS growth is at least 27% over the three-year performance period. A sliding scale of vesting
on a straight-line basis would be applied between these lower and upper vesting levels.
8.5.13.2 Implementation of non-executive directors’ remuneration policy

Annual fees for 2015/16
The implementation of policy in relation to non-executive directors is in line with the Directors’ remuneration policy. The fees per annum for the Non-Executive
Directors for 2014/15 and the amount set for 2015/16 are set out in Table 19 below.
Each non-executive director’s fee is set by the Board, taking account of the views of each director, the specific responsibilities of each director and the fees for
equivalent roles in comparable organisations.
TABLE 19 – NON-EXECUTIVE DIRECTOR FEES 2015/16 2014/15
fees fees
£ £
Chairman 208,900 204,800

Deputy Chairman 130,600 128,000
Chairmen of Audit, Remuneration and the Health, Safety & Environmental Committees 58,600 57,500
Other non-executive directors 52,500-53,600 52,500

9. Responsibility statement
The Directors confirm that to the best of their knowledge:
• The consolidated financial statements, prepared in accordance with the applicable United Kingdom law and in conformity with IFRS, as adopted by the
European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group and the undertakings included in the
consolidation taken as a whole; and
• The Strategic report and the Directors’ report include a fair review of the development and performance of the business and the position of the Group and
the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face.
Signed on 24 June 2015 on behalf of the Board by:
Martin A Griffiths Ross Paterson

Chief Executive Finance Director

10. Independent auditors’ report to the members of
Stagecoach Group plc (Company No. SC100764)
Report on the Group financial statements
Our opinion
In our opinion, Stagecoach Group plc’s Group financial statements (the “financial statements”):
• give a true and fair view of the state of the Group’s affairs as at 30 April 2015 and of its profit and cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (“IFRSs”) as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006 and Article 4 of the IAS Regulation.
What we have audited

Stagecoach Group plc’s financial statements comprise:
• the consolidated balance sheet (statement of financial position) as at 30 April 2015;
• the consolidated income statement and consolidated statement of comprehensive income for the year then ended;
• the consolidated statement of cash flows for the year then ended;
• the consolidated statement of changes in equity for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the Stagecoach Group Annual Report and Financial Statements 2015 (the “Annual Report”),
rather than in the notes to the financial statements. These are cross-referenced from the financial statements and are identified as audited. The financial
reporting framework that has been applied in the preparation of the financial statements is applicable law and IFRSs as adopted by the European Union.
Our audit approach

Overview
• Overall Group materiality: £8.7m which represents 5% of profit before tax of £173.1m prior to
exceptional items.
• In expressing our opinion over the Group financial statements, we audited the financial information of all
reporting units for UK Rail and North America, and the 15 most significant reporting units by scale of UK
Bus. We also instructed and received reporting from component auditors in relation to Virgin Rail Group
and Twin America.
• We performed additional procedures at Group level including over the consolidation process, exceptional
items, pensions, taxation, financial instruments, share based payments and presentation of the Group
financial statements
• We gained an understanding of the key controls and processes that management has in place in relation
to material balances and tested those that provided us with appropriate evidence for the purposes of our
audit.
• The reporting units where we conducted audit work accounted for 91% of Group profit before tax prior
to exceptional items, 92% of Group Revenue and 73% of Group Total Assets.
Our audit focused on the following areas:

• Pension liabilities
• UK Bus and North America insurance provisions
• Provision for uncertain tax positions
• Carrying value of Twin America investment
The scope of our audit and our areas of focus

We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”).
We designed our audit by determining materiality and assessing the risks of material misstatement in the financial statements. In particular, we looked at where
the Directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future
events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including evaluating whether
there was evidence of bias by the Directors that represented a risk of material misstatement due to fraud.
The risks of material misstatement that had the greatest effect on our audit, including the allocation of our resources and effort, are identified as “areas of
focus” in the table on the next page. We have also set out how we tailored our audit to address these specific areas in order to provide an opinion on the
financial statements as a whole, and any comments we make on the results of our procedures should be read in this context. These areas of focus require
significant management judgements and have a range of possible outcomes. This is not a complete list of all risks identified by our audit.

Stagecoach Group plc (Company No. SC100764) (continued)
Area of focus How our audit addressed the area of focus
Pension liabilities We obtained and read the independent actuary’s report commissioned by management which
The Group had a net pension deficit of £160.5m as at reported on the assumptions and methodology used to calculate the pension liabilities and
30 April 2015. compliance of management’s approach with the relevant accounting standard.
We focused on the valuation of the pension liabilities We considered, as further described below and challenged the critical actuarial assumptions
because of their significance to the overall financial used (including the discount rate, life expectancies of scheme members and inflation rates) and
statements. Relatively small movements in assumptions the judgements taken by management in applying these assumptions in calculating the
applied can result in a material impact to the financial pension liabilities.
statements. We compared the critical actuarial assumptions used by management to our own benchmark
Valuation of pension liabilities is dependent upon range of companies. The critical assumptions applied by management were within our
judgement by management in determining and applying benchmark range.
appropriate assumptions used in the actuarial calculation. We also checked that management’s methodologies were consistently applied year to year.
These assumptions include life expectancies of scheme
We checked the consistency of management’s critical assumptions with recent triennial
members, discount rate and inflation rates.
valuation reports and did not note any material exceptions.
Applying an appropriate methodology consistent with the
We tested pension scheme membership information as this is a key input used in the overall
requirements of accounting standards also requires
pension liability calculations. We agreed this data, on a sample basis, to underlying employee
judgement.
records. We did not note any material exceptions in our testing.
Refer also to notes 6 and 25 to the consolidated financial
statements.
UK Bus and North America insurance provisions We gained an understanding of the key controls and processes that management has in place to
Total insurance provisions as at 30 April 2015 amount to assess insurance claims and related provisions. In North America we tested certain controls that
£150.7m, the majority of which relate to UK Bus and North we determined provided us with appropriate audit evidence. In the UK our audit approach was
America. substantive in nature.
Although the Group uses insurance policies to protect We evaluated whether consistent methodology had been applied year on year in determining
against claims, the excesses under these policies that apply the level of provisioning, including the methodology applied by the independent actuary for the
to individual claims are payable by the Group and provided UK Bus provision. We found the approach to be consistent.
for within the balance sheet. These provisions are both We used our team, with relevant actuarial experience, in the USA to independently recalculate
material and judgemental. North American insurance provisions based on underlying data provided by management. We
tested controls over the accuracy of this data with no exceptions noted.
For the exposures which arise in North America,
management calculates the provision in-house using the We compared the level of provisions against past experience of claims and actual settlements.
best available claims and settlement information at a We tested material adjustments to the actuarial provision ranges to check that the rationale for
given point in time based on outcomes that are uncertain; any changes was appropriate and supported by underlying evidence.
and for the UK Bus business, the provision is calculated by For the UK Bus provision, we substantively tested a sample of year-end claims provisions by
reference to an independent actuarial report comparing the provision with recent settlement history for similar cases and obtaining relevant
commissioned by management. correspondence.
Key areas of management judgement in determining We found that the management’s assumptions were consistent with the prior year and, based
these provisions, on which we focus, include the likelihood on the evidence obtained, we did not note any material exceptions based on our evaluation of
of defending claims brought against the Group; assessing the available claims and settlement information.
the value of claims settlements; and assessing the impact
of incidents notified by year end but not yet reported.
Management has developed its methodology and
approach based on past experience and applying actuarial
probabilities in its calculations, both of which we consider
in addressing this area of focus.
Refer also to note 24 to the consolidated financial
statements
Provisions for uncertain tax positions We obtained reports showing the components of the tax provisions and used them to identify
The Group has a net consolidated tax liability of £63.2m as the most significant balances for testing.
at 30 April 2015 which includes provisions in relation to We then applied various selection criteria, including identifying the largest balances, for testing.
uncertain tax positions, which were the focus of our audit. As appropriate, we tested the provisions as follows:
We focused on this area because of the judgemental • understood and re-performed the provision calculation;
nature of the balances and the inherent complexity of • read relevant correspondence with tax authorities and considered the implications for our
interpreting and implementing taxation rules and the risk audit;
of challenge of certain of the Group’s tax positions.
• used our tax expertise and our knowledge and experience of developments in the relevant
Refer also to notes 7 and 23 to the consolidated financial tax jurisdictions to consider the completeness and challenge the basis of the significant
statements. provision judgements made by management and in house tax specialists; and
• utilised our experience of similar situations elsewhere to independently assess the evidence
supporting those tax provisions.
Based on our evaluation of the evidence obtained from the procedures described above, we did
not note any material exceptions in our audit testing.

Area of focus How our audit addressed the area of focus
Carrying value of the Twin America investment In considering management’s impairment model for the carrying value of Twin America, we
As described in note 31 to the consolidated financial tested and challenged key assumptions used in the model particularly in relation to assumed
statements, the Group is subject to anti-trust litigation in future revenue and costs assumptions and the discount rate applied by management within its
relation to its Twin America joint venture. impairment model.
Although uncertainty over the expected settlement has We did this by comparing recent trading results to evaluate management’s trading and cash
been reduced as a consequence of developments in the flow assumptions used in their impairment model. We compared management’s growth
litigation and agreements made in the US, the actions assumptions to independent economic growth forecasts.
required to resolve the litigation have contributed to We also applied sensitivities to management’s forecasts to assess the impact on the carrying
reduced revenue and profits. There is a risk that the carrying value of the investment and considered the extent of change in those assumptions, individually
value of the investment may be impaired as a result. or together, that would cause the investment to be impaired.
Management has concluded that the carrying value is not We considered the methodology used by management within its impairment calculation for
impaired at the balance sheet date, which is based on consistency with market practice.
judgement and involves modelling and projecting certain
assumptions, the most significant of which are future
revenue and costs growth. In evaluating management’s
assessment we focused on these key assumptions.
How we tailored the audit scope

The scope of our audit reflected the organisational structure of the Group, being 3 business areas: UK Bus, UK Rail and North America. We tailored the scope of
our audit to ensure that we performed enough work to be able to give an opinion on the financial statements as a whole, taking into account the geographic
structure of the Group, the accounting processes and controls and the areas of greatest audit risk.
As a result, we performed an audit of the financial information of all reporting units of UK Rail and North America and the 15 most significant reporting units by
scale of UK Bus. The audit work on all in scope reporting units, with the exception of Twin America and Virgin Rail Group, was performed directly by the Group
engagement team. For Twin America, the Group engagement team instructed component auditors from PricewaterhouseCoopers US, identifying and
explaining areas of focus for their work. We also communicated with a firm from outside the PricewaterhouseCoopers network of firms with respect to the audit
of the complete financial information at the Virgin Rail Group joint venture.
The Group engagement team held meetings and calls with those component auditors to clarify and discuss their audit approach, materiality and reporting
requirements. In addition, we had meetings and calls with the component auditors as their audit work progressed so that we could effectively supervise, direct
and understand the findings from their work.
This scope together with directed scope procedures over certain financial statement line items meant we performed audit work across the Group which
accounted for 91% of Group profit before tax prior to exceptional items, 92% of Group Revenue and 73% of Group Total Assets.
In addition, the Group audit team performed audit procedures on the Group consolidation balances of East Coast Main Line Company Limited. This, together
with additional procedures performed at the Group level, including over the consolidation process, exceptional items, pensions, taxation, financial instruments,
share based payments and presentation of the Group financial statements gave us the evidence we needed for our opinion on the Group financial statements as
a whole.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for materiality. These, together with qualitative
considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of
misstatements, both individually and on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall Group materiality £8.7m (2014: £8.3m).

How we determined it 5% of profit before tax of £173.1m prior to exceptional items (being the charges related to the Twin America
litigation and onerous property leases) (2014: 5% of profit before tax of £166.7m prior to exceptional items).
Rationale for benchmark applied We based our materiality on this adjusted profit figure as we believe this is a measure used by shareholders in
evaluating underlying business performance, and the exclusion of exceptional items provides us with a consistent
year-on-year basis for determining materiality.
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above £435,000 (2014: £415,000) as well as
misstatements below that amount that, in our view, warranted reporting for qualitative reasons.

Stagecoach Group plc (Company No. SC100764) (continued)
Going concern
Under the Listing Rules we are required to review the Directors’ statement, set out in Section 3.12, in relation to going concern. We have nothing to report
having performed our review.
As noted in the Directors’ statement, the Directors have concluded that it is appropriate to prepare the financial statements using the going concern basis of
accounting. The going concern basis presumes that the Group has adequate resources to remain in operation, and that the Directors intend it to do so, for at
least one year from the date the financial statements were signed. As part of our audit we have concluded that the Directors’ use of the going concern basis is
appropriate.
However, because not all future events or conditions can be predicted, these statements are not a guarantee as to the Group’s ability to continue as a going
concern.
Other required reporting

Consistency of other information
Companies Act 2006 opinions
In our opinion:
• the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent
with the financial statements; and
• the information given in the Corporate governance report set out in sections 4.13 and 4.14 of the Annual Report with respect to internal control and risk
management systems and provided in section 3.11 about share capital structures is consistent with the financial statements.
ISAs (UK & Ireland) reporting

Under ISAs (UK & Ireland) we are required to report to you if, in our opinion:
• information in the Annual Report is: We have no exceptions to
– materially inconsistent with the information in the audited financial statements; or report arising from this
– apparently materially incorrect based on, or materially inconsistent with, our knowledge of the Group acquired in the responsibility
course of performing our audit; or
– otherwise misleading.
• the statement given by the Directors in Section 3.6, in accordance with provision C.1.1 of the UK Corporate Governance We have no exceptions to
Code (“the Code”), that they consider the Annual Report taken as a whole to be fair, balanced and understandable and report arising from this
provides the information necessary for members to assess the Group’s performance, business model and strategy is responsibility
materially inconsistent with our knowledge of the Group acquired in the course of performing our audit.
• section 5.4.1 of the Annual Report, as required by provision C.3.8 of the Code, describing the work of the Audit We have no exceptions to
Committee does not appropriately address matters communicated by us to the Audit Committee. report arising from this
responsibility
Adequacy of information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion, we have not received all the information and explanations we require for our
audit. We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration specified by law are not made.
We have no exceptions to report arising from this responsibility.
Corporate governance statement

Under the Companies Act 2006 we are required to report to you if, in our opinion, a corporate governance statement has not been prepared by the parent
company. We have no exceptions to report arising from this responsibility.
Under the Listing Rules we are required to review the part of the Corporate Governance Statement relating to the parent company’s compliance with ten
provisions of the UK Corporate Governance Code. We have nothing to report having performed our review.

Responsibilities for the financial statements and the audit
Our responsibilities and those of the Directors

As explained more fully in the Responsibility statement, the Directors are responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards
require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of:
• whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied and adequately disclosed;
• the reasonableness of significant accounting estimates made by the Directors; and
• the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence, forming our own judgements, and evaluating the
disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to
draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial
statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the parent company financial statements of Stagecoach Group plc for the year ended 30 April 2015 and on the information in
the Directors’ Remuneration Report that is described as having been audited.
Graham McGregor (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Glasgow
24 June 2015

11. Consolidated Financial Statements
Consolidated income statement
For the year ended 30 April 2015
2015 2014
Performance Performance
pre intangibles Intangibles and pre intangibles Intangibles and
and exceptional Results for and exceptional Results for
exceptional items items (note 4) the year exceptional items items (note 4) the year
Notes £m £m £m £m £m £m
CONTINUING OPERATIONS
Revenue 2 3,204.4 – 3,204.4 2,930.0 – 2,930.0

Operating costs and other operating income 3 (3,002.7) (11.9) (3,014.6) (2,715.5) (14.0) (2,729.5)
Operating profit of Group companies 2 201.7 (11.9) 189.8 214.5 (14.0) 200.5
Share of profit of joint ventures
after finance costs, finance income and taxation 2 25.4 2.7 28.1 8.8 (8.4) 0.4
Total operating profit: Group operating profit and

share of joint ventures’ profit after taxation 2 227.1 (9.2) 217.9 223.3 (22.4) 200.9
Non-operating exceptional items 4 – (10.6) (10.6) – (0.3) (0.3)
Profit before interest and taxation 227.1 (19.8) 207.3 223.3 (22.7) 200.6
Finance costs 5 (44.8) – (44.8) (47.2) – (47.2)
Finance income 5 2.7 – 2.7 4.6 – 4.6
Profit before taxation 185.0 (19.8) 165.2 180.7 (22.7) 158.0

Taxation 7 (31.1) 5.4 (25.7) (31.2) 5.7 (25.5)
Profit for the year from continuing operations

and profit after taxation for the year 153.9 (14.4) 139.5 149.5 (17.0) 132.5
Attributable to:
Equity holders of the parent 153.6 (14.3) 139.3 149.5 (17.0) 132.5
Non-controlling interests 0.3 (0.1) 0.2 – – –
153.9 (14.4) 139.5 149.5 (17.0) 132.5
Earnings per share (all of which relates to

continuing operations)
– Adjusted basic/Basic 9 26.7p 24.3p 26.0p 23.1p
– Adjusted diluted/Diluted 9 26.6p 24.1p 25.8p 22.9p
The accompanying notes form an integral part of this consolidated income statement.

Consolidated statement of comprehensive income
2015 2014
£m £m
Profit for the year 139.5 132.5
Items that may be reclassified to profit or loss

Cash flow hedges:
– Net fair value losses on cash flow hedges (56.6) (2.8)
– Reclassified and reported in profit for the year 35.1 2.1
– Share of other comprehensive expense on joint ventures' cash flow hedges (2.3) –
– Tax effect of cash flow hedges 4.1 (0.2)
– Tax effect of share of other comprehensive expense on joint ventures' cash flow hedges 0.5 –
Foreign exchange differences on translation of foreign operations (net of hedging) 8.2 (14.8)
Share of foreign exchange differences on translation of foreign operations of joint ventures (0.2) –
Total items that may be reclassified to profit or loss (11.2) (15.7)
Items that will not be reclassified to profit or loss

Actuarial losses on Group defined benefit pension schemes (65.5) –
Tax effect of actuarial losses on Group defined benefit pension schemes 11.9 (3.2)
Share of actuarial gains on joint ventures' defined benefit pension schemes 0.1 –
Total items that will not be reclassified to profit or loss (53.5) (3.2)
Other comprehensive expense for the year (64.7) (18.9)
Total comprehensive income for the year 74.8 113.6
Attributable to:
Equity holders of the parent 75.0 113.6
Non-controlling interests (0.2) –
74.8 113.6

Consolidated balance sheet (statement of financial position)
As at 30 April 2015
2015 2014
Notes £m £m
ASSETS
Non-current assets
Goodwill 10 132.9 125.4
Other intangible assets 11 84.7 22.6
Property, plant and equipment 12 1,097.9 1,040.9
Interests in joint ventures 13 57.8 42.8
Available for sale and other investments 14 – 0.3
Derivative instruments at fair value 26(g) 2.3 0.1
Retirement benefit asset 25 25.5 7.8
Other receivables 19 12.1 14.2
1,413.2 1,254.1
Current assets
Inventories 18 26.9 24.6
Trade and other receivables 19 375.2 269.2
Foreign tax recoverable 0.1 0.8
Cash and cash equivalents 20 395.6 240.3
798.9 535.4
Total assets 2(d) 2,212.1 1,789.5
LIABILITIES
Current liabilities
Trade and other payables 21 830.4 581.2
Current tax liabilities 38.2 49.7
Borrowings 22 51.6 50.9
Provisions 24 64.7 57.5
1,020.8 749.1
Non-current liabilities
Other payables 21 40.0 28.5
Borrowings 22 733.7 660.2
Deferred tax liabilities 23 25.1 34.0
Provisions 24 106.1 111.4
Retirement benefit obligations 25 186.0 123.6
1,096.3 961.1
Total liabilities 2(d) 2,117.1 1,710.2
Net assets 2(d) 95.0 79.3
EQUITY
Ordinary share capital 27 3.2 3.2
Share premium account 29 8.4 8.4
Retained earnings 29 (279.6) (310.0)
Capital redemption reserve 29 422.8 422.8
Own shares 29 (32.1) (25.7)
Translation reserve 29 (1.8) (10.0)
Cash flow hedging reserve 29 (26.8) (9.4)
Total equity attributable to the parent 94.1 79.3
Non-controlling interests 0.9 –
Total equity 95.0 79.3
These financial statements have been approved for issue by the Board of Directors on 24 June 2015. The accompanying notes form an integral part of
this consolidated balance sheet.


Consolidated statement of changes in equity
Share Capital Cash flow Total equity Non-
Ordinary share premium Retained redemption Translation hedging attributable controlling Total
capital account earnings reserve Own shares reserve reserve to the parent interests equity
Notes £m £m £m £m £m £m £m £m £m £m
Balance at 30 April 2013 and 1 May 2013 3.2 8.4 (391.0) 422.8 (23.4) 4.8 (8.5) 16.3 – 16.3
Profit for the year – – 132.5 – – – – 132.5 – 132.5

Other comprehensive expense net of tax – – (3.2) – – (14.8) (0.9) (18.9) – (18.9)
Total comprehensive income/(expense) – – 129.3 – – (14.8) (0.9) 113.6 – 113.6
Own ordinary shares purchased – – – – (2.3) – – (2.3) – (2.3)

Credit in relation to equity-settled share based payments – – 2.2 – – – – 2.2 – 2.2
Tax credit in relation to equity-settled share based payments – – 0.5 – – – – 0.5 0.5
Dividends paid on ordinary shares 8 – – (51.0) – – – – (51.0) – (51.0)
Balance at 30 April 2014 3.2 8.4 (310.0) 422.8 (25.7) (10.0) (9.4) 79.3 – 79.3
Profit for the year – – 139.3 – – – – 139.3 0.2 139.5

Other comprehensive income/(expense) net of tax – – (55.1) – – 8.2 (17.4) (64.3) (0.4) (64.7)
Total comprehensive income/(expense) – – 84.2 – – 8.2 (17.4) 75.0 (0.2) 74.8
Own ordinary shares purchased – – – – (6.4) – – (6.4) – (6.4)

Credit in relation to equity-settled share based payments – – 2.2 – – – – 2.2 – 2.2
Tax credit in relation to equity-settled share based payments – – 0.3 – – – – 0.3 – 0.3
Transactions with non-controlling interest – – – – – – – – 1.1 1.1
Dividends paid on ordinary shares 8 – – (56.3) – – – – (56.3) – (56.3)
Balance at 30 April 2015 3.2 8.4 (279.6) 422.8 (32.1) (1.8) (26.8) 94.1 0.9 95.0
The accompanying notes form an integral part of this consolidated statement of changes in equity.

Consolidated statement of cash flows
2015 2014
Notes £m £m
Cash flows from operating activities

Cash generated by operations 30 367.7 293.8
Interest paid (38.5) (38.2)
Interest received 2.7 4.7
Dividends received from joint ventures 14.5 8.2
Net cash flows from operating activities before tax 346.4 268.5
Tax paid (30.9) (20.2)
Net cash from operating activities after tax 315.5 248.3
Cash flows from investing activities

Acquisition of subsidiaries, net of cash acquired 15 – (5.5)
Cash inflow on inception of rail franchise 1.3 –
Disposals and closures of subsidiaries and other businesses, net of cash disposed of 16 – 2.8
Purchase of property, plant and equipment (182.4) (154.2)
Disposal of property, plant and equipment 47.9 42.0
Purchase of intangible assets (12.5) (7.9)
Disposal of intangible assets – 1.0
Movements in loans to joint ventures (5.8) –
Net cash outflow from investing activities (151.5) (121.8)
Cash flows from financing activities

Purchase of treasury shares (2.5) (2.3)
Investment in own ordinary shares by employee share ownership trust (3.9) –
Repayments of hire purchase and lease finance (33.2) (56.9)
Drawdown of other borrowings 205.9 80.0
Repayment of other borrowings (121.2) (115.8)
Dividends paid on ordinary shares 8 (56.3) (51.0)
Sale of tokens 0.5 0.8
Redemption of tokens (0.8) (1.1)
Net cash used in financing activities (11.5) (146.3)
Net increase/(decrease) in cash and cash equivalents 152.5 (19.8)

Cash and cash equivalents at the beginning of year 240.3 262.2
Exchange rate effects 2.8 (2.1)
Cash and cash equivalents at the end of year 20 395.6 240.3
Cash and cash equivalents for the purposes of the consolidated statement of cash flows comprise cash at bank and in hand, overdrafts and other short-
term highly liquid investments with maturities at the balance sheet date of twelve months or less.
The accompanying notes form an integral part of this consolidated statement of cash flows.

Notes to the consolidated financial statements
Note 1 IFRS accounting policies
These consolidated financial statements are presented in accordance with International Financial Reporting Standards (“IFRS”), as adopted by the
European Union.
The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
• Basis of preparation
The consolidated financial statements have been prepared in accordance with IFRS and International Financial Reporting Interpretations Committee
(“IFRIC”) interpretations as adopted by the European Union (and therefore comply with Article 4 of the EU IAS Regulation), and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical
cost convention as modified by (i) the revaluation of available for sale financial assets and (ii) financial assets and financial liabilities (including
derivative financial instruments) at fair value through profit or loss.
The consolidated financial statements are presented in pounds sterling, the presentation currency of the Group, and the functional currency of the
Company and all values are rounded to the nearest one hundred thousand (£0.1m) except where otherwise indicated.
• New accounting standards adopted during the year
The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 May
2014:
• IFRS 10, Consolidated financial statements
• IFRS 11, Joint arrangements
• IFRS 12, Disclosure of interests in other entities
• Amendments to IFRS 10, 11 and 12 on transitional guidance
• IAS 27, Separate financial statements (revised 2011)
• IAS 28, Associates and joint ventures (revised 2011)
• Amendment to IFRS10, IFRS 12 and IAS 27, Investment entities
• Amendment to IAS 32, Financial instruments: Presentation, on offsetting financial assets and financial liabilities
• Amendment to IAS 36, Impairment of assets: Recoverable amount disclosures for non-financial assets
• Amendment to IAS 39, Financial Instruments: Novation of Derivatives and Continuation of Hedge Accounting
None of these have materially impacted the consolidated financial statements of the Group.
• New standards and interpretations not applied
The International Accounting Standards Board (“IASB”) and IFRIC have issued the following standards and interpretations with an effective date for
financial years beginning on or after the dates disclosed below and therefore after the date of these financial statements:
International Accounting Standards and Interpretations Effective for annual periods
beginning on or after
IFRS 9 Financial instruments: Hedge accounting* 1 January 2018
Amendments to IFRS 10 and IAS 28: 1 January 2016
Sale or contribution of assets between an
investor and its associate or joint venture*
Amendments to IFRS 10, 12 and IAS 28 1 January 2016
Investment Entities: Applying the
consolidation exception*
Amendments to IFRS 11 Accounting for acquisitions of interests in joint operations * 1 January 2016
IFRS 14 Regulatory deferral accounts* 1 January 2016
IFRS 15 Revenue from contracts with customers* 1 January 2017
Annual Improvements to IFRSs 2012 1 July 2014
Annual Improvements to IFRSs 2013 1 July 2014
Annual Improvements to IFRSs 2014* 1 January 2016
Amendments to IAS 1 resulting from
disclosure initiative* 1 January 2016
Amendments to IAS 16 and IAS 38: 1 January 2016
Clarification of Acceptable Methods
of Depreciation and Amortisation*
Amendments to IAS 16 and IAS 41: 1 January 2016
Bearer Plants *
IAS 19 Defined benefit plans: employee contributions 1 July 2014
Amendment to IAS 27 Equity method in separate financial statements * 1 January 2016
IFRIC 21 Levies 17 June 2014
*Not yet adopted for use in the European Union.
With the exception of IFRS 15, the Directors have reviewed the requirements of the new standards and interpretations listed above and they are not
expected to have a material impact on the Group’s financial statements in the period of initial application. The impact of IFRS 15 is being assessed.

