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%[LIIPGLEMVYWIV[LSXVEZIPWSR+S7SYXL'SEWXWIVZMGIWWEMH  “The drivers go over and above the call of duty, and are so helpful with my wheelchair. I do appreciate their kindness.”

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REVENUE OPERATING PROFIT* ADJUSTED EARNINGS GROUP REVENUE (£m) (£m) PER SHARE* (£m) (p) £2,297.0m £115.1m 135.2p £2,297.0m 6.0% 14.0% 6.5% 144.9 174.8 2,297.0 2,199.1 2,187.2 2,167.3 161.6 72% 128.8 13% 118.1 140.7 1,826.9 115.1 135.2 # 126.9 101.0 RAIL # # 15% REGULATED BUS DEREGULATED BUS

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

DIVIDEND PAID AND AVERAGE NUMBER CO2 EMISSIONS PER GROUP OPERATING PROPOSED PER SHARE† OF EMPLOYEES JOURNEY + PROFIT (p) (kg) (£m) 81.0p 22,201 0.88kg £115.1m 0.0% 1.6% 3.3% 1.00 81.0 81.0 81.0 81.0 27,627 27,177 0.96 0.93 0.91

24,983 42% 0.88 70.0 22,570 22,201

RAIL REGULATED BUS 29% DEREGULATED BUS

29%

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

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0720 0921 2011 2010 2009 2008 2007 0720 0921 2011 2010 2009 2008 2007

£67.1m £642.4m &97

37.7 279.3 18.1 (£m) OPERATING PROFIT 234.7 (£m) REVENUE

Deregulated Regulated Deregulated Regulated 5.3% 2.0%

41.9 314.0 24.3

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0720 0921 2011 2010 2009 2008 2007 0720 0921 2011 2010 2009 2008 2007 £48.0m £1,654.6m 6%-0

66.1 (£m) OPERATING PROFIT 1,071.3 (£m) REVENUE

7.6% 28.7%

77.2 1,378.4

61.5 1,552.0

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7XVEXIKMG6IZMI[ /)=4)6*361%2')-2(-'%8367 +S%LIEHGSRXMRYEPP]QSRMXSVWERHQIEWYVIWTIVJSVQERGIEKEMRWXMXW OI]WXVEXIKMGTVMSVMXMIWXSIRWYVIXLIIRXMVI+VSYTMW[SVOMRKXSKIXLIV XSHIPMZIVXLIPSRKXIVQWXVEXIK]SJHIPMZIVMRKLMKLUYEPMX]TEWWIRKIV XVERWTSVXMRXLITVIHSQMREXIP]HIRWIYVFERQEVOIXWXLEX[IWIVZI

(IPMZIVMRKSR 7XVEXIKMG4VMSVMX] 8LIJSPPS[MRK/4-WYRHIVTMRSYVWXVEXIKMG  SFNIGXMZIXSFIEVIWTSRWMFPISTIVEXSV 6-((36EGGMHIRXW &YWEGGMHIRXWTIV 74%(WTIVQMPPMSR 'EVFSRIQMWWMSRW TIVIQTPS]IIW QMPPMSRQMPIW QMPIW TIVTEWWIRKIV  8LI6ITSVXMRKSJ 8LI&SEVHQSRMXSVW %GVSWWXLIVEMPMRHYWXV] NSYVRI] -RNYVMIW(MWIEWIWERH XLIRYQFIVSJFYW XVEMRSTIVEXMRK ;IQSRMXSVXLI (ERKIVSYW3GGYVVIRGIW EGGMHIRXW[LMGLVIWYPX GSQTERMIWEVIPIKEPP] GEVFSRIQMWWMSRWJVSQ 6IKYPEXMSRW 6-((36 MW MRERSXM½GEXMSRXSE VIUYMVIHXSVITSVX SYVSTIVEXMSRWTIV EWXEXYXSV]VIUYMVIQIRX GPEMQWLERHPIV 7MKREPW4EWWIHEX(ERKIV TEWWIRKIVNSYVRI] JSVEPPGSQTERMIWERH 74%(W %PXLSYKLIZIV] ;L]MX´WMQTSVXERX ;L]MX´WMQTSVXERX VIPEXIWXSE[SVOTPEGI 74%(MWXVIEXIHEWE ,IPTWYWXS ,IPTWYWXSQIEWYVI MRGMHIRX[LMGLVIWYPXW WIVMSYWMRGMHIRXQSWX QIEWYVIEKEMRWX 74%(WSGGYVEXPS[ EKEMRWXSYVGSQQMXQIRX MREFWIRGIJVSQ[SVO SYVGSQQMXQIRX WTIIH[LIVIFVEOMRK XSMQTVSZISYVIRIVK] JSVSZIVXLVIIHE]W XSTVSZMHIEWEJI HMWXERGILEWFIIR IJ½GMIRG]ERHHIPMZIV SVEPIKEPP]VITSVXEFPI ERHTSWMXMZIXVEZIP QMWNYHKIHERHXLIXVEMR LMKLUYEPMX]WIVZMGIW MRGMHIRXXSXLI,IEPXL I\TIVMIRGIJSVSYVFYW MWWXSTTIHF]EYXSQEXMG XLEXTVSZMHIEXXVEGXMZI 7EJIX])\IGYXMZI;I TEWWIRKIVWERHLIPTW [EVRMRKW]WXIQWERH EPXIVREXMZIWXSGEVXVEZIP EVITPIEWIHXSVITSVXRS YWXSQEREKIEGGMHIRX XLIVIJSVIXLIPMOIPMLSSH IQTPS]IIJEXEPMXMIWXLMW %MQ8SVIHYGIF]  GPEMQGSWXW SJEREGGMHIRXMWZIV]PS[  ½RERGMEP]IEV F]  %MQ8SVIHYGIF]  8LIMRHYWXV]EZIVEKIMW ;L]MX´WMQTSVXERX  F]   ,IPTWYWXSQIEWYVI EKEMRWXSYVGSQQMXQIRX ;L]MX´WMQTSVXERX ,IPTWYWXSQIEWYVI XSTVSZMHIEWEJI[SVOMRK EKEMRWXSYVGSQQMXQIRX IRZMVSRQIRXJSVSYV XSTVSZMHIEWEJIVEMP IQTPS]IIW TEWWIRKIVWIVZMGI %MQ8SVIHYGIF]   %MQ8SVIHYGIF]  F] SVMKMREPP] F] SVMKMREPP] 8EVKIXYWIWEWXLI RIDDOR ACCIDENTS BUS ACCIDENTS PER SPADs PER MILLION CARBON EMISSIONS FEWI]IEV PER 100 EMPLOYEES MILLION MILES MILES PER PASSENGER JOURNEY &YWEGGMHIRXWVIJIVXSXLSWI [LMGLVIWYPXMRERSXM½GEXMSR XSEGPEMQWLERHPIV 1.14 51.71 0.75 0.88 74%(WI\GPYHIWXLSWIXLEX 23.0% 2.0% 6.3% 3.3% SGGYVMRSYVHITSXWMRPMRI [MXLMRHYWXV]VITSVXMRK 1.00 1.98 62.61 1.26 1.24 0.96 1.88 0.93 0.91 57.08 55.93

1.76 6EMP7EJIX]ERH7XERHEVHW  0.88 52.75 51.71 &SEVH1EVGL 1.48

0.89 '3  GSRZIVWMSRJEGXSVWYWIH 0.80 1.14 0.75 EVIMREGGSVHERGI[MXLXLI QSWXVIGIRX(ITEVXQIRXJSV )RIVK]ERH'PMQEXI'LERKI KYMHIPMRIW

2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011 2007 2008 2009 2010 2011

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

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8IVQSJSJ½GI 8IVQSJSJ½GI 8IVQSJSJ½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´W 6IQYRIVEXMSR'SQQMXXIIW 2SR 0SRHSRFYWFYWMRIWWJVSQXS )\IGYXMZI(MVIGXSVSJ2SVXLYQFVMER ERH[EWE1EMR&SEVHEHZMWIV ;EXIV0XH2SVXLYQFVMER;EXIV 4VMSVXSXLMWLILIPHXLITSWMXMSRWSJ 7LEVI7GLIQI8VYWXIIW0XH'EQIPSX 1EREKMRK(MVIGXSVJVSQERH 9/0SXXIVMIW0XHERH'EQIPSX 3TIVEXMSRW(MVIGXSVJSV0SRHSR +PSFEP7IVZMGIW0XH 'LEMVQERSJXLI +IRIVEP0SRHSR'IRXVEP,MW 9/%HZMWSV]&SEVHSJ%PI\ERHIV ]IEVXVERWTSVXGEVIIVFIKER[MXL 4VSYHJSSX0XH 0SRHSR8VERWTSVX

4VIZMSYWI\TIVMIRGI 7MV4EXVMGO&VS[RWTIRXXIR]IEVW /IMXL0YHIQER 2MGO7[MJX MRMRHYWXV]ERHQEREKIQIRX /IMXL0YHIQERJSVQIV+VSYT 2MGO7[MJXJSVQIV+VSYT GSRWYPXERG]FIJSVINSMRMRKXLI 'LMIJ)\IGYXMZIVIXMVIHJVSQXLI *MRERGI(MVIGXSVVIWMKRIHJVSQ 'MZMP7IVZMGIMRMXMEPP]MRZSPZIHMR &SEVHSR.YP] XLI&SEVHSR1EVGL TVMZEXMWEXMSRMRXLI(ITEVXQIRXSJ 8VERWTSVX (J8 HYVMRKXLI´W ,IXLIRQSZIHXSXLI(ITEVXQIRX SJXLI)RZMVSRQIRXFIJSVIVIXYVRMRK XSXLI(J8EW4IVQERIRX7IGVIXEV] JVSQXS

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW (MVIGXSVWLMTWSZIVXLIPEWX]IEVW LIPHEPEVKIZEVMIX]SJ2SR)\IGYXMZI [EW)HMXSVSJ8LI)GSRSQMWX,ILEW JVSQXSTVMSVXS[LMGLLI +SZIVRSVSJXLI&EROSJ)RKPERH 6YTIVX4IRRERX6IE[EW(ITYX] 4VIZMSYWI\TIVMIRGI 'SQQMXXIIERH%YHMX'SQQMXXII  *MIPHW0XH2SQMREXMSR +SZIVRERGI *MIPHW0XH QIQFIVSJXLI+SPH 8VYWXII'SQTER]0XHERH+SPH 6IG]GPMRK0XH8LI)GSRSQMWX+VSYT ,SPHMRKW0XH7TIGMEPMWX;EWXI 9/*MRERGITPG8MQIW2I[WTETIVW )\IGYXMZI(MVIGXSVSJ,IRHIVWSR XLI2SQMREXMSR'SQQMXXII 2SR ,IRHIVWSR+VSYTTPG 'LEMVQERSJ )GSRSQMWX2I[WTETIV0MQMXIHERH +VSYT0XH(IJEUXS+VSYT0XH8LI 2SR)\IGYXMZI'LEMVQERSJ4+- )\XIVREPETTSMRXQIRXW %YHMXERH2SQMREXMSR'SQQMXXIIW 'SQQMXXIIERHQIQFIVSJXLI 'LEMVQERSJXLI6IQYRIVEXMSR 'SQQMXXIIQIQFIVWLMT W =I -RHITIRHIRX IPIGXMSREXXLI%+1MR3GXSFIV %+1ERH[MPPWXERHJSVERRYEPVI VIIPIGXIHF]WLEVILSPHIVWEXXLI (MVIGXSVMR3GXSFIV,I[EWPEWX 7IRMSV-RHITIRHIRX2SR)\IGYXMZI MR3GXSFIVERH[EWETTSMRXIH 6YTIVX4IRRERX6IENSMRIHXLI&SEVH 8IVQSJSJ½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½GI 2SR)\IGYXMZI(MVIGXSV %RHVI[%PPRIV EXXLI%+1MR3GXSFIV ERH[MPPWXERHJSVERRYEPVIIPIGXMSR WLEVILSPHIVWEXXLI%+1 ETTSMRXQIRXWLI[EWIPIGXIHF] &SEVHMR.YP]*SPPS[MRKLIV /EXLIVMRI-RRIW/IVNSMRIHXLI 8IVQSJSJ½GI 2SR)\IGYXMZI(MVIGXSV /EXLIVMRI-RRIW/IV EHIGEHI[SVOMRKMRXLI'MX] +VSYTTPG/EXLIVMRILEWEPWSWTIRX 7YVZI]7LIH1IHMETPGERH+]VYW TPG;MPPMEQW0IETPG8LI3VHRERGI 8IPIZMWMSR'SVTSVEXMSRTPG*MFIVRIX %7%8E]PSV;SSHVS[TPG8LI 8E]PSV;MQTI]TPG1EVMRI*EVQW 2SR)\IGYXMZI(MVIGXSVWLMTWMRGPYHI /EXLIVMRI-RRIW/IV´WTVIZMSYW 4VIZMSYWI\TIVMIRGI 7X1SH[IR4VSTIVXMIWTPG ERH2SR)\IGYXMZI(MVIGXSVSJ %YHMXERH2SQMREXMSR'SQQMXIIW  'SQQMXXIIERHQIQFIVSJXLI 'LEMVQERSJXLI6IQYRIVEXMSR 8VMFEP+VSYTTPG 2SR)\IGYXMZI 7IRMSV-RHITIRHIRX(MVIGXSVSJ )\XIVREPETTSMRXQIRXW ERH2SQMREXMSR'SQQMXXIIW 1IQFIVSJXLI%YHMX6IQYRIVEXMSR 'SQQMXXIIQIQFIVWLMT W =I -RHITIRHIRX [[[KSELIEHGSQ MR.YP] EW+VSYT'SQTER]7IGVIXEV] 'EVSP]R7ITLXSR[EWETTSMRXIH 8IVQSJSJ½GI +VSYT'SQTER]7IGVIXEV] 'EVSP]R7ITLXSR XLI+VSYT´WFYWMRIWWEGXMZMXMIW ERHGSHIWSJGSRHYGXWTIGM½GXS GSQTPMERGIGSVTSVEXIKSZIVRERGI MRGPYHMRKWLEVIWGLIQIWPIKMWPEXMZI GSQTER]WIGVIXEVMEXJYRGXMSRW TIRWMSRWERHE[MHIVERKISJ [MXLVIWTSRWMFMPMX]JSVRSRVEMP 'SQTER]7IGVIXEV]JSVXLI+VSYT 7IGVIXEV]WLI[EW%WWMWXERX ETTSMRXQIRXEW+VSYT'SQTER] ERH%HQMRMWXVEXSVW4VMSVXSLIV -RWXMXYXISJ'LEVXIVIH7IGVIXEVMIW 7IGVIXEV]ERHE*IPPS[SJXLI MR'EVSP]RMWE'LEVXIVIH TIRWMSRWFIJSVINSMRMRK+S%LIEH TVIHSQMRERXP]MRXLI½IPHSJ [SVOMRKJSV2SVXLIVR)PIGXVMG 'EVSP]R7ITLXSRWTIRX]IEVW 4VIZMSYWI\TIVMIRGI 2SRI )\XIVREPETTSMRXQIRXW 2SQMREXMSR'SQQMXXIIW 6IQYRIVEXMSRERH 7IGVIXEV]XSXLI%YHMX 'SQQMXXIIQIQFIVWLMT 

'SVTSVEXI+SZIVRERGI 7)2-361%2%+)1)28

%PI\'EVXIV %PER)EX[IPP 6SKIV*VIRGL 1EREKMRK(MVIGXSV 1EREKMRK(MVIGXSV 1EREKMRK(MVIGXSV +S7SYXL'SEWX 1IXVSFYW &VMKLXSR ,SZI %PI\LEWFIIR1EREKMRK(MVIGXSV %PERLEWFIIR1EREKMRK(MVIGXSV 6SKIVLEWFIIR1EREKMRK WMRGI,IGSRXVSPWIMKLX WMRGIERH[EWTVIZMSYWP]XLI (MVIGXSVSJ&VMKLXSR ,SZIWMRGI FYWMRIWWIW[MXLMR+S7SYXL +VSYT´W)RKMRIIVMRK(MVIGXSV%PER XLIGSQTER][EWTYVGLEWIHF] 'SEWXIQFVEGMRKFYWGSEGLERH LEWSZIV]IEVW´I\TIVMIRGIMR +S%LIEHMR,INSMRIH IRKMRIIVMRK%PI\NSMRIHXLIFYW XLIFYWMRHYWXV]ERHWYGGIWWJYPP] &VMKLXSR ,SZIMRERHEW MRHYWXV]MRMRMXWREXMSREPMWIH TEVXMGMTEXIHMRXLIQEREKIQIRX KIRIVEPQEREKIVLI[EWTEVXSJXLI JSVQERHLEWLIPHERYQFIVSJ FY]SYXSJ&VMKLXSR ,SZI GSQTER]´WQEREKIQIRXFY]SYX WIRMSVVSPIWTSWXTVMZEXMWEXMSR 6SKIVVIGIMZIHER3&)MR JSVLMWWIVZMGIWXSTYFPMGXVERWTSVX ERHER,SRSVEV]1%HIKVIIJVSQ &VMKLXSR9RMZIVWMX]MR

4IXIV,YRXPI] 4LMPMT/MVO .SLR8VE]RIV 1EREKMRK(MVIGXSV 1EREKMRK(MVIGXSV3\JSVH&YW 1EREKMRK(MVIGXSV +S2SVXL)EWX 'SQTER] 8LEQIW8VEZIP +S%LIEH0SRHSR 4IXIVLEWFIIR1EREKMRK(MVIGXSV 4LMPMTLEWFIIR1EREKMRK(MVIGXSVSJ .SLRLEWFIIR1EREKMRK(MVIGXSV WMRGI,ILEWFVSYKLXE XLI3\JSVH&YW'SQTER]WMRGI WMRGI,INSMRIHXLI+VSYT [MHIVERKISJMRRSZEXMSRWERH LEZMRKNSMRIHXLIGSQTER]MR MREW3TIVEXMSRW(MVIGXSV HIZIPSTQIRXWXSXLIRSVXLIEWX WLSVXP]EJXIVMX[EWEGUYMVIHF]+S SJ0SRHSR'IRXVEP+IRIVEPLEZMRK FYWMRIWW4IXIVLEWSZIV]IEVW´ %LIEH,ILEW]IEVW´I\TIVMIRGI TVIZMSYWP]LIPHWIRMSVTSWMXMSRWEX I\TIVMIRGIMRXLIFYWMRHYWXV] SJQEREKIVMEPERHXIGLRMGEPTSWMXMSRW %VVMZE0SRHSR,ILEW[SVOIHMR MRGPYHMRKTIVMSHW[SVOMRK[MXL MRFYWGSQTERMIWERHMWGLEMVSJXLI XLIXVERWTSVXMRHYWXV]JSV]IEVW PSGEPERHREXMSREP+SZIVRQIRX 3\JSVH'MX]'IRXVI1EREKIQIRX SRTSPMG]HIZIPSTQIRX 'SQTER]4LMPMTFIGEQI1EREKMRK (MVIGXSVSJ8LEQIW8VEZIPYTSRMXW EGUYMWMXMSRF]+S%LIEHMR1E]

