Financial Statements

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Financial Statements Independent Auditor’s Report to the Members of National Express Group PLC We have audited the Group financial statements of National Express Group PLC for the year ended 31 December 2009 which comprise the Group Balance Sheet, the Group Income Statement, the Group Statement of Comprehensive Income, the Group Statement of Cash Flows, the Group Statement of Changes in Equity and the related notes 1 to 38. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of Directors and auditors As explained more fully in the Directors’ Responsibilities Statement set out on page 34, the Directors are responsible for the preparation of the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Group financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors. Scope of the audit of the financial statements 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 Opinion on financial statements In our opinion the Group financial statements: • give a true and fair view of the state of the Group’s affairs as at 31 December 2009 and of its loss for the year then ended; • have been properly prepared in accordance with 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. Opinion on other matter prescribed by the Companies Act 2006 In our opinion: • the information given in the Directors’ Report for the financial year for which the financial statements are prepared is consistent with the Group financial statements; and • the information given in the Corporate Governance Statement set out on pages 40 to 41 with respect to internal control and risk management systems in relation to financial reporting processes and about share capital structure is consistent with the financial statements. Matters on which we are required to report by exception We have nothing to report in respect of the following: 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; or • we have not received all the information and explanations we require for our audit. Under the Listing Rules we are required to review: • the Directors’ statement, set out on page 33, in relation to going concern; and • the part of the Corporate Governance Statement relating to the Company’s compliance with the nine provisions of the June 2008 Combined Code specified for our review. Other matter We have reported separately on the parent Company financial statements of National Express Group PLC for the year ended 31 December 2009 and on the information in the Directors’ Remuneration Report that is described as having been audited. Alison Baker (Senior statutory auditor) For and on behalf of Ernst & Young LLP, Statutory Auditor London 25 February 2010 National Express Group PLC 55 Group Income Statement For the year ended 31 December 2009 Total before Total before goodwill Goodwill goodwill Goodwill impairment, impairment, impairment, impairment, intangible intangible intangible intangible amortisation amortisation amortisation amortisation and exceptional and exceptional and exceptional and exceptional items items Total items items Total 2009 2009 2009 2008 2008 2008 Note £m £m £m £m £m £m Continuing operations Revenue 4 2,711.1 – 2,711.1 2,767.0 – 2,767.0 Operating costs before goodwill impairment, intangible amortisation and exceptional items (2,551.3) – (2,551.3) (2,513.1) – (2,513.1) Intangible amortisation 5 – (60.4) (60.4) – (55.2) (55.2) Exceptional items 5 – (100.0) (100.0) – (30.9) (30.9) Total operating costs 6 (2,551.3) (160.4) (2,711.7) (2,513.1) (86.1) (2,599.2) Group operating profit 159.8 (160.4) (0.6) 253.9 (86.1) 167.8 (Loss)/profit on disposal of non-current assets 5 – (7.4) (7.4) – 5.1 5.1 (Loss)/profit from operations 159.8 (167.8) (8.0) 253.9 (81.0) 172.9 Share of post tax results from associates and joint ventures accounted for using the equity method 18 (0.1) (12.0) (12.1) – – – Finance income 9 9.6 – 9.6 17.4 – 17.4 Finance costs 9 (53.1) (19.9) (73.0) (68.9) (11.5) (80.4) (Loss)/profit before tax 116.2 (199.7) (83.5) 202.4 (92.5) 109.9 Tax (charge)/credit 10 (23.0) 45.6 22.6 (52.3) 75.5 23.2 (Loss)/profit after tax for the year from continuing operations 93.2 (154.1) (60.9) 150.1 (17.0) 133.1 Profit/(loss) for the year from discontinued operations 11 – 8.2 8.2 (5.5) (7.9) (13.4) (Loss)/profit for the year 93.2 (145.9) (52.7) 144.6 (24.9) 119.7 (Loss)/profit attributable to equity shareholders 92.4 (145.9) (53.5) 143.7 (24.9) 118.8 Profit attributable to minority interests 0.8 – 0.8 0.9 – 0.9 93.2 (145.9) (52.7) 144.6 (24.9) 119.7 Earnings per share: – basic earnings per share 13 (17.6p) 40.4p – diluted earnings per share 13 (17.6p) 40.1p Normalised earnings per share: – basic earnings per share 13 30.5p 48.9p – diluted earnings per share 13 30.4p 48.6p Earnings per share from continuing operations: – basic earnings per share 13 (20.3p) 45.0p – diluted earnings per share 13 (20.3p) 44.7p 56 National Express Group PLC Group Statement of Comprehensive Income For the year ended 31 December 2009 2009 2008 Note £m £m (Loss)/profit for the year (52.7) 119.7 Other comprehensive income: Exchange differences on retranslation of foreign operations (121.3) 413.7 Exchange differences on retranslation of foreign currency borrowings 42.6 (264.2) Exchange differences on retranslation of minority interests (0.4) 1.3 Actuarial losses on defined benefit pension plans 34 (18.1) (24.8) Gain/(loss) on cash flow hedges taken to equity 0.2 (79.4) Transfers to the income statement on cash flow hedges 82.0 (9.2) Tax on exchange differences 1.9 17.6 Deferred tax on actuarial losses 5.4 7.0 Deferred tax on cash flow hedges (23.0) 24.8 Other comprehensive income for the year net of tax (30.7) 86.8 Total comprehensive income for the year (83.4) 206.5 Total comprehensive income attributable to: Equity shareholders (83.8) 204.3 Minority interests 0.4 2.2 (83.4) 206.5 National Express Group PLC 57 Group Balance Sheet At 31 December 2009 2009 2008 Note £m £m Non-current assets Intangible assets 14 1,349.9 1,519.6 Property, plant and equipment 15 672.6 841.5 Financial assets – Available for sale 17 7.7 9.2 – Derivative financial instruments 17 3.3 1.5 Investments accounted for using the equity method 18 6.7 7.9 Other receivables 20 4.0 7.0 Deferred tax asset 27 35.2 20.0 2,079.4 2,406.7 Current assets Inventories 21 16.4 24.4 Trade and other receivables 22 226.7 332.3 Financial assets – Derivative financial instruments 17 5.9 2.5 Current tax assets 3.7 4.0 Cash and cash equivalents 23 105.8 105.9 358.5 469.1 Assets in disposal group classified as held for sale 11 – 0.7 Total assets 2,437.9 2,876.5 Non-current liabilities Financial liabilities – Borrowings 28 (506.1) (1,215.0) – Derivative financial instruments 28 (11.2) (59.3) Deferred tax liability 27 (99.0) (124.9) Other non-current liabilities 25 (21.6) (20.7) Defined benefit pension liability 34 (54.9) (45.0) Provisions 26 (22.0) (39.0) (714.8) (1,503.9) Current liabilities Trade and other payables 24 (467.0) (557.3) Financial liabilities – Borrowings 28 (258.4) (71.6) – Derivative financial instruments 28 (36.0) (79.3) Current tax liabilities (56.8) (32.5) Provisions 26 (62.6) (44.3) (880.8) (785.0) Liabilities directly associated with disposal group assets classified as held for sale 11 – (2.2) Total liabilities (1,595.6) (2,291.1) Net assets 842.3 585.4 Shareholders’ equity Called up share capital 32 25.6 7.7 Share premium account 533.2 195.7 Capital redemption reserve 0.2 0.2 Own shares 32 (14.6) (15.2) Other reserves 33 116.1 133.7 Retained earnings 175.8 257.2 Total shareholders’ equity 836.3 579.3 Minority interest in equity 6.0 6.1 Total equity 842.3 585.4 J Devaney Chairman J K Maiden Group Finance Director 25 February 2010 58 National Express Group PLC Group Statement of Changes in Equity For the year ended 31 December 2009 Capital Own Other Share Share redemption shares reserves Retained Minority Total capital premium reserve (note 32) (note 33) earnings Total interests equity £m £m £m £m £m £m £m £m £m At 1 January 2009 7.7 195.7 0.2
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