Note 1 IFRS accounting policies (continued).
• Comparatives
Where appropriate, comparative figures for the previous year have been adjusted to conform to changes in presentation. These changes have no
impact on the consolidated income statement or on consolidated net assets.
• Basis of consolidation
The consolidated financial statements include the financial statements of the Company, its subsidiary undertakings and joint ventures made up to
30 April in each year.
The consolidated income statement includes the results of businesses purchased from the effective date of acquisition and excludes the results of
disposed operations and businesses sold from the effective date of disposal.
Non-controlling interests represents the portion of earnings and equity attributable to third party shareholders of a subsidiary of the Group.
• Subsidiaries and joint ventures
(i) Subsidiaries
Subsidiaries are all entities over which the Group has control. The Group controls an entity where the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control
ceases. The purchase method (also known as the acquisition method) of accounting is used to account for the acquisition of subsidiaries and other
businesses. The cost of an acquisition is measured as the fair value of the assets given up, shares issued or liabilities undertaken at the date of
acquisition. The excess of the cost of acquisition over the fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities is
recorded as goodwill. Costs attributable to the acquisition are expensed to the consolidated income statement.
The Group recognises any non-controlling interest on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s identifiable net assets at the acquisition date.
Intercompany transactions, balances, income and expenses are eliminated on consolidation.
(ii) Joint ventures
Joint ventures are entities over which the Group has joint control with other investors.
Investments in joint ventures are accounted for using the equity method of accounting.
Under the equity method of accounting, interests in joint ventures are initially recognised at cost and adjusted thereafter to recognise the Group’s
share of the post-acquisition profits or losses and movements in other comprehensive income. When the Group’s share of losses in a joint venture
equals or exceeds its interests in the joint ventures (which includes any long-term interests that, in substance, form part of the Group’s net investment
in the joint ventures), the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the joint ventures.
The Group’s reported interest in joint ventures includes goodwill on acquisition.
The Group applies its own accounting policies and estimates when accounting for its share of joint ventures making appropriate adjustments
where necessary, having due regard to all relevant factors.
• Presentation of income statement and exceptional items
Where applicable, income statement information has been presented in a columnar format, which separately highlights intangible asset expenses and
exceptional items. This is intended to enable users of the financial statements to determine more readily the impact of intangible asset expenses and
exceptional items on the results of the Group.
Exceptional items are defined in note 35.
• Use of estimates
The preparation of financial statements in conformity with IFRSs as adopted by the EU requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the period.
Although these estimates and assumptions are based on management’s best knowledge, actual results may ultimately differ from those estimates and
assumptions used.
The key sources of estimation uncertainty that have a significant risk of causing material adjustments to the carrying amounts of assets and liabilities
within the next financial year are the measurement of tax assets and liabilities, the measurement of contract provisions, the measurement of
retirement benefit amounts, the measurement of liabilities for litigation, the measurement and impairment of goodwill and other non-current assets,
the measurement of insurance provisions and the measurement of receivables and payables in relation to rail contracts. The measurement of tax assets
and liabilities requires an assessment to be made of the potential tax consequence of certain items that will only be resolved when agreed by the
relevant tax authorities. The measurement of contract provisions requires estimates of future cash flows relating to the relevant contracts and the
selection of a suitable discount rate. The measurement of retirement benefit amounts requires the estimation of life expectancies, future changes in
salaries, inflation and the selection of a suitable discount rate. The measurement of liabilities in respect of litigation involves estimating the financial
effects of uncertain litigation. The Group determines whether goodwill arising on business combinations is impaired on an annual basis and this
requires the estimation of value in use of the cash generating units to which the goodwill is allocated. This requires estimation of future cash flows and
the selection of a suitable discount rate. The estimation of the insurance provisions is based on an assessment of the expected settlement on known
claims together with an estimate of settlements that will be made in respect of incidents occurring prior to the balance sheet date but for which claims
have not been reported to the Group. The estimation of receivables and payables in relation to rail contracts requires an estimate of the likely outcomes
based on interpreting the applicable contracts.
Those accounting policies that the Directors believe require the greatest exercise of judgement are described in section 1.6.13 of this Annual Report,
which forms part of these financial statements.
• Revenue
Revenue represents gross revenue earned from public transport services and excludes payments received on account. Amounts receivable from
government bodies for tendered services and concessionary fare schemes are included as part of revenue as these represent payments for services
provided. Where appropriate, amounts are shown net of rebates and VAT. Revenues incidental to the Group’s principal activity (including advertising
income and maintenance income) are reported as miscellaneous revenue.
Rail revenue includes amounts attributable to the train operating companies, based principally on agreed models of route usage, by Railway
Settlement Plan Limited (which administers the income allocation system within the UK rail industry) in respect of passenger receipts. Franchise
agreement receipts or payments from or to the UK’s Department for Transport are treated as operating costs or other operating income.

Note 1 IFRS accounting policies (continued)
• Revenue (continued)
Revenue is recognised by reference to the stage of completion of the customer’s travel or services provided under contractual arrangements as a
proportion of total services to be provided. Cash received for the sale of season tickets and travelcards is deferred within liabilities and recognised in
the income statement over the period covered by the relevant ticket.
Income from advertising and other activities is recognised as the income is earned.
Finance income is recognised using the effective interest method as interest accrues.
Under the contractual terms of its franchise agreements to operate rail services, the Group has revenue sharing arrangements with the Department
for Transport. As a result of these arrangements, the Group may be liable to make payments to the Department for Transport or receive amounts
from the Department for Transport. The arrangements vary by franchise. The amounts at South West Trains and East Midlands Trains are based on
calculations that involve comparison of actual revenue with the target revenue specified in the relevant franchise agreement. The amounts at West
Coast Trains (operated by the Group’s Virgin Rail Group joint venture) and Virgin Trains East Coast are based on calculations that involve comparing
published UK national Gross Domestic Product (“GDP”) with the GDP comparator specified in the relevant franchise agreement. The Group
recognises revenue share amounts payable or receivable in the income statement in the same period in which it recognises the related revenue.
Revenue share amounts payable or receivable (if any) are treated as operating costs or other operating income.
The Group’s regional UK Bus operations receive Bus Service Operators’ Grant (“BSOG”) which is essentially a rebate of fuel tax. BSOG is recognised
within operating costs as part of the net fuel costs of the Group.
• Performance incentive payments
Performance incentive payments received from or made to Network Rail by the Group in respect of rail operational performance are recognised in
the same period that the performance relates to and are treated as operating costs or other operating income.
• Government grants
Grants from government are recognised where there is reasonable assurance that the grant will be received and the Group will comply with all attached
conditions. Government grants relating to costs are deferred and recognised in the income statement over the period necessary to match them with
the costs they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are recorded as liabilities and
are credited to the income statement on a straight-line basis over the expected lives of the related assets. Amounts are held as deferred grant income
within trade and other payables.
Revenue grants receivable (and franchise premia amounts payable) in respect of the operation of rail franchises in the UK are recognised in the income
statement in the period in which the related revenue or expenditure is recognised in the income statement or where they do not relate to any specific
revenue or expenditure, in the period in respect of which the amount is receivable or payable. These premia payments and rail franchise grants are
classified within operating costs and other operating income.
• Share based payments
The Group issues equity-settled and cash-settled share based payments to certain employees.
Equity-settled transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted and is
recognised as an expense over the vesting period. In valuing equity-settled transactions, no account is taken of any non-market based vesting
conditions and no expense is recognised for awards that do not ultimately vest as a result of a failure to satisfy a non-market based vesting condition.
None of the Group’s equity-settled transactions have any market based performance conditions.
Fair value for equity-settled share based payments is determinable from the Company’s quoted share price at the time of the award.
At each balance sheet date, before vesting, the cumulative expense is calculated based on management’s best estimate of the number of equity
instruments that will ultimately vest taking into consideration the likelihood of achieving non-market based vesting conditions. The movement in this
cumulative expense is recognised in the income statement, with a corresponding entry in equity.
Where an equity-settled award is cancelled by the Group or the holder, it is treated as if it had vested on the date of cancellation and any cost not yet
recognised in the income statement for the award is expensed immediately. Any compensation paid up to the fair value of the award at the
cancellation or settlement date is deducted from equity, with any excess over fair value being treated as an expense in the income statement.
Cash-settled transactions
The cost of cash-settled transactions is measured at fair value. Fair value is estimated initially at the grant date and at each balance sheet date
thereafter until the awards are settled. Market based performance conditions are taken into account when determining fair value. At each balance
sheet date, the liability recognised is based on management’s best estimate of the cash that will ultimately be payable taking into consideration the
likelihood of non-market based vesting conditions being achieved.
Fair value for cash-settled share based payments relating to the Long Term Incentive Plan is estimated by use of a simulation model.
During the vesting period, a liability is recognised representing the estimated fair value of the award and the portion of the vesting period expired as at
the balance sheet date. Changes in the carrying amount of the liability are recognised in the income statement for the period.
Choice of settlement
The Company can choose to settle awards under the Long Term Incentive Plan in either cash or equity, although it currently expects to settle all such
awards in cash. Awards under the Long Term Incentive Plan are accounted for as cash-settled transactions (see above).
Employment taxes
Liabilities are recognised for employment taxes (principally, employers’ national insurance liabilities) payable by the Group on share based payments.
The liability for employment taxes is calculated at the balance sheet date with reference to the fair value of the related share based payments at that
date. In the case of cash-settled share based payments, the fair value is the pre-tax amount recorded in the balance sheet. Movements in the liabilities
for employment taxes on share based payments are charged or credited to the income statement.
• Operating profit
Operating profit is stated inclusive of restructuring costs and the share of after-tax results of joint ventures but before finance income, finance costs,
non-operating exceptional items and taxation.

• Taxation
Tax, current and deferred, is calculated using tax rates and laws enacted or substantively enacted at the balance sheet date. Management periodically
evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation.
Corporation tax is provided on taxable profit at the current rate applicable. Tax charges and credits are accounted for through the same primary
statement as the related pre-tax item.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. Deferred income tax is measured at tax rates that are expected to apply in periods in which the
temporary differences reverse based on tax rates and law enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences
can be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and joint ventures, except where the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
• Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible
for allocating resources and assessing performance of operating segments, which for this purpose has been identified as the Board of Directors.
• Foreign currency translation
The financial statements of foreign operations are maintained in the functional currencies in which the entities transact business. The trading results of
foreign operations are translated into sterling using average rates of exchange. The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on acquisition, are translated into sterling using rates of exchange at the relevant balance sheet date. Exchange differences arising
on the translation of the opening net assets and results of foreign operations, together with exchange differences arising on net foreign currency
borrowings and foreign currency derivatives, to the extent they hedge the Group’s investment in foreign operations, are recognised as a separate
component of equity being the translation reserve. Further information on the Group’s accounting policy on hedges of net investments in a foreign entity
is provided on page 70.
Foreign currency monetary assets and liabilities are translated into the respective functional currencies of the Group entities at the rates of exchange
ruling at the balance sheet date. Foreign currency transactions arising during the year are translated into the respective functional currencies of Group
entities at the rate of exchange ruling on the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss.
On disposal of a foreign subsidiary, the amount of any exchange differences relating to the subsidiary that has been deferred in the translation reserve is
recognised in the income statement within the reported gain or loss on disposal.
The principal rates of exchange applied to the consolidated financial statements were:
2015 2014
US Dollar:
Year end rate 1.5368 1.6886
Average rate 1.5988 1.6013
Canadian Dollar:
Year end rate 1.8614 1.8531
Average rate 1.8323 1.6994
• Business combinations and goodwill

On the acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities of the acquiree. Goodwill
represents the excess of the fair value of the consideration given for a business over the fair value of such net assets. The fair value of intangible assets
(other than goodwill) and acquired customer contract provisions on the acquisition of a business are amortised to the income statement in line with the
projected cash flows.
Goodwill arising on acquisitions is capitalised and is subject to impairment review, both annually and when there are indications that the carrying value
may not be recoverable. Prior to 1 May 2004, goodwill was amortised over its estimated useful life; such amortisation ceased on 30 April 2004 but
goodwill amortisation expensed prior to 1 May 2004 was not reversed. Goodwill that arose prior to 1 May 2004 is measured at the amount recognised
under the Group’s previous accounting framework, UK GAAP.
Goodwill arising on acquisitions in the year ended 30 April 1998 and earlier periods was written off directly to equity in accordance with the UK
accounting standards then in force. Under IFRS 1 and IFRS 3, such goodwill remains eliminated against reserves.
For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash generating units expected to benefit from the combination.
Cash generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the
unit may be impaired. If the recoverable amount of the cash generating unit is less than the carrying amount of the unit, then the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the
carrying amount of each asset in the unit. The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the cash generating unit. An impairment loss recognised for goodwill is not reversed in a subsequent
period.
Any impairment of goodwill is recognised immediately in the income statement.
Where goodwill (other than that already written off directly to equity) forms part of a cash generating unit and all or part of that unit is disposed of, the
associated goodwill is included in the carrying amount of the disposed operation when determining the overall gain or loss on disposal.

• Impairment of non-current assets
Property, plant and equipment, intangible assets (excluding goodwill) and other non-current assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the
higher of fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest level for which there are
separately identifiable cash flows. Non-financial assets other than goodwill that have suffered an impairment are reviewed for possible reversal at each
reporting date.
In assessing value in use, the estimated future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the asset. Any impairment loss is recognised immediately in the income
statement.
• Intangible assets
Intangible assets acquired separately from a business combination are initially capitalised at cost and subsequently measured at cost less accumulated
amortisation and accumulated impairment losses. The initial cost recognised is the aggregate amount paid plus the fair value of any other
consideration given to acquire the asset. Intangible assets acquired as part of a business combination are capitalised, separately from goodwill, at fair
value at the date of acquisition if (i) the asset is separable or arises from contractual or legal rights and (ii) its fair value can be measured reliably, and
are subsequently measured at fair value less accumulated amortisation and accumulated impairment losses.
Amortisation is calculated to write-off the cost or fair value at acquisition (as the case may be) of each asset over their estimated useful lives shown
below. Amortisation of intangible assets relating to customer contracts and lease contracts is amortised based on the pattern of the consumption of
economic benefits obtained from the relevant contract. Amortisation on other intangible assets is calculated on the straight-line method. Intangible
assets relating to rail franchises of a finite duration are amortised over the expected life of the franchise.
Operating leases on favourable terms over the life of the lease (up to 4 years for current contracts)
Customer contracts over the life of the contract (1 to 5 years for current contracts)
Right to operate rail franchises over the expected life of the franchise (10 years from February 2007 to February 2017 for South
West Trains franchise, 7 years and 11 months from November 2007 to October 2015 for East
Midland Trains franchise and 8 years and 1 month from March 2015 to March 2023 for Virgin
Trains East Coast franchise)
Software costs 2 to 7 years
Where the life of a contract or rail franchise is shortened or extended, the useful economic lives of any related intangible assets are reviewed, the
intangible assets are reviewed for impairment and the remaining carrying value of each asset is amortised over its revised, remaining economic life.
New contracts and franchises are not treated as extensions of existing arrangements even when they cover the same business operations as expiring
contracts and franchises.
Marketing costs incurred during the start-up phase of a new activity are charged to the income statement as incurred.
• Property, plant and equipment
Property, plant and equipment acquired as part of a business combination is stated at fair value at the date of acquisition and is subsequently measured
at fair value on acquisition less accumulated depreciation and any provision for impairment. All other property, plant and equipment is stated at cost
less accumulated depreciation and any provision for impairment. Cost includes the original purchase price of the asset and the costs attributable to
bringing the asset to its working condition for its intended use.
Depreciation is calculated on the straight-line method to write off the cost, fair value at acquisition or deemed cost of each asset to their residual values
over their estimated useful lives as follows:
Heritable and freehold buildings and long leasehold properties 50 years
Short leasehold properties period of lease
IT and other equipment, furniture and fittings 3 to 10 years
Passenger Service Vehicles (“PSVs”) and transportation equipment 7 to 16 years
Motor cars and other vehicles 3 to 5 years
Freehold land is not depreciated.
The useful lives and residual values of property, plant and equipment are reviewed at least annually and, where applicable, adjustments are made on a
prospective basis.
An item of property, plant or equipment is derecognised upon disposal. An item on which no future economic benefits are expected to arise from the
continued use of the asset is impaired if it is continued to be used by the Group. Gains and losses on disposals are determined by comparing the
proceeds received with the carrying amount of the asset and are included in the income statement. Any gain or loss on derecognition of the asset is
included in the income statement in the period of derecognition.
Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of major renovations is
included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of
performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset.
• Inventories
Inventories are stated at the lower of cost and net realisable value after making due allowance for obsolete or slow moving items. Cost is determined
using the first-in, first-out (“FIFO”) or average cost method. Net realisable value is the estimated selling price in the ordinary course of business, less the
costs of completion and selling expenses.

• Pre-contract costs
The costs associated with securing new rail franchises are expensed as incurred, except when at the time the costs are incurred it is probable that a
contract will be awarded, in which case they are recognised as an intangible asset and are charged to the income statement over the life of the
franchise.
• Hire purchase and lease obligations
Assets acquired under hire purchase and finance lease arrangements, where substantially all the risks and rewards of ownership of the asset have passed
to the Group, are capitalised at the commencement of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum
lease payments. Fixed lease payments are apportioned between the finance costs, and the reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance costs are charged directly against income and are reported within finance costs in the
consolidated income statement.
Assets capitalised under finance leases and other similar contracts are depreciated over the shorter of the lease terms and their useful economic lives.
Assets capitalised under hire purchase contracts are depreciated over their useful economic lives.
Rentals under operating leases are generally charged on a straight-line basis over the lease term. However, contingent rentals, principally being rental
adjustments related to inflation indices, are accounted for in the period they are incurred.
The principal restriction on assets held under finance lease or hire purchase agreements is a restriction on the right to dispose of the assets during the
period of the agreement.
• Tokens
Tokens issued by the Group to facilitate public passenger travel in the United Kingdom are credited to a token redemption provision to the extent they
are expected to be redeemed. Redemptions are offset against this provision and associated handling commission paid to third parties is included in
operating costs. Funds from the sale of tokens and payments for the redemption of tokens are included as financing activities in the consolidated
statement of cash flows.
The estimate of the balance sheet provision for token redemptions is remeasured at each balance sheet date and is based on the value of tokens issued
by the Group but not yet redeemed or cancelled at the balance sheet date. Allowance is made for the estimated proportion of tokens in issue that will
never be redeemed. This allowance is estimated with reference to historic redemption rates.
• Restructuring provisions
Provisions for restructuring are recognised when the Group has a present legal or constructive obligation as a result of past events and a reliable
estimate of associated costs can be made.
• Insurance
The Group receives claims in respect of traffic incidents and employee claims. The Group protects against the cost of such claims through third party
insurance policies. An element of the claims is not insured as a result of the “excess” or “deductible” on insurance policies.
Provision is made on a discounted basis for the estimated cost to the Group to settle claims for incidents occurring prior to the balance sheet date. The
estimate of the balance sheet insurance provisions is based on an assessment of the expected settlement of known claims together with an estimate of
settlements that will be made in respect of incidents occurring prior to the balance sheet date but for which claims have not yet been reported to the
Group. The provision is set after taking account of advice from third party actuaries.
• Retirement benefit obligations
The Group contributes to a number of pension schemes.
In respect of defined benefit schemes, obligations are measured at discounted present value whilst scheme assets are recorded at market value. In
relation to each scheme, any recognised net asset is limited to the present value of economic benefits available in the form of any future refunds from
the scheme or reductions in future contributions to the scheme. An economic benefit is available to the Group if it is realisable during the life of the
scheme or on settlement of the scheme liabilities.
The service costs of defined benefit schemes are spread systematically over the working lives of employees and included within operating profit.
Scheme administration expenses are also included within operating profit. Net interest expense or income is calculated by applying the discount rate to
the net defined benefit asset or liability and included within net finance costs. Actuarial gains and losses are recognised immediately in the statement
of comprehensive income. Actuarial gains and losses include the difference between the actual return on assets (net of investment administration
costs and taxes, such as amounts levied by the UK Pension Protection Fund) and the discount rates applied to the assets. Mortality rates are considered
when retirement benefit obligations are calculated.
Past service costs and adjustments are recognised immediately in income, unless the changes to the pension scheme are conditional on the employees
remaining in service for a specified period (the vesting period), in which case the past service costs are amortised using a straight-line method over the
vesting period.
Curtailments arise where the Group makes a material reduction in the number of employees covered by a pension scheme or amends a defined benefit
pension scheme’s terms such that a material element of future service by current employees will qualify for no or significantly reduced benefits.
Settlements arise when the Group enters into a transaction that eliminates all or part of the Group’s obligations for benefits provided under a defined
benefit pension scheme. The gain or loss arising on a settlement or curtailment comprises the resulting change in the net pension asset or liability, and
such gain or loss is recognised in the income statement when the settlement or curtailment occurs. Where the gain or loss is related to a disposal of a
business, it is included within the reported gain or loss on disposal.
A full actuarial valuation is undertaken triennially for each scheme and updated annually using independent actuaries following the projected unit credit
method. The present value of the scheme obligations is determined by discounting the estimated future cash outflows using interest rates of high quality
corporate bonds which have terms to maturity equivalent to the terms of the related obligations. Experience adjustments and changes in assumptions
which affect actuarial gains and losses are reflected in the actuarial gain or loss for the year.
The liability or asset recognised for the relevant sections of the Railways Pension Scheme represents only that part of the net deficit (or surplus) of each
section that the employer expects to fund (or recover) over the life of the franchise to which the section relates. Where the award of a new rail franchise to
the Group results in it assuming a net pension liability, a corresponding intangible asset is recognised, reflecting a cost in obtaining the right to operate the
franchise. When a pension asset is assumed, a corresponding deferred income balance is recognised. The intangible asset or deferred income balance is
amortised to the income statement on a straight-line basis over the expected life of the related franchise.

• Retirement benefit obligations (continued)
For defined contribution schemes, the Group pays contributions to separately administered pension schemes. Once the contributions have been paid, the
Group has no further payment obligations. The Group’s contributions to defined contribution schemes are charged to the income statement in the period
to which the contributions relate.
• Financial instruments
The disclosure of the accounting policies that follow for financial instruments are those that apply under IFRS 7 ‘Financial Instruments: Disclosures’, IAS 32
‘Financial Instruments: Presentation’ and IAS 39 ‘Financial Instruments: Recognition and measurement’.
Financial assets
Financial assets are classified, as appropriate, as financial assets at fair value through profit or loss; loans and receivables; held-to-maturity investments or as
available for sale. They include cash and cash equivalents, accrued income, trade receivables, other receivables, other investments and derivative financial
instruments. The Group determines the classification of its financial assets at initial recognition. When financial assets are recognised initially, they are
measured at fair value, normally being the transaction price plus, in the case of financial assets not at fair value through profit or loss, directly attributable
transaction costs. The subsequent measurement of financial assets depends on their classification, as follows:
Financial assets at fair value through profit or loss: Financial assets classified as held for trading and other assets designated as such on inception are classified
as financial assets at fair value through profit or loss where the assets meet the criteria for such classification. Financial assets are classified as held for
trading if they are acquired for sale in the short-term. Derivatives are also classified as held for trading unless they are designated as hedging instruments.
Assets in this category are carried on the balance sheet at fair value with gains or losses recognised in the income statement.
Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market,
do not qualify as trading assets and have not been designated as either at fair value through profit or loss or available for sale. Such assets are carried at
amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the loans and receivables are
derecognised or impaired, as well as through the amortisation process. Trade receivables are recognised initially at fair value and subsequently measured at
amortised cost using the effective interest method, less provision for impairment. Where the time value of money is material, receivables are discounted to
the present value at the point they are first recognised and are subsequently amortised to the invoice amount by the payment due date. A provision for
impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the
original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation,
and default or delinquency in payments are considered in evaluating whether a trade receivable is impaired. The amount of the provision is the difference
between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying
amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the income statement within ‘Other
external charges’. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. An impairment loss is
reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised
cost, the reversal is recognised in profit or loss.
Held-to-maturity investments: The Group holds no held-to-maturity investments.
Available for sale financial assets: Available for sale financial assets are those non-derivative financial assets that are designated as such or are not classified in
any of the above categories. These are included in non-current assets unless the Group intends to dispose of them within 12 months of the balance sheet
date. After initial recognition, available for sale financial assets are measured at fair value, with gains or losses being recognised as a separate component of
equity until the asset is derecognised or until the asset is determined to be impaired, at which time the cumulative gain or loss reported in equity is included
in the income statement.
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. In the case
of equity securities classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator
that the securities are impaired. If any such evidence exists for available for sale financial assets, the cumulative loss - measured as the difference between
the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from
equity and is recognised in the income statement. Impairment losses recognised in the income statement on equity instruments are not reversed through
the income statement.
Financial liabilities
When a financial liability is recognised initially, the Group measures it at its fair value plus, in the case of a financial liability not at fair value through profit or
loss, transaction costs that are directly attributable to the issue of the financial liability. Financial liabilities include trade payables, accruals, other payables,
borrowings and derivative financial instruments. Subsequent measurement depends on its classification as follows:
Financial liabilities at fair value through profit or loss: Financial liabilities classified as held for trading and derivative liabilities that are not designated as hedging
instruments are classified as financial liabilities at fair value through profit or loss. Such liabilities are carried on the balance sheet at fair value with gains or
losses being recognised in the income statement.
Other: All other financial liabilities not classified as fair value through profit or loss are measured at amortised cost using the effective interest method.
Fair values
The fair value of quoted investments is determined by reference to appropriate market prices at the close of business on the balance sheet date. Where
there is no active market, fair value is determined using valuation techniques. These include using pricing models and discounted cash flow analysis.
Derivative financial instruments
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-
measured at fair value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
For those derivatives designated as hedges and for which hedge accounting is desired, the hedging relationship is documented at its inception. This
documentation identifies the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how effectiveness will be
measured throughout its duration. Such hedges are expected at inception to be highly effective.