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW 0SRHSR9RHIVKVSYRH ]IEVWMR2EXMSREP6EMPERH I\TIVMIRGIMREGEVIIVWTERRMRK LEWKEMRIHI\XIRWMZIQEREKIQIRX MRXLIWEQIVSPIEX7SYXLIVR,I WMRGI%TVMPEJXIVXLVII]IEVW 'LEVPIWLEWFIIR1EREKMRK(MVIGXSV 7SYXLIEWXIVR 1EREKMRK(MVIGXSV 'LEVPIW,SVXSR FYWMRHYWXV] QEREKIQIRXI\TIVMIRGIMRXLI 'SEWX%RHVI[LEWSZIV]IEVW´ 3TIVEXMSRW(MVIGXSVJSV+S7SYXL XLIGSQTER],I[EWTVIZMSYWP] [LIR+S%LIEHEGUYMVIH 1EREKMRK(MVIGXSVMR(IGIQFIV %RHVI[;MGOLEQ[EWETTSMRXIH 4P]QSYXL'MX]FYW 1EREKMRK(MVIGXSV %RHVI[;MGOLEQ ]IEVWSJVEMP[E]I\TIVMIRGI 6EMPXVEGOEGGYQYPEXMRKSZIV 'SQQSR[IEPXL3J½GIERH 8LEQIW8VEMRWXLI*SVIMKR JSVX[S]IEVW,ILEWEPWS[SVOIHEX TVIZMSYWP]FIIR3TIVEXMSRW(MVIGXSV SJ7SYXLIVRWMRGI%TVMPLEZMRK 'LVMWLEWFIIR1EREKMRK(MVIGXSV 7SYXLIVR 1EREKMRK(MVIGXSV 'LVMW&YVGLIPP GEVIIV[MXL0SRHSR8VERWTSVX ERH2EXMSREP)\TVIWW,IFIKERLMW VSPIWMRVEMPERHFYW[MXL*MVWX+VSYT 1EVXMRLIPHWIRMSVQEREKIQIRX %QIVMGESTIVEXMSRW4VIZMSYWP] /SRIGXFYWERH+S%LIEH2SVXL EGXMZMX]MRXLI+VSYTERHSZIVWIIW FYWHIZIPSTQIRXERHEGUYMWMXMSR ,IPIEHWERHEGXWEWEJSGYWJSVEPP 1EVXMRNSMRIH+S%LIEHMR &YW(IZIPSTQIRX 1EREKMRK(MVIGXSV 1EVXMR(IER SJ XLEX1MOI[MPPVIXMVIEXXLIIRH -R%YKYWXMX[EWERRSYRGIH ]IEVW´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´WJSVQIVEZMEXMSRWIVZMGIW (IGIQFIV,INSMRIH (MVIGXSVSJ6EMP(IZIPSTQIRXMR 4EXVMGO[EWETTSMRXIH1EREKMRK 6EMP(IZIPSTQIRX 1EREKMRK(MVIGXSV 4EXVMGO:IV[IV [[[KSELIEHGSQ 

'SVTSVEXI+SZIVRERGI '36436%8)+3:)62%2')

&SEVHWXVYGXYVIEXEKPERGI 4VSZMHMRKXLIVMKLXFEPERGI *900= SJWOMPPWORS[PIHKIERH I\TIVMIRGI T )JJIGXMZIVMWOQEREKIQIRX '311-88)( 1EREKMRKSYVVMWOERH MRXIVREPGSRXVSPW T 'SQQMXXIIWMREGXMSR 83,-+, %JSVQYPEJSVWYGGIWW T

78%2(%6(7 (IEV7LEVILSPHIV 3RFILEPJSJXLI&SEVH-EQTPIEWIHXSTVIWIRXXLI'SVTSVEXI +SZIVRERGI6ITSVXJSV 'SVTSVEXI+SZIVRERGI 8LVSYKLSYXXLI]IEVXLI&SEVHLEWGSRXMRYIHXSFIGSQQMXXIHXS QEMRXEMRMRKXLILMKLIWXWXERHEVHWSJGSVTSVEXIKSZIVRERGIERH[I %TTSMRXQIRXSJRI[ [IPGSQIXLIRI[9/'SVTSVEXI+SZIVRERGI'SHI XLI±'SHI²  )\IGYXMZI(MVIGXSVW [LMGLETTPMIWXS+S%LIEHMRJYPPJSVXLMW½RERGMEP]IEV;IFIPMIZI XLEXKSSHKSZIVRERGIMWMRXIKVEPXSXLI[E]SYVFYWMRIWWMWVYR ERHMXMWXLMWGSQQMXQIRXXLEXLEWFIIRETSWMXMZIGSRXVMFYXMRK JEGXSVXSXLIIJJIGXMZIRIWWSJXLI&SEVHHYVMRKXLI]IEV 8LI'SHIIQTLEWMWIWXLI&SEVH´WVIWTSRWMFMPMX]JSVTVSZMHMRK XLIPIEHIVWLMTRIGIWWEV]XSTVSQSXIXLIWYGGIWWSJXLI'SQTER] [MXLMRXLIGSRXI\XSJERIJJIGXMZIJVEQI[SVOSJEGGSYRXEFMPMX] SZIVWMKLXERHVMWOQMXMKEXMSR%W'LEMVQER-EQGSRWGMSYWXLEX 'SQTVILIRWMZIVIZMI[ MXMWQ]VIWTSRWMFMPMX]XSTVSZMHIPIEHIVWLMTXSXLI&SEVHMRSVHIV SJVIQYRIVEXMSRTSPMG] XSIRWYVIMXWIJJIGXMZIRIWWERHXSSZIVWIIXLIHIPMZIV]SJXLI +VSYT´WWXVEXIK]-RXLMWVIKEVH-EQQMRHJYPSJXLIMQTSVXERGI SJIRGSYVEKMRKXLITVSHYGXMZIIRKEKIQIRXSJEPP&SEVHQIQFIVW WSEWXSIREFPIEPP(MVIGXSVWXS[SVOMRYRMWSR[MXLMREGYPXYVI SJSTIRRIWWERHHIFEXI -RXLMWWXEXIQIRX-MHIRXMJ]LS[[IETTP]XLI'SHI´WTVMRGMTPIW VIPEXMRKXSXLIVSPIERHIJJIGXMZIRIWWSJXLI&SEVH -RGSVTSVEXMSRSJRI[ 9/'SVTSVEXI &SEVHGSQTSWMXMSR +SZIVRERGI'SHI 8LI&SEVHEMQWXSLEZIEHMZIVWMX]SJWOMPPWI\TIVMIRGIPIRKXL SJWIVZMGIORS[PIHKIERHKIRHIV;I[IPGSQIXLITYFPMGEXMSR SJXLI(EZMIW6IZMI[SR±;SQIRSR&SEVHW²8LIFIRI½XWSJ KVIEXIV&SEVHHMZIVWMX]RSXNYWXKIRHIVWTIGM½GEVIGPIEVERHXLMW MWETSWMXMZIWXITJSV[EVH &3%6(',%2+)7 7XVIRKXLIRIHVMWO QEREKIQIRXERH MRXIVREPGSRXVSPW

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'SVTSVEXI+SZIVRERGI '36436%8)+3:)62%2')'328-29)(

'SVTSVEXIVIWTSRWMFMPMX] 'SQTPMERGI[MXLXLI9/'SVTSVEXI+SZIVRERGI'SHI 'SVTSVEXIVIWTSRWMFMPMX]MWHIITP]IQFIHHIHEGVSWWEPPEWTIGXW SJSYVSVKERMWEXMSR8SIRWYVIXLEXGSVTSVEXIVIWTSRWMFMPMX]MW 8LVSYKLSYXXLI]IEVIRHIH.YP]XLI'SQTER] TVMSVMXMWIHEGVSWWXLIFYWMRIWWMRXIVREPWEJIX]ERHIRIVK]XEVKIXW GSQTPMIH[MXLXLIQEMRERHWYTTSVXMRKTVMRGMTPIWERH JSVIEGLSJSYVSTIVEXMRKGSQTERMIWEVIWIXEXXLIFIKMRRMRKSJ TVSZMWMSRWWIXSYXMR7IGXMSRSJXLI9/'SVTSVEXI IEGL½RERGMEP]IEV4VSKVIWWEKEMRWXXLIWIXEVKIXWMWPMROIHXSFSXL +SZIVRERGI'SHI XLI±'SHI² WEZIMRVIWTIGXSJXLI STIVEXMRKGSQTER]WIRMSVQEREKIVW´ERH)\IGYXMZI(MVIGXSVW´ JSPPS[MRKTVSZMWMSR VIQYRIVEXMSR-REHHMXMSRELIEPXLERHWEJIX]EYHMXSJIEGLSJ ˆ8LI'LEMVQERSJXLI%YHMX'SQQMXXII%RHVI[%PPRIV SYVFYWMRIWWIWMWYRHIVXEOIRF]ERI\XIVREPGSRWYPXERXIEGL]IEV [EWYREFPIXSEXXIRHXLI'SQTER]´W%+1HYI XSERMRNYV]8LMWVIWYPXIHMRTEVXMEPRSRGSQTPMERGI[MXL 8LI&SEVHMWYPXMQEXIP]VIWTSRWMFPIJSVGSVTSVEXIVIWTSRWMFMPMX] GSHITVSZMWMSR) EGVSWWXLI+VSYT%WWYGL[IHSRSXLEZIGSVTSVEXI VIWTSRWMFMPMX]SVLIEPXLERHWEJIX]GSQQMXXIIWEX&SEVHPIZIP %GST]SJXLI'SHITYFPMWLIHMR.YRIMW EW[IFIPMIZIXLEXEPP&SEVHQIQFIVWWLSYPHFIMRZSPZIHMR EZEMPEFPISRXLI*MRERGMEP6ITSVXMRK'SYRGMP´W[IFWMXI XLIWIJYRHEQIRXEPEVIEWXLEXEVIGIRXVEPXSSYVFYWMRIWW8LI [[[JVGSVKYOGSVTSVEXIYOGKGSHIGJQ  +VSYT´W¾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½RERGMEP]IEV[MXLXLII\GITXMSRSJ2MGO7[MJX[LSVIWMKRIHSR 1EVGL/IMXL(S[R[LS[EWETTSMRXIHSR1EVGL )<)'98-:)(-6)'8367 ERH(EZMH&VS[R[LS[EWETTSMRXIHSR%TVMP *SPPS[MRK/IMXL0YHIQER´WVIXMVIQIRXSR.YP]XLI&SEVH RS[GSRWMWXWSJX[S)\IGYXMZI(MVIGXSVW(EZMH&VS[RLEZMRK 34)6%8-2+'314%2=&3%6( EWWYQIHXLIVSPISJ+VSYT'LMIJ)\IGYXMZISR.YP] &SEVHQIIXMRKW 8LI&SEVHRSVQEPP]QIIXWEXPIEWXWIZIRXMQIWHYVMRKXLI +6394)2)6+= 34)6%8-2+ +6394,)%08, ]IEV%XPIEWXSRISJXLIQIIXMRKWIEGL]IEVMWHIHMGEXIHXS *3691 '314%2= 7%*)8=*3691 VIZMI[MRKXLI+VSYT´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´EXXIRHERGI )2)6+='311-88)) ,)%08, 7%*)8='311-88)) EXWGLIHYPIHQIIXMRKWXLI][IVIIPMKMFPIXSEXXIRH8LIEKIRHE JSVIEGL&SEVHQIIXMRKMWWIXF]XLI'LEMVQERMRGSRWYPXEXMSR 8LI+VSYT´WZEPYIWPIEHIVWLMTERHWXVEXIK]EVIYRHIVTMRRIH [MXLXLI+VSYT'LMIJ)\IGYXMZIERH+VSYT'SQTER]7IGVIXEV] F]XLILMKLIWXWXERHEVHWSJGSVTSVEXIKSZIVRERGI%WE&SEVH (IXEMPIHFVMI½RKTETIVWMRVIPEXMSRXSXLIFYWMRIWWXSFI SYVEMQMWXSIRWYVIXLEXXLMWIJJIGXMZIGSQFMREXMSRGSRXMRYIWXS GSRHYGXIHEXIEGLQIIXMRKEVIGMVGYPEXIHXSXLI&SEVHEXPIEWX VIXYVRIRLERGIHZEPYIXSSYVWLEVILSPHIVWSZIVXLIPSRKIVXIVQ SRI[IIOFIJSVIIEGLQIIXMRK-RHMZMHYEP&SEVHQIQFIVWLEZI [LMPIIREFPMRKSYVGSQTERMIWXSSTIVEXIMREWEJIWSGMEPP]ERH HMVIGXEGGIWWXSXLI)\IGYXMZI(MVIGXSVWERHXLI+VSYT'SQTER] IRZMVSRQIRXEPP]VIWTSRWMFPIQERRIV 7IGVIXEV]WLSYPHXLI][MWLXSVIGIMZIEHHMXMSREPMRJSVQEXMSR

7MV4EXVMGO&VS[R'LEMVQER %YKYWX

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Chairman 0-3 years Sir Patrick Brown Andrew Allner Independent Non-Executive Directors Katherine Innes Ker Andrew Allner 6-9 years Rupert Pennant-Rea Rupert Pennant-Rea Katherine Innes Ker 9+ years Executive Directors* Sir Patrick Brown David Brown There is currently no 3-6 year category. Keith Down

* As part of Go-Ahead's orderly succession plan, for a three month period only, there were three Executive Directors. This is not shown in the chart above.

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 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW Practices Board’sEthical theAuditin tocomply with us require standards Those Ireland). applicable law and International Standards onAuditin an opinion onthe Groupfinancial statements inaccordance with g have formed. a body,forourauditwork,this report,orfortheopinions we the Group’scircumstancesan assessment of:whethertheaccountin orerror.Thisincludesan misstatement, whethercausedbyfraud assurance thatthe disclosures inthe financial statementssufficient to An audit involves obtainin Scope oftheauditfinancial statements of theGroupfinan set outonpa As explainedmorefullyinthe Respective responsi anyone otherthan permitted bylaw,wedonota other purpose.Tothefullestextent in anauditors’ reportandforno Company’s membersthosemattersweare Our auditwork hasbeenundertaken sothatwemi Part 16oftheCompaniesActin accordancewith Chapter 2006. 3of This reportismadesolelyto adopted bytheEuropean Union. law andInternational Financial Reportin framework that hasbeenappliedin in equityandtherelatednotes1to29.Thefinancialreportin of comprehensive income,theconsolidated statementofchan the consolidated cashflowstatement, theconsolidated statement theconsolidated income consolidatedbalancesheet, statement, 2 July 2011 whichcompriseGroup plcfortheyearended the We have audited theGroupfinanci GO-AHEAD GROUPPLC INDEPENDENT AUDITORS’REPORT TO THEMEMBERSOF FINANCIAL STATEMENTS • • • In our opinion the Groupfinancial statements: Opinion onfinancial statements inconsistencies we considertheimplicationsforourreport. If webecomeawareofany identify material inconsistencies with the non-financial information inthe annual reportand accounts to the financial statements. Inaddition, wereadallthe financial and estimates madebytheDirectors;andoverall presentation of adequately disclosed; the reasonableness ofsi ive atrueandfairview.Our responsib    Companies Act 2006andArticle 4oftheIASRe with therequirementshave beenpreparedinaccordance ofthe as adoptedbytheEuropean Union; and have beenproperlypreparedinaccordancewith IFRSs as at2July2011andofitsprofitfortheyearthen ended; g ive atrueand fair viewofthestate oftheGroup’saffairs g e 80, theDirectorsareresponsibleforpreparation cial statemen financial statements arefreefrommaterial the Companyand bilities of Directors and Auditor Standards forAuditors. g evidence abouttheamountsand apparent materia the Company’s members, asabody, the Company’smembers, d havebeenconsisten ccept or assume responsibility to ccept orassumeresponsibility Directors’ Responsibilities Statement ts andforbein theirpreparation is applicable al statements ofthe Go-Ahead g policies areappropriate to g ility istoaudit andexpress Standards (IFRSs) as audited financialstatements. Company’s membersas required tostatethem l misstatementsor g g nificant accountin satisfiedthatthey g ive reasonable g tly appliedand ht statetothe g g (UKand ulation. g

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1. Notes: 31 Au London for andonbehalf of Ernst&Youn Kathryn Barrow(Seniorstatutoryauditor) • • • Under theListin • • in ouropinion: required toreport to youif, Under theCompaniesAct2006weare We have nothin Matters onwhichwearerequi financial yearfor which the Group In our opinion the information Act2006 Companies Opinion onothermatterprescribed by the Report thatisdescribedashavin 2 July2011 andon theinformation intheDirectors’Remuneration statements ofthe Go-Ahead Group plcfortheyearended the parentcompanyWe havereportedfinancial separatelyon Other matter consistent with theGroupfinancial statements. 2.        website is the responsibility of the Directors; theworkcarriedout website istheresponsibilityof The maintenance andinte on Directors’remuneration. to shareholdersbytheBoard certain elementsofthereport Corporate Governance Codespecified forourreview; and the Company’scompliance with the nineprovisions oftheUK the partofCorporate Governance Statement relatin concern; and the Directors’statement, setouton pa require forouraudit. we havenotreceived allthe information and explanations we not made;or certain disclosures ofDirectors’remuneration specified bylaware other jurisdictions. dissemination offinancialstatements maydifferfromle Le they wereinitially presented onthe website. chan and, accordin by theauditorsdoesnotinvolve consideration ofthesematters g g ust 2011 islation inthe United Kin g es that may have occurredtothefinancial statements since g g Rules wearerequiredtoreview: to reportinrespectofthefollowin g ly, theauditors noresponsibilityforany accept [[[KSELIEHGSQ g g rity oftheGo-Ahead Groupplc ivenin theDirectors’Reportfor g g dom been audited. g financial sta LLP, Statutory Auditor red to reportbyexception g overnin

g e 80,inrelationto tements arepreparedis g thepreparation and g : g islation in g to g oin g 

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 2 JULY 2011

Restated 2011 2010 Notes £m £m Group revenue 4 2,297.0 2,167.3 Operating costs (excluding amortisation and exceptional items) 5 (2,181.9) (2,066.3) Group operating profit (before amortisation and exceptional items) 115.1 101.0 Goodwill and intangible asset amortisation 3 (10.5) (10.9) Exceptional items (before taxation) 7 (2.3) (11.0) Group operating profit (after amortisation and exceptional items) 102.3 79.1 Finance revenue 9 1.5 1.6 Finance costs 9 (19.0) (14.9) Profit on ordinary activities before taxation 84.8 65.8 Tax expense 10 (9.8) (14.5) Profit for the year from continuing operations 75.0 51.3 Discontinued operations Profit/(loss) for the year from discontinued operations 8 4.4 (27.8) Profit for the year 79.4 23.5

Attributable to: Equity holders of the parent 67.4 17.2 Non-controlling interests 12.0 6.3 79.4 23.5 Earnings per share from continuing operations – basic & diluted 11 146.8p 104.8p – adjusted 11 135.2p 126.9p Earnings per share from total operations – basic & diluted 11 157.1p 40.1p – adjusted 11 135.4p 135.1p

Dividends paid (pence per share) 12 55.5p 106.5p Final dividend proposed (pence per share) 12 55.5p 30.0p

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eev rnfr 01–––(0.1) – – – 0.1 – Reserve transfer t3Jl 00 21 6.)201607(59.7) 0.7 1.6 2.0 (69.0) 72.1 At 3July2010 te opeesv noefrteya,nto a Other comprehensive income fortheyear,netoftax oa opeesv noe –1. 79.5 – – 14.1 – – Total comprehensive income t2Jl 01 21 6.)1. . . 36 71 4331.4 14.3 17.1 – (3.6) 0.7 – 1.6 – 16.1 (69.8) – 72.1 (0.8) – – – At 2July2011 – Acquisition ofownshares (0.3) – Arisin Acquisition ofownshares te opeesv noe –1. 12.1 – – 14.1 – (23.8) – – Dividends – – Other comprehensive income – (45.7) – – Dividends – – – – Non-controllin Tax reco hed (Gains)/losses on cashflow rftfrteya ––––17.2 – – (14.0) 0.7 – 1.6 – (10.5) (68.8) – 71.9 Profit fortheyear At 27June2009 F EQUITY OFCHANGESIN CONSOLIDATED STATEMENT Equity holdersofthe parent Attributable to: Profit fortheyear F CONSOLIDATED STATEMENTOFCOMPREHENSIVEINCOME FINANCIAL STATEMENTS rftfrteya – 67.4 – – – – – Share basedpaymentchar Profit fortheyear Share basedpaymentchar year Total comprehensiveincomeforthe Actuarial Other comprehensiveincome oa opeesv noe –1. (0.6) (17.8) – – – – 12.5 12.5 – – – – Total comprehensive income Other comprehensive income Unrealised O O R R T T share options g H H onshares issuedfor E E Y Y g g ie nohrcmrhnieicm 10 nised in other comprehensive income E E ains/(losses) ondefinedben g A A ains on cashflow hed R R E E g interests N N D D E E D D 2 2 J J U U L L g g Y Y 0.4 – – – e – 0.7 – – – – e – – 2 2 0 0 g 1 1 es taken toincome statement–operatin 1 1 g

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ftpninpas 28 efit pensionplans capital Share 0.2 ––––– £m Reserve for own shares £m Hed reserve g £m in g

g css costs reserve Other £m redemption reserve Capital Notes £m [[[KSELIEHGSQ Retained earnin £m g s

(52.3) (23.8) (45.7) (19.1) equity 93.6 26.2 67.4 17.2 11.9 (0.8) (0.3) (5.3) Total 0.2 0.4 0.7 £m – 101.7 101.7 (10.1) 22.3 93.6 23.0 12.9 79.4 (3.5) 2011 8.1 controllin £m interests

11.0 12.0 Non- (3.9) (4.8) (6.6) 8.1 9.6 6.3 8.0 1.7 £m – – – – – – g

101.7 (41.3) (28.6) (52.3) (22.5) 22.3 79.4 23.5 19.9 11.9 16.3 19.9 19.9 23.5 (0.8) (0.3) (9.5) (3.6) 2010 (3.6) Total 0.2 0.4 0.7 0.8 1.8 8.0 £m £m  –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET AS AT 2 JULY 2011

Restated Restated 2011 2010 2009 Notes £m £m £m Assets Non-current assets Property, plant and equipment 13 416.4 415.9 409.9 Intangible assets 14 100.9 108.6 110.3 Trade and other receivables 18 0.6 1.8 3.1 Investment in joint venture 3 4.1 0.7 – Other financial assets 24 4.7 4.3 3.1 Deferred tax assets 10 20.0 27.1 23.4 546.7 558.4 549.8 Current assets Inventories 17 15.5 12.9 13.1 Trade and other receivables 18 201.4 188.8 199.2 Cash and cash equivalents 19 228.6 235.8 207.1 Other financial assets 24 14.7 3.0 0.6 460.2 440.5 420.0 Assets classified as held for sale 16 1.6 1.7 9.7 Assets held in disposal groups held for sale 8 – 10.2 – 1.6 11.9 9.7 Total assets 1,008.5 1,010.8 979.5 Liabilities Current liabilities Trade and other payables 20 (428.2) (440.5) (432.4) Other financial liabilities 24 (1.7) (7.9) (16.4) Interest-bearing loans and borrowings 21 (6.5) (17.1) (30.4) Current tax liabilities (17.1) (20.4) (14.9) Provisions 25 (21.9) (27.6) (15.4) (475.4) (513.5) (509.5) Non-current liabilities Interest-bearing loans and borrowings 21 (287.6) (303.9) (266.5) Retirement benefit obligations 28 (76.9) (96.9) (83.5) Other financial liabilities 24 (0.4) (3.3) (8.5) Deferred tax liabilities 10 (50.9) (65.6) (68.4) Other liabilities 20 (6.3) (5.3) (8.9) Provisions 25 (79.6) (45.7) (43.7) (501.7) (520.7) (479.5) Liabilities held in disposal groups held for sale 8 – (17.9) – Total liabilities (977.1) (1,052.1) (989.0) Net liabilities 31.4 (41.3) (9.5) Capital & reserves Share capital 72.1 72.1 71.9 Reserve for own shares (69.8) (69.0) (68.8) Hedging reserve 16.1 2.0 (10.5) Other reserve 1.6 1.6 1.6 Capital redemption reserve 0.7 0.7 0.7 Retained earnings (3.6) (59.7) (14.0) Total shareholders’ equity 17.1 (52.3) (19.1) Non-controlling interests 14.3 11.0 9.6 Total equity 31.4 (41.3) (9.5)

Sir Patrick Brown, Chairman Keith Down, Group Finance Director 31 August 2011 31 August 2011

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

Movement in provisions provisions in Movement Cashflow generated fromoperations eraei rd n te aals Decrease intrade andotherpayables Net cashflows used ininvestingactivities Ices)dces nivnois Increase intradeandotherreceivables (Increase)/decrease ininventories Net cashoutflows onfinancingactivities ahascae ihdsoa disposal Cash associatedwith Cash acquiredwith subsidiaries Investment injoint venture ahtaserdfo seshl o ipsl Cash transferredfromassetsheldfordisposal amn ffnnelaeadhr ucaelaiiis Payment offinance leaseand hirepurchaseliabilities Share basedpayments aeo seshl o ipsl Sale ofassetsheld fordisposal Difference between pension contributions paidandamounts amn oaqieonsae bond financinProceeds from Payment toacquire ownshares Proceeds from borrowin Proceeds from Repayment ofborrowin rfto aeo rpry ln n qimn plantandequipment Profit onsaleofproperty, Release offuel hed Ineffective interest swaphed rcesfo aeo usdais ofsubsidiaries Proceeds fromsale Purchase ofsubsidiaries Purchase ofintan Purchase ofproperty,plant rcesfo su fsae ofshares Proceeds fromissue te o-ahecpinlies 7 Interest received Cashflows frominvestingactivities Taxation paid Other non-cash exceptional items Net finance costs Profit/(loss) aftertaxfromdiscontinuedoperations Profit aftertaxfrom continuingoperations F CONSOLIDATED CASHFLOWSTATEMENT FINANCIAL STATEMENTS e dces)ices ncs n aheuvlns Cash andcashequivalents at2July 2011 Cash andcashequivalents at3July 2010 andNet (decrease)/increaseincash cashequivalents Interest paid Cashflows fromfinancing activities Proceeds from sale ofproperty,plan Proceeds fromsale Net cashflows from operatingactivities Amortisation of Depreciation ofproperty,plant Tax expense Profit aftertaxfor theyear iied adt ebr fteprn 12 Dividends paidtomembersoftheparent Dividends paidtonon-controllin O R T reco H E Y g nised intheincomestatement E A R E N g g oodwill and intan D beast ible assets g E e D 2 J g g U s s L adeupet andequipment Y g 2 g e

0 adeupet 13 andequipment 1 g 1 itrss interests

g beast 14 ible assets n qimn t andequipment Notes [[[KSELIEHGSQ 15 10 19 19 6 9 8

137.9 113.0 223.6 230.0 (30.6) (14.1) (49.5) (69.9) (24.6) (54.1) (24.9) (13.6) (23.8) 28.8 11.2 10.5 49.2 17.5 75.0 79.4 (0.3) (2.3) (6.2) (3.4) (0.3) (7.1) (0.8) (1.5) (1.7) (6.4) (3.5) (2.3) (4.8) 2011 0.3 0.1 0.4 3.9 1.4 9.3 1.5 4.4 £m – – – –

Restated (216.4) 160.6 200.0 141.8 230.0 202.1 (10.6) (72.3) (41.6) (10.5) (35.2) (58.1) (18.8) (27.8) (12.3) (45.7) 14.2 14.8 50.0 35.8 27.9 10.9 52.1 10.8 13.3 51.3 23.5 2010 (0.1) (0.7) (0.2) (6.9) (0.3) (2.3) (6.6) 7.9 0.2 2.0 8.1 0.7 0.2 0.8 5.7 1.6 £m  – –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 2 JULY 2011

1. Authorisation of financial statements and statement • IAS 39 Financial Instruments: Recognition and Measurement – of compliance with IFRSs Eligible Hedge Items (amendment) The consolidated financial statements of The Go-Ahead Group plc • IFRIC 17 Distribution of Non-cash Assets to Owners (the ‘Group’) for the year ended 2 July 2011 were authorised for issue by the Board of Directors on 31 August 2011 and the balance • IFRIC 18 Transfers of Assets from Customers sheet was signed on the Board’s behalf by Sir Patrick Brown and • IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Keith Down. The Go-Ahead Group plc is a public limited company that is incorporated, domiciled and has its registered office in • Improvements to IFRS 2009 and Wales. The Company’s ordinary shares are publicly traded on • Improvements to IFRS 2010 the London Stock Exchange and it is not under the control of any single shareholder. The adoption of IAS 27 Consolidated and Separate Financial Statements (amendment) has required the reclassification of minority The consolidated financial statements of the Group have been interests as non-controlling interests. Also, any transactions with prepared in accordance with International Financial Reporting non-controlling interests that do not result in gaining or losing control Standards (IFRSs) as adopted by the European Union (EU) as they will be accounted for as equity transactions. apply to the consolidated financial statements of the Group for the year ended 2 July 2011, and applied in accordance with the provisions The Improvements to IFRS 2009 amended IFRS 8 Operating Segments of the Companies Act 2006. The Group is required to comply with to require segment assets and liabilities to be reported only when they international accounting requirements under IAS 1 ‘Presentation of are included in measures regularly provided to the chief operating Financial Statements’ except in extremely rare circumstances where decision maker. This is not the case, and therefore, segment assets management concludes that compliance would be so misleading and liabilities are no longer reported. that it would conflict with the objective to ‘present fairly’ its financial Adoption of IFRS 3 Business Combinations (revised) has required statements. On that basis, the Group has departed from the the legal expenses relating to the acquisition of Thames requirements of IAS 19 ‘Employee Benefits’ and has accounted for (Wallingford) Limited in the year to be expensed. The legal expenses its constructive but not legal obligations for the Railways Pension amounted to £0.1m. Scheme (RPS) under the terms of its UK rail franchise agreements. Details of the background and rationale for this departure are Adoption of the remaining new standards and interpretations did provided in note 28. not have a material impact on the financial performance or position of the Group. 2. Summary of significant accounting policies In accordance with IFRS 5 Non-current Assets Held for Sale and Basis of preparation Discontinued Operations, the Group has classified the results of A summary of the Group’s accounting policies applied in preparing the residual ground handling activities at Heathrow Terminal 1 and the financial statements for the year ended 2 July 2011 are set Meteor Parking operations as discontinued and accordingly the out below. comparatives in the income statement and related notes have been restated. The above treatment is a result of the cessation or sale The consolidated financial statements are presented in pounds sterling during the period of the above operations. and all values are rounded to the nearest one hundred thousand (£0.1m) except when otherwise indicated. Use of estimates The preparation of the financial statements requires the use of As noted above, the Group has taken the decision to depart estimates and assumptions. Although these estimates are based on from the requirements of IAS 19 so as to present fairly its financial management’s best knowledge, actual results ultimately may differ performance, position, and cashflows in respect of its obligation from these estimates. for the RPS. sources of estimation uncertainty that have a significant risk New standards of causing material adjustments to the carrying value of assets and The following new standards or interpretations are mandatory liabilities within the next financial year are in relation to: for the first time for the financial year ending 2 July 2011: • the measurement and impairment testing of indefinite life • IFRS 1 First-time Adoption of International Financial reporting intangible assets requires estimation of future cashflows and the Standards – Additional Exemptions for First-time Adopters selection of a suitable discount rate and growth rate, as detailed (amendments) in note 14; • IFRS 1 First-time Adoption of International Financial Reporting • the measurement of defined benefit pension obligations requires Standards – Limited Exemption from Comparative IFRS 7 the estimation of future changes in salaries, inflation, the expected Disclosures for First-time Adopters return on assets and the selection of a suitable discount rate, as • IFRS 3 Business Combinations (revised) set out in note 28; and • IFRS 2 Group Cash-settled Share-based Payment Arrangements • the measurement of uninsured liabilities is based on an (amendment) assessment of the expected settlement of known claims and an estimate of the cost of claims not yet reported to the Group. • IAS 27 Consolidated and Separate Financial Statements (amendment) • the measurement of franchise commitments, comprising dilapidation provisions on vehicles, depots and stations and • IAS 32 Financial Instruments: Presentation – Classification of also income claims from other rail franchise operators, is based Rights Issues (amendment) on management’s assessment of most probable outcomes, supported where appropriate by valuations from professional external advisers.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

of route usa of route Rail revenuecomprisesamount authorities. sales andrevenue Bus revenuecomprisesamountsreceivable transport andrail passen It isaccountedfor onastrai reco comprehensive incomeofthejointlycontrolledentity, theGroup The revenueoftheGroup Rendering ofservices excludin Revenue ismeasuredatthefairvalueofconsiderationreceived, income willflow to theGroupand thevalue canbereliably measured. Revenue isreco Revenue recognition statement ofcomprehensiveincome. after tax.Wherethere hasbeen achan statement reflects theshareof jointly controlled entity’s results any impairmentinvalueofth Group’s shareofitsnetassets,less andless distributionsreceived in thebalancesheet atcostplus post-acquisitionchan Under theequitymethod,interest inthejointventure iscarried entity’s assetsand liabilities usin (a jointlycontrolled entity).TheGroup reco share controlover anotherthrou entity, represents ajoint venture. Thistakes theformofana The Grouphasa contractual arran Interest injointventures from parentshareholders’ equity. presented within equity intheconsolidated balancesheet,separately by theGroupin Govia and subleasin on consistent accountin for thesamereportin in theconsolidationareprepared statements ofsubsidiariesforuse date onwhich control istransferred outoftheGroup.Thefinancial transferred tothe Groupandcease tobeconsolidatedfromthe Subsidiaries areconsolidated fromthedateon which controlis at 2July2011. statements ofTheGo-Ahead The consolidated financi Basis ofconsolidation Non-controllin transactions, have been eliminated infull. transactions, includin Rental incomeis Rental income statement overthelifeofrelevant season ticket ortravelcard. card incomeisdeferredwithinliabil services provided. Theattributable share ofseason ticket ortravel customer’s journey orforotherservicesbasedontheproportionof Revenue isreco payments tothe DfT arereco revenue, whereasExecutives (PTEs)aretreatedas franchisepremium and localPassen theDfT subsidy receiptsfrom commission maintenance and of passen respect in industry), UKrail the systemwithin allocation income the g nises itsshare ofanysuchchan g g discounts,rebates,VATandothersalestaxes orduty. er receipts and other related servicessuch as rollin er receiptsandotherrelated g e, by Railway Settlement Plan Limited (which administers administers (which Limited Plan Settlement e, byRailway g of rollin g interestsrepresenttheequity notheld g g nised to the extent thatitisprobablenised totheextent thatthe nised by reference to thesta nised byreference g enerated from rental enerated fromrental g enerated fromservicesprovidedon behalf oflocal g g unrealised profitsarisin yearastheparent companyandarebased Limited,a65%ownedsu g g stock andrailway infrastructure access. al statements comprisethefinancial g policies. All intra- er transport. comprises incomefromroadpassen g ht-line basis overthelease term. e investment. TheGroup income g Group plcanditssubsidiariesas on tickets sold.Inaddition, franchise g nised inoperatin s basedprincipallyona theequitymethod of accountin g ities andreleased totheincome ement with another partywhich g es intheConsolidated g of surplusproperties g e reco h aninterestinacompany g roup balances and g g enerated fromticket g nises itsinterestinthe g fromintra- g e ofcompletion ofthe g er Transport g nised inother bsidiary, andare costs. g g g es inthe reement to reed models g roup g stock g g er . of afranchise.Receipts areshowninrevenue. Revenue support is provided by the DfT Revenue supportisprovidedbythe char relevant amounts accruedatthebalancesheet date.Paymentsare to centralGovernment forthe estimated costtothe Group ofthe a The railcompanies have certain revenue and, historically, profit sharin Profit andrevenuesharing/support agreements asset andamortised overthelifeof thefranchise. after achievin outcome ofthebid.Directlyattrib as anexpense inthe incomestatement irrespectiveof theultimate costs incurredpriortoachievin securin A keypartofthe Group’s acti Franchise bidcosts income statement. effect onamounts reportedinthe out innotes20and25.Thereisno settlement onknown claims,to professional advice andisbasedonanassessment oftheexpected The estimation of this liability ismadeaftertakin to theoverallstoploss. claims forinci A liability isreco an annuala These provideindividual claim cover, subjecttohi public liability claims throu and costofmotor,employer The Grouplimitsitsexposuretothe Uninsured liabilities life oftherelevant asset. and isreleasedto the income statement overthe expected useful non-current asset, value iscredited that it is intended to compensate. Where the that itisintendedtocompensate. chan to showthe effect ofthese sheet presentedasat28June2009 industry. Comparatives have beenrestated and an additional balance relevant information andaidsco The Groupbelieves thatthis chan obli utilisation andre-measurement ofthese relatin disclosures the by accompanied and provisions within result, isnowclassified thisliability a provision. As rather thanasa de sufficient determined Grouphas thatthereisnolon the resolution, their trends relatin attachin is reasonableassurancethatthe Government Government grants principal outstandin Interest ondepositsisaccrueda Finance revenue the periodnecessary tomatchon a systematicbasistothecosts to anexpense item, itisreco the classification of this liability in the balance sheet. Inli thebalance ofthisliabilityin the classification of reportin ofourre Aspart current liabilities. withinthe as anaccrual and mana theevaluation in experience The Grouphasaccumulated considerable the insurer. been reportedtotheGroupby sheet datebutthathavenotyet that willbemadeinrespect g reements with the DfT. An accrual is ma reements withtheDfT.Anaccrual g g ed tooperatin es. The impact of this reclassification in the balancesheetisset reclassificationes. Theimpact in ofthis g g franchises tooperaterailservices inthe UK.Allfranchisebid conditions will becomplied with.When the g g ement ofsuchclaims and has historically classified this liability gg g practices and policies, we have we andpolicies, practices ree of certainty to classify all of this liability as an accrual as anaccrual ofthisliability all classify certaintyto ree of g g re dents occurrin g to the nature of claimsandtheincreasin nature the to preferred bidder status arecapitalised preferredbidder as anintan rants arereco g g ate stoplossfortotalclaimswithin the excesslimits. nised fortheestimatedcostto Grouptosettle g g and attheeffectiveinterest rate applicable. costs. [[[KSELIEHGSQ g h insurance policiesissued bythirdparties. g of incidents occurrin g priortothebal g nised at their fairvalue wherethere vities istheprocessofbiddin nised intheincomestatementover g g preferred bidder status aretreated preferredbidderstatus mparability withour peersinthe g ether with an estimate ofsettlements rant willbereceived andall g utable, incremental costsincurred e inpresentation providesmore to adeferredincomeaccount time basis, by reference tothe time basis,byreference typically inthe g de within amounts payable g iven fullconsideration to ations. ance sheetdate,subject g rant relatestoa g g appropriate g priortothebalance h excess limitsand g to their creation, creation, their to g g g time involvedin ht ofdevelopin rant relates last twoyears g ular review g forand g er a er a g ible  g g