• Financial instruments (continued)
For the purpose of hedge accounting, hedges are classified as:
– Fair value hedges, when hedging the exposure to changes in the fair value of a recognised asset or liability;
– Cash flow hedges, when hedging exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction; or
– Hedges of net investment in a foreign entity.
Net gains or losses arising from changes in the fair value of all other derivatives, which are classified as held for trading, are taken to the income statement.
These may arise from derivatives for which hedge accounting is not applied because they are either not designated or not effective as hedging instruments
from an accounting perspective.
The treatment of gains and losses arising from revaluing derivatives designated as hedging instruments depends on the nature of the hedging relationship,
as follows:
Fair value hedges: For fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses attributable to the risk being hedged; the
derivative is remeasured at fair value and gains and losses from both the derivative and the hedged item are taken to the income statement.
The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer meets the
criteria for hedge accounting or the Group revokes the designation.
Cash flow hedges: For cash flow hedges, the effective portion of the gain or loss on the hedging instrument is recognised in the statement of comprehensive
income, while the ineffective portion is recognised in the income statement. Amounts recorded in the statement of comprehensive income are transferred
to the income statement when the hedged transaction affects profit or loss, such as when a forecast sale or purchase occurs. For cash flow hedges of
forecast fuel purchases, the transfer is to operating costs within the income statement.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, amounts
previously recorded in the statement of comprehensive income remain in equity until the forecast transaction occurs and are then transferred to the
income statement. If a forecast transaction is no longer expected to occur, amounts previously recognised in the statement of comprehensive income are
transferred to the income statement immediately.
Hedges of net investment in a foreign entity: For hedges of the net investment in a foreign entity, the effective portion of the gain or loss on the hedging
instrument is recorded in the statement of comprehensive income, while the ineffective portion is recognised in the income statement. Amounts recorded
in the statement of comprehensive income are transferred to the income statement when the foreign entity is sold.
Non-derivative financial liabilities, such as foreign currency borrowings, can be designated as hedges of a net investment in a foreign entity and are subject
to the same requirements as derivative hedges of a net investment in a foreign entity.
Cash and cash equivalents
For the purposes of the balance sheet and cash flow statement, cash and cash equivalents comprise cash on hand, deposits held at call with banks and
other short-term highly liquid investments with maturities at the balance sheet date of twelve months or less.
Interest bearing loans and borrowings
Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost using
the effective yield method subject to any adjustments in respect of fair value hedges. Any difference between the proceeds (net of transaction costs) and
the redemption value is recognised in the income statement over the period of the borrowings. Interest on borrowings to purchase property, plant and
equipment is expensed in the income statement.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer or rollover settlement for at least 12 months after the
balance sheet date.
Trade and other payables
Trade and other payables are generally not interest bearing and are stated at amortised cost which approximates to nominal value due to creditors days
being relatively low.
Share capital and dividends
Ordinary shares are classified as equity.
Incremental external costs directly attributable to the issue of new ordinary shares are shown in equity as a deduction, net of tax, from the proceeds.
Where the Company, its subsidiaries or employee share ownership trusts sponsored by the Company purchase ordinary shares in the Company, the
consideration paid, including any attributable incremental external costs net of income taxes, is deducted from equity. Where such shares are subsequently
sold or reissued, any consideration received is included in equity.
Dividends on ordinary shares are recorded in the Group’s financial statements in the period in which they are approved by the Group’s shareholders, or in
the case of interim dividends, in the period in which they are paid.

Note 2 Segmental information
Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.
The Group is managed, and reports internally, on a basis consistent with its four continuing operating segments, being UK Bus (regional operations), UK
Bus (London), North America and UK Rail. The Group’s IFRS accounting policies are applied consistently, where appropriate, to each segment.
The segmental information provided in this note is on the basis of the four operating segments as follows:
Segment name Service operated Country of operation
UK Bus (regional operations) Coach and bus operations United Kingdom (and immaterial operations in mainland Europe)
UK Bus (London) Bus operations United Kingdom
North America Coach and bus operations United States and Canada
UK Rail Rail operations United Kingdom
The Group has interests in four joint ventures: Virgin Rail Group and Anglia Rail that operate in UK Rail, Citylink that operates in UK Bus (regional
operations) and Twin America LLC that operates in North America. The results of these joint ventures are shown separately in notes 2(c) and 2(g)
where material.
(a) Revenue
Due to the nature of the Group’s business, the origin and destination of revenue (i.e. United Kingdom or North America) is the same in all cases except
in respect of an immaterial amount of revenue for services operated by UK Bus (regional operations) between the UK and mainland Europe. As the
Group sells bus and rail services to individuals, it has few customers that are individually “major”. Its major customers are typically public bodies that
subsidise or procure transport services – such customers include local authorities, transport authorities and the UK Department for Transport.
Revenue split by segment was as follows:
2015 2014
£m £m
Continuing operations
UK Bus (regional operations) 1,045.5 1,012.8
UK Bus (London) 260.6 244.9
Total bus continuing operations 1,731.5 1,685.9

UK Rail 1,478.4 1,252.0
Total Group revenue 3,209.9 2,937.9

Intra-Group revenue – UK Bus (regional operations) (5.5) (7.9)
Reported Group revenue 3,204.4 2,930.0
(b) Operating profit

Operating profit split by segment was as follows:
2015 2014
£m £m £m £m £m £m
Continuing operations
UK Bus (regional operations) 141.1 – 141.1 147.4 – 147.4
UK Bus (London) 26.3 – 26.3 23.9 – 23.9
North America 22.1 – 22.1 23.7 – 23.7
Total bus continuing operations 189.5 – 189.5 195.0 – 195.0

UK Rail 26.9 – 26.9 34.3 – 34.3
Total continuing operations 216.4 – 216.4 229.3 – 229.3

Group overheads (13.9) – (13.9) (13.9) – (13.9)
Intangible asset expenses – (11.9) (11.9) – (14.0) (14.0)
Restructuring costs (0.8) – (0.8) (0.9) – (0.9)
Total operating profit of continuing

Group companies 201.7 (11.9) 189.8 214.5 (14.0) 200.5
Share of joint ventures’ profit
after finance costs, finance income and taxation 25.4 2.7 28.1 8.8 (8.4) 0.4
Total operating profit:

Group operating profit and share of joint ventures’
profit after taxation 227.1 (9.2) 217.9 223.3 (22.4) 200.9

Note 2 Segmental information (continued)
(c) Joint ventures
The share of profit from joint ventures was further split as follows:
2015 2014
£m £m £m £m £m £m
Continuing
Virgin Rail Group (UK Rail)
Operating profit 28.0 – 28.0 2.6 1.0 3.6
Finance income (net) – – – 0.3 – 0.3
Taxation (5.7) – (5.7) (0.9) (0.2) (1.1)
22.3 – 22.3 2.0 0.8 2.8
Citylink (UK Bus, regional operations)
Operating profit 1.4 – 1.4 1.7 – 1.7

Taxation (0.3) – (0.3) (0.4) – (0.4)
1.1 – 1.1 1.3 – 1.3
Twin America LLC (North America)
Operating profit 2.1 2.7 4.8 5.7 (9.2) (3.5)

Finance costs (net) (0.1) – (0.1) – – –
Taxation – – – (0.2) – (0.2)
2.0 2.7 4.7 5.5 (9.2) (3.7)
Share of profit of joint ventures after finance costs,

finance income and taxation 25.4 2.7 28.1 8.8 (8.4) 0.4
(d) Gross assets and liabilities

Assets and liabilities split by segment were as follows:
2015 2014
Gross Net assets/ Gross Net assets/
assets Gross liabilities (liabilities) assets Gross liabilities (liabilities)
£m £m £m £m £m £m
UK Bus (regional operations) 866.7 (341.8) 524.9 805.3 (310.1) 495.2

UK Bus (London) 80.5 (99.1) (18.6) 84.1 (69.8) 14.3
North America 372.0 (129.3) 242.7 349.0 (102.3) 246.7
UK Rail 415.1 (660.6) (245.5) 245.3 (402.4) (157.1)
1,734.3 (1,230.8) 503.5 1,483.7 (884.6) 599.1
Central functions 24.3 (37.7) (13.4) 21.9 (30.8) (8.9)
Joint ventures 57.8 – 57.8 42.8 – 42.8
Borrowings and cash 395.6 (785.3) (389.7) 240.3 (711.1) (470.8)
Taxation 0.1 (63.3) (63.2) 0.8 (83.7) (82.9)
Total 2,212.1 (2,117.1) 95.0 1,789.5 (1,710.2) 79.3
Central assets and liabilities include the token provision, interest payable and receivable and other net assets of the holding company and other head
office companies.
Segment assets and liabilities are determined by identifying the assets and liabilities that relate to the business of each segment but excluding intra-
Group balances, cash, borrowings, taxation, interest payable, interest receivable and the token provision.

Note 2 Segmental information (continued)
(e) Capital expenditure on property, plant and equipment
The capital expenditure on property, plant and equipment is shown below and is on an accruals basis, not on a cash basis, and includes expenditure on
property, plant and equipment through business combinations.
2015 2014
£m £m

UK Bus (London) 3.8 2.9
UK Rail 43.8 37.1
203.0 165.4
(f) Capital expenditure on intangible assets

The capital expenditure on intangible assets (including goodwill) is shown below and includes acquisitions through business combinations.
2015 2014
£m £m

North America – 0.6
UK Rail 64.9 1.3
73.3 13.1
(g) Earnings before interest, tax, depreciation and amortisation (“EBITDA”)

The results of each segment are further analysed below:
Year ended 30 April 2015
EBITDA Operating profit
EBITDA Joint venture including joint pre intangibles Intangible Allocation
pre-exceptional interest and venture interest Depreciation and exceptional asset Exceptional of restructuring Operating
items tax and tax expense items expenses items costs profit
£m £m £m £m £m £m £m £m £m
UK Bus (regional operations) 212.2 – 212.2 (71.1) 141.1 (1.5) – (0.4) 139.2
UK Bus (London) 32.4 – 32.4 (6.1) 26.3 (0.8) – – 25.5
North America 55.7 – 55.7 (33.6) 22.1 (5.3) – (0.2) 16.6
UK Rail – subsidiaries 35.9 – 35.9 (9.0) 26.9 (4.3) – (0.2) 22.4
UK Rail – joint venture (Virgin
Rail Group) 28.0 (5.7) 22.3 – 22.3 – – – 22.3
UK Bus – joint venture (Citylink) 1.4 (0.3) 1.1 – 1.1 – – – 1.1
North America – joint venture
(Twin America) 2.1 (0.1) 2.0 – 2.0 – 2.7 – 4.7
Group overheads (13.6) – (13.6) (0.3) (13.9) – – – (13.9)
Restructuring costs (0.8) – (0.8) – (0.8) – – 0.8 –
353.3 (6.1) 347.2 (120.1) 227.1 (11.9) 2.7 – 217.9

EBITDA Operating profit
EBITDA Joint venture including joint pre intangibles Intangible Allocation
pre-exceptional interest and venture interest Depreciation and exceptional asset Exceptional of restructuring Operating
items tax and tax expense items expenses items costs profit
£m £m £m £m £m £m £m £m £m
UK Bus (regional operations) 216.2 – 216.2 (68.8) 147.4 (1.4) – (0.3) 145.7
UK Bus (London) 29.8 – 29.8 (5.9) 23.9 (1.9) – – 22.0
North America 56.2 – 56.2 (32.5) 23.7 (7.8) – (0.3) 15.6
UK Rail – subsidiaries 42.5 – 42.5 (8.2) 34.3 (2.9) – (0.3) 31.1
UK Rail – joint venture (Virgin
Rail Group) 2.6 (0.6) 2.0 – 2.0 – 0.8 – 2.8
UK Bus – joint venture (Citylink) 1.7 (0.4) 1.3 – 1.3 – – – 1.3
North America – joint venture
(Twin America) 5.7 (0.2) 5.5 – 5.5 – (9.2) – (3.7)
Group overheads (13.6) – (13.6) (0.3) (13.9) – – – (13.9)
Restructuring costs (0.9) – (0.9) – (0.9) – – 0.9 –
340.2 (1.2) 339.0 (115.7) 223.3 (14.0) (8.4) – 200.9

Note 3 Operating costs and other operating income
Operating costs and other operating income were as follows:
2015 2014
£m £m
Miscellaneous revenue (see explanation below) 131.2 112.8

Rail franchise premia (see explanation below) (805.7) (599.0)
Rail revenue support (see explanation below) 315.3 301.3
Materials and consumables (419.8) (407.8)
Staff costs (note 6) (1,203.8) (1,133.9)
Depreciation on property, plant and equipment (note 12) (120.1) (115.7)
Gain/(loss) on disposal of property, plant and equipment 2.3 (2.1)
Repairs and maintenance expenditure on property, plant and equipment (32.8) (26.7)
Amortisation of intangible assets (note 11) (11.9) (14.0)
Network Rail charges, including electricity for traction (197.4) (250.9)
Operating lease rentals payable (207.7) (179.6)
Other external charges (463.4) (413.0)
Restructuring costs (0.8) (0.9)
Total operating costs and other operating income (3,014.6) (2,729.5)
Miscellaneous revenue comprises revenue incidental to the Group’s principal activities. It includes commissions receivable, advertising income,
maintenance income, railway station access income, railway depot access income, fuel sales and property income.
Rail franchise premia is the amount of financial premia payable to the UK’s Department for Transport in respect of the operation of UK passenger rail
franchises.
Rail revenue support is the amount of financial support receivable from the UK’s Department for Transport in certain circumstances where a train
operating company’s revenue is below target.
Amounts payable to the Company’s auditors, PricewaterhouseCoopers LLP, and their associates by the Company and its subsidiary undertakings in
respect of audit and non-audit services are shown below:
2015 2014
£000 £000
Fees payable to the Company’s auditors and its associates for the audit of the Company’s financial
statements and consolidated financial statements 400.0 400.0
Fees payable to the Company’s auditors and its associates for the audit of the Company’s subsidiaries
pursuant to legislation 434.0 411.0
Total audit fees 834.0 811.0
Taxation advisory services 46.5 6.0

Other assurance services 96.0 99.0
Non-audit fees 142.5 105.0
Total fees payable by the Group to its auditors 976.5 916.0
In addition to the fees detailed above, PricewaterhouseCoopers LLP received US$165,000 (2014: US$188,000) in relation to the audit of the Group’s
joint venture, Twin America LLC.
A description of the work of the Audit Committee is set out in the Audit Committee Report in section 5 of this Annual Report, and includes an
explanation of how auditor independence is safeguarded when non-audit services are provided by the auditors.

Note 4 Exceptional items and intangible asset expenses
The Group highlights amounts before intangible asset expenses and exceptional items as well as clearly reporting the results in accordance with IFRS.
Exceptional items are defined in note 35.
Information on exceptional items is provided in section 1.6.2 of the Strategic report.
The items shown in the column headed “Intangibles and exceptional items” on the face of the consolidated income statement for the year ended
30 April 2015 and for the prior year comparatives can be further analysed as follows:
2015 2014
Exceptional Intangible Intangibles and Exceptional Intangible Intangibles and
items asset expenses exceptional items items asset expenses exceptional items
£m £m £m £m £m £m
Operating costs
Intangible asset expenses – (11.9) (11.9) – (14.0) (14.0)
Share of profit of joint ventures
Refund of franchise bid costs – – – 1.0 – 1.0
– related tax – – – (0.2) – (0.2)
Twin America litigation 2.7 – 2.7 (9.2) – (9.2)
2.7 – 2.7 (8.4) – (8.4)
Non-operating exceptional items
– continuing operations
Expenses incurred in relation to acquisitions – – – (0.1) – (0.1)
Net loss on disposal of operations (note 16) – – – (0.2) – (0.2)
Provision for onerous property lease (2.1) – (2.1) – – –
Twin America litigation (8.5) – (8.5) – – –
Non-operating exceptional items
– continuing operations (10.6) – (10.6) (0.3) – (0.3)
Intangible asset expenses and exceptional
items – continuing operations (7.9) (11.9) (19.8) (8.7) (14.0) (22.7)
Tax effect of intangible asset expenses
and exceptional items 2.3 3.1 5.4 1.2 4.5 5.7
Intangible asset expenses and exceptional
items after taxation – continuing operations (5.6) (8.8) (14.4) (7.5) (9.5) (17.0)
In respect of the Twin America litigation, the Group made payments in the year ended 30 April 2015 of £4.5m (2014: £Nil) to settle litigation and legal
fees. Its share of payments made by joint ventures was £6.7m (2014: £3.6m). The prior year exceptional items for refund of franchise bid costs and
acquisition expenses were cash items.
Note 5 Finance costs and income

Net finance costs and items of income, expense, gains and losses in respect of financial instruments (excluding commodity hedges, trade and other
payables, and trade and other receivables) have been recognised in the income statement as follows:
2015 2014
£m £m
Interest income on financial assets not at fair value through profit and loss
– Interest receivable on cash 1.5 3.2
Interest income on fair value hedges
– Interest receivable on interest rate swaps qualifying as fair value hedges 1.2 1.4
Finance income 2.7 4.6

Interest expense on financial liabilities not at fair value through profit and loss
– Interest payable and other facility costs on bank loans, loan notes, overdrafts and trade finance (7.9) (7.2)
– Interest payable on hire purchase and finance leases (2.5) (3.5)
– Interest payable and other finance costs on bonds (27.3) (28.0)
Other finance costs
– Unwinding of discounts on provisions (3.8) (3.9)
– Interest charge on defined benefit pension schemes (3.3) (4.6)
Finance costs (44.8) (47.2)
Net finance costs (42.1) (42.6)

Note 6 Staff costs
Total staff costs were as follows: 2015 2014
£m £m
Staff costs
Wages and salaries 1,027.0 971.4
Social security costs 91.1 86.3
Pension costs, excluding interest on net liability (note 25) 80.9 69.6
Share based payment costs (excluding social security costs)
– Equity-settled 2.2 2.2
– Cash-settled 2.6 4.4
1,203.8 1,133.9
The total amount shown for staff costs above includes an amount of £0.5m (2014: £1.0m) in respect of share based payment costs for the Directors.
Key management personnel are considered to be the Directors and full information on their remuneration, waivers of remuneration, share based
payments, incentive schemes and pensions is contained within the Directors’ remuneration report in section 8 of this Annual Report.
The average monthly number of persons employed by the Group during the year (including executive directors) was as follows:
2015 2014
number number
UK operations 28,496 27,172

UK administration and supervisory 3,453 3,330
North America 4,860 4,968
36,809 35,470
The average monthly number of persons employed by the Group during the year, split by segment, was as follows:
2015 2014
number number
UK Bus (regional operations) 20,075 19,426

UK Bus (London) 4,144 3,971
North America 4,860 4,968
UK Rail 7,609 6,976
Central 121 129
36,809 35,470

Note 7 Taxation
(a) Analysis of charge in the year
2015 2014
exceptional items items the year exceptional items items the year
Notes £m £m £m £m £m £m
Current tax:
UK corporation tax at 20.9% (2014: 22.8%) 22.3 (1.4) 20.9 37.7 (1.2) 36.5
Prior year over provision for corporation tax (2.7) – (2.7) (6.0) – (6.0)
Foreign tax (current year) 0.8 – 0.8 0.1 – 0.1
Foreign tax (prior year) 0.4 – 0.4 – – –
Total current tax 20.8 (1.4) 19.4 31.8 (1.2) 30.6
Deferred tax:
Origination and reversal of temporary differences 14.2 (4.0) 10.2 6.2 (4.5) 1.7
Change in tax rates – – – (6.1) – (6.1)
Adjustments in respect of prior years (3.9) – (3.9) (0.7) – (0.7)
Total deferred tax (note 23) 10.3 (4.0) 6.3 (0.6) (4.5) (5.1)
Total tax on profit 31.1 (5.4) 25.7 31.2 (5.7) 25.5
(b) Factors affecting tax charge for the year

2015 2014
£m £m
Profit before taxation – continuing operations 165.2 158.0
Profit multiplied by standard rate of corporation tax applying to the year in the UK of 20.9% (2014: 22.8%) 34.5 36.0
Effects of:
Intangible asset allowances/deductions 0.3 –
Non-deductible expenditure/non-taxable income 1.6 5.1
Utilisation of tax losses not previously recognised as deferred tax assets – (2.5)
Foreign taxes differences 0.6 0.9
Adjustments to tax charge in respect of prior years (6.2) (6.7)
Tax effect of share of results of joint ventures (4.7) (1.2)
Change in UK corporation rate to 20% from 1 April 2015 (0.4) (6.1)
Total taxation (note 7a) 25.7 25.5
(c) Factors that may affect future tax charges

There are no temporary differences associated with investments in foreign subsidiaries for which deferred tax liabilities have not been recognised.
Gross deductible temporary differences of £27.4m (2014: £30.1m) have not been recognised due to restrictions in the availability of their use.
Temporary differences in respect of the revaluation of land and buildings and in respect of rolled over capital gains are fully offset by temporary
differences in respect of capital losses.
The deferred tax balances have been calculated with reference to the enacted UK corporation tax rate of 20% (2014: 20%).
(d) Tax on items taken directly or transferred from equity

The components of tax on items taken directly to or transferred from equity are shown in the consolidated statement of comprehensive income on
page 59 and the consolidated statement of changes in equity on page 61.

Note 8 Dividends
Dividends payable in respect of ordinary shares are shown below.
2015 2014 2015 2014

pence per share pence per share £m £m
Amounts recognised as distributions in the year

Dividends on ordinary shares
Final dividend in respect of the previous year 6.6 6.0 37.9 34.4
Interim dividend in respect of the current year 3.2 2.9 18.4 16.6
Amounts recognised as distributions to equity holders in the year 9.8 8.9 56.3 51.0
Dividends proposed but neither paid nor included as liabilities in the

financial statements
Dividends on ordinary shares
Final dividend in respect of the current year 7.3 6.6 41.9 37.9
Note 9 Earnings per share

Basic earnings per share (”EPS“) have been calculated by dividing the profit attributable to equity shareholders by the weighted average number of
ordinary shares in issue during the year, excluding any ordinary shares held in treasury and by employee share ownership trusts.
The diluted earnings per share was calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all
dilutive potential ordinary shares in relation to executive share plans and long-term incentive plans.
2015 2014
no. of shares no. of shares
million million
Basic weighted average number of ordinary shares 574.4 574.2
Dilutive ordinary shares
– Long Term Incentive Plan 0.2 1.8
– Executive Participation Plan 2.3 2.6
Diluted weighted average number of ordinary shares 576.9 578.6
2015 2014
£m £m
Net profit attributable to equity holders of the parent (for basic EPS calculation) 139.3 132.5
Intangible asset expenses before tax (see note 4) 11.9 14.0
Non-controlling interest in intangible asset expenses (0.1) –
Exceptional items before tax (see note 4) 7.9 8.7
Tax effect of intangible asset expenses and exceptional items (see note 4) (5.4) (5.7)
Net profit attributable to equity holders of the parent for adjusted EPS calculation 153.6 149.5
Earnings per share before intangible asset expenses and exceptional items is calculated by adding back intangible asset expenses and exceptional items
after taking account of taxation, as shown on the consolidated income statement. This has been presented to allow shareholders to gain a further
understanding of the underlying performance.

Note 10 Goodwill
The movements in goodwill were as follows:
2015 2014
£m £m
Net book value

At beginning of year 125.4 127.8
Acquired through business combinations – 4.0
Disposals – (0.1)
Foreign exchange movements 7.5 (6.3)
At end of year 132.9 125.4
For the purpose of impairment testing, all goodwill that has been acquired in business combinations has been allocated to three individual cash
generating units (”CGUs”) on the basis of the Group’s operations. Each cash generating unit is an operational division. The UK Bus (regional
operations) and UK Bus (London) cash generating units operate coach and bus operations in the United Kingdom. The UK Bus (regional operations)
Division also operates a small number of inter-city coach services in mainland Europe. The North America cash generating unit operates coach and bus
operations in the US and Canada. No goodwill has been allocated to the Group’s UK rail operations.
The cash generating units are as follows:

UK Bus UK Bus North America
(regional operations) (London)
2015 2014 2015 2014 2015 2014
£m £m £m £m £m £m
Carrying amount of goodwill 47.5 47.5 3.6 3.6 81.8 74.3
Basis on which recoverable amount has

been determined Value in use Value in use Value in use Value in use Value in use Value in use
Period covered by approved management

plans used in value in use calculation 5 years 5 years 5 years 5 years 5 years 5 years
Pre-tax discount rate applied to cash flow

projections 9.0% 9.9% 9.0% 9.9% 11.8% 13.0%
Growth rate used to extrapolate cash flows

beyond period of management plan 2.3% 2.2% 2.3% 2.2% 4.4% 4.6%
Difference between above growth rate and

long-term average growth rate for market in
which unit operates Nil Nil Nil Nil Nil Nil
The calculation of value in use for each cash generating unit shown above is most sensitive to the assumptions on discount rates and growth rates and
in the case of UK Bus (London), the number of new contracts won and the commercial terms of such contracts. The assumptions used are considered
to be consistent with past experience and external sources of information and to be realistically achievable in light of economic and industry measures
and forecasts.
The principal risks and uncertainties facing the Group are set out in section 1.4.6 of the Strategic report.
The cost base of the UK Bus (regional operations) and North American operations can be flexed in response to changes in revenue and there is scope
to reduce capital expenditure in the medium-term if other cash flows deteriorate. Risks to the cash flow forecasts remain, however, and are described in
section 1.4.6. The cost base of UK Bus (London) is less flexible because the business is contractually committed to operate the majority of its services.
The discount rates have been determined with reference to the estimated post-tax Weighted Average Cost of Capital (“WACC”) of the Group. The
WACC has been estimated as at 30 April 2015 at 7.2% (2014: 7.9%) based on:
• The market capitalisation and net debt of the Group as at 30 April 2015 as an indication of the split between debt and equity;
• A risk-free rate of 1.9% (2014: 2.7%);
• A levered beta for the Group of 0.8 (2014: 0.9);
• A marginal pre-tax cost of debt of 5.4% (2014: 5.2%).
The pre-tax discount rate for each CGU has been determined by adjusting the Group’s WACC for the risk profile and effects of tax on each of the
relevant CGUs.
The Directors believe that in the case of each of the cash generating units shown above, any reasonably possible change in the key assumptions on
which the recoverable amount of the unit is based would not cause its carrying amount to exceed its recoverable amount.

Note 11 Other intangible assets
The movements in other intangible assets, none of which were internally generated and all of which are assumed to have finite useful lives, were as
follows:

Operating Customer Non-compete Rail Software
leases contracts contracts franchises costs Total
£m £m £m £m £m £m
Cost
At beginning of year 1.0 38.0 4.1 19.7 16.9 79.7
Additions – – - 60.9 12.4 73.3
Disposals – (17.7) (4.3) – – (22.0)
Foreign exchange movements 0.1 1.6 0.2 – 0.5 2.4
At end of year 1.1 21.9 – 80.6 29.8 133.4
Accumulated amortisation
At beginning of year (0.6) (30.9) (4.1) (15.4) (6.1) (57.1)
Amortisation charged to income statement (0.4) (5.4) – (3.5) (2.6) (11.9)
Disposals – 17.7 4.3 – – 22.0
Foreign exchange movements (0.1) (1.2) (0.2) – (0.2) (1.7)
At end of year (1.1) (19.8) – (18.9) (8.9) (48.7)
Net book value at beginning of year 0.4 7.1 – 4.3 10.8 22.6
Net book value at end of year – 2.1 – 61.7 20.9 84.7

Intangible assets include customer contracts and operating leases on favourable terms to market purchased as part of business combinations, the right
to operate UK Rail franchises and software costs.
There are no unexpired, material non-compete arrangements and the amounts at the beginning of the year have been shown as disposals in the year.

Operating Customer Non-compete Rail Software
leases contracts contracts franchises costs Total
£m £m £m £m £m £m
Cost
At beginning of year 1.0 56.5 12.6 19.7 10.4 100.2
Additions – – – – 7.9 7.9
Acquired through business combinations – 1.2 – – – 1.2
Disposals – (18.2) (8.1) – (1.0) (27.3)
Foreign exchange movements – (1.5) (0.4) – (0.4) (2.3)
At end of year 1.0 38.0 4.1 19.7 16.9 79.7
Accumulated amortisation
At beginning of year (0.3) (40.2) (12.6) (13.1) (4.4) (70.6)
Amortisation charged to income statement (0.3) (9.6) – (2.3) (1.8) (14.0)
Disposals – 18.2 8.1 – – 26.3
Foreign exchange movements – 0.7 0.4 – 0.1 1.2
At end of year (0.6) (30.9) (4.1) (15.4) (6.1) (57.1)
Net book value at beginning of year 0.7 16.3 – 6.6 6.0 29.6
Net book value at end of year 0.4 7.1 – 4.3 10.8 22.6

Note 12 Property, plant and equipment
The movements in property, plant and equipment were as follows:
Year ended 30 April 2015 Land and Passenger Other plant
buildings service vehicles and equipment Total
£m £m £m £m
Cost
At beginning of year 322.7 1,259.0 224.9 1,806.6
Additions 13.4 138.5 51.1 203.0
Disposals (16.7) (64.2) (50.7) (131.6)
Reclassifications 3.4 – (3.4) –
Foreign exchange movements 4.2 30.8 0.1 35.1
At end of year 327.0 1,364.1 222.0 1,913.1
Depreciation
At beginning of year (66.1) (535.6) (164.0) (765.7)
Depreciation charged to income statement (10.0) (96.6) (13.5) (120.1)
Disposals 6.9 58.6 20.2 85.7
Foreign exchange movements (1.2) (13.9) – (15.1)
At end of year (70.4) (587.5) (157.3) (815.2)
Net book value at beginning of year 256.6 723.4 60.9 1,040.9

Net book value at end of year 256.6 776.6 64.7 1,097.9
Included in the above net book value at end of year are:
Assets on hire purchase – 90.5 – 90.5
Assets on finance leases – 36.8 – 36.8
Long leasehold land and buildings 48.7 – – 48.7
Included in the net book value of property, plant and equipment is £17.1m (2014: £22.2m) in respect of assets under construction that the Group expects to be
sold to Network Rail and other third parties following the completion of each asset’s construction.
Year ended 30 April 2014 Land and Passenger Other plant

buildings service vehicles and equipment Total
£m £m £m £m
Cost
At beginning of year 298.7 1,247.2 225.9 1,771.8
Additions 16.0 104.7 41.7 162.4
Acquired through business combinations 0.1 2.7 0.2 3.0
Disposals (2.5) (53.3) (40.5) (96.3)
Disposal of subsidiaries and other businesses – (8.5) – (8.5)
Foreign exchange movements (3.9) (36.7) (0.6) (41.2)
Reclassification 1.7 0.1 (1.8) –
Prior year adjustments 12.6 2.8 – 15.4
At end of year 322.7 1,259.0 224.9 1,806.6
Depreciation
At beginning of year (47.2) (508.9) (152.6) (708.7)
Depreciation charged to income statement (8.9) (93.2) (13.6) (115.7)
Disposals 0.9 47.9 1.9 50.7
Disposal of subsidiaries and other businesses – 5.6 – 5.6
Foreign exchange movements 1.7 15.9 0.2 17.8
Reclassification – (0.1) 0.1 –
Prior year adjustments (12.6) (2.8) – (15.4)
At end of year (66.1) (535.6) (164.0) (765.7)
Net book value at beginning of year 251.5 738.3 73.3 1,063.1

Net book value at end of year 256.6 723.4 60.9 1,040.9
Included in the above net book value at end of year are:
Assets on hire purchase – 109.6 – 109.6
Assets on finance leases – 44.3 – 44.3
Long leasehold land and buildings 54.3 – – 54.3

Note 13 Interests in joint ventures
The Group has four joint ventures as summarised below. Each joint venture is structured as a distinct legal entity and the Group accounts for its
interests in all four joint ventures using the equity method of accounting. There are no quoted market prices for any of the Group’s investments in
joint ventures.
(a) Virgin Rail Group Holdings Limited
The Group holds 49% of the equity and voting rights in Virgin Rail Group Holdings Limited (“Virgin Rail Group”). The principal business of the group
headed by Virgin Rail Group is the operation of inter-city train services under the West Coast rail franchise. Virgin Rail Group is incorporated in the UK.
The Group considers that it has joint control of Virgin Rail Group even though it controls less than half of the voting rights in Virgin Rail Group. That
joint control results from contractual arrangements between the shareholders of Virgin Rail Group that require the agreement of both shareholders to
decisions on key matters.
Virgin Rail Group‘s principal subsidiary is West Coast Trains Limited. Under the terms of its rail franchise agreement, West Coast Trains Limited may only
pay dividends and/or repay loans from other related companies to the extent it remains compliant with certain financial ratios specified in the franchise
agreement. This could restrict West Coast Trains Limited from making distributions or repaying loans that would be otherwise permitted by company
law. West Coast Trains Limited is also prohibited from loaning money to related companies without the prior consent of the UK Department for
Transport. Such restrictions on distributions and loans generally apply to all entities operating train services under UK rail franchise agreements.
In addition, under arrangements pursuant to which a performance bond has been issued by an insurance company in connection with the West Coast
rail franchise, Virgin Rail Group is required to maintain consolidated net assets (under UK GAAP and applying its own accounting policies) of no less
than £22.5m (2014: £22.5m). This could restrict Virgin Rail Group’s ability to make distributions to the Stagecoach Group.
Subject to the shareholders consideration of how much cash to retain in the business for working capital requirements and subject to retaining
sufficient cash to meet any obligations under rail franchise agreements, the distributable profits of Virgin Rail Group are to be distributed in full to its
shareholders. Both shareholders in Virgin Rail Group would need to agree to any changes to or deviations from that dividend policy.
(b) Twin America LLC
The Group holds 60% of the economic interests and 50% of the voting rights in Twin America LLC (“Twin America”). The principal business of the
group headed by Twin America is the operation of sightseeing coach tours in and around the city of New York in the United States. Twin America is
incorporated in the United States.
Contractual arrangements are in place in respect of Twin America which require the agreement of both members to decisions on key matters. In light
of that and despite the fact that the Chief Executive of Twin America is a representative of the other member, the Group considers that it has joint
control of Twin America.
In connection with the settlement of litigation in respect of Twin America (see note 31 (iv)), the Group has contractually committed to make loans of up
to US$15.0m to Twin America. As at 30 April 2015, the outstanding amount of loans made by the Group to Twin America was US$9.0m. The Group
currently expects that the maximum loan that will be required in connection with the settlement of the litigation will be US$9.0m. The Group has also
contractually committed to pay non-refundable amounts of US$6.0m directly to the plaintiffs in connection with the settlement of the litigation, of
which US$4.0m had been paid prior to 30 April 2015 and the remaining US$2.0m is expected to be paid during the year ending 30 April 2016.
The contractual arrangements between the members of Twin America permit dividends of US$6.0m per annum to be paid by Twin America prior to
the repayment of any loans outstanding to the Group. No dividends in excess of US$6.0m per annum may be paid for as long as there remain
outstanding loans from the Group. Subject to that and other than where both members agree otherwise, the available cash flow of Twin America is
distributed to its members quarterly after retaining sufficient cash for the anticipated working capital needs of the business.
(c) Scottish Citylink Coaches Limited
The Group holds 35% of the equity and voting rights in Scottish Citylink Coaches Limited (“Citylink”). The principal business of Citylink is the operation
of inter-city coach services to, from and within Scotland. It is incorporated in the UK.
The Group considers that it has joint control of Citylink even although it controls less than half of the voting rights in Citylink but is responsible for the
day-to-day management of the business. That joint control results from contractual arrangements between the shareholders of Citylink that require
the agreement of both shareholders to decisions on key matters.
The profit after tax of Citylink is distributed in full to its shareholders subject to retaining sufficient cash to meet the liquidity requirements of the
business and subject to there being no outstanding amounts payable by Citylink in respect of loans from its shareholders and accrued interest on such
loans. Both shareholders in Citylink need to agree to any changes to or deviations from that dividend policy.
(d) Anglia Rail Holdings Limited
The Group acquired 40% of the equity and voting rights in Anglia Rail Holdings Limited (“Anglia Rail”) during the year ended 30 April 2015. The group
headed by Anglia Rail is one of three bidders shortlisted to bid for the new East Anglia rail franchise. It is a joint venture between the Group and
Abellio. Anglia Rail is incorporated in the UK.
The Group considers that it has joint control of Anglia Rail even though it controls less than half of the voting rights in Anglia Rail. That joint control
results from contractual arrangements between the shareholders of Anglia Rail that require the agreement of both shareholders to decisions on key
matters.
Under the contractual arrangements pertaining to the joint venture, the Group is contractually committed to funding up to £2.4m of costs in
connection with the bid for the new East Anglia rail franchise.
The distributable profits of Anglia Rail are to be distributed in full to its shareholders subject to retaining sufficient cash to meet any obligations under
rail franchise agreements. Both shareholders in Anglia Rail need to agree to any changes to or deviations from that dividend policy.

Note 13 Interests in joint ventures (continued)
(e) Impairment reviews
The Directors undertook an impairment review as at 30 April 2015 of the carrying value of the Group’s joint venture interests and concluded that there
had been no impairment loss. Other than in respect of Twin America, there is no reasonably possible change that would cause the carrying values to
exceed the recoverable amounts.
Trading at Twin America has remained challenging during the year ended 30 April 2015, as the New York sightseeing market continues to be
competitive. In addition, the joint venture is relinquishing rights to use certain bus stops as explained in section 1.5.5.2 of the Strategic Report.
Headroom exists between the £35.9m carrying value of the investment and its value in use. As at 30 April 2015, the headroom in the base case is
£9.3m. This headroom would be eliminated with the investment at breakeven if the assumed revenue growth rate was lower by 70 basis points in
each year of the 5-year forecast period, or if the discount rate were to increase by a further 160 basis points.
(f) Movements in carrying values

The movements in the carrying values were as follows:
Virgin Rail Twin Total Total
Group Citylink America LLC 2015 2014
£m £m £m £m £m
Cost
At beginning of year 67.7 4.1 28.5 100.3 110.8
Share of recognised profit 22.3 1.1 4.7 28.1 0.4
Share of actuarial gains on defined
benefit pension schemes, net of tax 0.1 – – 0.1 –
Share of other comprehensive expense on
cash flow hedges, net of tax (1.8) – – (1.8) –
Share of foreign exchange differences on translation
of foreign operations – – (0.2) (0.2) –
Dividends received in cash (13.7) (0.4) (0.4) (14.5) (8.2)
Foreign exchange movements – – 3.3 3.3 (2.7)
At end of year 74.6 4.8 35.9 115.3 100.3
Amounts written off

At beginning and end of year (57.5) – – (57.5) (57.5)
Net book value at beginning of year 10.2 4.1 28.5 42.8 53.3
Net book value at end of year 17.1 4.8 35.9 57.8 42.8
A loan payable to Citylink of £1.7m (2014: £1.7m) is reflected in note 21. A loan receivable from Twin America of £5.9m (2014: £Nil) is reflected in
note 19.
(g) Summarised financial information of joint ventures

The summarised financial information shown below is in accordance with IFRS and the Group’s accounting policies. Where a joint venture’s own
accounts are prepared other than in accordance with IFRS and the Group’s accounting policies, appropriate adjustments have been made to determine
the figures shown below. Adjustments have also been made, as appropriate, to reflect fair value adjustments made at the time of acquisition. Except
where stated, the amounts shown are in respect of 100% of each joint venture and not just the Group’s share of the joint venture.
Each of the Group’s joint ventures has a statutory financial year-end that differs from that of the Group’s, which is 30 April. In applying the equity
method of accounting to its interests in joint ventures, the Group refers to the edition of each joint venture’s management accounts that has a balance
sheet date closest to the Group’s balance sheet date. In some cases, the balance sheet date differs from the Group’s by a few days but the impact of
that on the Group’s consolidated financial statements is not material. Further information on the relevant dates in respect of material joint ventures is
below:
Joint venture Latest statutory financial year-end Balance sheet date of management accounts
closest to 30 April 2015
Virgin Rail Group 31 March 2015 2 May 2015
Twin America 31 March 2015 30 April 2015
Citylink 31 December 2014 17 April 2015

(g) Summarised financial information of joint ventures (continued)
The financial impact of Anglia Rail on the consolidated financial statements for the year ended 30 April 2015 is immaterial. The consolidated balance
sheets of each of the Group’s other joint ventures are summarised below:
As at 30 April 2015 Virgin Rail Twin Total

Group Citylink America 2015
£m £m £m £m
Non-current assets 16.2 0.1 18.8 •

Cash and cash equivalents 92.3 3.3 5.5 •
Other current assets 85.3 11.3 6.2 •
Non-current liabilities (9.8) – (3.8) •
Current liabilities (149.0) (8.4) (15.8) •
Net assets 35.0 6.3 10.9 •
Non-controlling interests (0.1) – – •
Shareholders’ funds 34.9 6.3 10.9 •
Group share 49% 35% 60%
Group share of net assets 17.1 2.2 6.5 25.8
Goodwill – 2.6 29.4 32.0
Group interest in joint ventures 17.1 4.8 35.9 57.8
As at 30 April 2014 Virgin Rail Twin Total

Group Citylink America 2014
£m £m £m £m
Non-current assets 2.8 0.3 19.5 •

Cash and cash equivalents 84.4 0.3 8.2 •
Other current assets 87.3 12.6 6.6 •
Current liabilities (153.6) (8.9) (31.3) •
Net assets 20.9 4.3 3.0 •
Non-controlling interests (0.1) – – •
Shareholders’ funds 20.8 4.3 3.0 •
Group share 49% 35% 60%
Group share of net assets 10.2 1.5 1.8 13.5
Goodwill – 2.6 26.7 29.3
Group interest in joint ventures 10.2 4.1 28.5 42.8
The liabilities shown above include the following financial liabilities (excluding trade and other payables):
2015 2014
£m £m
Virgin Rail Group

Non-current liabilities – derivative instruments at fair value (2.4) –
Current liabilities – derivative instruments at fair value (2.3) –
Twin America
Current liabilities – bank borrowings – (2.8)
Current liabilities – loan from Stagecoach Group (5.9) –

(g) Summarised financial information of joint ventures (continued)
The financial performance of each of the Group’s joint ventures, other than Anglia Rail that is immaterial, is summarised below:
Year ended 30 April 2015 Virgin Rail Twin
Group Citylink America
£m £m £m
Revenue 1,041.4 43.7 77.9

Depreciation & amortisation (0.3) – (3.2)
Other operating expenses (984.0) (39.9) (71.2)
Operating profit 57.1 3.8 3.5
Exceptional items – – 4.5
Finance income 0.5 – –
Finance costs (0.5) – (0.2)
Taxation (11.6) (0.8) –
Profit after tax 45.5 3.0 7.8
Other comprehensive expense (3.5) – (0.3)
Total comprehensive income 42.0 3.0 7.5
Year ended 30 April 2014 Virgin Rail Twin

Group Citylink America
£m £m £m
Revenue 950.2 44.6 85.0

Depreciation & amortisation (0.7) – (3.8)
Other operating expenses (944.2) (39.7) (71.7)
Operating profit 5.3 4.9 9.5
Exceptional items 2.0 – (15.3)
Finance income 0.6 – –
Finance costs – – –
Taxation (2.2) (1.2) (0.4)
Profit / (loss) after tax 5.7 3.7 (6.2)
Other comprehensive income – – –
Total comprehensive income 5.7 3.7 (6.2)
Note 14 Available for sale and other investments

The available for sale and other investments were as follows:
2015 2014
£m £m
Cost / valuation and net book value

At beginning and end of year 0.3 0.3
Amounts written off

Amounts written off in year (0.3) –
At end of year (0.3) –
Net book value at beginning of year 0.3 0.3
Net book value at end of year – 0.3
Note 15 Business combinations

The Group completed no material business combinations during the year ended 30 April 2015. Details of business combinations completed in previous
years are provided in the Annual Reports for the years concerned.
Note 16 Disposals
In respect of businesses disposed of, the consideration, net assets disposed and loss on disposal for the years ended 30 April 2014 and 30 April 2015,
were as follows:
2015 2014
£m £m
Net assets disposed – 3.1

Loss on disposal – (0.2)
Net consideration receivable – 2.9

Deferred consideration in respect of businesses disposed of in current year – (0.1)
Net cash inflow – 2.8

Note 17 Principal subsidiaries
The principal subsidiary undertakings (ordinary shares 100% owned unless otherwise stated) as at 30 April 2015 were:
Jurisdiction of
registration or
Company incorporation Principal activity
SCOTO Limited England Holding and property company

Stagecoach Bus Holdings Limited Scotland Holding and financing company
Stagecoach Rail Holdings Limited Scotland Holding company
Stagecoach (South) Limited England Bus and coach operator
Stagecoach (North West) Limited England Bus and coach operator
East Midland Motor Services Limited England Bus and coach operator
East Kent Road Car Company Limited England Bus and coach operator
Busways Travel Services Limited England Bus and coach operator
Cleveland Transit Ltd England Bus and coach operator
Cambus Limited England Bus and coach operator
Greater Manchester Buses South Limited England Bus and coach operator
Glenvale Transport Limited England Bus and coach operator
Stagecoach Devon Limited England Bus and coach operator
Thames Transit Limited England Bus and coach operator
The Yorkshire Traction Company Limited England Bus and coach operator
Stagecoach Services Limited England Provision of accounting, payroll and other
support services
PSV Claims Bureau Limited England Claims handling
Red & White Services Limited England Bus and coach operator
Cheltenham & Gloucester Omnibus Company Limited England Bus and coach operator
Midland Red (South) Limited England Bus and coach operator
Fife Scottish Omnibuses Limited Scotland Bus and coach operator
Bluebird Buses Limited Scotland Bus and coach operator
Western Bus Limited Scotland Bus and coach operator
East London Bus & Coach Company Limited England Bus operator
South East London & Kent Bus Company Limited England Bus operator
East London Bus Group Property Investments Limited England Property company
Stagecoach South Western Trains Limited England Train operating company
East Midlands Trains Limited England Train operating company
East Coast Main Line Company Limited (90% owned) England Train operating company
Trentway-Wager Inc Canada Bus and coach operator
Hudson Transit Lines Inc USA Bus and coach operator
Sam Van Galder Inc USA Bus and coach operator
Megabus Northeast LLC USA Coach operator
All companies operate in the countries shown above and are indirectly held. The Group considers that principal subsidiaries includes any subsidiary that
has revenue greater than £25.0m per annum, profit before interest and taxation greater than £2.5m per annum, gross assets greater than £25.0m or
gross liabilities greater than £25.0m. These thresholds exclude any intercompany amounts and investments in subsidiaries. A complete list of
subsidiary undertakings is available on request to the Company and will be filed with the next Annual Return.
Stagecoach Group plc has given a guarantee under section 479C of the Companies Act 2006 (the “Act”) in respect of the year ended 30 April 2015 of
the following of its subsidiary companies and the following subsidiary company is exempt from the requirements of the Act relating to the audit of
individual accounts by virtue of Section 479A of the Companies Act 2006:
Magicbus Limited

Note 17 Principal subsidiaries (continued)
Asset purchase and non-controlling interests
The UK Department for Transport awarded the Virgin Trains East Coast rail franchise to the Group during the year ended 30 April 2015. In connection
with that award, a subsidiary company, Inter City Railways Limited, purchased all of the equity in East Coast Main Line Company Limited, the train
operating company that now operates inter-city train services in the UK under the Virgin Trains East Coast rail franchise. East Coast Main Line Company
Limited held certain assets and liabilities at the date of purchase. However, it did not constitute a business and so the purchase was accounted for by
the Group as an asset purchase rather than as a business combination. The purchase price was allocated to the assets acquired and liabilities assumed
by the Group based on their fair values and the excess of the purchase price over the fair value of the net liabilities assumed was recognised as an
intangible asset, being the cost of the right to operate the franchise.
Inter City Railways Limited is the one subsidiary in which a third party has a material non-controlling interest. The Group holds 90% of the equity and
voting rights in Inter City Railways Limited. Both Inter City Railways Limited and East Coast Main Line Company Limited are incorporated in the UK.
The Virgin Group of companies holds the other 10% of the equity and voting rights of Inter City Railways Limited and also receives a royalty fee from
East Coast Main Line Company Limited that varies depending on the revenue and profit of that company. The Group has contractual arrangements
with the Virgin Group in respect of the business. However, the Group may appoint a majority of the directors of Inter City Railways Limited and appoint
the executive management of East Coast Main Line Company Limited. Also, the Group is responsible for the day-to-day management of the business,
the Managing Director of the business reports directly to the Group Chief Executive and so the Group has the power to direct the activities of the entity.
The Group therefore accounts for Inter City Railways Limited and East Coast Main Line Company Limited as subsidiaries.
The profit for the year ended 30 April 2015 allocated to the non-controlling interest is shown on the consolidated income statement. The
accumulated non-controlling interest as at 30 April 2015 is shown on the consolidated balance sheet and the movement in that interest in the year
(including any dividends paid to non-controlling interests) is shown in the consolidated statement of movements in equity.
At least 75% of the distributable profit of Inter City Railways Limited should be distributed to its shareholders within four months of each financial year-
end subject to retaining sufficient cash to meet any obligations under rail franchise agreements. Both shareholders in Inter City Railways Limited need
to agree to any changes to or deviations from that dividend policy.
Under the terms of its rail franchise agreement, East Coast Main Line Company Limited may only pay dividends and/or repay loans from other Group
companies to the extent it remains compliant with certain financial ratios specified in the franchise agreement. This could restrict it from making
distributions or repaying loans that would be otherwise permitted by company law. East Coast Main Line Company Limited is also prohibited from
loaning money to other Group companies without the prior consent of the UK Department for Transport. Such restrictions on dividends and loans
generally apply to all entities operating train services under UK rail franchise agreements, including two of Stagecoach Group’s other subsidiaries,
Stagecoach South Western Trains Limited and East Midlands Trains Limited.
The Group may be required to loan amounts to East Coast Main Line Company Limited pursuant to the committed loan facilities shown in note 31(iii).
The consolidated balance sheet of Inter City Railways Limited as at 30 April 2015 and its financial performance for the year ended 30 April 2015 are
summarised below. The amounts shown below are determined in accordance with the Group’s accounting policies before inter-company eliminations.
2015
£m
Non-current assets 80.8

Current assets 129.8
Current liabilities (138.5)
Non-current liabilities (63.0)
Net liabilities 9.1
Revenue 118.0
Expenses (114.5)
Operating profit 3.5
Intangible asset expenses (1.5)
Finance costs (net) (0.1)
Taxation (0.4)
Profit after tax 1.5
Other comprehensive expense (5.7)
Total comprehensive expense (4.2)

Note 18 Inventories
Inventories were as follows:
2015 2014
£m £m
Parts and consumables 26.9 24.6
All inventories are carried at cost less a provision to take account of slow moving and obsolete items. Changes in the provision for slow moving and
obsolete inventories were as follows:
2015 2014
£m £m
At beginning of year (2.3) (2.1)

Charged to income statement (1.8) (0.5)
Amount utilised 0.3 0.3
At end of year (3.8) (2.3)
The Group is party to consignment stock arrangements and as at 30 April 2015, the Group physically held consignment stock of a value amounting to
£0.3m (2014: £0.3m) in addition to the amounts disclosed above.
Note 19 Trade and other receivables

Trade and other receivables were as follows: 2015 2014
£m £m
Non-current:
Prepayments 11.9 13.9
Other receivables 0.2 0.3
12.1 14.2
Current:
Trade receivables 204.7 132.6
Less: provision for impairment (2.8) (2.1)
Trade receivables – net 201.9 130.5

Other receivables 22.0 23.0
Loans to joint ventures 5.9 –
Prepayments 54.6 30.5
Accrued income 50.9 59.6
VAT and other government receivables 39.9 25.6
375.2 269.2
The movements in the provision for impairment of current trade receivables were as follows:
2015 2014
£m £m

Impairment losses in year charged to income statement (1.0) (0.6)
Reversal of impairment losses credited to income statement 0.1 0.1
Amounts utilised 0.2 0.3
Further information on credit risk is provided in note 26.

Note 20 Cash and cash equivalents
2015 2014
£m £m
Cash at bank and in hand 395.6 240.3
The cash amounts shown above include £10.0m on 9 month deposit maturing by August 2015, £15.0m on 6 month deposit maturing by August
2015, £15.0m on 6 month deposit maturing by September 2015, £15.0m on 3 month deposit maturing by May 2015, £22.0m on 3 month deposit
maturing by June 2015, £40.0m on 1 month deposit maturing by May 2015, and £25.0m on 1 week deposit maturing by May 2015 (2014: £10.0m
on 12 month deposit maturing by November 2014, £80.0m on 6 month deposit maturing by October 2014, £17.0m on 3 month deposit maturing
by May 2014 and £10.0m on 2 month deposit maturing by May 2014). The remaining amounts are accessible to the Group within one day (2014:
one day).
The Group has a bank offset arrangement whereby the Company and several of its subsidiaries each have bank accounts with the same bank, which
are subject to rights of offset. The cash at bank and in hand of £395.6m (2014: £240.3m) above included the net balance on these offset accounts
of £49.4m (2014: £22.1m), which comprised £309.8m (2014: £296.9m) of positive bank balances less £260.4m (2014: £274.8m) of bank
overdrafts.
Note 21 Trade and other payables

Trade and other payables were as follows: 2015 2014
£m £m
Current
Trade payables 229.6 156.3
Accruals 439.9 297.6
Deferred income 122.9 92.8
Cash-settled share based payment liability 1.3 2.4
Deferred grant income 6.2 8.5
Loans from joint ventures 1.7 1.7
PAYE and NIC payable 28.5 21.2
VAT and other government payables 0.3 0.7
830.4 581.2
Non-current
Accruals 1.0 11.4
Deferred grant income 14.9 13.0
Cash-settled share based payment liability 1.2 1.7
PAYE and NIC payable 0.5 0.6
Other payables 0.5 0.5
Deferred income 21.9 1.3
40.0 28.5

Note 22 Borrowings
(a) Repayment profile
Borrowings are repayable as follows: 2015 2014
£m £m
On demand or within 1 year

Loan notes 19.5 19.7
Hire purchase and lease obligations 32.1 31.2
51.6 50.9
Within 1-2 years
Bank loans – 82.4
Sterling 5.75% Notes 408.5 –
439.3 113.2
Within 2-5 years
Bank loans 172.1 –
Sterling 5.75% Notes – 409.3
197.2 457.5
Over 5 years
Hire purchase and lease obligations – 1.1
US Dollar 4.36% Notes 97.2 88.4
97.2 89.5
Total borrowings 785.3 711.1
Less current maturities (51.6) (50.9)
Non-current portion of borrowings 733.7 660.2
Interest terms on UK hire purchase and lease obligations are at annual rates between 0.40% and 1.90% (2014: 0.40% and 2.00%) over bank base rate
or equivalent LIBOR rates, subject to certain minimum rates. Interest terms on overseas lease obligations are at fixed rates, which at 30 April 2015
averaged 2.3% per annum (2014: 2.6%). Interest terms on bank loans are at LIBOR plus margins ranging from 0.40% to 1.10% (2014: 0.80% to
1.40%). Interest on loan notes are at three months LIBOR. Loan notes amounting to £19.5m (2014: £19.7m) are backed by guarantees provided under
Group banking facilities.
The loan notes have been classified by reference to the earliest date on which the loan note holders can request redemptions.
Bank loans, Sterling Notes and US Dollar Notes are unsecured.
The minimum lease payments under hire purchase and lease obligations fall due as follows: 2015 2014
£m £m
Not later than one year 33.6 33.3

Later than one year but not more than five years 57.2 81.6
More than five years – 1.1
90.8 116.0
Future finance costs on hire purchase and finance leases (2.8) (4.7)
Carrying value of hire purchase and finance lease liabilities 88.0 111.3
For variable-rate hire purchase arrangements, the future finance costs included in the above table are based on the interest rates applying at the
balance sheet date.
The Group in its ordinary course of business enters into hire purchase and finance lease agreements to fund or refinance the purchase of vehicles. All of
the hire purchase and lease obligations shown above are in respect of vehicles. The lease agreements are typically for periods of 5 to 10 years and do
not have contingent rent or escalation clauses.
The agreements have industry standard terms and do not contain any restrictions on dividends, additional debt or further leasing.
(b) Sterling 5.75% Notes

On 16 December 2009, the Group issued £400m of 5.75% Notes. Interest on the Notes is paid annually in arrears and all remaining Notes are due to be
redeemed at their principal amount on 16 December 2016.
The Notes were issued at 99.599% of their principal amount. The consolidated carrying value of the Notes at 30 April 2015 was £408.5m (2014:
£409.3m) after taking account of accrued interest, the discount on issue, issue costs and the fair value of interest rate swaps previously used to manage
the interest rate profile of the Notes.
(c) US Dollar 4.36% Notes

On 18 October 2012, the Group issued US$150m of 4.36% Notes as a private placement. Interest on the Notes is paid semi-annually in arrears and all
remaining Notes are due to be redeemed at their principal amount on 18 October 2022. The consolidated carrying value of the Notes at 30 April 2015
was £97.2m (2014: £88.4m) after taking account of accrued interest, issue costs and the effect of fair value hedges.