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Summary of significant accounting policies continued Goodwill is initially measured at cost being the excess of the aggregate Exceptional items of the acquisition-date fair value of the consideration transferred and The Group presents as exceptional items on the face of the income the amount recognised for the non-controlling interest (and where statement those material items of revenue or expense which, because the business combination is achieved in stages, the acquisition-date of the size or the nature and expected infrequency of the events fair value of the acquirer’s previously held equity interest in the giving rise to them, merit separate presentation to allow better acquiree) over the net identifiable amounts of the assets acquired understanding of financial performance. and the liabilities assumed in exchange for the business combination. Assets acquired and liabilities assumed in transactions separate to Property, plant and equipment the business combinations, such as the settlement of pre-existing Property, plant and equipment is stated at cost or deemed cost on relationships or post-acquisition remuneration arrangements are transition to IFRSs less accumulated depreciation and any impairment accounted for separately from the business combination in in value. Freehold land is not depreciated. accordance with their nature and applicable IFRSs. Identifiable Assets held under finance leases are depreciated over the shorter intangible assets, meeting either the contractual-legal or separability of their expected useful lives and the lease terms. criterion are recognised separately from goodwill. Contingent liabilities representing a present obligation are recognised if the acquisition-date Depreciation is charged to the income statement based on cost fair value can be measured reliably. or fair value, less estimated residual value of each asset, evenly over its expected useful life as follows: If the aggregate of the acquisition-date fair value of the consideration transferred and the amount recognised for the non-controlling Short leasehold land and buildings The life of the lease interest (and where the business combination is achieved in stages, Freehold buildings and Over 10 to 100 years the acquisition-date fair value of the acquirer’s previously held equity long leasehold land and buildings interest in the acquiree) is lower than the fair value of the assets, liabilities and contingent liabilities and the fair value of any pre-existing Bus vehicles Over 8 to 15 years interest held in the business acquired, the difference is recognised in Plant and equipment Over 3 to 15 years profit and loss. The carrying values of items of property, plant and equipment After initial recognition, goodwill is measured at cost less any are reviewed for impairment when events or changes in accumulated impairment losses. For the purpose of impairment circumstances indicate the carrying value may not be recoverable. testing, goodwill acquired in a business combination is, from the If any such indication exists the assets are written down to their acquisition date, allocated to each of the Group’s cash-generating recoverable amount. units (or groups of cash generating units) that are expected to benefit from the combination, irrespective of whether other assets Non-current assets held for sale or liabilities of the acquiree are assigned to those units. Each unit or Non-current assets classified as held for sale are measured at the group of units to which goodwill is allocated shall represent the lowest lower of carrying amount and fair value less costs to sell. Non-current level within the entity at which the goodwill is monitored for internal assets are classified as held for sale if their carrying amount will be management purposes and not be larger than an operating segment recovered through a sale transaction rather than through continuing before aggregation. use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present Where goodwill forms part of a cash-generating unit and part of condition. Management must be committed to the sale which should the operation within that unit is disposed of, the goodwill associated be expected to qualify for recognition as a completed sale within one with the operation disposed of is included in the carrying amount of year from the date of classification. the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured Business combinations and goodwill based on the relative values of the operation disposed of and the (a) Business combinations since 4 July 2010 portion of the cash-generating unit retained. Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of (b) Business combinations prior to 4 July 2010 the consideration transferred, measured at acquisition date fair value Acquisitions of businesses since 3 July 2004 are accounted for under and the amount of any non-controlling interest in the acquiree. The IFRS 3 Business Combinations using the purchase method. Goodwill choice of measurement of non-controlling interest, either at fair value on acquisition is initially measured at cost being the excess of the or at the proportionate share of the acquiree’s identifiable assets is costs of the business combination over the Group’s interest in the net determined on a transaction by transaction basis. Acquisition costs fair value of the identifiable assets, liabilities and contingent liabilities, incurred are expensed and included in administrative expenses. meeting the conditions for recognition under IFRS 3 at the acquisition date. It is capitalised and carried as an asset on the balance sheet. If an When the Group acquires a business, it assesses the financial assets acquisition gives rise to negative goodwill, this is released immediately and liabilities assumed for appropriate classification and designation to the income statement. in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the In some instances certain fair value accounting adjustments are separation of embedded derivatives in host contracts by the acquiree. required to be made using provisional estimates, based on information available, and amendments are sometimes necessary in the 12 months Any contingent consideration to be transferred by the acquirer will be following the acquisition, with a corresponding adjustment to goodwill. recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with IAS 39 either in profit or loss or in other comprehensive income. If the contingent consideration is classified as equity, it should not be remeasured until it is finally within equity.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

annually, or more frequentlyannually, ifevents ormore orchan accumulated impairmentlosses.Good The Group assesses at each reportin The Groupassessesat Impairment ofassets by mana g ofimpairmenttestin subsequently reversed. Forthepurposes is reco indicate thatthecarryin Followin

that thecarryin and inotherperiodsifeventsorchan the endoffirst financialyearfollowin The carryin a strai income balanceis amortised throu representin then acorrespondin the franchise. If a pension surplusexists atthe start ofthefranchise, makes an estimate oftheasset’srecoverable amount, bein or whenannualimpairmenttestin exists, indication such any If beimpaired. may asset an that indication would havebeen determined, netof The reinstated amount cannotexceed thecarryin was reco the asset’srecoverable amountsince thelastimpairment loss only iftherehasbeen achan estimated. Apreviouslyreco decreased. Ifsuchindicati reco reportin the functionofimpairedasset. Anassessmentismadeateach income statement inthose expense cate Impairment lossesofcontinuin to itsrecoverableamount. amount, the asset isconsideredtobeimpairedandwritten down Where thecarryin of thetimevaluemoneyand risksspecifictotheasset. usin the estimatedfuture cashflows arediscountedtotheir presentvalue or independent ofthosefromother assets unless theassetdoes not its valueinuse.Valueuseisd of theasset’sorcash- asset isreco deficit existsatthe startofthefranchise,acorrespondin Group expectstofunddurin representin that existsatthat point in time,the Group reco the Grouptoassume le Where theconditions relatin Franchise assets basis overitsremainin asset’s revisedcarryin the depreciation char loss beenreco oodwill isallocated totherelated cash- g g apre-taxdiscount ratethatreflects currentmarket assessments nised impairment lossesmaynolon g g ht-line basisoverthe period ofthefranchise. nised immediately intheincome statement and not g g g g date astowhetherthere isanyindication that previously initial reco ement. ement. nised. g g g g value offranchiseassets isreviewed for impairmentat thefairvalueof relatednetpension deficit thatthe a nised, reflectin g g g nised for the asset in prior years.Aftersuchareversal nised fortheassetin overnment valuemaynotberecoverable. g amount of an asset exceeds its recoverable amount ofanassetexceedsitsrecoverable g g g deferredincomebalanceisreco g nition, g g e isadjusted infuture periodstoallocate the amount, less any residualvalue, onasystematic amount,less eneratin useful life. g g value may be impaired.Anyimpairment al responsibility foranypension liability on exists, therecoverable amountis on exists, g enerate cashinflows thatarelar g g g g a costinacquirin g g rant. Theintan g oodwill ismeasuredatcostlessany nised impairmentlossisreversed e in theestimatesusedtodetermine e in the franchise term. Whenapension the tothe awardofafranchise require g g operations arereco etermined foranindividualasset, unit’s fairvalue lesscoststoselland g g foranassetisrequired,theGroup h theincomestatement on g depreciation, had noimpairment g date whether there isan will isreviewed forimpairment, es incircumstancesindicate g g g g eneratin ories consistentwith the award of thefranchise er existor mayhave g g roups ofassets,and ible asset ordeferred g g es in circumstances theri g nises aliability g g unitsmonitored amountthat g nised inthe g g ht tooperate nised, g intan g g thehi ely g , g ible g her and netrealisable andcosts value. Costcomprisesdirectmaterials Stocks offueland en Inventories evenly overitsexpected usefullife ofthreetofiveyears. impairment in value. Amortisation is char as anintan Software, that isnotinte Software Net realisablevaluerep incurred inbrin and effectiveashed Chan balance sheetdate. re-measuredatfairvalueeachinstruments, andsubsequently or otherwisenolon is sold,terminated orexercisedwithoutreplacement or rollover, at thetime reco thatasset orliabilityis results inthe reco immediately intheincomesta portionisreco comprehensive incomeandtheineffective reco associated with interest ratefluctuations. Such derivatives areinitially with fuelpricefl The Groupusesener plus directlyattributable transaction costs. Hed income statement astheyarise. assets areinitially reco Financial assetsare accountedforinaccordancewith IAS 39.Financial Financial assetsandderivatives equivalents asdefined above,netofoutstandin consistofcash andcash statement, cashandequivalents of threemonths orless.Forthepurposeofconsolidated cashflow ori an termdepositswith short and hand, in and bank at Cash andshorttermdepositsin Cash andcashequivalents of sale. income statement. reco is nolon related non-financial asset as describedabove.Ifahed income statement orincludedinthe initial carryin the forecasttransaction occurs,at which pointit is takentothe reco in time,anycumulative reco reco that non-financial asset orliability. For hed comprehensive incomeareincluded losses onthederivative that had previously beenreco or lossesarisin For derivativesthatdonotqualifyforhed item affectsnetprofit orloss. g g g g g g g e accountin nised in the income statement in theperiodwhichhed nised intheincomestatement nised atfair tomarketvalues value byreference for similar nised inother comprehensive incomeistransferred tothe nised inother comprehensive incom nition ofan asset oraliabi es in thefair valueoffinancial instruments thataredesi g er expected tooccur,the netcumulative g ible asset andstatedatcost lessamortisation and any g g fromchan uctuations andinterest derivativesto hed in g g isdiscontinuedwhen the derivative expires or g nition ofanon-financial assetoraliability, then the items to their presentlocation theitemstotheir and condition. g g es of futurecashflows arereco es g er qualifies for hed [[[KSELIEHGSQ g ineerin g y derivatives to hed y derivatives nised atfair value, bein g resents theestimatedsellin g ain orloss on the hed ral to the related hardware,iscapitalised ral tothe g es infair value are taken directly tothe g spares arevalued atthelowerofcost tement. Whenthecashflow hed lity, amounts deferredinequityare the balancesheet comprise cash in theinitial measurement of g g nised, theassociated e accountin g g g ed totheincome statement g e iskeptin equity until e accountin es thatdonotresultin the e itsrisksassociated g g g thetransaction price in bank overdrafts. g g instrument amountofthe g g g pricelesscosts g ain orloss nised inother . Atthatpoint g g g nised inother ed transaction , any g g inal maturity maturity inal g e itsrisks nised g g g ains ains or nated g e g ed 

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Summary of significant accounting policies continued Retirement benefits Interest-bearing loans and borrowings The Group operates a number of pension schemes; both defined Debt is initially stated at the amount of the net proceeds, being benefit and defined contribution. The costs of these are recognised in the fair value of the consideration received after deduction of issue the income statement within operating costs. As discussed below, the costs. Following initial recognition the carrying amount is measured Group has invoked the provisions of IAS 1 Presentation of Financial at amortised cost using the effective interest method. Amortisation Statements and has departed from the requirements of IAS 19 in of liabilities and any gains and losses arising on the repurchase, respect of the Rail Pension Schemes (RPS). settlement or other de-recognition of debt, are recognised directly Non-rail schemes in the income statement. The cost of providing benefits under the defined benefit plans is Assets held under finance leases, which are leases where substantially determined separately for each plan using the projected unit credit all of the risks and rewards of ownership of the asset have passed to method, which attributes entitlement to benefits to the current period the Group, and hire purchase contracts are capitalised in the balance (to determine current service cost) and to the current and prior sheet, with a corresponding liability being recognised, and are periods (to determine the present value of defined benefit obligation) depreciated over the shorter of their useful lives and the lease terms. and is based on actuarial advice. The interest element of the defined benefit cost represents the change in present value of obligations The capital elements of future obligations under leases and hire during the period, and is determined by applying the discount rate purchase contracts are included as liabilities in the balance sheet. to the opening present value of the benefit obligation, taking into The interest element of the rental obligations is charged to the account material changes in the obligation during the year. The income statement over the periods of the leases and hire purchase expected return on plan assets is based on an assessment made at the contracts and represents a constant proportion of the balance of beginning of the year of long term market returns on scheme assets, capital repayments outstanding. adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year. Leases where a significant proportion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. The Group has applied the option under IAS 19 to recognise actuarial Rentals payable under operating leases, and the amortisation of lease gains and losses in the statement of comprehensive income in the incentives and initial direct costs in securing leases, are charged to the period in which they occur. income statement on a straight-line basis over the lease term. The difference between the expected return on plan assets and the Provisions interest cost, along with the current service cost, is recognised in the Provisions are recognised when the Group has a present legal or income statement within operating costs. constructive obligation as a result of past events, it is probable that The defined benefit pension asset or liability in the balance sheet an outflow of resources will be required to settle the obligation, and comprises the total for each plan of the present value of the defined a reliable estimate of the amount can be made. If the effect is material, benefit obligation (using a discount rate based on high quality expected future cash flows are discounted using a current pre-tax corporate bonds), less any past service cost not yet recognised and rate that reflects, where appropriate, the risks specific to the liability. less the fair value of plan assets out of which the obligations are to Where the Group expects some or all of a provision to be be settled directly. Fair value is based on market price information reimbursed, the reimbursement is recognised as a separate asset and in the case of quoted securities is the published bid price. but only when recovery is virtually certain. The expense relating Past service costs are recognised in the income statement on a to any provision is presented in the income statement net of any straight-line basis over the vesting period or immediately if the reimbursement. Where discounting is used, the increase in the benefits have vested. When a settlement (eliminating all obligations provision due to unwinding the discount is recognised as a for benefits already accrued) or a curtailment (reducing future finance cost. obligations as a result of a material reduction in the scheme As part of our regular review of reporting practices and policies, we membership or a reduction in future entitlement) occurs, the have reclassified franchise commitments relating to dilapidations as a obligation and related plan assets are remeasured using current provision, as the Group has determined that there is no longer a actuarial assumptions and the resultant gain or loss recognised in sufficient degree of certainty to classify all of this liability as an accrual. the income statement during the period in which the settlement Comparatives have been restated and an additional balance sheet or curtailment occurs. presented as at 28 June 2009 to show the effect of these changes. Contributions payable under defined contribution schemes are The impact of this reclassification in the balance sheet is set out in charged to operating costs in the income statement as they fall due. notes 20 and 25. There is no effect on amounts reported in the income statement. Treasury shares Re-acquired shares in the Group, which remain uncancelled, are deducted from equity. Consideration paid and the associated costs are also recognised in shareholders’ funds as a separate reserve for own shares. Any gain or loss on the purchase, sale, issue or cancellation of the Group’s shares is transferred from the reserve for own shares to revenue reserves.

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for awardswhere vestin position andcashflow from IAS19soas topresentfairly No costisreco not met. conditions within thecontrolof the Grouportheemployeeare period from The costofoptions isreco service (‘non-vestin (‘market conditions’); toconditions followin equity-settled optionsconditions are linkedtosomeorallofthe an external valuation usin to thefairvalueat thedateat which theyare The costofoptions Share-based payment transactions benefit fromdurin represents thedeficitorsurplusthat theGroupexpectstofundor offset byafranchise adjustmentsothatthe netliability orasset with other defined benefitschemes intheGroup, althou employer and40% employee.Aliabilityorassetisreco shared costscheme, which means that costsareformallyshared60% to thepensionschemes operatedbymostbusinesses,theRPSisa relevant franchise. Incontrastof theseschemeswhilstitoperatesthe partitioned intosection benefit scheme which covers the whole ofthe UKrailindustry.Thisis Our train operatin Rail schemes vestin at each reportin correspondin relevant employees becomefully as describedabove.Thisinclud subject toamarket ornon-vestin of optionsthat will ultimatelyve other performance Where conditionsan equity-settled aresatisfied. not themarketor non-vestin condition, which are treated asvestin g hasexpired andtheDirectors’ bestestimateofthenumber g : the priceofthesharesTheGo-Ahead Group plc g g rant tovestin increase in equity.Thecumulativeexpense reco increase g g nised forawardsthatdono datereflectstheextent to which the periodto g g g thefranchiseterm.Th companiesparticipate in theRPS,adefined g conditions’); and toearnin ranted to employees ismeasured byreference ranted toemployees inrespectofitsobli s andtheGroup is g isconditional upon amarket ornon-vestin g an appropriate pricin g g nised in theincomestatement overthe nised date,bein g condition issatisfied, providedthatall es anyawardwherenon-vestin st or, intheca g entitled totheaward,witha theGroup’sfinancial performance, condition, betreated asvestin not relatedtoperformanceor g irrespective ofwhether or g thedateon which the g is representsadeparture responsible forthefundin ations fortheRPS. t ultimatelyvestexcept g se ofaninstrument ranted, determinedby g g s persharecriteria. model.In g g nised inline h thisis g rantin g g

nised g

g

g g

in correlation withtheunderlyin is reco Tax relatin income taxassetto beutilised. taxable profitwill be available toallow all orpartofthedeferred no lon and reducedtotheextentthatitis ateach balancesheetdate amount ofdeferredtaxassetsisreviewed or partofthedeferredincometaxassettobeutilised. Thecarryin foreseeable future andtaxable profit willbeavailable toallow all probable thatthe temporary differenceswillbereversed inthe Deferred taxassets areonlyreco • • differences, except: in thefinancial statements. Itis assets andliabilities fortaxation purposes andtheircarryin differences atthe balancesheetdate betweenthe taxbaseof Deferred taxisprovided,usin enacted atthebalancesheet date. on taxratesandlawsthathave been enactedorsubstantively when therelated asset isrealisedor on anundiscountedbasisat tothetaxationauthorities paid fromor expected toberecovered Current tax assets andliabilities are measured attheamount Taxation is reco of cancellation, andanycostnotyet reco award iscancelled, itistreatedas ifithadvestedonthe date reco   in theforeseeable future. probable thatthe temporary differenceswillnot reverse be controlledanditis of thetemporarydifferencescan investments insubsidiaries wherethe timin in respectoftaxabletemporary differencesassociated with profit orloss;and the transaction, affects neither theaccountin transaction thatisnotabusiness combination and, at the timeof reco initial the on g nised intheincomestatement. g g nised inother comprehensiveincomeordirectlyinequity nised immediately. g toitems reco [[[KSELIEHGSQ g nition of g nised outsidetheincomestatement thetaxratesthatareexpectedtoapply g provided foronalltemporary the liabilitymethod,on temporary g g oodwill orofanassetliabilityina transaction.Otherwise, taxis g nised totheextentnised thatitis the liability issettled,based g nised fortheaward g er probable thatsufficient g ofthereversal g profitnortaxable g amounts g



*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

2. Summary of significant accounting policies continued New standards and interpretations not applied The IASB and IFRIC have issued the following standards and interpretations with an effective date after the date of these financial statements:

Effective date International Accounting Standards (IAS/IFRSs) (periods beginning on or after) IAS 24 Related Party Disclosures (revised) 1 January 2011 Improvements to IFRSs (May 2010) 1 January 2011 IFRS 1 First-time Adoption of International Financial Reporting Standards (amendment) – Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters 1 July 2011 IFRS 7 Amendment – Transfers of Financial Assets 1 July 2011 IAS 12 Income Taxes (amendment) – Deferred Taxes: recovery of Underlying Assets 1 January 2012 IFRS 9 Financial Instruments: Classification and Measurement 1 January 2013 IFRS 10 Consolidated Financial Statements 1 January 2013 IFRS 11 Joint Arrangements 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 IFRS 13 Fair Value Measurements 1 January 2013 IAS 19 Amendment – Employee Benefits 1 January 2013

International Financial Reporting Interpretation Committee (IFRIC) IFRIC 14 Prepayments of a minimum funding requirement (amendment) 1 January 2011 With the exception of the amendment to IAS 19 Employee Benefits, which will reduce the credit in the income statement for returns on scheme assets, the Directors do not anticipate adoption of these standards and interpretations will have a material impact on the Group’s financial statements. The effective dates stated above are those given in the original IASB/IFRIC standards and interpretations. As the Group prepares its financial statements in accordance with IFRS as adopted by the European Union (EU), the application of new standards and interpretations will be subject to their having been endorsed for use in the EU via the EU endorsement mechanism. In the majority of cases this will result in an effective date consistent with that given in the original standard or interpretation.