Note 23 Deferred tax
The Group movement in deferred tax during the year was as follows: 2015 2014
£m £m
Due after more than one year:
Credited to income statement (6.3) 5.1
Arising through business combinations – (0.3)
Credited/(charged) to equity 16.0 (3.8)
Foreign exchange movements (0.8) 0.5
At end of year (25.1) (34.0)
Deferred taxation is calculated as follows:

2015 2014
£m £m
Accelerated capital allowances (115.2) (101.1)

Pension temporary differences 35.3 23.1
Short-term temporary differences 54.8 44.0
(25.1) (34.0)
The amount of deferred tax recognised in the income statement by type of temporary difference is as follows: 2015 2014
£m £m
Accelerated capital allowances (8.1) (6.2)

Pension temporary differences 0.2 1.2
Short-term temporary differences 1.6 10.1
(6.3) 5.1
Note 24 Provisions
The movements in provisions were as follows: Token redemption Insurance Environmental Redundancy Onerous
provision provisions provisions provision contracts Total
£m £m £m £m £m £m
Beginning of year 9.9 140.9 4.9 0.4 12.8 168.9

Provided during year (after discounting) – 50.6 – 1.1 2.7 54.4
Unused amounts credited to income statement (3.6) – – – – (3.6)
Unwinding of discount – 3.8 – – – 3.8
Utilised in the year – (48.6) (0.5) (1.0) (6.5) (56.6)
Arising on sale of tokens during year 0.5 – – – – 0.5
Redemption of tokens (0.9) – – – – (0.9)
Foreign exchange movements – 4.0 0.2 – 0.1 4.3
End of year 5.9 150.7 4.6 0.5 9.1 170.8
30 April 2015:
Current 1.2 55.2 1.3 0.5 6.5 64.7
Non-current 4.7 95.5 3.3 – 2.6 106.1
5.9 150.7 4.6 0.5 9.1 170.8
30 April 2014:
Current 2.0 48.3 0.4 0.4 6.4 57.5
Non-current 7.9 92.6 4.5 – 6.4 111.4
9.9 140.9 4.9 0.4 12.8 168.9
The token redemption provision relates to tokens issued to third parties to be redeemed as payment for transportation services. Tokens are typically redeemed within
five years of issue.
The insurance provisions relate to insurance reserves on incurred accidents up to 30 April in each year where claims have not been settled. These are based on actuarial
reviews and prior claims history. Claims are typically settled within five years of origination.
The environmental provisions relate to legal or constructive obligations to undertake environmental work, such as an obligation to rectify land which has been
contaminated by fuel or to eliminate the presence of asbestos. The provision is based on the estimated cost of undertaking the work required, and is expected to be
utilised over the next five years.
The redundancy provision relates to planned redundancies and is expected to be utilised within one year.
Provisions for onerous contracts relate to contracts where the costs of fulfilling the contract outweigh the economic benefits to be received, which includes contracts
that have been acquired through business combinations that have been identified as being on unfavourable terms at the relevant acquisition date. The provisions are
expected to be fully utilised within three years.

Note 25 Retirement benefits
(a) Description of retirement benefit arrangements
United Kingdom funded schemes
The Group participates in a number of funded defined benefit schemes in the UK as follows.
Date as at which last scheme valuation was prepared
• Stagecoach Pension Schemes (“SPS”) comprising:

The Stagecoach Group Pension Scheme; and 30 April 2011
The East London and Selkent Pension Scheme; 5 April 2013
• The South West Trains section of the Railways Pension Scheme (“RPS”); 31 December 2013
• The Island Line section of the Railways Pension Scheme (“RPS”); 31 December 2013
• The East Midlands Trains section of the Railways Pension Scheme (“RPS”); 31 December 2013
• The East Coast Main Line section of the Railways Pension Scheme (“RPS”); and 31 December 2013
• A number of UK Local Government Pension Schemes (“LGPS”). 31 March 2013
The Stagecoach Pension Schemes and the Local Government Pension Schemes are closed to new members from the Group. All relevant sections of the
Railways Pension Schemes are open to new members.
The Group also operates a number of defined contribution schemes covering UK employees, for which the Group has no further payment obligation
once the contributions are paid other than lump-sum death in service benefits that are provided for certain UK employees.
For the defined benefit schemes, benefits are related to length of service and pensionable salary. Pensionable salary for the Stagecoach Pension
Schemes is subject to capped increases. The weighted average duration as at 30 April 2015 of the expected benefit payments across all UK defined
benefit schemes is estimated at 20.0 years (2014: 19.5 years).
The Directors believe that separate consideration should be given to RPS as the Group has no rights or obligations in respect of the relevant sections of
the scheme following expiry of the related franchises. In addition, under the terms of RPS, any fund deficit or surplus is shared by the employer (60%)
and the employees (40%) in accordance with the shared cost nature of RPS. The employees’ share of the deficit (or surplus) is reflected as an
adjustment to RPS liabilities (or assets).Therefore the liability (or asset) recognised for the relevant sections of RPS reflects only that part of the net
deficit (or surplus) of each section that the employer is expected to fund (or expected to recover) over the life of the franchise to which the section
relates. The adjusting entry referred to as the “franchise adjustment” represents that proportion of the deficit (or surplus) that is expected to exist at the
end of the franchise and which the Group would not be obliged to fund (or entitled to recover).
The Group is a participating employer in a number of UK Local Government Pension Schemes, and has limited influence over the operations of these
schemes. Active membership of these schemes is small and represents 2.3% (2014: 2.4%) of the pensions charge in the consolidated income
statement, but historic liabilities mean that these schemes represent around 8.9% (2014: 11.5%) of the gross present value of pension obligations as at
30 April 2015 shown in the consolidated balance sheet. The Group liaises with the administering authorities to seek to set contributions at appropriate
levels to fund the benefits and deficit recovery payments over a reasonable period of time.
North America funded schemes

The Group participates in two small funded defined benefit schemes in North America, both of which are closed to new members. The Group also
operates defined contribution schemes which are open to eligible North American employees, for which the Group has no further payment obligation
once the contributions are paid.
Unfunded schemes
The Group makes contributions to an unapproved employer-financed retirement benefit scheme (“EFRBS”) in the UK and a non qualifying defined
contribution scheme (“NQDC”) in the US. In each case, the liabilities of these schemes are unfunded but the Group has set aside assets to meet its
obligations under the schemes. In the case of the EFRBS, the scheme holds a guarantee over the assets which the Group has set aside. The Group
considers that the assets set aside are in substance pensions assets and so the amounts of those assets are included within the net pension amounts
reported in the consolidated balance sheet. The carrying value of those assets as at 30 April 2015 was £5.2m (2014: £3.9m).
Other unfunded benefits are provided to a small number of former employees with the net liabilities included within the unfunded balance reported in
the tables that follow.

Note 25 Retirement benefits (continued).
(b) Principal actuarial assumptions
The principal actuarial assumptions used in determining the pensions amounts as at 30 April 2015 and 30 April 2014 are shown below:
2015 2014
Discount rate 3.7% 4.5%

Retail Prices inflation assumption 3.2% 3.3%
Consumer Prices inflation assumption 1.9% 2.3%
Rate of increase in pensionable salaries
SPS 2.0% 2.0%
Others 3.2% 3.8%
Rate of increase of pensions in payment
SPS 3.1% 3.2%
Others 1.9% 2.3%
Post-retirement mortality (life expectancies in years)
Current pensioners at 65 – male 19.3 19.2
Current pensioners at 65 – female 23.6 23.5
Future pensioners at 65 aged 45 now – male 21.4 21.3
Future pensioners at 65 aged 45 now – female 25.5 25.3
The assumptions shown above are chosen from a range of possible actuarial assumptions which, due to the long-term nature of the schemes, may not
be borne out in practice. The discount rate assumption is not determined using a cash-weighted method and is based on market yields on high quality
corporate bonds at the year end, adjusted to reflect the duration of the schemes’ liabilities.
The post-retirement mortality assumptions have been chosen with regard to the latest available published tables adjusted to reflect the experience of
the Group and its sector and allow for expected increases in longevity.
(c) Pension amounts recognised in the balance sheet

The consolidated balance sheet shows retirement benefit assets of £25.5m (2014: £7.8m) and retirement benefit obligations of £186.0m (2014:
£123.6m), resulting in the net liability of £160.5m (2014: £115.8m) analysed below.
The amounts recognised in the balance sheet were as follows:
Funded schemes
As at 30 April 2015
SPS RPS LGPS Other Unfunded schemes Total
£m £m £m £m £m £m
Equities 687.8 – 225.0 3.9 – 916.7

Private Equity 46.5 148.5 – – – 195.0
Infrastructure – 56.1 – – – 56.1
Growth Pooled Fund* – 1,127.7 – – – 1,127.7
Bonds 364.8 – 49.7 1.2 – 415.7
Cash 100.2 6.3 42.6 0.9 – 150.0
Property 60.2 – 20.5 0.2 – 80.9
Fair value of scheme assets 1,259.5 1,338.6 337.8 6.2 – 2,942.1
Present value of obligations (1,431.2) (1,793.6) (314.7) (8.8) (4.0) (3,552.3)
– adjustment for members’ share of RPS deficit (40%) – 182.0 – – – 182.0
– franchise adjustment – 297.4 – – – 297.4
(Deficit)/Surplus in the scheme (171.7) 24.4 23.1 (2.6) (4.0) (130.8)
Asset ceiling – – (29.7) – – (29.7)
Pension (liability)/asset before tax (171.7) 24.4 (6.6) (2.6) (4.0) (160.5)

Note 25 Retirement benefits (continued)
(c) Pension amounts recognised in the balance sheet (continued)
As at 30 April 2014 Funded schemes
SPS RPS LGPS Other Unfunded schemes Total
£m £m £m £m £m £m
Equities 726.3 0.2 202.6 1.0 – 930.1
Private Equity 43.4 86.6 – – – 130.0
Infrastructure 1.2 38.5 – – – 39.7
Growth Pooled Fund* – 640.9 – – – 640.9
Bonds 266.0 25.9 45.0 2.0 – 338.9
Cash 53.8 3.7 40.3 2.0 – 99.8
Property 64.9 – 17.9 – – 82.8
Fair value of scheme assets 1,155.6 795.8 305.8 5.0 – 2,262.2
Present value of obligations (1,248.2) (1,126.8) (309.6) (7.0) (3.9) (2,695.5)
– adjustment for members’ share of RPS deficit (40%) – 132.4 – – – 132.4
– franchise adjustment – 204.9 – – – 204.9
(Deficit)/Surplus in the scheme (92.6) 6.3 (3.8) (2.0) (3.9) (96.0)
Asset ceiling – – (19.8) – – (19.8)
Pension (liability)/asset before tax (92.6) 6.3 (23.6) (2.0) (3.9) (115.8)
*The Growth Pooled Fund is the principal investment vehicle for the Group’s sections of the RPS. This fund is a multi-asset fund, tactically adjusted by the
RPS Investment team.
(d) Funding arrangements and schemes
The schemes’ investment approach, which aims to meet their liabilities as they fall due, is to invest the majority of the schemes’ assets in a mix of
equities and other return-seeking assets in order to strike a balance between:
• maximising the returns on the schemes’ assets, and
• minimising the risks associated with lower than expected returns on the schemes’ assets.
Trustees are required to regularly review investment strategy in light of the term and nature of the schemes’ liabilities.
The regulatory framework in the UK requires the Trustees of the Stagecoach Pension Schemes and the Group to agree upon the assumptions underlying
the funding target, and then to agree upon the contributions necessary to fund the benefits, including any deficit recovery amounts, over a reasonable
period of time. A Pensions Oversight Committee has been established comprising the Finance Director, a Non-Executive Director and other senior
executives, to oversee the Group’s overall pensions strategy. The Board participates in major decisions on the funding and design of pension schemes.
There is a risk to the Group that adverse experience could lead to a requirement for the Group to make additional contributions to fund deficits. The
defined benefit pension schemes typically expose the Group to actuarial funding risks such as investment risk, interest rate risk, and longevity/life
expectancy risk.
Pension contributions are determined with the advice of independent qualified actuaries on the basis of regular valuations using the projected unit method.
The actuarial valuation for the East London and Selkent Pension Scheme was completed during the year, and showed that as at 5 April 2013, the scheme was
100% funded on the Trustees’ technical provisions basis. Actuarial valuations were completed for the Local Government Pension Schemes, showing that the
schemes were underfunded on the technical provisions basis as at 31 March 2013 with deficit contributions payable. The actuarial valuations for the
Stagecoach Group Pension Scheme as at 30 April 2014 is currently being finalised. The Group forecasts to contribute £73.4m (forecast at 30 April 2014 for
year ended 30 April 2015: £59.1m) to its defined benefit schemes in the financial year ending 30 April 2016.
(e) Changes in net retirement benefit obligations
The change in net liabilities recognised in the balance sheet in respect of defined benefit schemes is comprised as follows:
Year ended 30 April 2015 Funded schemes
SPS RPS LGPS Other Unfunded Total
schemes
£m £m £m £m £m £m
At beginning of year – (liability)/asset (92.6) 6.3 (23.6) (2.0) (3.9) (115.8)

Rail franchise changes – 24.5 – – – 24.5
Expense charged to consolidated income statement (24.1) (38.1) (1.9) (0.9) (0.2) (65.2)
Recognised in the consolidated statement of comprehensive income (74.3) (3.2) 12.4 (0.2) (0.2) (65.5)
Employers’ contributions 19.3 34.9 6.5 0.5 0.3 61.5
At end of year – (liability)/asset (171.7) 24.4 (6.6) (2.6) (4.0) (160.5)
Year ended 30 April 2014 Funded schemes

schemes
£m £m £m £m £m £m
At beginning of year – (liability)/asset (106.0) 9.8 (7.6) (1.6) (4.2) (109.6)

Expense charged to consolidated income statement (26.2) (33.7) (1.8) (0.6) (0.2) (62.5)
Recognised in the consolidated statement of comprehensive income 19.5 (0.5) (18.9) (0.3) 0.2 –
Employers’ contributions 20.1 30.7 4.7 0.5 0.3 56.3
At end of year – (liability)/asset (92.6) 6.3 (23.6) (2.0) (3.9) (115.8)

(f) Sensitivity of retirement benefit obligations to changes in assumptions

The measurement of the defined benefit obligation is particularly sensitive to changes in key assumptions as described below:
• The discount rate has been selected following actuarial advice and taking into account the duration of the liabilities. A 10 basis points increase in the
discount rate would result in a £20.3m decrease in the net pension liabilities as at 30 April 2015 (2014: £20.0m). A 10 basis points decrease in the
discount rate would result in a £20.6m increase in the net pension liabilities as at 30 April 2015 (2014: £20.4m).
• The inflation assumption adopted is consistent with the discount rate used. It is used to set the assumptions for pension increases, uncapped
pensionable salary increases and deferred revaluations. A 10 basis points increase in the inflation rate would result in a £11.4m increase in the net
pension liabilities as at 30 April 2015 (2014: £12.7m). A 10 basis points decrease in the inflation rate would result in a £11.4m decrease in the net
pension liabilities as at 30 April 2015 (2014: £14.0m).
• A 10 basis point increase in the rate of increase in uncapped pensionable salaries would result in a £1.2m increase in the net pension liabilities as at
30 April 2015 (2014: £0.6m). A 10 basis point decrease in the rate of increase in uncapped pensionable salaries would result in a £1.3m decrease in the
net pension liabilities as at 30 April 2015 (2014: £0.6m).
• A 10 basis point increase in the rate of increase of pensions in payment would result in a £7.1m increase in the net pension liabilities as at 30 April 2015
(2014: £11.6m). A 10 basis point decrease in the rate of increase of pensions in payment would result in a £7.1m decrease in the net pension liabilities
as at 30 April 2015 (2014: £10.7m).
• The longevity assumptions adopted are a best estimate of the mortality of scheme members both during and after employment, and are based on the
most recent mortality data available from actuarial valuations. If life expectancy of the relevant individuals was to increase by one year, this would result
in an increase of £36.2m in the net pension liabilities as at 30 April 2015 (2014: £41.6m). If life expectancy of the relevant individuals was to decrease
by one year, this would result in a decrease of £36.2m in the net pension liabilities as at 30 April 2015 (2014: £43.8m).
These sensitivities have been calculated to show the movement in the net liability in isolation, and assuming no other changes in market conditions at the
accounting date. In practice, a change in discount rate is unlikely to occur without any movement in the value of the invested assets held by the schemes.
(g) Pension amounts recognised in income statement

The amounts recognised in the consolidated income statement are analysed as follows:
Funded schemes
and DC
Schemes
Year ended 30 April 2015 £m £m £m £m £m £m
Current service cost (19.0) (39.4) (1.3) (0.8) – (60.5)

Administration costs (1.0) (0.4) – – – (1.4)
Defined contribution costs – – – – (19.0) (19.0)
Included in operating profit (20.0) (39.8) (1.3) (0.8) (19.0) (80.9)
Net interest (expense)/income (4.1) (8.4) 0.3 (0.1) (0.2) (12.5)
Interest expense on asset ceiling – – (0.9) – – (0.9)
Unwinding of franchise adjustment – 10.1 – – – 10.1
(24.1) (38.1) (1.9) (0.9) (19.2) (84.2)
Funded schemes
and DC
Year ended 30 April 2014 Schemes
£m £m £m £m £m £m
Current service cost (20.8) (33.6) (1.5) (0.5) – (56.4)

Defined contribution costs – – – – (11.7) (11.7)
Included in operating profit (21.7) (34.2) (1.5) (0.5) (11.7) (69.6)
Net interest expense (4.5) (7.9) (0.1) (0.1) (0.2) (12.8)
Interest expense on asset ceiling – – (0.2) – – (0.2)
Unwinding of franchise adjustment – 8.4 – – – 8.4
(26.2) (33.7) (1.8) (0.6) (11.9) (74.2)
Current service costs and administration costs are recognised in operating costs and net interest on net pension liability and unwinding of franchise
adjustment are recognised in net finance costs.

(h) Pension amounts recognised in statement of comprehensive income
The amounts recognised in the consolidated statement of comprehensive income are analysed as follows:
Funded schemes
Schemes
Actual return on scheme assets higher than the discount rate 79.9 117.2 25.0 0.1 – 222.2
Changes in financial assumptions (153.3) (36.0) (14.6) (0.3) (0.1) (204.3)
Experience on benefit obligations (0.9) (14.9) 11.0 – (0.1) (4.9)
Changes in asset ceiling (net of interest) – – (9.0) – – (9.0)
Change in franchise adjustment – (69.5) – – – (69.5)
(74.3) (3.2) 12.4 (0.2) (0.2) (65.5)
Funded schemes
Schemes
Actual return on scheme assets (lower)/higher than the discount rate (20.5) 17.4 (1.7) – – (4.8)
Changes in financial assumptions 7.1 (0.4) (1.0) – – 5.7
Changes in demographic assumptions 10.2 – – – – 10.2
Experience on benefit obligations 22.7 (23.5) (2.2) (0.3) 0.2 (3.1)
Changes in asset ceiling (net of interest) – – (14.0) – – (14.0)
Change in franchise adjustment – 6.0 – – – 6.0
19.5 (0.5) (18.9) (0.3) 0.2 –
(i) Benefit obligations

Changes in the present value of the defined benefit obligations are analysed as follows.
Funded schemes
Schemes
At beginning of year 1,248.2 789.5 309.6 7.0 3.9 2,358.2

Current service cost 19.0 39.4 1.3 0.8 – 60.5
Interest on benefit obligations 55.6 31.6 13.3 0.3 0.2 101.0
Unwinding of franchise adjustment – (10.1) – – – (10.1)
Benefits paid (46.8) (36.6) (13.5) (0.5) (0.3) (97.7)
Contributions by employees 1.0 5.6 0.4 0.6 – 7.6
Actuarial losses/(gains) due to:
– Changes in financial assumptions 153.3 36.0 14.6 0.3 0.1 204.3
– Experience on benefit obligations 0.9 14.9 (11.0) – 0.1 4.9
– Change in franchise adjustment – 69.5 – – – 69.5
Exchange differences – – – 0.3 – 0.3
At end of year 1,431.2 1,314.2 314.7 8.8 4.0 3,072.9

(i) Benefit obligations (continued) Funded schemes
Schemes
At beginning of year 1,257.2 743.6 304.8 5.8 4.2 2,315.6

Current service cost 20.8 33.6 1.5 0.5 – 56.4
Interest on benefit obligations 54.8 28.1 13.2 0.3 0.2 96.6
Unwinding of franchise adjustment – (8.4) – – – (8.4)
Benefits paid (45.7) (31.1) (13.6) (0.2) (0.3) (90.9)
Actuarial (gains)/losses due to:
– Changes in demographic assumptions (10.2) – – – – (10.2)
– Changes in financial assumptions (7.1) 0.4 1.0 – – (5.7)
– Experience on benefit obligations (22.7) 23.5 2.2 0.3 (0.2) 3.1
– Change in franchise adjustment – (6.0) – – – (6.0)
Foreign exchange movements – – – (0.4) – (0.4)
At end of year 1,248.2 789.5 309.6 7.0 3.9 2,358.2
(j) Scheme assets

The movement in the fair value of scheme assets was as follows: Funded schemes
Schemes
At beginning of year 1,155.6 795.8 305.8 5.0 – 2,262.2

Interest income 51.5 23.2 13.6 0.2 – 88.5
Employer contributions 19.3 34.9 6.5 0.5 0.3 61.5
Benefits paid (46.8) (36.6) (13.5) (0.5) (0.3) (97.7)
Remeasurements
– Return on assets excluding amounts included in net interest 79.9 117.2 25.0 0.1 – 222.2
Foreign exchange movements – – – 0.3 – 0.3
At end of year 1,259.5 1,338.6 337.8 6.2 – 2,942.1
Funded schemes
Schemes
At beginning of year 1,151.2 753.4 302.8 4.2 – 2,211.6

Interest income 50.3 20.2 13.1 0.2 – 83.8
Employer contributions 20.1 30.7 4.7 0.5 0.3 56.3
Benefits paid (45.7) (31.1) (13.6) (0.2) (0.3) (90.9)
Remeasurements
– Return on assets excluding amounts included in net interest (20.5) 17.4 (1.7) – – (4.8)
Foreign exchange movements – – – (0.4) – (0.4)
At end of year 1,155.6 795.8 305.8 5.0 – 2,262.2
(k) Asset ceiling

The movement in the asset ceiling is shown below:
2015 2014
£m £m

Interest expense (0.9) (0.2)
Remeasurements (9.0) (14.0)
At end of year (29.7) (19.8)

Note 26 Financial instruments
(a) Overview
This note provides details of the Group’s financial instruments. Except where otherwise stated, the disclosures provided in this note exclude:
– Interests in subsidiaries and joint ventures accounted for in accordance with International Financial Reporting Standard 10 (“IFRS 10”), Consolidated
Financial Statements and International Financial Reporting Standard 11 (“IFRS 11”), Joint Arrangements.
– Retirement benefit assets and obligations.
– Financial instruments, contracts and obligations under share based payment transactions.
Liabilities or assets that are not contractual (such as income taxes that are created as a result of statutory requirements imposed by governments,
prepayments, provisions and deferred income) are not financial liabilities or financial assets. Accordingly, prepayments, provisions, deferred income
and amounts payable or receivable in respect of corporation tax, sales tax (including UK Value Added Tax), payroll tax and other taxes are excluded from
the disclosures provided in this note.
(b) Carrying values of financial assets and financial liabilities
The carrying amounts of financial assets and financial liabilities on the consolidated balance sheet and their respective fair values were:
2015 2014 2015 2014

Other
balance Carrying value Carrying value Fair value Fair value
sheet
notes £m £m £m £m
Financial assets
Financial assets at fair value through profit or loss – – – –
Held-to-maturity investments – – – –
Loans and receivables
– Non-current assets
– Other receivables 19 0.2 0.3 0.2 0.3
– Current assets
– Accrued income 19 50.9 59.6 50.9 59.6
– Trade receivables, net of impairment 19 201.9 130.5 201.9 130.5
– Loans to joint ventures 19 5.9 – 5.9 –
– Other receivables 19 22.0 23.0 22.0 23.0
– Cash and cash equivalents 20 395.6 240.3 395.6 240.3
Available for sale financial assets
– Non-current assets
– Available for sale and other investments 14 – 0.3 – 0.3
Total financial assets 676.5 454.0 676.5 454.0
Financial liabilities
Financial liabilities at fair value through profit or loss – – – –
Financial liabilities measured at amortised cost
– Non-current liabilities
– Accruals 21 (1.0) (11.4) (1.0) (11.4)
– Other payables 21 (0.5) (0.5) (0.5) (0.5)
– Borrowings 22 (733.7) (660.2) (760.4) (696.8)
– Current liabilities
– Trade payables 21 (229.6) (156.3) (229.6) (156.3)
– Accruals 21 (439.9) (297.6) (439.9) (297.6)
– Loans from joint ventures 21 (1.7) (1.7) (1.7) (1.7)
– Borrowings 22 (51.6) (50.9) (51.6) (50.9)
Total financial liabilities (1,458.0) (1,178.6) (1,484.7) (1,215.2)
Net financial liabilities (781.5) (724.6) (808.2) (761.2)
Derivatives that are designated as effective hedging instruments are not shown in the above table. Information on the carrying value of such
derivatives is provided in note 26(g).
The fair values of financial assets and financial liabilities shown above are determined as follows:
• The carrying value of cash and cash equivalents, accrued income, trade receivables, loans to joint ventures and other receivables is considered to be a
reasonable approximation of fair value. Given the short average time to maturity, no specific assumptions on discount rates have been made. The
effect of credit losses not already reflected in the carrying value as impairment losses is assumed to be immaterial.
• The carrying value of trade payables, other payables, accruals and loans from joint ventures is considered to be a reasonable approximation of fair
value. Given the relatively short average time to maturity, no specific assumptions on discount rates have been made.
• The fair value of fixed-rate notes (included in borrowings) that are quoted on a recognised stock exchange is determined with reference to the “bid”
price as at the balance sheet date.