3. Segmental analysis In prior years the Group has been organised into three core divisions, Bus, Rail and Aviation Service, which formed the basis for the Group’s reportable segments. Following the sale of residual ground handling activities at Heathrow Terminal I and Meteor Parking this year, management has reviewed the basis for segment reporting and concluded that there should be four reportable segments, Deregulated Bus, Regulated Bus, Rail and Go-Ahead North America. Comparative disclosures have been restated to reflect the new basis of segmentation. Operating segments within those reportable divisions are combined on the basis of their long term characteristics and similar nature of their products and services, as follows; The Deregulated Bus division comprises bus operations outside of London. The Regulated Bus division comprises bus operations in London. The Rail operation, Govia, is 65% owned by Go-Ahead and 35% by Keolis and comprises three rail franchises: Southern, Southeastern and London Midland. The Go-Ahead North America division comprises a 50% investment in a US school bus operation. The Group’s share of the profit of this division is currently £nil, and it is therefore not included within the tables below. The information reported to the Group Chief Executive in his capacity as Chief Operating Decision Maker does not include an analysis of assets and liabilities and accordingly IFRS 8 does not require this information to be presented. Segment performance is evaluated based on operating profit or loss excluding amortisation of goodwill and intangible assets and exceptional items. Transfer prices between operating segments are on an arm’s length basis similar to transactions with third parties. The following tables present information regarding the Group’s reportable segments for the year ended 2 July 2011 and the year ended 3 July 2010. Information relating to prior periods has been restated to reflect those elements of the other services division that are classified as discontinued operations and to report separately our regulated bus operations in London.

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xetoa tm –(.)(.)04(.) . 1.5 88.7 2.6 3.8 49.2 3.9 (2.3) – 11.1 54.1 84.8 0.4 38.1 18.4 2.6 (2.7) 11.9 35.7 2.6 – 49.2 within (included depreciation Exceptional 2,304.3 (2.7) Depreciation 26.2 11.7 7.3 Intan – – Acquisitions 2.6 – 54.1 Additions 24.0 2,297.0 Capital expenditure: Other segmentinformation 1,654.6 – 642.4 351.5 Profit fortheyear 290.9 Tax expense Profit beforetaxandnon-controllinginterests Net finance costs Group operatingprofit(afteramortisation and Exceptional items Goodwill and intan Segment profit–Groupoperating Operatin Group revenue Inter-se Se Year ended2July 2011

g etrvne 0. 5. 6. ,5. ,2. 772,332.9 7.7 2,325.2 1,659.0 666.2 357.4 308.8 ment revenue xetoa tm) 3. 966. 07123 . 106.2 3.9 102.3 40.7 exceptional items) 61.6 29.6 32.0 exceptional items) items) profit (beforeamortisation andexceptional exceptional items) g befxdast 3402361450 5.0 – 5.0 1.4 3.6 0.2 3.4 ible fixedassets g etrvne 1.)(.)(38 44 2.) 04 (28.6) (0.4) (28.2) (4.4) (23.8) (5.9) (17.9) ment revenue g costs(excludin g beaotsto (.)(.)(.)(.)(05 –(10.5) – (10.5) (7.7) (2.8) (1.1) (1.7) ible amortisation g amortisationand

Dere Dere 272 381 553 1666 2119 72 (2,189.1) (2,181.9)(7.2) (1,606.6) (575.3) (318.1) (257.2) g g ulated ulated 373. 714. 1. . 115.2 115.10.1 48.0 67.1 33.4 33.7 Bus Bus £m £m . . . 3.0 3.0– – 3.0 3.0 – Re Re g g ulated ulated Bus Bus £m £m Total Total Bus Bus £m £m [[[KSELIEHGSQ Rail Rail £m £m operations operations continuin continuin 1.)–(17.5) (17.5) – 504479.4 75.0 4.4 Total Total 98 . (9.3) (9.8) 0.5 £m £m g g

discontinued discontinued operations operations (note 8) Total Total £m £m operations operations Total Total £m £m 

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

3. Segmental analysis continued Year ended 3 July 2010 Total Total discontinued Deregulated Regulated Total continuing operations Total Bus Bus bus Rail operations (note 8) operations £m £m £m £m £m £m £m Segment revenue 289.2 361.7 650.9 1,546.0 2,196.9 136.2 2,333.1 Inter-segment revenue (15.8) (5.6) (21.4) (8.2) (29.6) (3.4) (33.0) Group revenue 273.4 356.1 629.5 1,537.8 2,167.3 132.8 2,300.1 Operating costs (excluding amortisation and exceptional items) (246.2) (319.6) (565.8) (1,500.5) (2,066.3) (128.3) (2,194.6) Segment profit – Group operating profit (before amortisation and exceptional items) 27.2 36.5 63.7 37.3 101.0 4.5 105.5

Goodwill and intangible amortisation (1.0) (1.3) (2.3) (8.6) (10.9) (0.1) (11.0) Exceptional items (0.9) (3.4) (4.3) (6.7) (11.0) (35.8) (46.8) Group operating profit/(loss) (after amortisation and exceptional items) 25.3 31.8 57.1 22.0 79.1 (31.4) 47.7 Net finance costs (13.3) (0.1) (13.4) Profit/(loss) before tax and non-controlling interests 65.8 (31.5) 34.3 Tax expense (14.5) 3.7 (10.8) Profit/(loss) for the year 51.3 (27.8) 23.5

Total Total Deregulated Regulated Total continuing discontinued Total Bus Bus bus Rail operations operations operations £m £m £m £m £m £m £m Other segment information Capital expenditure: Additions 21.7 17.9 39.6 18.2 57.8 0.558.3 Acquisitions 10.6 4.7 15.3 – 15.3 –15.3 Intangible fixed assets 23.9 0.3 24.2 1.9 26.1 – 26.1 Depreciation 23.3 12.2 35.5 14.4 49.9 2.252.1 Exceptional depreciation – 2.6 2.6 – 2.6 – 2.6 Impairment charges ––––– 16.216.2 Provision for onerous contracts – 0.9 0.9 – 0.9 6.0 6.9 At 2 July 2011, there were non-current assets of £4.1m (2010: £0.7m) relating to US operations, being made up entirely of equity accounted investments in Go-Ahead North America, a 50:50 joint venture with Cook Illinois which commenced trading in August 2010. For the year ended 2 July 2011, segment revenue for this venture was £2.3m and segment profit was £nil. During the year ended 2 July 2011, revenue from external customers outside the United Kingdom was £2.3m, and related entirely to the Go-Ahead North America joint venture.

4. Group revenue Restated 2011 2010 £m £m Rendering of services 2,057.7 1,960.9 Rental income 6.3 7.0 Franchise subsidy receipts 233.0 199.4 Group revenue from continuing operations 2,297.0 2,167.3 Group revenue from discontinued operations (note 8) 7.3 132.8 Total group revenue 2,304.3 2,300.1

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Other operatin Operatin Total leaseandsubl Total operatin Total leaseandsu – otherrail Total ener – costofsiteener – railelectricity (EC4T) – raildieselfuel – busfuel Durin Ener Trade receivables not recovered – otherservices – taxation services – auditofthe financial statements Auditors’ remuneration Total depreciation expense – leasedassets – ownedassets Depreciation ofproperty,plant Other operatin – railaccesschar Total operatin Staff costs(note6) Operatingcosts(excludingamortisation andexceptional items) 5. In addition aspartofthecost acquisit toauditfeesdetailed above, (2010:£0.2m) ofnon-auditfeeswerecapitalised £nil and audit ofsubsidiaries’financialstatements£0.5m (2010:£0.5m). financial statementsof£0.1m(2010: £0.1m) Includin Thetotalleaseandsublease paymentsreco * Goodwill and intan Exceptional items(note7) Operatin Costs expensedrelatin Gain/(loss) ondisposal of Government – railrollin – othernon rail – nonrailproperties – busvehicles ** The totalleaseandsublease paymentsreco other railleases. g y costs g the year, £0.2m (2010: £0.3m) was alsopaidto other ‘Bi theyear,£0.2m(2010: £0.3m)was g discontinued operations, thefeerelatin g g costs on discontinued operations (note8) costsondiscontinued costsfrom continuin g g y costs stock g g g rants g g costs lease costs income g es blease payments recoblease payments g g y ease paymentsreco ible amortisation g to franchise biddin tofranchise property, plantandequipment andequipment g operations g g nised asanexpense(excludin nised as an expensearemadeup ofminimum lease payments of£762.4mnetsublease payments of£20.8m relatin g g nised asanexpense** nised asanexpense (excludin g activities g to the audit of the financial statements canbeanalysed tothe audit between auditofthe ofthefinancial Company’s g railaccesschar g 4’accountin g es) are madeupofminimumlease payments of£378.2mnetsublease paymentsof £20.8m relatin g railaccesschar g firmsforavariety ofservices. g es)* [[[KSELIEHGSQ

g tootherrailleases. 2,181.9 2,189.1 741.6 357.4 471.3 150.8 384.2 788.9 284.5 (21.0) 57.0 11.2 68.3 64.7 49.2 15.4 33.8 10.5 14.2 (0.3) (2.7) (1.5) ions durin ions 2011 0.8 6.6 2.5 0.8 0.1 0.1 0.6 7.2 0.1 1.6 £m

g the year. year. the 2,066.3 2,194.6 Restated 773.6 376.9 329.1 167.2 396.7 776.9 128.3 298.0 (32.1) g 63.5 11.1 78.0 71.2 49.9 15.7 34.2 11.0 46.8 13.0 2010 (0.3) to 0.1 6.9 1.1 0.8 0.1 0.2 0.5 0.2 2.2 £m  –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

6. Staff costs Year ended 2 July 2011 Continuing Discontinued Total operations operations operations £m £m £m Wages and salaries 686.2 3.9 690.1 Social security costs 59.4 0.4 59.8 Other pension costs 42.9 0.1 43.0 Share based payments charge 0.4 – 0.4 Total staff costs 788.9 4.4 793.3 Year ended 3 July 2010 Restated Restated Continuing Discontinued Total operations operations operations £m £m £m Wages and salaries 676.7 73.3 750.0 Social security costs 58.7 6.8 65.5 Other pension costs 40.9 1.1 42.0 Share based payments charge 0.6 0.1 0.7 Total staff costs 776.9 81.3 858.2 The average monthly number of employees during the year, including Directors, was:

2011 2010 No. No. Administration and supervision 2,289 2,518 Maintenance and engineering 2,226 2,192 Operations 17,686 17,860 22,201 22,570 The information required by Schedule 5 of the Large and Medium sized Companies and Groups (Accounts and Reports) Regulations 2008 is provided in the Directors’ Remuneration Report. Sharesave Scheme The Group previously operated an HM Revenue & Customs (‘HMRC’) approved savings-related share option scheme, known as The Go-Ahead Group plc Savings-Related Share Option Scheme 2003 (the ‘Sharesave Scheme’). The Sharesave Scheme was open to all Group employees (including Executive Directors) who had completed at least six months’ service with a Group company at the date they were invited to participate in the scheme. No invitations have been made during the current or prior year and no accounts remain outstanding. The expense recognised for these schemes during the year to 2 July 2011 was £nil (2010: £0.5m).

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dividend shares),althou The SIPpermitstheCompanyto make fourdifferenttypesof date theyareinvited toparticipateintheplan. dividend yield,fu terms andconditions upon The fairvalueofequity-settledshare options conditions upon which the options were Directors andcertainothersenior The Executive Directors participate in TheGo-Ahead GroupLon Long termincentiveplans the termsofscheme,certaintax advanta qualifyin is opentoallGroup employees(includin The Companyoperates anHMRC approvedshare incentiveplan,known asThe Share incentiveplans Exercisable attheendofyear Exercised durin Outstandin Vested durin The followin companies between Correlation Future shareprice volatility FTSE Mid-250 indexcomparator companies between Correlation Future shareprice volatility Transport sectorcomparator Future shareprice volatility The Go-Ahead Group There werenooptions outstandin was £13.18. theperiod.The wei There werenooptions exercisedin Forfeited durin Granted durin Outstandin The followin None oftheoptionswereexercisable at the yearend andthewei Forfeited durin Granted durin Outstandin The wei The fairvalu The expensereco further Remuneration detailsoftheLTIP.Report for met overaperiodofthreeyears.RefertotheDirectors’ g g employees toapplybetween£10and hted avera g g g attheendofyear atthebe atthebe e ofLTIPoptions g g g tableillustrates the number(No.)andwei table illustrates the numberof share optionsfortheLTIP: theyear g g g g theyear theyear g theyear theyear theyear ture riskfreeinterest rate,forfeiture rateandoption life. g nised forthe LTIP durin g e fairvalueof options g g innin innin g h theCompany ofpartnership has,sofar,madeawards which the options were g g ofthe year ofthe year g ranted is estimated as at the date of ranted isestimatedasatthedate g employees to be awarded shares in the Companyconditionalemployees tobeawardedshares on specified performancecondition at the end of the year. The exercise price for options outstandin end ofthe year. Theexercise priceforoptions atthe g g Executive Directors) whohavecompletedat least sixmonths’servicewith a Groupcompany atthe ranted. The inputs to the model used for the options ranted. Theinputstothe modelusedforthe g g theyearto2July2011 was£0.4m(2010:£0.2m). ranted durin g g es areavailabletotheCompany andemployees. ranted is estimated as at the date of ranted isestimatedasatthedateof £125 per month in acquirin £125permonthin g ranted. Thekey assumptions inputintothemodelarefuture sharepricevolatility, future g g g hted avera hted avera theyear was £11.83(2010:£14.01). awards toemployees(freeshares,partn g g Term Incentive Plan 2005 (the LTIP). The LTIP provides for Executive 2005 TermIncentive (theLTIP).TheLTIPprovidesfor Plan Executive hted avera g g g e exercise prices (WAEP) of shareoptions fortheSAYE: e exerciseprices(WAEP)of rant usin e share price at the date of exercise for the options exercised in2010 e share priceatthedateofexerciseforoptions exercised

g sharesinthe Companyat theprevailin g g aMonte Carlomodel,takin e exercisee priceoftheoptions is£nil. shares only. Underthese awards,theCompany invites Go-Ahead Group plcShareIncen Go-Ahead Group g 3813 19.14 (328,133) 2,3 19.14 328,133 rant usin No. –– –– –– g aBlack-Scholes model,takin [[[KSELIEHGSQ g ranted intheyearto2July 2011were: g at the endof2010was £19.14. ership shares,matchin WAEP 2011 g into accountthe terms and £

35.0 –52.0 tive Plan (the SIP).The g % perannum (204,157) (519,763) 15.10 market price.Under 194,337 166,240 232,254 328,133 19.14 861,595 16.63 (13,699) 14.67 20.0 40.0 55.0 38.0 g 2011 2011 No. No. intoaccount the g – – shares and shares

35.0 –51.0 s bein % perannum 232,254 132,017 124,751 (19,195) (5,319) SIP WAEP g 20.0 40.0 60.0 37.0 2010 2010 2010

No.  £

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

6. Staff costs continued Directors’ discretionary deferred share awards On 29 October 2009 the Company awarded a total of 6,996 ordinary shares to Directors of the Group. The stock was at no cost to the Directors and restrictions limit the sale or transfer of these shares until they vest, which occurs at the end of a three year period. The shares are held in a trust until they vest. The expense recognised for the Directors’ discretionary deferred share awards during the year to 2 July 2011 was £nil (2010: £nil).

2011 2010 2011 WAEP 2010 WAEP No £ No £ Outstanding restricted stock at the beginning of the year 6,996 14.29 – – Granted during the year –– 6,996 14.29 Forfeited during the year (3,498) 14.29 – – Vested during the year –– – – Outstanding restricted stock at the end of the year 3,498 14.29 6,996 14.29 The weighted average fair value of options granted during 2010 was £14.29. There were no options exercised in the year. None of the options were exercisable at the year end. The exercise price of options outstanding at the year end was £14.29 (2010: £nil).

7. Exceptional items Restated 2011 2010 £m £m Continuing operations Bus and rail related items: Rail reorganisation costs 0.4 (6.7) London bus accelerated depreciation (3.0) (2.6) Bus reorganisation costs – (0.8) Onerous bus leases 0.3 (0.9) Total exceptional items on continuing operations (2.3) (11.0)

Discontinued operations Profit/(loss) on sale: Agreed proceeds 11.2 14.8 Less net assets sold (5.7) (17.8) Profit/(loss) on sale 5.5 (3.0) Less contingent sale costs (3.9) (10.1) Net profit/(loss) on sale 1.6 (13.1) Pre-sale reorganisation costs 2.2 (2.6) Onerous contracts – (6.1) Pension scheme curtailment gain – 2.2 Pre-sale impairments – (16.2) Total exceptional items on discontinued operations 3.8 (35.8)

Total exceptional items 1.5 (46.8)

Consisting of: Non-cash items (9.7) (50.6) Cash proceeds 11.2 14.8 1.5 (35.8) Other cash items – (11.0) Total 1.5 (46.8)

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and provisionsof £10.1m. subsequently soldof£2.6m, pension schemecurtailment handlin The discontinuedexceptionalnet profitonthe saleof incomeresidual elementsexpense: £35.8m)consistsof of£3.8m(2010 of of £0.3m(2010expense:£0.9m),andtherelease ofrailreor The discontinued exceptional items of £35.8m consist of a net loss on sale of £13.1m,pre-salereor The discontinuedexceptional itemsof£35.8mconsist ofanetlossonsale out in2011. The results of the discontinued operations fortheyearsThe resultsofthe ended2July2011discontinued operations and3July2010 areasfollows: In the prioryear,themajority ofthe Group’s aviation servicesdivision £6.7m ofrailrestructurin Exceptional itemsoncontinuin of £11.0m. Total exceptional items intheyear were£46.8m,consistin Year ended3July 2010 related tooperations sold Profit/(loss) from discontinued operations beforetaxationProfit/(loss) fromdiscontinued Net finance costs Operatin Exceptional items Goodwill and intan Operatin Revenue The disposalofour aviation services division wascompleted durin 8. Discontinued operations articulated London buseswhichare bein Exceptional itemsoncontinuin Year ended2July 2011 ru eeu ndsotne prtos 7.3 4.4 Group revenueondiscontinuedoperations Franchise subsidyreceipts Rental income Renderin Revenue note 11. The losspershareisattributableto equity hold – basicanddiluted Profit/(loss) persharefromdiscontinuedoperations Profit/(loss) forthe yearfromdiscontinuedoperations Taxation Operatin and the a g operations andMeteor Parkin g g g g g ofservices profit/(loss) (afteramor profit(before amortisation andexceptionalitems) costs(excludin reed sale oftheresidual g ible amortisation has beenclassifiedasdiscontinued. g g costs, and £2.6m of accelerateddepreciationinrespect thearticulatedLondon costs,and£2.6m buseswhichare bein in thepriorperiod. amortisation andexceptionalitems) onerous contract provisionsof£6.1m,pre-sal onerous contract g ain of £2.2m. The loss on sale represents sales proceeds of £14.8m, less net book value of assets sold of£17.8m less netbookvalueofassetssold £14.8m, ain of sales proceedsof £2.2m. Thelossonsalerepresents g g operations for the period were £2.3m (2010: £11.0m), consistin operations fortheperiodwere£2.3m(2010:£11.0m), operations fortheyearwere£11.0m. Busandrailrelated exceptionalcosts totalled£11.0m,includin tisation andexceptionalitems) g round handlin g operations and adjustment to the provisions in respect of thepre-salereor g phased out over the next few months of £3.0m (2010: £2.6m), the release of onerous bus leases phasedoutthe release overthenext ofonerous £3.0m(2010:£2.6m), fewmonths bus of g round handlin ers of the parent and calculated asdescri ers oftheparent g activities atHeathrow Terminal Ifora combinedconsideration ofour of£11.2m.All g of sales proceeds of £14.8m, non-cash items of £50.6m, and other cash items non-cash £14.8m, itemsof £50.6m,andothercash ofsalesproceeds g g and car and anisation accruals of £0.4m (2010 expense:£6.7m). £0.4m anisation accruals of g the year ended 2 July 2011with thesale ofourMeteor the yearended2 Parkin g o operations were soldfor£14.8mconsideration. e impairmentsoftheMeteorParkin bed onthebasis [[[KSELIEHGSQ g ofaccelerated depreciation in respect of g anisation costs which related tooperationsanisation costswhichrelated of thenumbersh

g businessof£16.2manda g anisation costs which anisation costs 10.3p (7.2) 2011 2011 3.9 0.1 3.9 3.8 7.3 0.5 7.3 £m £m – – – – ares disclosedin the g g phased operations g g

round Restated Restated (64.7p) (128.3) 132.8 132.8 132.5 (31.5) (31.4) (35.8) (27.8) 2010 2010 (0.1) (0.1) 4.5 0.3 3.7 £m £m  –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