Note 26 Financial instruments (continued)
(b) Carrying values of financial assets and financial liabilities (continued)
Financial liabilities (continued)
• The carrying value of fixed-rate notes that are not quoted on a recognised stock exchange and fixed-rate hire purchase and finance lease liabilities
(included in borrowings) is considered to be a reasonable approximation of fair value taking account of the amounts involved in the context of total
financial liabilities and the fixed interest rates relative to market interest rates at the balance sheet date.
• The fair value of other borrowings on which interest is payable at floating rates is not considered to be materially different from the carrying value.
We do not consider that the fair value of financial instruments would change materially from that shown above as a result of any reasonable change to
the assumptions made in determining the fair values shown above. The fair value of financial instruments, and in particular the fixed rate notes, would
be affected by changes in market interest rates. Excluding the element hedged in a fair value hedge, we estimate that a 100 basis points reduction in
market interest rates would increase the fair value of the fixed-rate notes liability by around £12.1m (2014: £15.8m).
Fair value estimation
Financial instruments that are measured in the balance sheet at fair value are disclosed by level of the following fair value measurement hierarchy:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability either directly (that is, as prices) or indirectly
(that is, derived from prices).
Level 3 – Inputs for the assets or liability that are not based on observable market data (that is, unobservable inputs).
The following table presents the Group’s financial assets and liabilities that are measured at fair value within the hierarchy at 30 April 2015.
Note Level 2 Level 3 Total
£m £m £m
Assets
Derivatives used for hedging 26(g) 3.4 – 3.4
Liabilities
Derivatives used for hedging 26(g) (41.3) – (41.3)
The following table presents the Group’s financial assets and liabilities that are measured at fair value within the hierarchy at 30 April 2014.
Note Level 2 Level 3 Total
£m £m £m
Assets
Derivatives used for hedging 26(g) 0.6 – 0.6
Available for sale financial assets
– Equity securities – 0.3 0.3
Total assets 0.6 0.3 0.9
Liabilities
Derivatives used for hedging 26(g) (13.2) – (13.2)
The “Level 3” financial assets of £0.3m were written down to nil during the year ended 30 April 2015. The value of the assets is not material to the
Group and therefore changes in valuations would not have a material effect on the financial statements.
(c) Nature and extent of risks arising from financial instruments

The Group’s use of financial instruments exposes it to a variety of financial risks, principally:
• Market risk – including currency risk, interest rate risk and price risk;
• Credit risk; and
• Liquidity risk.
This note (c) presents qualitative information about the Group’s exposure to each of the above risks, including the Group’s objectives, policies and
processes for measuring and managing risk: there have been no significant changes to these matters during the year ended 30 April 2015. This note (c)
also provides summary quantitative data about the Group’s exposure to each risk. In addition, information on the Group’s management of capital is
provided in section 1.6.11 of the Strategic report which forms part of these financial statements.
The Group’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to reduce the likelihood
and/or magnitude of adverse effects on the financial performance and financial position of the Group. The Group uses derivative financial instruments
from time to time to reduce exposure to foreign exchange risk, commodity price risk and interest rate movements. The Group does not generally hold
or issue derivative financial instruments for speculative purposes.
A Group Treasury Committee and central treasury department (“Group Treasury”) oversee financial risk management in the context of policies
approved by the Board. Group Treasury identifies, evaluates and hedges financial risks in co-operation with the Group’s operating units. Group Treasury
is responsible for the execution of derivative financial instruments to manage financial risks. Certain financial risk management activities (for example,
the management of credit risk arising from trade and other receivables) are devolved to the management of individual business units. The Board
provides written principles for overall risk management, as well as written policies covering specific areas such as foreign exchange risk, interest rate risk,
credit risk, use of derivative financial instruments and investing excess liquidity.
(i) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, equity prices and commodity prices will affect the
Group’s financial performance and/or financial position. The objective of the Group’s management of market risk is to manage and control market risk
exposures within acceptable parameters.
The Group enters into derivative financial instruments in the ordinary course of business, and also incurs financial liabilities, in order to manage market
risks. All such transactions are carried out within the guidelines set by the Board. Generally the Group seeks to apply hedge accounting in order to
reduce volatility in the consolidated income statement.

(c) Nature and extent of risks arising from financial instruments (continued)
(i) Market risk (continued)
Foreign currency translation risk
Foreign currency translation risk is the risk that the fair value or future cash flows of a financial instrument (including foreign net investments) will
fluctuate because of changes in foreign exchange rates. The Group is exposed to foreign currency translation risk principally as a result of net
investments in foreign operations and borrowings denominated in foreign currencies.
The Group has material foreign investments in Canada and the USA. To reduce balance sheet translation exposure, the Group partially hedges the
sterling carrying value of foreign operations through borrowings denominated in their functional currency or, where appropriate, through the use of
derivative financial instruments. Gains and losses arising from hedging instruments that provide a hedge against foreign net investments are
recognised in the statement of comprehensive income. Bank loans drawn in US Dollars and a US$150.0m bond issued in October 2012 have been
accounted for as a hedge of the Group’s foreign net investments.
The Group’s objective in managing and measuring foreign currency translation risk associated with net investments in foreign operations and
borrowings denominated in foreign currencies is to maintain an appropriate cost of borrowing and retain some potential for benefiting from currency
movements whilst partially hedging against adverse currency movements. It is the Group’s policy to examine each foreign investment individually and
to adopt an appropriate hedging strategy. The Group measures foreign currency translation risk by identifying the carrying value of assets and liabilities
denominated in the relevant foreign currency and quantifying the impact on equity of changes in the relevant foreign currency rate.
The Group’s consolidated income statement is principally exposed to movements in foreign exchange rates in the following ways:
• The translation of the revenues and costs of the Group’s North American operations; and
• The translation of interest payable on US dollar denominated debt.
The Group’s consolidated balance sheet exposures to foreign currency translation risk (excluding immaterial exposure to Euros) were as follows:
2015 2014
£m £m
US dollars
– Net investments in foreign operations (excluding intra-group balances, cash and borrowings) 249.4 230.7
– Cash 33.8 24.5
– Borrowings (183.3) (174.0)
Canadian dollars
– Net investments in foreign operations (excluding intra-group balances, cash and borrowings) 29.8 37.0
– Cash 1.0 0.7
Net exposure 130.7 118.9
The amounts shown above are the carrying values of all items in the consolidated balance sheet that would have differed at the balance sheet date had
a different foreign currency exchange rate been applied, except that derivatives that are cash flow hedges are excluded.
The sensitivity of the amounts shown above in the Group’s consolidated balance sheet to translation exposures is illustrated below:
2015 2014
US dollar
US dollar balance sheet foreign exchange rate 1.5368 1.6886
Impact of 10% depreciation of UK sterling against US dollar
– US dollar foreign exchange rate 1.3831 1.5197
– Increase in consolidated equity (£m) 11.1 9.0
Impact of 10% appreciation of UK sterling against US dollar
– Decrease in consolidated equity (£m) (9.1) (7.4)
Canadian dollar
Canadian dollar balance sheet foreign exchange rate 1.8614 1.8531
Impact of 10% depreciation of UK sterling against Canadian dollar
– Canadian dollar foreign exchange rate 1.6753 1.6678
– Increase in consolidated equity (£m) 3.4 4.2
Impact of 10% appreciation of UK sterling against Canadian dollar
– Decrease in consolidated equity (£m) (2.8) (3.4)
The above sensitivity analysis is based on the following assumptions:
– Only those foreign currency assets and liabilities that are directly affected by changes in foreign exchange rates are included in the calculation.
– The above calculations assume that the exchange rates between sterling and any currencies other than the one stated do not change as a result of
the change in the exchange rate between the currencies stated.

The Group’s consolidated income statement exposures to foreign currency translation risk (excluding immaterial exposure to Euros) were as follows:
2015 2014
£m £m
US dollars
– US$ element of North American operating profit 16.9 22.3
– Intangible asset expenses (5.3) (7.8)
– Redundancy / restructuring costs (0.3) (0.3)
– Share of profit of joint ventures (excluding exceptional items) 2.0 5.5
– Exceptional items (7.9) (9.2)
– Net finance costs (8.6) (9.8)
– Net tax credit/(charge) 0.5 (0.7)
Canadian dollars
– C$ element of North American operating profit 4.7 2.4
– Redundancy/restructuring costs adjustment 0.1 –
– Exceptional items – (0.2)
– Net tax (charge)/credit (1.1) 0.1
Net exposure 1.0 2.3
The operating profit figures shown in the above table reconcile to the operating profit for North America shown in the segmental information in note
2(b) as follows:
2015 2014
£m £m
US$ element of North American operating profit shown above 16.9 22.3
C$ element of North American operating profit shown above 4.7 2.4
Share based payment adjustment denominated in sterling 0.5 (1.0)
Operating profit shown in segmental information 22.1 23.7
The sensitivity of the Group’s consolidated income statement to translation exposures is illustrated below:
2015 2014
US dollar
US dollar average foreign exchange rate 1.5988 1.6013
Impact of 10% depreciation of UK sterling against US dollar
– Decrease in consolidated profit after taxation (£m) (0.3) –
Impact of 10% appreciation of UK sterling against US dollar
– Increase in consolidated profit after taxation (£m) 0.2 –
Canadian dollar
Canadian dollar average foreign exchange rate 1.8323 1.6994
Impact of 10% depreciation of UK sterling against Canadian dollar
– Increase in consolidated profit after taxation (£m) 0.4 0.3
Impact of 10% appreciation of UK sterling against Canadian dollar
– Decrease in consolidated profit after taxation (£m) (0.3) (0.2)
The above sensitivity analysis is based on the following assumptions:

– Only those income statement items directly affected by changes in foreign exchange rates are included in the calculation. For example, changes
in the sterling value of commodity prices that indirectly occur due to changes in foreign exchange rates are not included in the sensitivity
calculation.
– The above calculations assume that the exchange rates between sterling and any currencies other than the one stated do not change as a result of
the change in the exchange rate between the currencies stated.

Foreign currency transactional risk
Foreign currency transactional risk is the risk that future cash flows (such as from sales and purchases of goods and services) will fluctuate because of
changes in foreign exchange rates.
The Group is exposed to limited foreign currency transactional risk due to the low value of transactions entered into by subsidiaries in currencies other
than their functional currency. Group Treasury carries out forward buying of currencies where appropriate.
The Group reviews and considers hedging of actual and forecast foreign exchange transactional exposures up to one year forward. At 30 April 2015
there were no material net transactional foreign currency exposures (2014: £Nil).
The Group’s exposure to commodity price risk includes a foreign currency element due to the impact of foreign exchange rate movements on the
sterling cost of fuel for the Group’s UK operations. The effect of foreign exchange rate movements on sterling-denominated fuel prices is managed
through the use of fuel derivative financial instruments denominated in the functional currency in which the fuel is purchased. Further information on
fuel hedging is given under the heading “Price risk” on page 103.
Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Group is exposed to interest rate risk principally through its borrowings and interest rate derivatives. It has a mixture of fixed-rate borrowings
(where the fair value is exposed to changes in market interest rates), cash and floating-rate borrowings (where the future cash flows are exposed to
changes in market interest rates).
The Group’s objective with regards to interest rate risk is to reduce the risk of changes in interest rates significantly affecting future cash flows and/or
profit. To provide some certainty as to the level of interest cost, it is the Group’s policy to manage interest rate exposure through the use of fixed and
floating rate debt. Derivative financial instruments are also used where appropriate to generate the desired interest rate profile.
The Group measures interest rate risk by quantifying the relative proportions of each of gross debt and net debt that are effectively subject to fixed
interest rates and considers the duration for which the relevant interest rates are fixed.
At 30 April 2015, the interest rate profile of the Group’s interest bearing financial liabilities was as follows:
Currency Floating rate Fixed rate Total Weighted Weighted

average fixed average period
interest rate for which rate
is fixed
£m £m £m % Years
Sterling 189.9 412.1 602.0 5.8% 1.6

US Dollar 149.3 34.0 183.3 2.3% 2.2
Gross borrowings 339.2 446.1 785.3 5.5% 1.7
At 30 April 2014, the interest rate profile of the Group’s interest bearing financial liabilities was as follows:
Currency Floating rate Fixed rate Total Weighted Weighted

average fixed average period
interest rate for which rate
is fixed
£m £m £m % Years
Sterling 122.8 414.3 537.1 5.8% 2.6

US Dollar 135.8 38.2 174.0 2.6% 2.6
Gross borrowings 258.6 452.5 711.1 5.5% 2.6
The above figures take into account the effect of US$150m of interest rate derivatives which swap the US$150m Notes maturing October 2022 from
fixed to floating rate debt for a period of four years to December 2016.
The floating rate financial liabilities bear interest at rates fixed in advance for periods ranging from one to six months based on market rates.
The maturity profile of the Group’s borrowings is shown in note 22(a).
The Group’s financial assets on which floating interest is receivable include cash deposits and cash in hand of £395.6m (2014: £240.3m). Loans to joint
ventures of £5.9m (2014: £Nil) bear interest at a fixed rate of 6% (2014: not applicable) per annum. As at 30 April 2015, the Group had no other
financial assets on which fixed interest is receivable (2014: £Nil).
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss.

The net impact of a change of 100 basis points on all relevant floating interest rates on annualised interest payable on cash and borrowings balances
outstanding at the balance sheet date was not material.
Price risk
The Group is exposed to commodity price risk. The Group’s operations as at 30 April 2015 consume approximately 406.0m litres of diesel fuel per
annum. As a result, the Group’s profit is exposed to movements in the underlying price of fuel.
The Group’s objective in managing commodity price risk is to reduce the risk that movements in fuel prices result in adverse movements in its profit
and cash flow. The Group has a policy of managing the volatility in its fuel costs by maintaining an ongoing fuel-hedging programme whereby
derivatives are used to fix or cap the variable unit cost of a percentage of anticipated fuel consumption. The Group’s exposure to commodity price risk
is measured by quantifying the element of projected future fuel costs, after taking account of derivatives in place, which varies due to movements in
fuel prices. Group Treasury is responsible for the processes for measuring and managing commodity price risk.
The Group’s overall fuel costs include the impact of delivery margins, fuel taxes and fuel tax rebates. These elements of fuel costs are not managed as
part of Group Treasury’s commodity price risk management and are managed directly by business unit management.
The Group uses a number of fuel derivatives to hedge against movements in the price of the different types of fuel used in each of its divisions. The
fuel derivatives hedge the underlying commodity price risk (denominated in US$) and in the case of the UK Bus (regional operations) Division, the UK
Bus (London) Division and the UK Rail Division, they also hedge the currency risk due to the commodity being priced in US$ and the functional
currency of the divisions being pounds sterling.
At 30 April 2015 and 30 April 2014, the projected fuel costs (excluding premia payable on fuel derivatives, delivery margins, fuel taxes and fuel tax
rebates) for the next twelve months were:
2015 2014
£m £m
Costs subject to fuel swaps:

– UK Bus (regional operations) (81.7) (90.7)
– UK Bus (London) (8.4) (9.5)
– UK Rail (25.1) (24.6)
– North America (33.2) (34.8)
(148.4) (159.6)
Costs not subject to fuel swaps:
– UK Bus (London) (6.1) (8.9)
– UK Rail (1.4) (9.0)
(18.2) (31.6)
Total (166.6) (191.2)
The figures in the above table are after taking account of derivatives and applying the fuel prices and foreign exchange rates as at the balance sheet
date.
If all of the relevant fuel prices were 10% higher at the balance sheet date, the amounts in the above table would change by the following:
2015 2014
£m £m

– UK Bus (London) (0.6) (0.9)
– UK Rail (0.1) (0.9)
Decrease in projected profit before taxation (1.8) (3.2)

If all of the relevant fuel prices were 10% lower at the balance sheet date, the amounts would change by the following:
2015 2014
£m £m

– UK Bus (regional operations) 0.5 0.6
– UK Bus (London) 0.6 0.9
– UK Rail 0.1 0.9
– North America 0.6 0.8
Increase in projected profit before taxation 1.8 3.2
The revenue receivable under certain of the contracts that the Group has with customers is subject to adjustment for changes to certain fuel prices. This
further reduces the unhedged exposure to fuel prices shown above.
Demand for the Group’s services can also be affected by movements in fuel prices due to the impact on the cost of competing transport services,
including private cars.
The Group is also exposed to changes in electricity prices, principally in its UK Rail Division where electricity is consumed to power some of the trains
operated. The Group has some protection to price changes via rail industry arrangements to fix the price on a proportion of anticipated future
electricity consumption.
The Group’s joint venture, Virgin Rail Group, is also exposed to changes in fuel and electricity prices and applies commodity price risk management
strategies similar to those applied by the Group and explained above.
(ii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations.
Credit risk is managed by a combination of Group Treasury and business unit management, and arises from cash and cash equivalents, derivative
financial instruments and deposits with banks and financial institutions, as well as credit exposures to amounts due from outstanding receivables and
committed transactions.
The Group’s objective is to minimise credit risk to an acceptable level whilst not overly restricting the Group’s ability to generate revenue and profit. It
is the Group’s policy to invest cash assets safely and profitably. To control credit risk, counterparty credit limits are set by reference to published credit
ratings and the counterparty’s geographical location. The Group considers the risk of material loss in the event of non-performance by a financial
counterparty to be low.
In determining whether a financial asset is impaired, the Group takes account of:
• The fair value of the asset at the balance sheet date and where applicable, the historic fair value of the asset;
• In the case of receivables, the counterparty’s typical payment patterns;
• In the case of receivables, the latest available information on the counterparty’s creditworthiness such as available financial statements, credit
ratings etc.
The movement in the provision for impairment of trade and other receivables is shown in note 19.
The table below shows the financial assets exposed to credit risk at the balance sheet date:
Gross Impairment Net exposure Gross Impairment Net exposure

2015 2015 2015 2014 2014 2014
£m £m £m £m £m £m
Trade receivables 204.7 (2.8) 201.9 132.6 (2.1) 130.5

Loans, other receivables and accrued income 79.0 – 79.0 82.9 – 82.9
Cash and cash equivalents – pledged as collateral 18.8 – 18.8 18.9 – 18.9
Cash and cash equivalents – other 376.8 – 376.8 221.4 – 221.4
Excluding derivative financial instruments 679.3 (2.8) 676.5 455.8 (2.1) 453.7
Derivatives used for hedging 3.4 – 3.4 0.6 – 0.6
Total exposure to credit risk 682.7 (2.8) 679.9 456.4 (2.1) 454.3
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer or counterparty. The Group’s largest credit
exposures are to the UK’s Department for Transport, Transport for London, and other government bodies and financial institutions with short-term
credit ratings of A2 (or equivalent) or better, all of which the Group considers unlikely to default on their respective liabilities to the Group.

(ii) Credit risk (continued)
The Group’s total net exposure to credit risk by geographic region is analysed below: 2015 2014
£m £m
United Kingdom & Europe 623.5 407.3

679.9 454.3
The Group’s financial assets by currency are analysed below:
2015 2014
£m £m
Sterling & Euros 623.2 406.8

US dollars 54.8 44.8
Canadian dollars 1.9 2.7
679.9 454.3
The amount of financial assets denominated in Euros included in the figures above is immaterial.
The following financial assets were past due, but not impaired at the balance sheet date: 2015 2014
£m £m
Amounts 1 to 90 days overdue 7.0 9.5
Amounts more than 365 days overdue 1.8 0.7
12.2 11.8
The Group does not hold any collateral in respect of its credit risk exposures set out above (2014: £Nil) and has not taken possession of any collateral it
holds or called for other credit enhancements during the year ended 30 April 2015 (2014: £Nil).
(iii) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group’s objective in managing
liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The funding policy is to finance the Group through a mixture of bank, lease and hire purchase debt, capital markets issues and cash generated by the
business.
As at 30 April 2015, the Group’s credit facilities were £1,141.1m (2014: £1,051.4m), £673.7m (2014: £483.5m) of which were utilised, including
utilisation for the issuance of bank guarantees, performance/season ticket bonds and letters of credit.
The Group had the following undrawn committed banking and uncommitted asset finance facilities:
2015 2014
£m £m
Expiring within one year 168.1 202.6

Expiring in more than one year but not more than two years – 355.8
Expiring beyond two years 299.3 9.5
467.4 567.9
Although there is an element of seasonality in the Group’s bus and rail operations, the overall impact of seasonality on working capital and liquidity is not
considered significant.
The Board expects the Group to be able to meet current and future funding requirements through free cash flow and available committed facilities. In
addition, the Group has investment grade credit ratings which should allow it access at short notice to additional bank and capital markets debt funding.
The Group has bank lines of credit arranged on a bi-lateral basis with a group of relationship banks which provide bank facilities for general corporate
purposes. These arranged lines of credit allow cash drawdowns to finance the Group and also include facilities which are dedicated to issuing
performance/season ticket bonds, guarantees and letters of credit.
The Group’s committed bank facilities as at 30 April 2015 are analysed below:
Performance bonds, Available for Available for
Loans guarantees non-cash cash
Facility drawn etc drawn utilisation only drawings
Expiring in £m £m £m £m £m
MAIN GROUP FACILITIES
– 2019 590.3 (172.1) (121.4) (11.1) 285.7
– 2018 105.0 – (102.5) (2.5) –
– 2016 110.5 – (96.5) (14.0) –
– 2015 36.9 – (36.8) (0.1) –
842.7 (172.1) (357.2) (27.7) 285.7
LOCAL & SHORT-TERM FACILITIES
– Various 20.7 – (7.6) – 13.1
863.4 (172.1) (364.8) (27.7) 298.8

(iii) Liquidity risk (continued)
The Group manages its liquidity risk based on contracted cash flows. The following are the contractual maturities of financial liabilities, including
interest payments.
As at 30 April 2015 Carrying Contractual Less 1-2 2-5 More

amount cash flows than 1 year years years than 5 years
£m £m £m £m £m £m
Non derivative financial liabilities:

Unsecured bond issues (505.7) (564.9) (27.3) (416.3) (12.9) (108.4)
Finance lease liabilities (34.0) (35.0) (13.4) (14.1) (7.5) –
Hire purchase liabilities (54.0) (55.8) (20.2) (17.6) (18.0) –
Loan notes payable (19.5) (19.5) (19.5) – – –
Trade and other payables (672.7) (672.7) (671.2) (1.5) – –
Bank loans (172.1) (172.5) (0.4) – (172.1) –
(1,458.0) (1,520.4) (752.0) (449.5) (210.5) (108.4)
Derivative financial liabilities:
Derivatives used for hedging (41.3) (41.3) (35.9) (3.4) (1.7) (0.3)
(1,499.3) (1,561.7) (787.9) (452.9) (212.2) (108.7)
As at 30 April 2014 Carrying Contractual Less 1-2 2-5 More

amount cash flows than 1 year years years than 5 years
£m £m £m £m £m £m
Non derivative financial liabilities:

Unsecured bond issues (497.7) (579.1) (26.9) (26.9) (423.7) (101.6)
Finance lease liabilities (38.2) (39.7) (13.1) (11.2) (15.4) –
Hire purchase liabilities (73.1) (76.3) (20.2) (21.1) (33.9) (1.1)
Loan notes payable (19.7) (19.7) (19.7) – – –
Trade and other payables (467.5) (467.5) (455.6) (11.9) – –
Bank loans (82.4) (82.7) (0.3) (82.4) – –
(1,178.6) (1,265.0) (535.8) (153.5) (473.0) (102.7)
Derivative financial liabilities:
Derivatives used for hedging (13.2) (13.2) (9.8) (2.2) (1.2) –
(1,191.8) (1,278.2) (545.6) (155.7) (474.2) (102.7)
The “contractual cash flows” shown in the above tables are the contractual undiscounted cash flows under the relevant financial instruments. Where
the contractual cash flows are variable based on a price, foreign exchange rate, interest rate or index in the future, the contractual cash flows in the
above table have been determined with reference to the value of the relevant price, foreign exchange rate, interest rate or index as at the balance sheet
date. In determining the interest element of contractual cash flows in cases where the Group has a choice as to the length of interest calculation
periods and the interest rate that applies varies with the period selected, the contractual cash flows have been calculated assuming the Group selects
the shortest available interest calculation periods. Where the holder of an instrument has a choice of when to redeem, the amounts in the above tables
are on the assumption the holder redeems at the earliest opportunity. In the case of bank loans, which are drawn under revolving facilities, the
contracted interest cash flows in respect of interest up to and including the next rollover date are shown and the principal is shown as repayable at the
expiry date of the relevant facility.

(d) Accounting policies
The Group’s significant accounting policies and measurement bases in respect of financial instruments are disclosed in note 1.
(e) Collateral
Included within the cash and cash equivalents balance of £395.6m as at 30 April 2015 (2014: £240.3m) are £18.8m (2014: £18.9m) of cash balances
that have been pledged as collateral for liabilities as follows:
– £18.4m (2014: £18.4m) has been pledged by the Group as collateral for £18.4m (2014: £18.4m) of loan notes that are classified within current
liabilities: borrowings. The cash is held on deposit at Bank of Scotland. Bank of Scotland has guaranteed the Group’s obligations to the holders of
the loan notes and to the extent that the Group fails to satisfy its obligations under the loan notes, Bank of Scotland shall use the cash collateral to
satisfy such obligations.
– £Nil (2014: £0.1m) has been pledged by the Group as collateral for liabilities to the vendors of certain businesses that the Group acquired in North
America.
– £0.4m (2014: £0.4m) is held in an escrow account in North America in relation to insurance claims.
The fair value of the financial assets pledged as collateral is the same as their carrying value as at 30 April 2015 and 30 April 2014.
(f) Defaults and breaches

The Group has not defaulted on any loans payable during the years ended 30 April 2015 and 30 April 2014 and no loans payable were in default as at
30 April 2015 and 30 April 2014. The Group was in compliance with all bank loan covenants as at 30 April 2015 and as at 30 April 2014.
(g) Hedge accounting

A summary of the Group’s current hedging arrangements is provided in the table below.
Type of hedge Risks hedged by Group Hedging instruments used

Fair value hedges – Interest rate risks – Derivatives (interest rate swaps)
Cash flow hedges – Commodity price risk – Derivatives (commodity swaps)
– Interest rate risks – Derivatives (interest rate swaps)
Hedges of net investment in foreign operations – Foreign investment risk – Foreign currency borrowings
Carrying value and fair value of derivative financial instruments

Derivative financial instruments are classified on the balance sheet as follows:
2015 2014
£m £m
Non-current assets
Interest rate derivatives 0.1 –
Fuel derivatives 2.2 0.1
2.3 0.1
Current assets
Interest rate derivatives – 0.3
Fuel derivatives 1.1 0.2
1.1 0.5
Current liabilities
Fuel derivatives (35.9) (9.8)
Interest rate derivatives (0.8) (0.6)
(5.4) (3.4)
Interest rate derivatives (0.7) (0.3)

(37.9) (12.6)
The fair value of derivative financial instruments is equal to their carrying value, as shown in the above table.
Embedded derivatives
In accordance with IAS 39, Financial Instruments: Recognition and measurement, all significant contracts to which the Group is a party have been
reviewed for embedded derivatives. There were no embedded derivatives as at 30 April 2015 (2014: None) which were separately accounted for.

(g) Hedge accounting (continued)
Cash flow hedges - fuel
As noted previously, the Group uses a number of fuel derivatives to hedge the different types of fuel used in each of its divisions.
The movements in the fair value of fuel derivatives in the year were as follows:
2015 2014
£m £m
Fuel derivatives
Fair value at start of year (12.3) (11.0)
Changes in fair value during year taken to cash flow hedging reserve (56.0) (2.8)
Cash paid during the year 31.1 1.5
Fair value at end of year (37.2) (12.3)
The fair value of the fuel derivatives split by maturity was as follows:
Assets Liabilities
£m £m
As at 30 April 2015
Within one year 1.1 (35.9)
1 to 2 years 2.2 (3.0)
2 to 3 years – (1.3)
More than 3 years – (0.3)
3.3 (40.5)
As at 30 April 2014
Within one year 0.2 (9.8)
1 to 2 years 0.1 (2.1)
2 to 3 years – (0.7)
0.3 (12.6)
The fair value of fuel derivatives is further analysed by currency and segment as follows: Fair value Notional quantity
of fuel covered
by derivatives
£m Millions of litres
As at 30 April 2015
Sterling denominated – UK Bus (regional operations) (20.0) 398.8
Sterling denominated – UK Bus (London) (3.7) 47.5
Sterling denominated – UK Rail (3.3) 114.2
US dollar denominated – North America (10.2) 143.9
(37.2) 704.4
As at 30 April 2014
Sterling denominated – UK Bus (regional operations) (7.9) 367.9
Sterling denominated – UK Bus (London) (1.9) 66.3
Sterling denominated – UK Rail (2.4) 108.1
US dollar denominated – North America (0.1) 151.8
(12.3) 694.1
Fair value and cash flow hedges - interest

The Group uses a number of interest rate derivatives to hedge its exposure to movements in interest rates. In connection with the issue of the Group’s
US$150m Bonds in October 2012, the Group entered into a number of interest rate fair value hedges. In addition, during the year ended 30 April 2015,
the Group entered into a number of interest rate derivative as cash flow hedges of the Group’s exposure to floating interest rates from December 2016.
The movements in the fair value of interest rate derivatives used as hedging instruments in the year were as follows:
Cash flow hedges Fair value hedges
(Sterling denominated) (US dollar denominated)
2012 20151 2015 2014
£m £m £m £m
Interest rate derivatives
Fair value at start of year – (0.3) 0.5
Changes in fair value reflected in carrying value of hedged item – 0.6 (0.5)
Changes in fair value during the year taken to cash flow hedging reserve (0.6) – –
Cash received during the year – (0.4) (0.3)
Fair value at end of year (0.6) (0.1) (0.3)

(g) Hedge accounting (continued)
Fair value and cash flow hedges - interest (continued)
The fair value of the interest rate derivatives split by maturity as at 30 April 2015 was as follows:
Assets Liabilities
£m £m
As at 30 April 2015
1 to 2 years Nil Nil – (0.4)
More than 3 years Nil Ni 0.1 –
Nil Nil 0.1 (0.8)
The fair value of the interest rate derivatives split by maturity as at 30 April 2014 was as follows:
Assets Liabilities
£m £m
30 April 2014
Within one year Nil Nil 0.3 –
2 to 3 years Nil Ni – (0.5)
Nil Nil 0.3 (0.6)
All of the interest rate derivatives were managed and held centrally.
Cash flow hedging reserve
Interest Fuel Total
The movements in the cash flow hedging reserve were as follows: derivatives derivatives
£m£m £m £m
Cash flow hedging reserve at 30 April 2013 – (8.5) (8.5)

Changes in fair value during the year taken to cash flow hedging reserve – (2.8) (2.8)
Cash flow hedges reclassified and reported in profit for year – 2.1 2.1
Tax effect of cash flow hedges – (0.2) (0.2)
Cash flow hedging reserve at 30 April 2014 – (9.4) (9.4)
Changes in fair value during the year taken to cash flow hedging reserve (0.6) (56.0) (56.6)
Cash flow hedges reclassified and reported in profit for year – 35.1 35.1
Tax effect of cash flow hedges 0.1 4.0 4.1
Cash flow hedging reserve at 30 April 2015 (0.5) (26.3) (26.8)
Cash flow hedging reserve before tax (0.6) (32.8) (33.4)
Tax to be credited to income statement in future periods 0.1 6.5 6.6
Cash flow hedging reserve after tax (0.5) (26.3) (26.8)
There have been no instances during the year ended 30 April 2015 (2014: None) from a Group perspective where a forecast transaction for which
hedge accounting had previously been used was no longer expected to occur.
Hedge of foreign net investments
The Group’s hedging of foreign net investments during the year ended 30 April 2015 is explained on page 100.
The movements in the fair value of the US$150m 4.36% notes and US$ bank loans used as hedging instruments in the year were as follows:
2015 2014
£m £m
US$ 4.36% notes

Fair value at start of year 88.9 96.4
Changes in fair value during the year 8.7 (7.5)
Fair value at end of year 97.6 88.9
US$ bank loans
Fair value at start of year 47.4 51.4
Changes in fair value during the year 4.7 (4.0)
Fair value at end of year 52.1 47.4
The fair values of the non-derivative hedging instruments shown above only take account of fair value movements arising from movements in foreign
exchange rates.

Note 27 Share capital
Under the Companies Act 2006, companies are no longer required to have an authorised share capital and a resolution was passed at the 2010 Annual
General Meeting to take advantage of this deregulating measure. Therefore, the Company no longer has an authorised share capital. The allotted,
called-up and fully paid ordinary share capital was:
2015 2014
No. of shares £m No. of shares £m
Allotted, called-up and fully-paid

ordinary shares of 125/228 pence each
At beginning and end of year 576,099,960 3.2 576,099,960 3.2
The balance on the share capital account shown above represents the aggregate nominal value of all ordinary shares in issue. This figure includes
1,371,639 (2014: 724,693) ordinary shares held in treasury, which are treated as a deduction from equity in the Group’s financial statements. The
shares held in treasury do not qualify for dividends.
The Group operates two Employee Share Ownership Trusts: the Stagecoach Group Qualifying Employee Share Ownership Trust (“QUEST”) and the
Stagecoach Group Employee Benefit Trust (“EBT”). Shares held by these trusts are treated as a deduction from equity in the Group’s financial
statements. Other assets and liabilities of the trusts are consolidated in the Group’s financial statements as if they were assets and liabilities of the
Group. As at 30 April 2015, the QUEST held 300,634 (2014: 300,634) ordinary shares in the Company and the EBT held 891,396 (2014: 725,821)
ordinary shares in the Company. The trusts have waived dividends on the shares they hold and therefore received no dividends during the year ended
30 April 2015 (2014: £Nil). The trust deed for the EBT obliges the trustee to waive the right to any dividend on the shares unless and until they are
vested in an individual. The trustee is confirmed not to be liable for any lost income as a result of that waiver. The QUEST deed requires the trustee to
waive any dividends payable on the shares and the QUEST confirms that waiver within the deed. This can be reversed by a direction from the Company
to the trustee but is otherwise ongoing.
Note 28 Share based payments

The Group operates a Buy as You Earn Scheme (“BAYE”), a Long Term Incentive Plan (“LTIP”) and an Executive Participation Plan (“EPP”). The Directors’
remuneration report in section 8 of this Annual Report gives further details of each of these arrangements.
As disclosed in note 6, share based payment charges of £4.8m (2014: £6.6m) have been recognised in the income statement during the year in
relation to the above schemes.
The following assumptions were applied in accounting for awards under the LTIP scheme:
Grant date June December June December June December June December
2011 2011 2012 2012 2013 2013 2014 2014
Share price at time of grant/award (£) 2.5530 2.5915 2.6170 3.1210 3.1595 3.7200 3.8000 3.7920
Vesting period (years) 3 3 3 3 3 3 3 3
Option/award life (years) 3 3 3 3 3 3 3 3
Expected life (years) 3 3 3 3 3 3 3 3
Expected dividends expressed
as an average annual dividend yield 3.00% 2.96% 3.22% 2.70% 2.94% 2.50% 2.70% 2.71%
Fair value per Incentive Unit
at grant date (£) 0.73 0.74 0.75 0.90 0.90 1.06 2.60* 2.59*
Bespoke Bespoke Bespoke Bespoke Bespoke Bespoke Bespoke Bespoke
Option pricing model simulation simulation simulation simulation simulation simulation simulation simulation
*Ignoring non-market vesting conditions.

LTIP awards are based on Incentive Units. One Incentive Unit has a value equal to one of the Company’s ordinary shares but subject to performance
conditions. LTIP awards are not share options and are valued using a separate simulation model and disclosures in respect of exercise prices, expected
volatility and risk free rates are not applicable. Expectations of meeting market-based performance criteria are reflected in the fair value of the LTIP awards.

Note 28 Share based payments (continued)
Long Term Incentive Plan
Under the LTIP, executives are awarded Incentive Units with a value equal to one of the Company’s ordinary shares but subject to the same performance
conditions disclosed in the Directors’ remuneration report. The movements in the LTIP Incentive Units during the year to 30 April 2015 were as follows:
Price per
Incentive Unit Fair value per Fair value per
Outstanding Awards granted Lapsed Dividends Outstanding achieved on LTIP unit at LTIP unit at TSR ranking
at start of year in year in year in year Vested in year at end of year vesting grant 30 April 2015 at Vesting date
Award date (Incentive Units) (Incentive Units) (Incentive Units) (Incentive Units) (Incentive Units) (Incentive Units) £ £ £ 30 April 2015**
30 June 2011 818,913 – (341,167) – (477,746) – 3.7600 0.7339 – – 30 June 2014

8 Dec 2011 726,933 – (583,866) 13,065 (156,132) – 3.7920 0.7449 – – 11 Dec 2014
27 June 2012 881,369 – – 24,339 – 905,708 – 0.7523 0.934 133 27 June 2015
6 Dec 2012 743,943 – – 20,532 – 764,475 – 0.8972 0.622 162 6 Dec 2015
27 June 2013 888,186 – – 24,519 – 912,705 – 0.8987 0.808 144 27 June 2016
12 Dec 2013 734,085 – – 20,261 – 754,346 – 1.0574 0.716 154 12 Dec 2016
26 June 2014 – 782,513 – 21,604 – 804,117 – 2.5999* 2.310* 187 26 June 2017
11 Dec 2014 – 790,115 – 7,479 – 797,594 – 2.5945* 2.212* 209 11 Dec 2017
4,793,429 1,572,628 (925,033) 131,799 (633,878) 4,938,945
*Ignoring non-market based vesting conditions.
**TSR ranking is based on the Group’s ranking of total shareholder return in the FTSE 250 whereby 1 is top of the comparator group. The TSR ranking is
calculated by independent advisors.
Executive Participation Plan

Under the EPP, executives and senior managers sacrifice part of their actual annual cash bonus and are awarded Deferred Shares with an initial market
value approximately equal to the amount of bonus foregone. The movements in EPP Notional Units were as follows:
Outstanding Awards granted Vested Lapsed Dividends Outstanding Expected total Closing
at start of year in year in year in year in year at end of year value of award at share price on
Award date (Deferred Shares) (Deferred Shares) (Deferred Shares) (Deferred Shares) (Deferred Shares) (Deferred Shares) Vesting date time of grant date of grant
£ £
30 June 2011 875,258 – (875,258) – – – 30 June 2014 2,155,206 2.5530

27 June 2012 903,227 – (28,334) (7,747) 24,250 891,396 27 June 2015 2,271,556 2.6190
27 June 2013 757,167 – (21,007) (8,350) 20,445 748,255 27 June 2016 2,289,350 3.1600
26 June 2014 – 660,269 – (5,270) 18,120 673,119 26 June 2017 2,497,467 3.8100
2,535,652 660,269 (924,599) (21,367) 62,815 2,312,770
Buy As You Earn Scheme

BAYE enables eligible employees to purchase shares (“partnership shares”) from their gross income. The Company provides two matching shares for
every share bought from the first £10 of each employee’s monthly investment, subject to a maximum Company contribution of shares to the value of
£20 per employee per month. If the shares are held in trust for five years or more, no Income Tax and National Insurance will be payable. The matching
shares will be forfeited if the corresponding partnership shares are removed from trust within three years of award.
At 30 April 2015 there were 8,732 (2014: 8,617) participants in the BAYE scheme to which were attributed 4,438,746 (2014: 3,200,457) shares that
they purchased, 1,473,172 (2014: 1,185,596) matching shares that the Company contributed and 261,500 shares (2014: 137,727) in respect of
notional dividends. These amounts exclude unattributed shares and any shares to be withdrawn because the employee has left the Group or requested
a withdrawal.
Note 29 Reserves
A reconciliation of the movements in each reserve is shown in the Consolidated statement of changes in equity on page 61.
The balance of the share premium account represents the amounts received in excess of the nominal value of the ordinary shares offset by issue costs,
bonus issues of shares and any transfer between reserves.
The balance held in the retained earnings reserve is the accumulated retained profits of the Group. Cumulative goodwill of £113.8m (2014: £113.8m)
has been written off against reserves in periods prior to 1 May 1998 in accordance with the UK accounting standards then in force and such goodwill will
remain eliminated against reserves.
The capital redemption reserve represents the cumulative par value of all shares bought back and cancelled.
Details of own shares held are given in note 27. The own shares reserve represents the cumulative cost of shares in Stagecoach Group plc purchased in
the market and held in treasury and/or by the Group’s two Employee Share Ownership Trusts offset by cumulative sales proceeds.
The translation reserve is used to record exchange differences arising from the translations of the financial statements of foreign operations. It is also
used to record the effect of hedging net investments in foreign operations.
The cash flow hedging reserve records the portion of the gain or loss on a hedging instrument in a cash flow hedge that is determined to be an effective
hedge. The cumulative gain or loss is recycled to the income statement to match the recognition of the hedged item through the income statement.

Note 30 Consolidated cash flows
(a) Reconciliation of operating profit to cash generated by operations
The operating profit of Group companies reconciles to cash generated by operations as follows: 2015 2014
£m £m
Operating profit of Group companies 189.8 200.5

Depreciation 120.1 115.7
(Gain)/loss on disposal of property, plant and equipment (2.3) 2.1
Intangible asset expenses 11.9 14.0
Equity-settled share based payment expense 2.2 2.2
Operating cashflows before working capital movements 321.7 334.5

Decrease/(increase) in inventories 3.4 (3.8)
Increase in receivables (34.1) (26.7)
Increase/(decrease) in payables 85.8 (3.2)
Decrease in provisions (9.5) (8.6)
Differences between employer pension contributions and pension expense in operating profit 0.4 1.6
Cash generated by operations 367.7 293.8
(b) Reconciliation of net cash flow to movement in net debt

The increase/(decrease) in cash reconciles to the movement in net debt as follows: 2015 2014
£m £m
Increase/(decrease) in cash 152.5 (19.8)

Cash flow from movement in borrowings (51.5) 92.7
101.0 72.9
Debt assumed in business combinations – (1.8)
New hire purchase and finance leases (6.4) (6.7)
Foreign exchange movements (14.1) 13.1
Other movements (0.2) (1.1)
Decrease in net debt 80.3 76.4
Opening net debt (as defined in note 35) (461.6) (538.0)
Closing net debt (as defined in note 35) (381.3) (461.6)
(c) Analysis of net debt

For the purpose of this note, net debt is as defined in note 35. The analysis below further shows the other items classified as net borrowings in the
consolidated balance sheet.
Other/
New hire Foreign Charged to
purchase/ exchange income
Opening Cashflows finance leases movements statement Closing
£m £m £m £m £m £m
Cash 221.4 152.6 – 2.8 – 376.8

Cash collateral (see note 26(e)) 18.9 (0.1) – – – 18.8
Hire purchase and finance lease
obligations (111.3) 33.2 (6.4) (3.5) – (88.0)
Bank loans and loan notes (102.1) (84.7) – (4.8) – (191.6)
Bonds (488.5) – – (8.6) (0.2) (497.3)
Net debt (461.6) 101.0 (6.4) (14.1) (0.2) (381.3)

Accrued interest on bonds (8.7) 27.3 – – (27.1) (8.5)
Effect of fair value hedges on carrying value of borrowings 0.4 – – – (0.3) 0.1
Unamortised gain on early settlement of interest rate swaps (0.9) – – – 0.9 –
Net borrowings (IFRS) (470.8) 128.3 (6.4) (14.1) (26.7) (389.7)
The cash amounts shown above include term deposits as explained in note 20 and cash held by train operating companies as explained in note 31(iii).
(d) Non cash transactions
The principal non cash transactions were the acquisition of property, plant and equipment using new hire purchase and finance leases.
During the year, the Group entered into hire purchase and finance lease arrangements in respect of new assets with a total capital value at the
inception of the contracts of £6.4m (2014: £6.7m) and no deposits paid up front.

Note 31 Contingencies
Contingent liabilities
(i) At 30 April 2015, the following bonds and bank guarantees were in place relating to the Group’s rail operations:
2015 2014
£m £m
Performance bonds backed by bank facilities and/or insurance arrangements
– South West Trains 36.8 35.7
– East Midlands Trains 30.5 28.8
– Virgin Trains East Coast 20.0 –
Season ticket bonds backed by bank facilities and/or insurance arrangements

– South West Trains 59.7 54.2
– East Midlands Trains 6.3 5.9
Shareholder loan commitment backed by bank facilities

These contingent liabilities are not expected to crystallise.

(ii) The Group and its joint venture, Virgin Rail Group Holdings Limited, have, in the normal course of business, entered into a number of long-term
supply contracts. The most significant of these relate to track, station and depot access facilities, together with train lease and maintenance
arrangements.
(iii) Under UK Rail franchise agreements, the Group and its joint venture, Virgin Rail Group Holdings Limited, have agreed with the Department for
Transport annual amounts receivable or payable in respect of the operation of rail franchises for future periods. Under these agreements, there is a
requirement to comply with a number of obligations. Failure to comply with these obligations would be a breach of the relevant franchise.
The Group assessed whether a provision for onerous contracts is required in respect of its rail franchises. The Group has discounted the expected
future cash flows related to its rail franchises to determine whether it is probable that the benefits to be derived by the Group from the franchises will
be lower than the unavoidable costs of meeting its obligations under the franchises. Estimates of cash flows are consistent with management’s plans
and forecasts. The Group has determined that no provision is necessary. The estimation of future cash flows and the discount rate involves a
significant degree of judgment. Actual results can differ from those assumed and there can be no absolute assurance that the assumptions used will
hold true.
Under certain circumstances following a breach by the Group of one or more of its rail franchise agreements, the Department for Transport has the
right to terminate the relevant franchises. Where the Group has defaulted on one franchise, the Department for Transport has cross-default rights in
certain circumstances that might enable it (but not require it) to terminate all of the franchises. The financial effect on the Group of a termination of
one or more franchises would depend on which, if any, of the Group’s contingent liabilities that the Department for Transport sought to call. As at
30 April 2015, the capital at risk of the Group in this respect was:
Virgin Trains South West East Midlands
East Coast Trains Trains Total
£m £m £m £m
Actual liabilities
Net intra-group amounts payable to train operators – 60.7 – 60.7
Contingent liabilities
Season ticket bonds 4.0 59.7 6.3 70.0
Performance bonds 20.0 36.8 30.5 87.3
Parent company guarantees to suppliers 6.6 – 10.6 17.2
Undrawn committed loan facilities 165.0 25.0 – 190.0
Capital at risk as at 30 April 2015 195.6 182.2 47.4 425.2
Cash
Cash in train operating companies 44.0 154.7 82.3 281.0
Pro forma impact on net debt 239.6 336.9 129.7 706.2
To the extent that any of the above contingent liabilities in respect of Virgin Trains East Coast crystalise the Group is contractually entitled to recover
10% of any such payment from Virgin Holdings Limited. The Group has credit exposure to Virgin Holdings Limited in this regard.
We consider the likelihood of the contingent liabilities crystallising as being low. However, if all of the contingent liabilities had crystallised at 30 April
2015, the Group would have needed to have financed £425.2m (2014: £240.0m) and its gross debt would have increased by this amount. In
addition, some of the cash in the train operating companies would be transferred with the franchises.
There is no recourse to the Group in respect of any liabilities or contingent liabilities of Virgin Rail Group.

Note 31 Contingencies (continued)
Contingent liabilities (continued)
(iv) We have made progress in resolving the previously reported litigation regarding Twin America.
The US Department of Justice and the New York Attorney General (together, "the Government plaintiffs") initiated litigation against Twin America
and its joint venture partners ("the Defendants", which include two Stagecoach US subsidiaries) in 2012. The litigation alleges that the formation of
the Twin America joint venture in 2009 was anti-competitive. Separately, private plaintiffs brought a claim based on the same allegations on behalf
of a proposed class of customers.
In March 2014, Twin America and lawyers for the private plaintiffs reached agreement on a settlement without any admission of liability. Settlement
has now also been agreed in principle with the US Department of Justice and the New York Attorney General's office. That settlement remains
subject to court approval.
Related to the Twin America litigation involving the Group’s North America Division, the Department of Justice is continuing to investigate the
conduct of company personnel in responding to discovery obligations in the investigation and litigation. The Department of Justice has not taken
any enforcement action related to these issues, and the Group is co-operating with the investigation.
(v) The Group and the Company are from time to time party to other legal actions arising in the ordinary course of business. Liabilities have been
recognised in the financial statements for the best estimate of the expenditure required to settle obligations arising under such legal actions. As at
30 April 2015, the accruals in the consolidated financial statements for such claims total £0.1m (2014: £0.1m) in addition to the amounts recognised
specifically in respect of the Twin America litigation noted in (iv) above. In addition, certain of the claims intended to be covered by the insurance
provisions (see note 24) are subject to or might become subject to litigation against the Group and/or the Company.
Note 32 Guarantees and other financial commitments

(a) Capital commitments
Contractual commitments for the acquisition of property, plant and equipment were as follows:
2015 2014
£m £m
Contracted for but not provided:

For delivery within one year 146.0 135.9
(b) Operating lease commitments

The following were the future minimum contractual lease payments due under unexpired operating leases as at 30 April 2015:
As at 30 April 2015 Buses & other
Land & road transportation Trains & Plant &
buildings equipment rolling stock machinery Total
£m £m £m £m £m
Lease payments due in respect of:

Year ending 30 April 2016 17.0 19.3 216.9 6.8 260.0
1 May 2020 and thereafter 28.5 – 3.5 8.8 40.8
78.9 51.6 586.5 32.0 749.0
The following were the future minimum contractual lease payments due under unexpired operating leases as at 30 April 2014:
As at 30 April 2014 Buses & other
Land & road transportation Trains & Plant &
buildings equipment rolling stock machinery Total
£m £m £m £m £m
Lease payments due in respect of:

Year ending 30 April 2018 5.9 4.6 – 0.3 10.8
Year ending 30 April 2019 5.0 3.2 – 0.1 8.3
1 May 2019 and thereafter 30.5 0.1 – – 30.6
76.3 49.1 385.2 6.0 516.6
The amounts shown above do not include Network Rail charges, which are shown separately in note 32(c).

Note 32 Guarantees and other financial commitments (continued)
(c) Network Rail charges
The Group’s UK Rail franchises have contracts with Network Rail for access to the railway infrastructure (track, stations and depots). Commitments for
payments, until the expected end of the franchises or the end of the current Network Rail regulatory control period, if earlier, under these contracts as
at 30 April 2015 are as shown below.
2015
.
£m
Year ending 30 April 2016 80.9

217.6
Commitments for payments under these contracts as at 30 April 2014 were as follows: 2014
£m

186.3
(d) Joint ventures

Our share of commitments and contingent liabilities in joint ventures shown below are based on the latest statutory financial statements of the
relevant companies:
2015 2014
£m £m
Annual commitments under non-cancellable operating leases 71.5 64.7

Franchise performance bonds 10.3 10.3
Season ticket bonds 2.8 2.7
Note 33 Related party transactions

Details of major related party transactions during the year ended 30 April 2015 are provided below, except for those relating to the remuneration of the
Directors and management.
(i) Virgin Rail Group Holdings Limited

Two of the Group’s directors are non-executive directors of the Group’s joint venture, Virgin Rail Group Holdings Limited. During the year ended
30 April 2015, the Group earned fees of £60,000 (2014: £60,000) from Virgin Rail Group Holdings Limited in this regard. As at 30 April 2015, the
Group had £60,000 (2014: £60,000) receivable from Virgin Rail Group Holdings Limited in respect of this. In addition, the Group net purchased £0.4m
(2014: £0.5m) from the group headed by Virgin Rail Group Holdings Limited, principally in respect of work undertaken on rail franchise bids, and had
an outstanding receivable of £0.1m as at 30 April 2015 (2014: £0.5m payable) in this respect.
The Group also earned £0.3m (2014: £0.4m) from Virgin Holdings Limited (which holds a 51% joint venture interest in Virgin Rail Group Holdings
Limited), in respect of work undertaken on rail franchise bids, and had an outstanding receivable of £Nil as at 30 April 2015 (2014: £0.4m) in this respect.
(ii) West Coast Trains Limited
West Coast Trains Limited is a subsidiary of Virgin Rail Group Holdings Limited (see note 33(i)). In the year ended 30 April 2015, East Midlands Trains
Limited (a subsidiary of the Group) had purchases totalling £0.2m (2014: £0.2m) from West Coast Trains Limited, and sales to West Coast Trains
Limited totalling £1.4m (2014: £Nil). The outstanding amounts payable as at 30 April 2015 and 30 April 2014 were immaterial. The Group had £1.4m
receivable as at 30 April 2015 (30 April 2014: £Nil).
(iii) Alexander Dennis Limited
Sir Brian Souter (Chairman) and Ann Gloag (Non-Executive Director) collectively hold, via companies that they control, 55.1% (2014: 55.1%) of the
shares and voting rights in Alexander Dennis Limited. Noble Grossart Investments Limited (of which Sir Ewan Brown (Non-Executive Director) is a
director of its holding company) controls a further 33.2% (2014: 33.2%) of the shares and voting rights of Alexander Dennis Limited. None of Sir Brian
Souter, Ann Gloag or Sir Ewan Brown is a director of Alexander Dennis Limited nor do they have any involvement in the management of Alexander
Dennis Limited. Furthermore, they do not participate in deciding on and negotiating the terms and conditions of transactions between the Group and
Alexander Dennis Limited.
For the year ended 30 April 2015, the Group purchased £64.0m (2014: £65.5m) of vehicles from Alexander Dennis Limited and £8.9m (2014: £9.4m)
of spare parts and other services. As at 30 April 2015, the Group had £0.8m (2014: £1.0m) payable to Alexander Dennis Limited, along with
outstanding orders of £64.0m (2014: £70.9m).
(iv) Pension Schemes
Details of contributions made to pension schemes are contained in note 25.

Note 33 Related party transactions (continued)
(v) Scottish Citylink Coaches Limited
A non interest bearing loan of £1.7m (2014: £1.7m) was due to the Group’s joint venture, Scottish Citylink Coaches Limited, as at 30 April 2015. The Group
earned £23.8m in the year ended 30 April 2015 in respect of the operation of services subcontracted by Scottish Citylink Coaches Limited (2014: £25.2m).
As at 30 April 2015, the Group had a net £0.7m (2014: £0.1m) receivable from Scottish Citylink Coaches Limited, excluding the loan referred to above.
(vi) Argent Energy Group Limited
Sir Brian Souter (Chairman) and Ann Gloag (Non-Executive Director) collectively held 39.3% of the shares and voting rights in Argent Energy Group
Limited, until its sale to John Swire & Sons (Green Investments) Ltd on 23 July 2013. Neither Sir Brian Souter nor Ann Gloag was a director of Argent
Energy Group Limited nor did they have any involvement in the management of Argent Energy Group. Furthermore, they did not participate in deciding
on and negotiating the terms and conditions of transactions between the Group and Argent Energy Group.
For the period from 1 May 2013 to 23 July 2013, the Group purchased £2.9m of biofuel from Argent Energy Group. At 23 July 2013, the Group had £0.4m
payable to Argent Energy Group along with outstanding orders of £0.3m.
(vii) Twin America LLC
In the year ended 30 April 2015, the Group earned revenue of £3.3m (2014: £3.6m) from its joint venture, Twin America LLC, in respect of ticket sales
made by Twin America LLC for tour services provided by Group subsidiaries. As at 30 April 2015, the Group had £0.5m (2014: £0.3m) receivable from
Twin America LLC in this regard.
The Group had an outstanding receivable of £5.9m as at 30 April 2015 (2014: £Nil) in respect of a loan note to Twin America LLC. The interest receivable
for the year ended 30 April 2015 was £0.1m (2014: £Nil), and accrued interest receivable by the Group as at 30 April 2015, was £Nil (2014: £Nil).
(viii) East Coast Main Line Company Limited
The Group owns 90% and Virgin Holdings Limited owns 10% of the ordinary shares in Inter City Railways Limited. East Coast Main Line Company Limited
is 100% owned by Inter City Railways Limited and enters into various arm’s length transactions with other Group companies. In the period from 1 March
2015 ( the date on which East Coast Main Line Company Limited became part of the Group) to 30 April 2015, other Group companies earned £4.4m from
East Coast Main Line Company Limited in respect of the provision of certain services including train maintenance and rail replacement bus services. Other
Group companies had a net payable balance of £1.2m as at 30 April 2015.
The ultimate parent company of the Group, Stagecoach Group plc, had an outstanding receivable of £35m as at 30 April 2015 in respect of a loan to East
Coast Main Line Company Limited. The interest receivable for the year ended 30 April 2015 was £0.2m. Related to that, the Group had an outstanding
payable of £3.5m (2014: £Nil) in respect of a loan from Virgin Holdings Limited.
In addition, in the period from 1 March 2015 to 30 April 2015, East Coast Main Line Company Limited purchased services amounting to £0.5m from
Virgin Holdings Limited. The Group had a payable balance of £0.5m to Virgin Holdings Limited at 30 April 2015 in this respect.
Note 34 Post balance sheet events

Details of the final dividend proposed are given in note 8.
Note 35 Definitions
• Adjusted earnings per share is calculated by dividing profit after taxation excluding intangible asset expenses and exceptional items by the basic
weighted average number of shares in issue in the period.
• Like-for-like amounts are derived, on a constant currency basis, by comparing the relevant year-to-date amount with the equivalent prior year
period for those businesses and individual operating units that have been part of the Group throughout both periods.
• Operating profit or loss for a particular business unit or division within the Group refers to profit or loss before net finance income/costs,
taxation, intangible asset expenses, exceptional items and restructuring costs (except where shown otherwise in note 2(g)).
• Operating margin for a particular business unit or division within the Group means operating profit or loss as a percentage of revenue.
• Exceptional items means items which individually or, if of a similar type, in aggregate need to be disclosed by virtue of their nature, size or
incidence in order to allow a proper understanding of the underlying financial performance of the Group.
• Gross debt is borrowings as reported on the consolidated balance sheet, adjusted to exclude accrued interest, the effect of fair value hedges on
the carrying value of borrowings and unamortised gains on the early settlement of interest rate swaps.
• Net debt (or net funds) is the net of cash and gross debt.