8. Discontinued operations continued Operating costs Restated 2011 2010 £m £m Staff costs 4.4 81.3 Total lease and sublease payments recognised as an expense* 0.3 11.8 Depreciation of property, plant and equipment – owned assets – 2.0 Depreciation of property, plant and equipment – leased assets – 0.1 Auditors’ remuneration – audit of the financial statements – 0.1 Trade receivables not recovered – 0.3 Loss on disposal of property, plant and equipment – 0.1 Other operating costs 2.5 32.6 Operating costs on discontinued operations 7.2 128.3 * The entire balance comprises minimum lease payments. The cashflows attributable to the discontinued operations are as follows:

2011 2010 £m £m Operating cashflows 0.7 1.5 Investing cashflows – 15.0 Financing cashflows 0.1 (0.4) Net cashflow 0.8 16.1 The net assets disposed of and consideration received on the sales of Meteor Parking operations and the residual ground handling activities at Heathrow Terminal 1 were as follows:

2011 £m Net assets disposed of: Tangible fixed assets 2.7 Intangible assets 2.2 Inventories 0.1 Receivables 6.2 Cash at bank 0.3 Payables falling due within one year (5.3) Deferred taxation – Provisions (0.5) 5.7 Consideration received: Cash 11.2 Total consideration 11.2

Profit/(loss) on disposal 5.5

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Other interestpayable Interest payableon £200mSterlin Interest payable onbank Finance revenue Other interestreceivable Bank interestreceivable onbankdeposits Finance revenueandcosts 9. Net liabilities held indisposal Total liabilities held indisposal liability Taxation Trade andother payables Liabilities: Total assetsheldindisposal Taxation asset Trade andotherreceivables Cash Inventories Current assets: Deferred taxasset Non-current assets: Assets: At 2July2011,net assetsheldindisposal oa a nldn icniudoeain 9.3 Includestheone-offimpact ofreleasin * Tax oncontinuin Tax ondiscontinuedoperations Total taxincludingdiscontinuedoperations Impact ofopenin Previously unreco Deferred taxrelatin taxof previous years Adjustments inrespect ofcurrent Current taxchar Taxrecognised intheincomestatementandequity a. 10. Taxation Interest payableunderfi Ineffectiveness on financial instruments Finance costs g g g g e operations deferredtaxra nised deferredtaxofapriorperiod g to ori nance leasesandhi loansand overdrafts g ination and reversaloftemporary differences at26%(2010:28%)* g roups heldforsale g g a £7.8mdeferred taxliability totheincome statement.Thisrelates tothea roups heldforsale g roups heldforsale te reduction g 7.5yearbond g roups held forsalewereasfollows; re purchase contracts g reement oftaxefficientfinancin [[[KSELIEHGSQ g by HMRC.

(11.1) (19.0) 21.4 23.1 (1.7) (4.9) (4.4) (8.0) (2.5) (0.5) (0.5) 2011 2011 2011 1.5 0.1 1.4 0.3 9.8 £m £m £m – – – – – – – – – – – – –

Restated (17.9) (17.9) (14.9) 10.8 16.3 10.2 16.1 14.5 2010 2010 2010 (7.7) (7.8) (3.0) (5.5) (0.8) (2.4) (3.7) (0.9) 0.2 6.9 2.4 4.0 0.3 0.2 3.3 3.3 1.6 0.3 1.3  £m £m £m – – –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

10. Taxation continued Tax relating to items charged or credited outside of profit or loss 2011 2010 £m £m Tax on actuarial losses on defined benefit pension plans 3.4 (6.3) Corporation tax on IAS 39 asset 2.5 5.3 Deferred tax on IAS 39 asset 2.3 0.2 Impact of opening deferred tax rate reduction 1.9 – Tax reported outside of profit or loss 10.1 (0.8) b. Reconciliation A reconciliation of income tax applicable to accounting profit before tax and exceptional items at the statutory tax rate to tax at the Group’s effective tax rate for the years ended 2 July 2011 and 3 July 2010 is as follows: Year ended 2 July 2011 Pre-exceptional One-off tax, excluding deferred tax rate discontinued change and tax on operations Pre-exceptional exceptional items Total £m £m £m £m Profit on ordinary activities before taxation from continuing operations 87.1 87.1 (2.3) 84.8 Profit on ordinary activities before taxation from discontinued operations – 0.1 3.8 3.9 Accounting profit on ordinary activities before taxation 87.1 87.2 1.5 88.7

At United Kingdom tax rate of 27.5% 24.0 24.0 0.4 24.4 Adjustments in respect of current tax of previous years (0.5) (0.5) (1.2) (1.7) Expenditure not allowable for tax purposes 1.3 1.3 – 1.3 Previously unrecognised deferred tax of a prior period 0.3 0.3 – 0.3 Losses brought forward 0.1 0.1 – 0.1 Differences relating to tax efficient financing (2.4) (2.4) – (2.4) Expenses not allowable on sale of aviation business – – (0.5) (0.5) Tax efficient financing agreed by HMRC – – (7.8) (7.8) Deferred tax due to rate change – – (4.4) (4.4) Total tax reported in consolidated income statement 22.8 22.8 (13.5) 9.3 Effective tax rate 26.2% 26.1% 10.5% Year ended 3 July 2010 Pre-exceptional excluding Exceptional tax and discontinued tax on exceptional Restated operations Pre-exceptional items Total £m £m £m £m Profit on ordinary activities before taxation from continuing operations 76.8 76.8 (11.0) 65.8 Profit on ordinary activities before taxation from discontinued operations – 4.3 (35.8) (31.5) Accounting profit on ordinary activities before taxation 76.8 81.1 (46.8) 34.3

At United Kingdom tax rate of 28% 21.5 22.7 (13.1) 9.6 Adjustments in respect of current tax of previous years 0.2 0.2 – 0.2 Expenditure not allowable for tax purposes 0.8 0.8 – 0.8 Goodwill amortisation and impairment charges 0.4 0.4 4.5 4.9 Differences relating to tax efficient financing (2.9) (2.9) – (2.9) Expenses not allowable on sale of aviation business – – 0.8 0.8 Release of deferred tax on rolled over gains arising on sale of aviation business – – (2.6) (2.6) Total tax reported in consolidated income statement 20.0 21.2 (10.4) 10.8 Effective tax rate 26.0% 26.1% 31.5%

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

to 18%andfrom10%8%witheffect from1April2012. The Group’sfuture taxchar a further£1.5mto£18.5m. been reducedby eerdtxlaiiyicue nblneset (50.9) Deferred taxcreditoncontinuin discontinued operations Deferred taxexpense/(credit)on Adjustments inrespect ofopenin Adjustments inrespect ofprioryears Other temporary differences Retirement benefit obli Tax losses Accelerated capital allowances The deferredtaxincludedintheGroup incomestatement isasfollows: Deferred taxasset included inbalancesheet held fordisposal(note8) Included withinnet assets Total deferredtax asset Retirement benefit obli Deferred taxasset sheet Deferred taxliability includedinbalance held fordisposal(note8) Included withinnet assets Accelerated capital allowances Deferred taxliability balancesheet isasfollows: The deferredtaxincludedinthe c. Deferred tax 2 July2011theGroup’sdeferredtax has announced its intention tofurther reducetheUKcorporationtax rateto24%by1April2014.Ifthisreduction hadbeen en A reduction inthe UKcorporationtax ratefrom28%to26%with effect from1April2011wasenacteddurin Other temporary differences Intan Total deferredtaxcredit Revaluation ofland andbuildin Total deferredtaxliability g ible assets g g ations ations g e will also be affected by the Government’se willalsobeaffectedby intentio g s g g operations deferredtaxratereduction liability wouldhavebeenreduced by a further£3.9mto£47.0mandthedeferredtaxasset n toreducethemainrateofcapitalallowance from20% [[[KSELIEHGSQ

g the period. The Government the period.TheGovernment (23.3) (15.3) (12.1) (22.6) (50.9) 20.0 20.0 20.0 (3.5) (4.5) (4.9) (3.9) (1.5) (7.9) 2011 2011 0.8 3.2 0.3 0.1 £m £m – –

acted by acted would have Restated (65.6) (28.7) (24.3) (62.3) 27.1 27.1 27.1 2010 2010 (1.8) (4.6) (6.0) (0.9) (3.7) (4.7) (5.5) (5.5) 1.4 3.3  £m £m – – – –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

11. Earnings per share Basic and diluted earnings per share Restated 2011 2010 Net profit on total operations attributable to equity holders of the parent (£m) 67.4 17.2 Consisting of: Adjusted earnings on continuing operations attributable to equity holders of the parent (£m) 58.0 54.5 Exceptional items after taxation and non-controlling interests (£m) 10.7 (3.6) Amortisation after taxation and non-controlling interests (£m) (5.7) (5.9) Basic and diluted earnings on continuing operations attributable to equity holders of the parent (£m) 63.0 45.0 Profit/(loss) on discontinued operations attributable to equity holders of the parent (£m) 4.4 (27.8) Basic and diluted earnings on total operations attributable to equity holders of the parent (£m) 67.4 17.2

Weighted average shares in issue (‘000) 42,913 42,938

Earnings per share: Adjusted earnings per share from continuing operations (pence per share) 135.2 126.9 Basic and diluted earnings per share from continuing operations (pence per share) 146.8 104.8 Basic and diluted earnings per share from total operations (pence per share) 157.1 40.1 The weighted average number of shares in issue excludes treasury shares held by the Company, and shares held in trust for the Directors’ LTIP. No shares were bought back and cancelled by the Group in the period from 2 July 2011 to 31 August 2011. At the year ended 3 July 2010, the effect of potentially issuable shares is anti-dilutive in all periods presented and as such basic and diluted earnings per share are the same. At the year ended 2 July 2011, there is no effect from potentially issuable shares and as such basic and diluted earnings per share are the same. The effect of taxation and non-controlling interests on exceptional items and amortisation is shown below for each of the periods. Adjusted earnings per share Adjusted earnings per share is also presented to eliminate the impact of goodwill and intangible amortisation and exceptional costs and revenues in order to show a ‘normalised’ earnings per share. For continuing operations this is analysed as follows: Year ended 2 July 2011 Profit for Exceptional 2011 the year items Amortisation Total £m £m £m £m Profit before taxation from continuing operations 84.8 2.3 10.5 97.6 Less: Taxation* (9.8) (13.0) (2.9) (25.7) Less: Non-controlling interests (12.0) – (1.9) (13.9) Adjusted profit attributable to equity holders of the parent 63.0 (10.7) 5.7 58.0 Adjusted earnings per share from continuing operations (pence per share) 135.2 * Exceptional items include the one-off impact of releasing a £7.8m deferred tax liability to the income statement, relating to the agreement of tax efficient financing by HMRC, and the impact of the rate change on the opening deferred tax balance. Year ended 3 July 2010 Restated Profit for Exceptional 2010 the year items Amortisation Total £m £m £m £m Profit before taxation from continuing operations 65.8 11.0 10.9 87.7 Less: Taxation (14.5) (5.7) (2.7) (22.9) Less: Non-controlling interests (6.3) (1.7) (2.3) (10.3) Adjusted profit attributable to equity holders of the parent 45.0 3.6 5.9 54.5 Adjusted earnings per share from continuing operations (pence per share) 126.9

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

es aain 1.)(04 (.) (23.9) (2.7) (10.4) 92.1 (10.8) 11.0 46.8 34.3 Interim dividend for2011:25.5ppershare(2010:51.0p) (2009:55.5p)Final dividend for2010:30.0ppershare Equity dividends onordinaryshares: Declared andpaid duringtheyear 58.1 12. Dividends paid andproposed 5.7 Adjusted earnings pershare fromtotaloperations parent equityholdersofthe Adjusted profitattributableto (15.0) Less: Non-controllin Less: Taxation Profit beforetaxation fromtotaloperations 67.4 Year ended3July 2010 Exceptionalitemsinclude the one-offimpactofreleasin * Adjusted earnings pershare fromtotaloperations parent holders ofthe Adjusted profitattributabletoequity Less: Non-controllin Less: Taxation* Profit beforetaxation fromtotaloperations Year ended2July 2011 For totaloperations thisisanalysedasfollows: (2010:30.0p)Final dividend for2011:55.5ppershare Equity dividends onordinaryshares: asa liability asat2JulyProposed forapprovalatAGM(not 2011) recognised chan (pence pershare) (pence pershare) g e ontheopenin g deferred taxbalance. g g interests itrss 63 16 (.) (10.2) (2.3) (1.6) (6.3) interests g a£7.8mdeferred taxliability totheincomestatement, relatin

Profit for Profit for g the year the year tothe a 1.)–(1.9) (13.9) (12.0) 87(.)1. 97.7 (1.5)10.5 88.7 7234.86.0 58.0 17.2 93 (13.5)(2.9) (25.7) (9.3) £m £m g reement oftaxefficient financin [[[KSELIEHGSQ Exceptional Exceptional items items £m £m

135.1 135.4 g Amortisation Amortisation byHMRC, andthe impactoftherate Amortisation 23.8 10.9 12.9 23.8 2011 2011 £m £m £m £m

Restated 45.7 21.9 23.8 12.9 Total 2010 2010 2010 Total 2011  £m £m £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

13. Property, plant and equipment Freehold land Leasehold Plant and and buildings properties Bus vehicles equipment Total £m £m £m £m £m Cost: At 27 June 2009 146.5 19.6 363.7 205.8 735.6 Additions 7.2 0.1 31.7 19.3 58.3 Acquisitions 0.2 1.3 13.2 0.6 15.3 Disposals (0.7) (4.0) (15.4) (75.9) (96.0) Transfer categories 1.5 – – (1.5) – Transfer of assets held for resale – – (1.3) – (1.3) At 3 July 2010 154.7 17.0 391.9 148.3 711.9 Additions 3.9 0.3 28.6 21.3 54.1 Acquisitions – – 2.5 0.1 2.6 Disposals – – (14.0) (5.0) (19.0) Disposal of discontinued operations (0.5) (1.1) (1.6) (4.7) (7.9) Transfer categories – – 0.3 (0.3) – Transfer of assets held for resale – – (0.2) – (0.2) At 2 July 2011 158.1 16.2 407.5 159.7 741.5

Depreciation and impairment: At 27 June 2009 5.5 5.2 164.6 150.4 325.7 Charge for the year 0.7 1.4 30.0 20.0 52.1 Exceptional depreciation – – 2.6 – 2.6 Disposals (0.1) (2.2) (13.2) (67.7) (83.2) Transfer of assets held for resale – – (1.2) – (1.2) At 3 July 2010 6.1 4.4 182.8 102.7 296.0 Charge for the year 1.0 0.9 32.1 15.2 49.2 Exceptional depreciation – – 3.0 – 3.0 Disposals – – (13.2) (4.7) (17.9) Disposal of discontinued operations – (0.6) (0.8) (3.6) (5.0) Transfer categories – – 0.2 (0.2) – Transfer of assets held for resale – – (0.2) – (0.2) At 2 July 2011 7.1 4.7 203.9 109.4 325.1

Net book value At 2 July 2011 151.0 11.5 203.6 50.3 416.4 At 3 July 2010 148.6 12.6 209.1 45.6 415.9 At 27 June 2009 141.0 14.4 199.1 55.4 409.9 The net book value of leased assets and assets acquired under hire purchase contracts is:

2011 2010 £m £m Bus vehicles 72.0 97.4 Plant and equipment – 0.4 72.0 97.8 No additions were made during the year (2010: £nil) under finance leases and hire purchase contracts.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

Meteor Parkin bein Durin Impairment based ontheunexpired This relatestothe contracts valueattributed and relationships tocustomer Customer contracts softwareSoftware costscapitalisedexclude thatisinte Software costs between five and ei t2 ue20 6. . . 10 . 110.3 108.6 100.9 2.3 1.9 0.9 31.0 24.9 19.0 3.7 4.1 68.7 3.2 5.4 4.4 3.2 4.0 204.0 67.9 73.3 18.6 73.8 6.2 179.0 3.7 5.5 49.6 relatin 6.0 This reflectsthecost oftheri Rail franchise asset 49.6 8.7 At 27June2009 At 3July2010 37.2 At 2July2011 – Net bookvalue 7.4 11.7 – – Char 11.4 127.8 – – – 105.1 – – – At 27June2009 1.3 – Amortisation and impairment 2.3 – (0.7) 1.0 Disposals (5.0) 0.7 Additions 2.7 At 3July2010 Disposals (0.4) Additions 23.1 (5.0) At 27June2009 5.0 Cost (1.1) assets 14. Intangible 26.1 relatin t2Jl 01 2. 40874. 62 204.0 6.2 49.6 8.7 14.0 125.5 Char At 2July2011 ipsl 28 – – – – Disposals (2.8) (2.8) t2Jl 01 171. . 06 . 103.1 5.3 30.6 5.5 10.0 51.7 – – At 2July2011 (0.4) – Disposals – (0.4) t3Jl 00 4573462. 43 95.4 4.3 24.7 4.6 7.3 – 54.5 – – – At 3July2010 Impairment 16.2 16.2 g g g written downto£2.2m.Durin g o h er . . . 10 10.5 1.0 5.9 0.9 2.7 – e fortheyear o h er . . . . 11 10.9 1.1 6.1 0.9 1.7 1.1 e fortheyear g g theyearended3July2010 an impairmentreviewofthe aviation resultedinthe servicesdivision totheSoutheastern rail franchise.Theintan totheopenin g at theyearend. g ht years). g deficit in the RPS and £7.8mrelatin deficit inthe RPSand term of the contracts at the date ofacqu term ofthecontractsat date g ht to operate arail franchise.Thebrou g the year ended 2 July 2011, Meteor Parkin theyearended 2 July2011,

g Goodwill ible asset isbein ible asset g ral totherelated hardware. £m g tothecost oftheintan Software costs isition andisamortised g g amortised onastrai ht forward element ofthefranchise intan £m purchased as part ofthe Franchise bidcosts g was sold and therefore there isno wassoldandtherefore g ible asset acquiredon thehandover ofthe franchise assets overthatperiod. £m g ht-line basisover thelifeof the franchises (bein [[[KSELIEHGSQ Rail franchiseasset Group’s acquisitions.The g oodwill ofMeteor Parkin £m

g Customer contracts ible ismade upof£17.1m g oodwill leftrelatin £m value iscalculated g of£18.4m g to g Total