Stagecoach Group plc
Report on the parent company financial statements
Our opinion
In our opinion, Stagecoach Group plc’s parent company financial statements (the “financial statements”):
• give a true and fair view of the state of the parent company’s affairs as at 30 April 2015;
• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
What we have audited

Stagecoach Group plc’s financial statements comprise:
• the Company balance sheet as at 30 April 2015; and
• the notes to the financial statements, which include a summary of significant accounting policies and other explanatory information.
Certain required disclosures have been presented elsewhere in the Stagecoach Group Annual Report and Financial Statements 2015 (the “Annual Report”),
rather than in the notes to the financial statements. These are cross-referenced from the financial statements and are identified as audited.
The financial reporting framework that has been applied in the preparation of the financial statements is applicable law and United Kingdom Accounting
Standards (United Kingdom Generally Accepted Accounting Practice).
Other required reporting
Consistency of other information

Companies Act 2006 opinions
In our opinion, the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
ISAs (UK & Ireland) reporting
Under International Standards on Auditing (UK and Ireland) (“ISAs (UK & Ireland)”) we are required to report to you if, in our opinion, information in the Annual
Report is:
• materially inconsistent with the information in the audited financial statements; or
• apparently materially incorrect based on, or materially inconsistent with, our knowledge of the company acquired in the course of performing our audit; or
• otherwise misleading.
Adequacy of accounting records and information and explanations received

Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not
visited by us; or
• the financial statements and the part of the Directors’ remuneration report to be audited are not in agreement with the accounting records and returns.
Directors’ remuneration
Directors’ remuneration report - Companies Act 2006 opinion
In our opinion, the part of the Directors’ remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.
Other Companies Act 2006 reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of directors’ remuneration specified by law are not made.

Stagecoach Group plc (continued)
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors

As explained more fully in the Responsibility statement, the directors are responsible for the preparation of the financial statements and for being satisfied that
they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and ISAs (UK & Ireland). Those standards
require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves

We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence about the amounts and disclosures in the financial
statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This
includes an assessment of:
• whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently applied and adequately disclosed;
• the reasonableness of significant accounting estimates made by the directors; and
• the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence, forming our own judgements, and evaluating the
disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary to provide a reasonable basis for us to
draw conclusions. We obtain audit evidence through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial
statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Group financial statements of Stagecoach Group plc for the year ended 30 April 2015.
Graham McGregor (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Glasgow
24 June 2015

13. Separate Financial Statements of Parent, Stagecoach Group PLC
Company balance sheet
As at 30 April 2015
Prepared using UK Generally Accepted Accounting Practice (UK GAAP)
2015 2014
Notes £m £m
Fixed assets
Tangible assets 2 0.6 1.0
Investments 3 1,188.3 1,172.6
1,188.9 1,173.6
Current assets
Debtors – due within one year 4 783.7 746.0
Derivative financial instruments at fair value – due after more than one year 7 2.1 2.8
Derivative financial instruments at fair value – due within one year 7 0.5 9.9
Cash 18.4 18.4
804.7 777.1
Creditors: Amounts falling due within one year

Deferred tax liability 5 – (0.2)
Derivative financial instruments at fair value 7 (35.9) (9.6)
Trade and other creditors 6 (349.3) (420.7)
(385.2) (430.5)
Net current assets 419.5 346.6
Total assets less current liabilities 1,608.4 1,520.2

Creditors: Amounts falling due after more than one year
Deferred tax liability 5 (0.2) –
Derivative financial instruments at fair value 7 (5.4) (3.4)
Other creditors 6 (678.5) (579.7)
Net assets excluding pension liability 924.3 937.1

Pension liability, net of deferred tax 8 (3.9) (2.8)
Net assets including pension liability 920.4 934.3
Capital and reserves

Called-up share capital 9 3.2 3.2
Share premium account 10 8.4 8.4
Capital redemption reserve 10 422.8 422.8
Own shares 10 (32.1) (25.7)
Profit and loss account 10 518.1 525.6
Total shareholders’ funds 920.4 934.3
These financial statements were approved for issue by the Board of Directors on 24 June 2015. The accompanying notes form an integral part of this
balance sheet.


Notes to the Company financial statements
Note 1 UK GAAP accounting policies
The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act, the separate
financial statements have been prepared in accordance with UK GAAP.
• Basis of accounting
The financial statements have been prepared under the historical cost convention, except for the revaluation of certain financial instruments, and in
accordance with applicable accounting standards in the United Kingdom.
No profit and loss account is presented by the Company as permitted by Section 408 of the Companies Act 2006.
The Company is not required to prepare a cash flow statement under Financial Reporting Standard 1 (“FRS 1”) (revised).
• Tangible assets
Tangible assets are shown at their original historic cost net of depreciation and any provision for impairment. Cost includes the original purchase price
of the assets and costs attributable to bringing the asset to its working condition for its intended use.
Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset on a straight-line basis over their estimated
useful lives, as follows:
IT and other equipment, furniture and fittings 3 to 10 years
Motor cars and other vehicles 3 to 5 years
The need for any fixed asset impairment write-down is assessed by comparing the carrying value of the asset against the higher of net realisable value
and value in use.
• Investments
Investments in subsidiary undertakings are stated at cost, less provision for impairment.
Where the Company has designated foreign currency borrowings as a fair value hedge against its foreign equity investments, the part of that
investment which has been hedged is treated as a monetary asset and retranslated at the spot rate at the balance sheet date.
Exchange differences arising on the translation of foreign currency equity investments and on foreign currency borrowings (including loans from other
Group companies), to the extent the borrowings hedge the equity investments, are dealt within the profit and loss account.
• Taxation
Corporation tax is provided on taxable profit at the current rate applicable. Tax charges and credits are accounted for through the same primary
statement (either the profit and loss account or the statement of total recognised gains and losses) as the related pre-tax item.
In accordance with FRS 19, “Deferred Taxation”, full provision is made for deferred tax on a non-discounted basis in respect of all timing differences
except those arising from the revaluation of fixed assets where there is no binding sale agreement and undistributed profits of foreign subsidiaries.
Deferred tax is calculated at rates at which it is estimated the tax will arise. Deferred tax assets are recognised to the extent they are more likely than not
to be recovered.
Tax, current and deferred, is calculated using tax rates and laws enacted or substantively enacted at the balance sheet date.
• Foreign currencies
Foreign currency transactions arising during the year are translated into sterling at the rate of exchange ruling on the date of the transaction. Foreign
currency monetary assets and liabilities are retranslated into sterling at the rates of exchange ruling at the year end. Any exchange differences so arising
are dealt with through the profit and loss account.
For the principal rates of exchange used see the Group IFRS accounting policies on page 66.
• Share based payment
The Company issues equity-settled and cash-settled share based payments to certain employees of its subsidiary companies.
Share based payment awards made by the Company to employees of its subsidiary companies are recognised in the Company’s financial statements as
an increase in its investments in subsidiary undertakings rather than as an expense in the profit and loss account to the extent that the amount of the
expense recorded by each subsidiary company is less than the amount recharged to it by the Company.
Equity-settled transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted and is
recognised as an expense (or as an increase in investments in subsidiary undertakings) over the vesting period. In valuing equity-settled transactions,
no account is taken of any non-market based vesting conditions and no expense or investment is recognised for awards that do not ultimately vest as
a result of a failure to satisfy a non-market based vesting condition. None of the Group’s equity-settled transactions have any market based
performance conditions.
Fair value for equity-settled share based payments is determinable from the Company’s quoted share price at the time of the award.
At each balance sheet date, before vesting, the cumulative expense or investment is calculated based on management’s best estimate of the number of
equity instruments that will ultimately vest taking into consideration the likelihood of achieving non-market based vesting conditions.
Cash-settled transactions
The cost of cash-settled transactions is measured at fair value. Fair value is estimated initially at the grant date and at each balance sheet date
thereafter until the awards are settled. Market based performance conditions are taken into account when determining fair value.
Fair value for cash-settled share based payments relating to the Long Term Incentive Plan is estimated by use of a simulation model.
During the vesting period, a liability is recognised representing the estimated fair value of the award and the portion of the vesting period expired as at
the balance sheet date.
Choice of settlement
The Company can choose to settle awards under the Long Term Incentive Plan in either cash or equity, although it currently expects to settle all such
awards in cash. Awards under the Long Term Incentive Plan are accounted for as cash–settled transactions (see above).
• Dividends
Dividends on ordinary shares are recorded in the financial statements in the period in which they are approved by the Company’s shareholders, or in the
case of interim dividends, in the period in which they are paid.

Note 1 UK GAAP accounting policies (continued)
• Financial instruments
The accounting policy of the Company under FRS 25 “Financial instruments: Presentation”, FRS 26 “Financial instruments: Recognition and
measurement” and FRS 29 “Financial instruments: Disclosures” for financial instruments is the same as the accounting policy for the Group under IAS
32 “Financial Instruments: Presentation”, IAS 39 “Financial instruments: Recognition and measurement”, and IFRS 7 “Financial instruments:
Disclosures”. Therefore for details of the Company’s accounting policy for financial instruments refer to pages 69 and 70.
The Company holds derivative financial instruments that hedge financial risks of the Group as a whole and to which hedge accounting is applied in the
consolidated financial statements. However, these instruments and certain intra-group derivative financial instruments are accounted in the Company
financial statements at fair value through profit or loss.
• Investment in own shares
In accordance with UITF Abstract 38, “Accounting for ESOP Trusts”, own shares held by the Group’s Employee Benefit Trust and Qualifying Employee
Share Ownership Trust have been classified as deductions from shareholders’ funds. Shares held in treasury by the Company have also been classified as
deductions from shareholders’ funds.
• Interest bearing loans and borrowings
Borrowings are recognised initially at the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost
using the effective interest rate method; any difference between proceeds (net of transaction costs) and the redemption value is recognised in the
profit and loss account over the period of the borrowings.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement for at least 12 months after the
balance sheet date.
• Pensions
The Company accounts for pensions and similar benefits under FRS 17 “Retirement Benefits” and measures its obligations due at discounted present
value.
Note 2 Tangible assets

The movements in tangible assets were as follows: 2015
£m
Cost
At beginning and end of year 2.5
Depreciation
At beginning of year (1.5)
Charge for year (0.4)
At end of year (1.9)
Net book value at beginning of year 1.0
Net book value at end of year 0.6
Note 3 Investments
The movements in investments were as follows:
Subsidiary
undertakings
£m
Cost and net book value
At beginning of year 1,172.6
Additions 2.2
Foreign exchange movements 13.5
At end of year 1,188.3
Note 4 Debtors
Amounts falling due within one year were:
2015 2014
£m £m
Amounts owed by Group undertakings 720.4 708.9

Other debtors 63.1 36.9
Prepayments and accrued income 0.2 0.2
783.7 746.0

Note 5 Deferred tax asset/(liability)
The movement in the deferred tax asset/(liability) during the year was as follows: 2015 2014
£m £m
At beginning of year (0.2) 0.2

Charge to the profit and loss account – (0.4)
The deferred tax liability recognised can be analysed as follows:

2015 2014
£m £m
Short-term timing differences (0.2) (0.2)
Note 6 Creditors
(a) Creditors: Amounts falling due within one year 2015 2014
£m £m
Bank overdrafts 147.5 207.1

Amounts owed to Group undertakings 176.4 185.6
Accruals and deferred income 5.9 8.3
349.3 420.7
(b) Creditors: Amounts falling due after more than one year 2015 2014
£m £m
Sterling 5.75% Notes 408.8 408.4

Bank loans 172.1 82.4
Accruals and deferred income 0.1 0.2
678.5 579.7
(c) Borrowings were repayable as follows: 2015 2014

£m £m
On demand or within 1 year

Bank overdraft 147.5 207.1
Repayable between 1 and 2 years
Bank loans – 82.4
Sterling 5.75% Notes 408.8 –
Repayable after 2 years, but within 5 years
Bank loans 172.1 –
Sterling 5.75% Notes – 408.4
Repayable after 5 years
Total borrowings 845.4 806.3
Note 7 Derivative financial instruments

The fair values of derivative financial instruments are set out below: 2015 2014
£m £m
Current assets – due after more than one year

Interest rate derivatives – external 0.1 –
Fuel derivatives – external 2.0 –
Fuel derivatives – intra-group – 2.8
2.1 2.8
Current assets – due within one year
Interest rate derivatives – external – 0.3
Fuel derivatives – external 0.5 0.2
Fuel derivatives – intra-group – 9.4
0.5 9.9

Note 7 Derivative financial instruments (continued)
2015 2014
£m £m
Current liabilities
Fuel derivatives – external (35.9) (9.4)
Fuel derivatives – intra-group – (0.2)
(35.9) (9.6)
Interest rate derivatives – external (0.8) (0.6)
Fuel derivatives – external (4.6) (2.8)
(5.4) (3.4)
In accordance with FRS 26, “Financial Instruments: Recognition and measurement”, the Company has reviewed all significant contracts for embedded
derivatives that are required to be separately accounted for. No such embedded derivatives were identified (2014: None).
There were no derivatives outstanding at the balance sheet date designated as hedges.
Note 8 Pension liability, net of deferred tax
2015 2014
£m £m
Pension liability before tax 4.9 3.5

Deferred tax asset (1.0) (0.7)
3.9 2.8
The Company no longer has any employees but has unfunded liabilities in respect of former employees and funded liabilities in respect of employees
of subsidiary companies, which are shown above. See note 25 to the consolidated financial statements for more details on retirement benefits.
Note 9 Called up share capital

Information on share capital is provided in note 27 to the consolidated financial statements.
Note 10 Share capital and reserves

Equity Share Capital Profit and Total
share premium redemption Own loss
capital account reserve shares account
£m £m £m £m £m £m
At 1 May 2014 3.2 8.4 422.8 (25.7) 525.6 934.3
Profit for the year – – – – 46.6 46.6
Credit in relation to share based payments – – – – 2.2 2.2
Dividends paid – – – – (56.3) (56.3)
Own shares purchased – – – (6.4) – (6.4)
At 30 April 2015 3.2 8.4 422.8 (32.1) 518.1 920.4
As permitted by section 408 of the Companies Act 2006, the Company has not presented its own profit and loss account. The profit as disclosed above
of £46.6m (2014: £276.7m) is consolidated in the results of the Group. Details of dividends paid, declared and proposed during the year are given in
note 8 to the consolidated financial statements.
The profit and loss account reserve is distributable but the other components of shareholders’ funds shown above are not distributable.
The remuneration of the Directors is borne by other Group companies and is detailed in section 8 of this Annual Report. The remuneration of the
auditors is shown in note 3 to the consolidated financial statements.
Note 11 Share based payments

For details of share based payment awards and fair values see note 28 to the consolidated financial statements. The Company accounts for the equity-
settled share based payment charge for the year of £2.2m (2014: £2.2m) by recording an increase to its investment in subsidiaries for this amount and
recording a corresponding entry to the profit and loss account reserve to reflect the fact that the Company has no employees (2014: Nil) and all share
based payment awards are to employees of subsidiary companies. The Company accounts for the cash-settled share based payment charge for the year
of £0.9m (2014: £3.1m) by recording a liability for this amount and recording a corresponding entry as a charge through the profit and loss account.
The cash-settled share based payment charge is recharged in full to subsidiary companies and the recharge income and related expense are both
included in the profit and loss account.

Note 12 Guarantees, other financial commitments and contingent liabilities
(a) The Company has provided guarantees to third parties of £231.0m (2014: £214.4m) in respect of subsidiary companies’ liabilities. The liabilities
that are guaranteed are included in the consolidated balance sheet but are not included in the Company balance sheet.
In addition, the Company has provided guarantees to third parties of £302.1m (2014: £143.8m) in respect of contingent liabilities that are neither
included in the consolidated balance sheet nor the Company balance sheet.
The Company is also party to cross-guarantees whereby the bank overdrafts and Value Added Tax liabilities of it and certain of its subsidiaries are
cross-guaranteed by it and all of the relevant subsidiaries.
None of the above contingent liabilities of the Company are expected to crystallise.
The Company may be found to be liable for some of the legal liabilities referred to in note 31 (v) to the consolidated financial statements.
(b) Capital commitments
Capital commitments (where the Company has contracted to acquire assets on behalf of its subsidiaries) are as follows:
2015 2014
£m £m
Contracted for but not provided:

For delivery in one year 92.7 110.2
(c) Operating lease commitments

Annual charges for operating leases are made with expiry dates as follows:
2015 2014
Land and buildings Other Land and buildings Other
£m £m £m £m
Within one year – 0.1 – 0.1

Between one year and five years – 0.3 – 0.6
Five years and over 0.3 – 0.3 –
Note 13 Related party transactions

The Company has taken advantage of the exemption under FRS 8, “Related party disclosures” from having to provide related party disclosures in its
own financial statements when those statements are presented with consolidated financial statements of its group. Related party disclosures provided
by the Group can be found in note 33 to the consolidated financial statements.

Shareholder information
Registrars
All administrative enquiries relating to shareholdings should, in the first instance, be directed to the Company’s registrars and clearly state the
shareholder’s name and address. Please write to: Capita Asset Services, Stagecoach Group Share Register, The Registry, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU. Telephone +44 (0)371 664 0443 (Calls are charged at the standard geographic rate and will vary by provider. Calls from
outside the UK will be charged at the applicable international rate. Lines are open 9.00am to 5.30pm, Monday to Friday excluding public holidays in
England and Wales), or email StagecoachGroup@capita.co.uk. Registrar forms can be obtained on-line at
http://www.stagecoach.com/investors/shareholder-services/registrar-forms/
Online share portal

You can register to access your share account online using the share portal service at www.capitashareportal.com. You will need your Investor Code,
which is shown on shareholder correspondence, in order to register to use the portal.
Registering your account is quick and easy and you will immediately be able to benefit from the full range of services available on the share portal.
including updating your personal details, adding a mandate to receive dividends direct to your bank account and registering proxy votes online. Using
the online share portal reduces the need for paperwork and provides 24 hour access.
Stagecoach individual savings accounts

The Company has appointed Halifax Share Dealing Limited as an ISA provider and shareholders who would like further information should contact
their help desk on +44 (0)8457 22 55 25. Lines are open 8.00am to 9.15pm, Monday to Friday.
The Company has also made arrangements with Stocktrade for ISAs. Full details and an application form are available from Stocktrade (a division of
Brewin Dolphin), 6th Floor, Atria One, 144 Morrison Street, Edinburgh, EH3 8BR. Telephone +44 (0)131 240 0448. Lines are open 8.00am to 4.30pm,
Monday to Friday.
Other organisations also offer ISA facilities.
Share dealing facilities

The Company has set up a range of execution only share dealing services to enable Stagecoach shareholders to buy and sell shares by phone, online or
by post. The phone and online dealing services are provided by Capita Share Dealing Services and offer a quick and easy way to buy and sell shares at
latest market prices. To use these services go to www.capitadeal.com or call +44 (0)371 664 0364 (Calls are charged at the standard geographic rate
and will vary by provider. Calls from outside the United Kingdom will be charged at the applicable international rate. Lines are open 8.00am to 4.30pm,
Monday to Friday excluding public holidays in England and Wales). Please have your share certificate to hand when you log-in or call. Charges are
1.25% with a £30.50 minimum charge online and 1.5% with a £40.50 minimum charge by phone.
A postal dealing service is available from Stocktrade, a division of Brewin Dolphin. Charges are 0.5%, with a £17.50 minimum charge and 0.2% for
trades exceeding £10,000. Shareholders who would like further information should write to Stocktrade, 6th Floor, Atria One, 144 Morrison Street,
Edinburgh, EH3 8BR or call +44 (0)131 240 0414, quoting dealing reference ‘Stagecoach dial and deal’. Lines are open 8.00am to 4.30pm, Monday to
Friday. Postal dealing packs are available on request.
Other organisations also offer facilities to buy and sell shares.
Payment of dividends by BACS

Many shareholders have already arranged for dividends to be paid by mandate directly to their bank or building society account. The mandates enable
the Company to pay dividends through the BACS (Bankers’ Automated Clearing Services) system. The benefit to shareholders of the BACS system is
that the registrar posts the tax vouchers directly to them, whilst the dividend is credited on the payment date to the shareholder’s bank or building
society account. Shareholders who wish to benefit from this service should request the Company’s registrars (address above) to send them a
dividend/interest mandate form or alternatively complete the mandate form attached to the next dividend tax voucher they receive, or register their
details through the Capita Share Portal.
Dividend Re-Investment Plan

he Company operates a Dividend Re-Investment Plan which allows a shareholder’s cash dividend to be used to buy Stagecoach shares at agreed rates.
Shareholders who would like further information should telephone the Company’s registrars, Capita Asset Services, on +44 (0)371 664 0443 (Calls are
charged at the standard geographic rate and will vary by provider. Calls from outside the UK will be charged at the applicable international rate. Lines
are open 9.00am to 5.30pm, Monday to Friday excluding public holidays in England and Wales), or email StagecoachGroup@capita.co.uk.

Share fraud warning
Share fraud includes scams where investors are called out of the blue and offered shares that often turn out to be worthless or non-existent, or are
offered an inflated price for shares they own. These calls come from fraudsters operating in ‘boiler rooms’ that are mostly based abroad.
While high profits are promised, those who buy or sell shares in this way usually lose their money.
The Financial Conduct Authority (“FCA”) has found most share fraud victims are experienced investors who lose an average of £20,000, with around
£200m lost in the UK each year.
PROTECT YOURSELF
If you are offered unsolicited investment advice, discounted shares, a premium price for shares you own, or free company or research reports, you
should take these steps before handing over any money:
1. Get the name of the person and organisation contacting you.
2. Check the FCA Register at www.fca.org.uk/consumers/protect-yourself/unauthorised-firms/ to ensure they are authorised.
3. Use the details on the FCA Register to contact the firm.
4. Call the FCA Consumer Helpline on 0800 111 6768 if there are no contact details on the Register or you are told they are out of date.
5. Search the FCA list of unauthorised firms and individuals to avoid doing business with.
6. REMEMBER: if it sounds too good to be true, it probably is!
If you use an unauthorised firm to buy or sell shares or other investments, you will not have access to the Financial Ombudsman Service or Financial
Services Compensation Scheme (“FSCS”) if things go wrong.
REPORT A SCAM
If you are approached about a share scam you should tell the FCA using the share fraud reporting form at
www.fca.org.uk/consumers/scams/report-scam. You can find out about the latest investment scams at
www.fca.org.uk/consumers/scams/investment-scams. You can also call the Consumer Helpline on 0800 111 6768.
If you have already paid money to share fraudsters you should contact Action Fraud on: 0300 123 2040

Corporate information and financial calendar
Corporate Information Financial Calendar

Company Secretary Annual General Meeting
Mike Vaux 28 August 2015
Registered Office Interim Results

10 Dunkeld Road
9 December 2015
Perth PH1 5TW
Telephone +44 (0) 1738 442 111 Final Dividend
Facsimile +44 (0) 1738 643 648 30 September 2015
Email info@stagecoachgroup.com
Interim Dividend
Company Number March 2016
SC 100764
Re
Registered
gistered Office:
Office:
110
0 Dunkeld
Dunkeld Road
Road
Perth
Perth
PH1
PH1 5TW
5TW
Scotland
Scotland
Tel:
Tel: 01738
01738 4442111
42111
FFax:
ax: 01738
01738 6643648
43648
EEmail:
mail: info@stagecoachgroup.com
inffo@stagecoachgroup.com
R
Registered
egistered in SScotland
cotland
Nu
Number:
mber: 1100764
00764
www.stagecoach.com
www.stagecoach.com

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IInvesting

Operational performance Customer service

UK Rail UK Rail customer UK Bus customer

75% 70% 70%

2011/12 2013/14 2011/12 2013/14 2012/13 2014/15

Stagecoach Group plc | page 1

Revenue (£m) 3,204.4 2,930.0 3,204.4 2,930.0

Total operating profit (£m) 227.1 223.3 217.9 200.9

Non-operating exceptional items (£m) – – (10.6) (0.3)

Net ﬁnance charges (£m) (42.1) (42.6) (42.1) (42.6)

Profit before taxation (£m) 185.0 180.7 165.2 158.0

Earnings per share (pence) 26.7p 26.0p 24.3p 23.1p

+ see definitions in note 35 to the consolidated financial statements

Stagecoach Group plc | page 2

1.2 Cautionary statement

1.3 Overview of the year ended 30 April 2015

Revenue by division is summarised below:

Stagecoach Group plc | page 1

1.3 Overview of the year ended 30 April 2015 (continued)

1.4 The Stagecoach Group

1.4.2 What we look to achieve (business objectives and long-term strategy)

page 2 | Stagecoach Group plc

Stagecoach Group plc | page 3

1.4.3 What we do (description and strategy of each business segment) (continued)

page 4 | Stagecoach Group plc

1.4.3 What we do (description and strategy of each business segment) (continued)

1.4.4 How we create value (the business model)

Safe and Advertising Value for Other drivers of

Flexible cost Contract/

Lower cost Supportive Long-term Increasing Rising Rising car

The right environment Decentralised Emphasis on Sustainable, efficient

Stagecoach Group plc | page 5

1.4.5 What we need, to do what we do (resources and relationships)

The financial community

Government and regulatory bodies

Corporate reputation, brand strength, and market position

Natural resources and manufacturing technology

Transport and industry representation groups

page 6 | Stagecoach Group plc

Description of risk Management of risk Developments in year ended Section in

Stagecoach Group plc | page 7

1.4.6 The challenges we face (principal risks and uncertainties) (continued)

Description of risk Management of risk Developments in year ended Section in

page 8 | Stagecoach Group plc

Description of risk Management of risk Developments in year ended Section in

Insurance and claims environment

Regulatory changes and availability of public funding

Management and Board succession

Stagecoach Group plc | page 9

1.4.6 The challenges we face (principal risks and uncertainties) (continued)

Description of risk Management of risk Developments in year ended Section in

page 10 | Stagecoach Group plc

KPI 2 – organic growth

KPIs 3 and 4 – safety and service delivery

Year ended 30 April

Adjusted EPS To increase in excess of inflation 26.7p 26.0p 24.6p

Year ended Year ended Year ended

Stagecoach Group plc | page 11

1.4.7 How we measure our performance (key performance indicators) (continued)