 £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

14. Intangible assets continued Goodwill As from 3 July 2004, goodwill is no longer amortised and is tested annually for impairment. The goodwill charge of £nil (2010: £1.1m) is in respect of rail businesses which, due to the finite nature of the franchises, require the goodwill to be impaired annually. Goodwill acquired through acquisitions has been allocated to individual cash-generating units for impairment testing on the basis of the Group’s business operations. The carrying value of goodwill by cash-generating unit is as follows:

2011 2010 £m £m Meteor Parking – 2.2 Metrobus 10.6 10.6 28.6 28.6 Brighton & Hove 2.1 2.1 13.0 13.0 Go-Ahead London 10.5 10.5 2.7 2.7 Konectbus 3.6 3.6 2.7 – 73.8 73.3 The recoverable amount of goodwill has been determined based on a value in use calculation for each cash-generating unit, using cashflow projections based on financial budgets and forecasts approved by senior management covering a three-year period which have then been extended over an appropriate period. The Directors feel that the extended period is justified because of the long term stability of the relevant income streams. Growth has been extrapolated forward from the end of the three year forecasts over the extended period plus a terminal value using a growth rate of 2.25%-3.0% which reflects the Directors’ view of long term growth rates in each business. The pre-tax cashflows for all cash-generating units have been discounted using a pre-tax discount rate of 11.0% (2010: 11.1%), based on the Group’s weighted average cost of capital, plus an appropriate risk premium for each cash-generating unit of 0.0-2.0% (2010: 0.0-2.0%). The calculation of value in use for each cash-generating unit is most sensitive to the forecast operating cashflows, the discount rate and the growth rate used to extrapolate cashflows beyond the budget period. The operating cashflows are based on assumptions of revenue, staff costs and general overheads. These assumptions are influenced by several internal and external factors. The Directors consider the assumptions used to be consistent with the historical performance of each unit and to be realistically achievable in light of economic and industry measures and forecasts. We have conducted sensitivity analysis on our calculations and confirmed that there is no likely movement on assumptions that would lead to an impairment. The cash generating unit with the least headroom is Plymouth Citybus, as expected given it has only recently been acquired. The headroom on Plymouth Citybus is £1.1m. An increase of 1% of the Group’s weighted cost of capital would result in an impairment of less than £1m.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

Net assetsatdate ofacquisition: West Berkshireand (Wallin Deferred taxation Hire purchasecontracts The Receivables have been assessedand expensed throuAcquisition costsof£0.1mhavebeen Cash Goodwill capitalised fallin Payables Current tax liabilities Receivables Inventories Tan On 24May2011, Go-AheadHoldin Year ended2July 2011 combinations 15. Business

acquisitions was£8.2m. Go NorthEast’s Ashin subsidiary ofthe Group, en of 44vehicles and2010, GoNorthEast Limited, a employsapproximately70employeeswholly ow intheNorfolkarea.On28March On 1December2009,Go-AheadHoldin which providesbusservicesin total cashconsideration of£5.0m.Theinterestsinclude afleet of18vehiclesand58employees,willoperate aspartofM On 3October2009,MetrobusLimited, awhollyownedsubsi vehicles overnineTfLcontractedroutes. a totalcashconsiderationBuses fromTransportforLondon(‘TfL’) of for £5.0m.East Thames Busesoperatedafleetofapproxim On 3October2009,LondonGeneralTransportSe Year ended3July 2010 awareness and anassembledworkforce forwhich thereco achieved upon acquisition. Mana Total consideration operatin and £5.5mofrevenuetotheGroup.Thiswoul £0.5m. Hadthecombinations taken placeatthebe From thedateofacquisition, inthe yearended2July 2011, theacquisitions recorded anoperatin On 9March 2010, Go-AheadHoldin approximately 470employeesinthePlymoutharea. Council foracashCitybus Limited consideration fromPlymouthCity of £19.0m.PlymouthCitybusoperates afleetof175vehicle g g ible fixedassets oodwill and thepotential capitalisedreflectsthe access tothemarketsservedbyacquiredentities business syner g g ford) Limited foracashconsideration of£3.5m profitfrom continuin g due within one year one duewithin g enerates turnoverenerates ofaround£5.5m. g ton operations toArriva.The operationsbecameeffectiveApril 2010. The combinedconsiderationfor these tered intoacontract toacquiretheHexham op Sussex, SurreyandKentincludin g operations (before amortisation and exceptionalitems)of£115.5m. operations (beforeamortisationand g ement believes that g are consideredtoberecoverable. g Limited, a wholly owned subsidiary of the Group, acquired 100% of the sharecapitalofThames Travel Limited,awhollyownedsubsidiaryoftheGroup,acquired100% Limitedalso acquired 100%of thesharecapital ofKonectbusLimited which operates abusfleet g Limited, a wholly owned subsidiary of the Group, acquired 100% ofthesharecapitalPlymouth awholly ownedsubsidiaryoftheGroup, Limited, d haveresultedintotal Group revenuefrom continuin g rvices Limited,a wholly ownedsubsidi innin g g oodwill representsfuture h otheroperatin . Thames Travel carriesaround3 . Thames million passen g oftheyear, it isestimatedthat g nition ofadiscreteintan diary of theGroup,acquired theassetsofArriva’sbusinterest inHo diary of g re g ulated servicesforTfL. g costs. erations ofArrivaplcforacashconsiderationand g rowth ofcustomer opportunities andcreatedvalueinrespect g ible assetisnotpermitted. ary oftheGroup,acqu they would operatin have recorded £0.4mof [[[KSELIEHGSQ g profitof £niltotheGroup andrevenueof g operations of£2,302.5m, andtotal g ers peryearinSouth and

ired the assets ofEa Book value g (0.4) (0.2) (1.8) (0.1) 2011 ies thatcan be 1.1 0.8 0.6 0.1 2.9 2.6 £m etrobus Limited 3.5 3.5 2.7 3.5 g reed tosell ately 120 s andemploys rsham fora st Thames ned g Fair value to Group profit 2011  £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

15. Business combinations continued A summary of the transactions is detailed below: Net assets at date of acquisition: Fair value Book value to Group 2010 2010 £m £m Intangible assets – contracts – 0.7 Tangible fixed assets 15.3 15.3 Inventories 0.5 0.5 Receivables 0.9 0.9 Cash at bank 2.0 2.0 Payables falling due within one year (4.2) (4.2) Payables falling due after one year (0.4) (0.4) Deferred taxation (0.5) (0.7) 13.6 14.1

Goodwill capitalised 23.1 37.2

Cash 34.9 Expenses 0.3 Total cash consideration 35.2 Deferred consideration 1.3 Transfer of operations 0.7 Total consideration 37.2 Intangible assets acquired represent customer contracts of £0.7m. Payment of deferred consideration is dependent upon achievement of target operating profit levels. The goodwill capitalised reflects the access to the markets served by the acquired entities and the potential business synergies that can be achieved upon acquisition. Management believes that goodwill represents future growth opportunities and created value in respect of customer awareness and an assembled workforce for which the recognition of a discrete intangible asset is not permitted. From the date of acquisition, in the year ended 3 July 2010, the acquisitions recorded an operating profit of £3.6m to the Group and revenue of £31.5m. Had the combinations taken place at the beginning of the year, it is estimated that they would have recorded £4.9m of operating profit and £48.7m of revenue to the Group.

16. Assets classified as held for sale Assets held for sale, with a carrying amount of £1.6m (2010: £1.7m), represent property, plant and equipment which are currently not used in the business and are now available for sale. These assets classified as held for sale had no associated liabilities at the year end (2010: £nil).

17. Inventories 2011 2010 £m £m Raw materials and consumables 15.5 12.9 The amount of any write down of inventories recognised as an expense during the year is immaterial.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

t2Jl 01 . . – 2.6 – (0.4) 2.6 (0.5) – – 4.4 – – (0.3) (0.4) – – 2.6 (0.5) 0.3 (0.1) 0.2 4.4 (0.1) – (0.3) (0.2) (0.4) 0.5 0.3 – (3.3) 3.9 (0.2) – At 2July2011 Unused amountsreversed Utilised (3.3) Char Write downondisposals Transfer toheldfor disposal – Char Transfer toheldfor disposal At 27June2009 receivables were as follows: providedfor.Movementsinthe provision for Trade receivables at nominal wereimpairedandfully valueof£2.6m(2010:£3.6m) Other receivables Non-current (3.3) Receivable fromcentral Prepayments and accrued income Other receivables Trade receivables – net Less: Provision forimpairmentofreceivables Trade receivables Current 18. Trade andotherreceivables 1.0 1.6 1.3 2010 85.4 2011 3.8 1.0 As at2July2011,thea 76.7 t3Jl 00 . . . 03 3.9 0.3 (0.3) 3.6 – 0.2 (1.8)(0.1)(1.9) (0.3) 3.4 (0.3) (0.1) (1.5) (0.2) At 3July2010 Unused amountsreversed Utilised g g o h er . . – 2.9 – 1.7 2.9 0.2 – 1.5 2.9 0.1 1.4 e fortheyear e fortheyear g

ein g overnment g analysis oftradereceivablesisasfollows: 067. . . . 03 1.5 0.3 1.4 3.5 3.6 80.6 70.3 Total £m Neither pastdue nor impaired £m

Individually < 30days impaired £m £m 30 –60days Collectively impaired £m £m [[[KSELIEHGSQ 60 –90days Continuin operations £m £m g

90 –120days Discontinued individually operations impaired 201.4 40.9 46.6 33.3 80.6 83.2 (2.6) 2011 2011 0.6 £m £m £m £m

impairment of not impaired Past duebut > 120days 188.8 39.9 51.3 12.2 85.4 89.0 Total 2010 2010 (3.6) 1.8  £m £m £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

19. Cash and short term deposits 2011 2010 £m £m Cash at bank and in hand 48.6 28.3 Short term deposits 180.0 207.5 228.6 235.8 Cash associated with discontinued operations (note 8) – 0.3 228.6 236.1 Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates. Short term deposits are made for varying periods of between one day and three months depending on the immediate cash requirements of the Group, and earn interest at the respective deposit rates. The fair value of cash and cash equivalents is not materially different from book value. Amounts held by rail companies included in cash at bank and on short term deposit can be distributed only with the agreement of the DfT, normally up to the value of revenue reserves or based on a working capital formula agreed with the DfT. As at 2 July 2011, balances amounting to £189.7m (2010: £204.0m) were restricted. Part of this amount is to cover deferred income for season tickets which was £104.8m at 2 July 2011 (2010: £95.5m). For the purposes of the consolidated cashflow statement, cash and cash equivalents comprise the following:

2011 2010 £m £m Cash at bank and in hand 48.6 28.3 Short term deposits 180.0 207.5 Bank overdrafts (note 21) (5.0) (5.8) 223.6 230.0

Cash associated with discontinued operations (note 8) – 0.3 223.6 230.3

20. Trade and other payables Restated Restated 2011 2010 2009 £m £m £m Current Trade payables 124.3 150.3 166.2 Other taxes and social security costs 24.1 23.7 22.2 Other payables 40.1 38.0 30.1 Deferred season ticket income 99.5 91.0 88.8 Accruals and deferred income 98.3 69.7 81.3 Payable to central Government 39.6 65.3 39.5 Government grants 2.3 2.5 4.3 428.2 440.5 432.4

2011 2010 £m £m Non-current Government grants 3.9 2.7 Other liabilities 2.4 2.6 6.3 5.3 Terms and conditions of the above financial liabilities are as follows: • Trade payables are non-interest-bearing and are normally settled on 30 day terms; • Other payables are non-interest-bearing and have varying terms of up to 12 months. As described in note 2, accruals for uninsured liabilities and certain franchise commitments have been reclassified as provisions. Accordingly, trade and other payables as at 3 July 2010 have been reduced by £13.2m (2009: £13.1m) relating to liabilities for franchise commitments and uninsured claims accruals of £40.0m in 2010 (2009: £40.2m) have been reclassified from trade and other payables and included in provisions. As part of this revised presentation, the Group has re-assessed the analysis of these obligations between current and non current to reflect management’s estimate of the timing of settlements.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

iac essadH omtet seblw 52 - er . . –10.0 – 3.6 6.4 0-5years 5.26 Total interest-bearing loans andborrowings Finance leases below) and HPcommitments(see Debt issuecosts £200m Sterlin akoedat(oe1) .0O ead58– 5.8 – 5.6 – – 5.8 – Ondemand 1.50 5.6 0-1years 0.92 Bank overdraft (note19) Medium termloans(seebelow) Finance leases and HPcommitments(seebelow) Debt issuecosts £200m Sterlin Dollar loans(seebelow) oa neetbaiglasadbroig 658. 196294.1 199.6 88.0 6.5 Net debt Total interest-bearing loans andborrowings etisecsso ydctdlas 07 –(0.7) – 103.0 – – 103.0 (0.7) – 0-3years 1.02 Debt issuecostsonsyndicated loans Syndicated loans(seebelow) Year ended3July 2010 Adjusted netdebt Restricted cash Cash andshort Debt issuecosts Bank overdraft (note19) syndicatedloans Debt issuecostson Syndicated loans (seebelow) Our netdebtpositioncomprisesca Net debtandinterest-bearing loans andborrowings 21. Interest-bearing loansandborrowings etisecss . . 233.4 2.3 (236.1) 0.4 – 0.7 – (236.1) Adjusted netdebt Restricted cash Net debt (note19) Cash andshortterm deposits Total interest-bearin Debt issuecosts Year ended2July 2011 Total interest-bearin ( ( g g oso etisecss 1. 0. 200324.4 200.0 106.6 17.8 ross ofdebtissuecosts) ross ofdebtissuecosts) g g 75ya od(e eo) .808yas–– 0. 200.0 200.0 – – 0-8years 5.38 below) 7.5 yearbond(see 7.5 year bond (see below) 7.5 yearbond(see term deposits(note19) g g loansandborrowin loansandborrowin Current Non-current sh, shorttermdeposits,interest-bearin g g s s

Cret o-urn Non-current Current interest rate interest interest rate Effective Effective .905yas2431 5.5 3.9 – – 3.1 3.9 2.4 – 0-5years 4.89 0-5years 1.97 .807yas–– 0. 200.0 200.0 – – 0-7years 5.38 .0O ead50– 5.0 – – 84.0 – 5.0 84.0 Ondemand 1.50 – 0-5years 1.78 % % g loansandborrowin Maturity Maturity [[[KSELIEHGSQ one year 212 1020069.8 (228.6) 91.0200.0 – (221.2) (228.6) one year 283 0. 0. 88.3 106.6200.0 (218.3) g s, andcanbe summarisedas: Within Within 71162177321.0 106.2197.7 17.1 04 15 04 (2.3) (1.5)(0.4) (2.0) (1.5)– (0.4) (0.5) . . . 4.3 3.00.4 0.9 . 10200298.4 91.0200.0 7.4 £m £m 04 23 (2.7) (0.4) (2.3) –

After oneyear After oneyear than fiveyears than fiveyears but notmore but notmore £m £m 259.5 189.7 292.3 204.0 five years five years After After £m £m Total Total  £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

21. Interest-bearing loans and borrowings continued Analysis of Group net debt Cash and cash Syndicated Hire purchase/ £200m equivalents loan facility Term loans Dollar loan finance leases Sterling Bond Total £m £m £m £m £m £m £m 27 June 2009 202.1 (239.0) (36.0) – (18.1) – (91.0) On acquisitions ––––(2.4) –(2.4) Cashflow 28.2 136.0 30.4 – 10.5 (200.0)5.1 3 July 2010 230.3 (103.0) (5.6) – (10.0) (200.0) (88.3) On acquisitions ––––(1.8) –(1.8) Cashflow (6.7) 19.0 5.6 (3.9) 6.3 –20.3 2 July 2011 223.6 (84.0) – (3.9) (5.5) (200.0) (69.8) Adjusted net debt (259.5) Syndicated loan facility On 3 February 2011 the Group re-financed and entered into a new £275.0m five year syndicated loan facility, replacing the previous £280.0m syndicated loan facility. The new loan facility is unsecured and interest is charged at LIBOR + Margin, where the margin is dependent upon the gearing of the Group. As at 2 July 2011, £84.0m (2010: £103.0m) of the facility was drawn down. £200m Sterling 7.5 Year Bond On 24 March 2010, the Group raised a £200m bond of 7.5 years maturing on 29 September 2017 with a coupon rate of 5.375%. Medium term loans The Group currently has no medium term loans.

Effective interest rate 2011 2010 % £m £m Fixed rate term loan – – – Floating rate term loans – – 5.6 – 5.6 The floating rate loan was repaid early on 2 August 2010. Dollar loan On 26 July 2010, a $10.0m facility was entered into for the purposes of financing our US Yellow school bus joint venture. As at 2 July 2011, $6.2m or £3.9m of this facility was drawn down. The dollar loan is unsecured and interest is charged at US$ LIBOR + Margin. Debt issue costs There are debt issue costs of £2.0m (2010: £0.7m) on the syndicated loan facility and £nil (2010: £nil) on medium term loans. The £200m sterling 7.5 year bond has debt issue costs of £2.3m (2010: £2.7m). The Group is subject to two covenants in relation to its borrowing facilities. The covenants specify a maximum adjusted net debt to EBITDA and a minimum net interest cover. At the year end and throughout the year, the Group has not been in breach of any bank covenants.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

explained in note24. explained The mainfinancialrisksarisin purchased forinternal benefit. to It is,andhasbeenthrou rate andfuelprice risksarisin The Groupalsoenters into derivativetran such astradereceivables andtrade payables, which arise directlyfromitsoperations. namely workin term deposits.Themainpurpose The Group’sprincipal financial Financial riskfactorsandmanagement 23. Financial risk management objectives andpolicies The financelease and hirepurchase all relate to busvehicles. commitments Present valueof minimum lease payments Less amountsrepresentin After oneyear butnotmorethanfiveyears Within oneyear clau no termsofrenewalorpurchaseoptionescalation The Grouphasfinance leases andhire purchasecontracts forbusvehic 22. Finance leaseandhirepurchase commitments

Total minimumleasepayments g ether withthe present valueofthenetminim g capital,dividends fixedasset and expenditure, acquisitions, g hout 2011 theGroup’s policythatnotradin and2010, g finance char g g from the Group’s activities are interest rate risk, liquidity risk andcreditrisk.Risksarisin fromtheGroup’sactivitiesinterest raterisk,liquidityrisk are from the Group’s operations anditssourcesoffinance. fromtheGroup’s instruments comprise bank loans, a sterlininstruments comprisebankloans, of thesefinancial instruments g es sactions, primarilyinterest Thepurpose rateswapsandfuel swaps. of these istoma um leasepayments,are asfollows: ses. Futureminimumlease istoprovideanappropriate les andvarious items ofplantandmachinery. These contr g

bond,hirepurchaseandfinance lease contracts, and cashandshort sharebuybacks. TheGrouphas various otherfinancial instrument Minimum payments g inderivativesshallbeundertaken andderivatives areonly payments underfinan 05 – (0.5) . 5.5 3.1 5.5 2.4 3.5 2.5 . – 6.0 £m 2011 level ofnetdebttofundtheGroup [[[KSELIEHGSQ Present value of payments ce leasesandhirepurchase £m 2010

(.) – (0.7) 10.0 10.0 3.8 3.6 6.9 6.4 1. – 10.7 g fromfuelderivatives are payments Minimum £m na ’s activities, g acts have e the interest contracts, Present value of payments s  £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23. Financial risk management objectives and policies continued Interest rate risk The Group borrows and deposits funds and is exposed to changes in interest rates. The Board’s policy toward cash deposits is to deposit cash short term on UK money markets. Interest payable on senior bank borrowings is based on re-fixing the rate of interest over short periods of time of up to 36 months. During the year the Group has partially managed interest rate risk by hedging. Excluding fixed rate debt, the Group has net borrowings and hence the present adverse risk is an increase in interest rates. The maturity and interest rate profile of the financial assets and liabilities of the Group as at 2 July 2011 is as follows:

Average Within More than rate 1 year 1-2 years 2-3 years 3-4 years 4-5 years 5 years Total % £m £m £m £m £m £m £m Year ended 2 July 2011 Floating rate liabilities/(assets) Bank overdrafts 1.50 5.0–––– –5.0 Variable rate loans 1.78 ––––87.9 87.9 Obligations under finance lease and hire purchase contracts – ––––– –– Interest rate swaps 2.25 (52.0) (80.0) – – – – (132.0) Gross floating rate (assets)/liabilities (47.0) (80.0) – – 87.9 – (39.1) Cash assets 0.65 (228.6) –––– –(228.6) Net floating rate (assets)/liabilities (275.6) (80.0) – – 87.9 – (267.7) Fixed rate liabilities £200m Sterling 7.5 year bond 5.38 ––––– 200.0 200.0 Obligations under finance lease and hire purchase contracts 4.89 2.4 1.5 0.4 0.5 0.7 – 5.5 Interest rate swaps 2.25 52.080.0––– –132.0 54.4 81.5 0.4 0.5 0.7 200.0 337.5 Total floating and fixed profile (221.2) 1.5 0.4 0.5 88.6 200.0 69.8

Year ended 3 July 2010 Floating rate liabilities/(assets) Bank overdrafts 1.50 5.8–––– –5.8 Variable rate loans 1.01 5.6 – 103.0 – – – 108.6 Obligations under finance lease and hire purchase contracts 1.31 0.8–––– –0.8 Interest rate swaps 2.25 – (53.4) (80.0) – – – (133.4) Gross floating rate liabilities/(assets) 12.2 (53.4) 23.0 – – – (18.2) Cash assets 0.55 (236.1) –––– –(236.1) Net floating rate (assets)/liabilities (223.9) (53.4) 23.0 – – – (254.3) Fixed rate liabilities £200m Sterling 7.5 year bond 5.38 ––––– 200.0 200.0 Medium term fixed rate loan – ––––– –– Obligations under finance lease and hire purchase contracts 5.68 5.5 2.3 1.0 0.3 0.1 – 9.2 Interest rate swaps 2.25 – 53.4 80.0 – – – 133.4 5.555.7 81.0 0.3 0.1 200.0342.6 Total floating and fixed profile (218.4) 2.3 104.0 0.3 0.1 200.0 88.3 Interest on financial instruments classified as floating rate is re-priced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until the maturity of the instrument. The other financial instruments of the Group that are not included in the above tables are non-interest-bearing and are therefore not subject to interest rate risk.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

Headroom Headroom mutdandw ne ydctdla aiiy 84.0 On 24March 2010, theGroupraisedof7.5yearsmaturin a£200mbond Total available facility Amount drawndownundersyndicatedloanfacility Available liquidity as at2July2011wasfollows: The Grouphasin place a£275.0msyndicated loan facilitywhich allowsthe thedesired Grouptomaintainliquiditywithin Liquidity risk GBP GBP 2010 GBP GBP 2011 wasfixedat2.39%plusmar the variableratesyndicatedloan –£50.0m At 2July2011,theGrouphadfour interest rateswaps totallin

Risk ofexposuretonon-return any one or abovebyatleastoneofthecreditratin counterparties to be asi The majorityoftheGroup’s where there isanidentified ofareduction loss event inthe which,basedonprevious recoverability experience,isevidence o thebalance sheet,which are the Groupcomprisesamountspresentedin On 26July2010, a $10.0mfacilitywas Foreign currencyrisk over twotofive The Group’sroadpassen interest ratesaredetailedinnote 21. Group’s profitbeforetax(throu The followin Interest raterisk table in interestrates. Hencethe adverseriskatyea These swapsresultinanet of£2.0mat2July2011(2010: fixedrate £3.4mliability). liability (2010: £3.0m). totallin The Group’screditriskisprimarilya Credit risk As theinvestmentandborrowin The amountdrawn onthefacility reflects theinvestment in and theworkin to provideaneffective forei g £80.0marenowineffective. Durin g iven financial institution. g table demonstratesthesensitivity to areasonably possible chan year primaryborrowin g g nificant credit theGroup risk.Outside doesnotconsider ofthis, ithassi er vehicles canbefinancedor finance byhirepurchase lease arran g receivables arewith n currency hed of cash ondepositis mana g g h the impact onfloatin h the s arebothdenominatedinUS ttributable to its trade receivables and cash deposits (see note18).The receivablesmaximum credit ttributable toitstrade andcashdeposits(see g g periods. This provides a re periods.This provides reed with RBS toensuredollarinvestment in our USjointventure isfundedbydollarborrowin g g a theyearended 2July2011, these fourinterestswapshaveresultedinarealisedlossof£2.1m g e. g encies. Ourtreasury policythe maximumlevel outlines ofdepositthatcanbeplaced with public (orquasi-public)bodies(such g rateborrowin g ed throu g £130.0m. One of these interest rate swaps fixes the interest on partof £130.0m. Oneoftheseinterestrateswaps fixestheintereston $ thisprovidesanaturalhed g g ular inflow offundin h a treasurypolicyofholdin g g in 2012.Theremainin until December s). g on 29September 2017.Thelevelofdrawdownandprevailin g capital requirements jointventure. capital oftheGroup’s shareinitsUS stated netofprovisions fordoubtfuldebt.Aprovisi g e in interest rates,with all other variables held constant, ofthe astheDfT).TheGroupdoesnotconsider g tocoverexpenditureasitarises.

g g ements, or term loans at fixed rates ofinterest ements, orterm loansatfixedrates e overtheGroup’s forei Increase/decrease in [[[KSELIEHGSQ g g depositswithbank nificant concentrations of creditnificant risk. concentrations basis points 5.)01 0.1 (50.0) 0.1 5.)05 0.5 (50.0) 0.5 50.0 (0.1) (0.1) 50.0 (0.5) (0.5)

g three interest swaps rate Effect onprofit s ratedA+orAa3 g before tax n currency exposure. n currencyexposure. 191.0 275.0 r endisadecrease g 2011 earin £m £m f futurecashflows. risk exposureof g these on ismade ran Effect onequity g e. g g s 177.0 280.0 103.0

2010  £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

23. Financial risk management objectives and policies continued Contractual payments The table below summarises the maturity profile of the Group’s financial liabilities at 2 July 2011 based on contractual undiscounted payments. Year ended 2 July 2011 Less than On demand 3 months 3 to 12 months 1 to 5 years > 5 years Total £m £m £m £m £m £m Interest-bearing loans and borrowings 5.0 1.5 2.6 97.5 – 106.6 £200m Sterling 7.5 year bond – 10.4 – 41.5 212.4 264.3 Other financial liabilities – 0.4 1.3 0.4 – 2.1 Trade and other payables 37.6 209.9 39.0 2.0 0.2 288.7 42.6 222.2 42.9 141.4 212.6 661.7

Year ended 3 July 2010 (restated) Less than On demand 3 months 3 to 12 months 1 to 5 years > 5 years Total £m £m £m £m £m £m Interest-bearing loans and borrowings 5.8 3.7 6.9 110.6 – 127.0 £200m Sterling 7.5 year bond – 5.9 – 47.0 235.3 288.2 Other financial liabilities – 2.0 5.9 3.3 – 11.2 Trade and other payables 51.4 213.1 44.4 1.0 1.1 311.0 57.2 224.7 57.2 161.9 236.4 737.4 Managing capital During the year the Group obtained investment grade long term credit ratings from Standard & Poor’s and Moody’s as follows: Standard & Poor’s BBB – (Stable outlook) Moody’s Baa3 (Stable outlook) The Group manages its capital structure such that net debt (adjusted to exclude restricted cash) to EBITDA (before exceptionals) is within a range which retains an investment grade debt rating. Adjusted net debt at the year end was £259.5m (2010: £292.3m), equivalent to 1.58x (2010 restated: 1.94x) EBITDA in line with the Group’s aim to maintain an adjusted net debt to EBITDA ratio of 1.5x to 2.5x through the cycle. Operating leases The Group uses operating leases for bus and coach purchases across the Group primarily where the vehicles service specific contracts to mitigate the risk of ownership at the end of the contract. This results in £1.5m (2010: £1.2m) of cost within operating charges which would otherwise have been charged to interest. The Group holds operating leases for its bus fleet with an asset capital value of 38.0m (2010: £31.2m). The majority of assets in the rail division are financed by operating leases, in particular rolling stock. Leases are entered into by the respective operating companies and are not the subject of parent company guarantees.

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91.0% oftheanticipated fuel usa As at2July2011theGrouphadderivatives a has been As at2July2011theGrouphadderivatives a financial yearsof58 and over 122,72and 31 millionvalue ofthe assetorliability litresoffuelrespectively.has beenreco Thefair litres ofrailfuel. fuel usa At the year end, the Group had various fuel price swaps in place. For the 2012, 2013 and 2014 financial priceswapsinplace.Forthe2012,2013 years cashflow hed At theyear end,theGrouphadvariousfuel to hed The Groupisexposedtocommoditypriceri Fuel derivatives b. Hedging activities ended 2July2011, therewerenotransfers between valuation levels. As at2July2011,theGrouphasused alevel2valuation technique to determine thefair valueofallfinancialinstruments. D Level 3:techniques which useinputs which haveasi indirectly; and Level 2:othertechniques forwhich Level 1:quoted(unadjusted)pri The Groupusesthefollowin price derivatives and interest rate swaps were valuedprice derivativesandinterestrateswapswere externallybythere £200m sterlin All other fairvalues shown above havebeencalculateddiscountin by relevant date. e iaca iblte –(.) 39 (3.9) (3.4) (0.5) (3.9) (3.4) (0.5) (3.9) (3.4) (0.5) – – – of the£200msterlin The fairvalueofallotherassetsand 20and21isnotsi liabilitiesinnotes 18, Obli Net financialliabilities Interest ratederivatives Fuel pricederivatives Year ended3July 2010 Obli Net financial assets Interest ratederivatives Fuel pricederivatives Year ended2July 2011 financial instrumentsThe fairvaluesoftheGroup’s carried inthefinancialstatements asat2July2011a have been reviewed a. Fair values 24. Derivatives andfinancial instruments

g g tosudrfnnelaeadhr ucaecnrcs 1.)– 1.) (10.0) (10.0) – (10.0) ations under financelease and hire purchasecontracts ations under finance lease and hire purchasecontracts g g e itsexposure toincreasesinfuelprices,when itdeemsappropriate. e inLondon derivativesforthe2013financialyear Asat2July2011the Group Midlandand Southern. alsohadfurther of14mi g enerated sincethedateof instru theacquisition of the g 7.5 year bond has been determined by referencetothe priceavailablefrom 7.5yearbondhasbeendetermined themarketon which the Thefuel bondis traded. g 7.5 year bond which has a fair value of £207.0m but is carried at its amortised cost of £200.0m. The fair valueofthe at its 7.5yearbondamortised costof£200.0m.Thefair which hasafairvalueof£207.0mbutiscarried 31 millionlitresrespectively. g hierarchy fordeterminin ces inactivemarkets foridentical assets or liabilities: g e inourbusdivision.had derivativesa Asat2July2011 the Groupalso allinputs which haveasi sk as a result of fuel usa sk asaresultoffuel g g ainst bus fuel of 105 million litresfortheyearainst endin busfuelof105million ainst railfuelof17million litresfortheyear endin g nificant effect on therecordedfairvaluenificant that effect g and disclosin g nificant effect ontherecorded fairvalueareobservable, either directlyor ments due tothemovemen g g g e. The Group closely monitors fuel prices and uses fuel derivatives fuelpricesanduses derivatives e. TheGroupcloselymonitors cash flows at prevailin cashflowsat the fairvalue offinancial instruments byvaluation technique: spective banksbycompa

g nificantly differenttotheircarryin Amortised cost Amortised cost 1.)(3.9)(13.9) (10.0) 55 –(5.5) (5.5) (5.5) 55 17.311.8 (5.5) £m £m 17.3 (2.0) (2.0) 19.3 – – – g t inmarketfuel prices. interestrates. [[[KSELIEHGSQ g Held fortrading – Fair value throu Held fortradin fair value through 30June2011, representin rison withth g are not based on observable marketdata. are not based onobservable profit andloss 30June2012,representin profit andloss g g nised on the balance sheet.Thevalue nised onthebalance ainst bus fuel for the 2013 and2014 ainst busfuelfor £m g £m g – h g e market fuelpri amount with the exception carrying value carryin g value Total Total g urin £m g £m nd areasfollows: es were placed es were the anticipated the g approximately ce forthe g the year llion Fair value Fair value  £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

24. Derivatives and financial instruments continued The Group’s hedging policy for the target percentage of anticipated bus fuel usage hedged for the next year and subsequent two years is as follows:

2012 2013 2014 Percentage to hedge per Group policy 100.0% 50.0% 25.0% Actual percentage hedged 91.0% 50.0% 27.0%

25. Provisions Onerous Franchise Uninsured Depots contracts commitments claims Total £m £m £m £m £m At 27 June 2009 (restated) 4.3 1.5 13.1 40.2 59.1 Provided 3.0 1.0 11.3 15.2 30.5 Utilised – (0.9) – (15.4) (16.3) At 3 July 2010 (restated) 7.3 1.6 24.4 40.0 73.3 Provided – – 26.6 24.6 51.2 Utilised – (0.3) – (15.6) (15.9) Released – (0.3) (2.3) – (2.6) Disposed – (0.6) – – (0.6) Transferred to creditors – – (3.9) – (3.9) At 2 July 2011 7.3 0.4 44.8 49.0 101.5

2011 2010 2009 £m £m £m Current 21.9 27.6 15.4 Non current 79.6 45.7 43.7 101.5 73.3 59.1 At 2 July 2011 the depots provision has been maintained at £7.3m, representing ongoing legal actions relating to planning consent issues expected to be incurred within four years. During the year ended 2 July 2011 the onerous contract provision in the aviation services division reduced from £0.6m to £nil as a result of the sale of the remaining aviation services in the year. The onerous contract provision in the bus division reduced from £1.0m to £0.4m as the expected costs were incurred on operating lease commitments served by articulated buses being phased out. Onerous contracts provisions are expected to be incurred within three years, with £0.2m being classified as current. Franchise commitments comprise £40.1m dilapidation provisions on vehicles, depots and stations across our three active rail franchises and £4.7m claims of other disputes. Of the dilapidation provisions, £1.4m are classified as current, and all of the £4.7m income claims are classified as current. The provisions are based on management’s assessment of most probable outcomes, supported where appropriate by valuations from professional external advisers. The dilapidations will be incurred as part of a rolling maintenance contract over the next six years. Following a management review, it was decided that uninsured claims be classified as provisions given the expected timing and nature of these claims. Of the uninsured claims, £15.6m are classified as current and £33.4m are classified as non current based on past experience of uninsured claims paid out annually. It is estimated that the majority of uninsured claims will be settled within the next six years. Provisions at 27 June 2009 have been increased by the uninsured claims liability of £40.2m and by £13.1m in respect of franchise commitments, previously included within trade and other payables. Provisions at 3 July 2010 have been increased by the uninsured claims liability of £40.0m and by £13.2m in respect of franchise commitments, previously included within trade and other payables. The accounting policies in note 2 describe the basis for this revised presentation.

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The hed Hedging reserve Section 612oftheCompaniesThis treatment Act isinlinewith 2006. on shares thathavebeenissued The otherreserve representsthepremium Other reserve The redemptionreservereflectsthe nominalvalueofcancelledshares. Capital redemptionreserve The Grouphasentered intocommercial and otheritems.Renewalsareatthe leasesoption ofthe lessee. oncertainproperties T Operating leasecommitments–Groupaslessee Contracted forbutnotprovided Capital commitments 27. Commitments andcontingencies made fortheshares purchased durin consideration of £0.8m (2010:£0.3m)includin the future(andDirectors’ bonusplans2010). A LTIP awardsthatmayvestin appropriate circumstances.Durin The remainin plans andLTIP arran capital), ofwhich132,427The reserveforownsharesisinrespect areheldforDi of4,034,657ordinary shares(8.6%ofshare Reserve forownshares issue oftheCompany’s equity,bothnominalShare capital representsproceedson value andsharepremium. Share capital The Companyhas oneclassofordi As at3July2010&22011 62.5 million10pordinary shares 26. Issued capitaland reserves vrfv er 03112. 60 44 8.5 96.4 44.4 354.4 36.0 190.0 297.5 28.8 898.2 3.4 728.1 1.1 2.6 8.9 1,061.6 0.3 41.1 12.2 5.3 9.0 30.6 Details ofthelease costfortheperiodareshowninnote5and 8. 43.1 Over fiveyears In the secondtofifthyearsinclusive 1,297.0 Within one year As at3July2010 Over fiveyears In the secondtofifth yearsinclusive Within oneyear 294.9 Future minimum rentals payable Future minimumrentals under non-cancellable operatin restrictions placed uponthelessee by enterin

As at2July2011 g in g reserve records the movement in value of fuel price derivatives, offsetbyanymovementsreco value of fuelpricederivatives, reserverecordsthemovementin g shares were purchased in order to enhance shareholders’ returnsandare inordertoenhanceshareholders’ bein shareswerepurchased g ements. g the year ended 2 July 2011 the Company has purchased 58,632 shares (2010: 26,447 shares) for potential the Companyhaspurchased 58,632shares(2010: 26,447shares)for theyearended2July2011 nary shareswhichcarry nori g the year. The Company has not cancelled anysharesdurin the year.TheCompanyhas

g intotheseleases. Bus vehicles Bus vehicles 5722017531072 231.2 785.31,017.2 96.5 303.7354.2 0.1 0.1 2.2 2.3 35.7 14.0 02600210901314 327.7 1,089.01,371.4 0.2 6.0 50.2 . . – – 1.5 0.5 £m £m g g leases asat2July2011 are asfollows: ht tofixedincome. Bus property Bus Bus property £m £m Allotted,calledup and fully paid to fundorpartacquis Millions non rail non rail Other Other 694.7 46.9 £m £m g held as treasury shares for future issue in held astreasurysharesforfuture [[[KSELIEHGSQ g theyear(2010:noshares). Rail rolling Rail rollin itions madebytheGroup. stock stock 2011 £m £m £m g g nised directly in equity. nised directlyinequity.

Rail access Rail access char Millions charges 68.8 46.9 4.7 2011 2011 6.3 £m g £m £m £m g es expenseswas rectors’ bonus here areno Rail other Rail other 10.4 2010 2010 2010 6.3  £m £m £m £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

27. Commitments and contingencies continued Operating lease commitments – Group as lessor The Group’s train operating companies hold agreements under which they sub-lease rolling stock, and agreements with Network Rail for access to the railway infrastructure (track, stations and depots). Future minimum rentals payable under non-cancellable operating leases as at 2 July 2011 are as follows:

2011 2010 Land and Other rail Land and Other rail buildings agreements buildings agreements £m £m £m £m Within one year 2.4 21.7 2.8 18.5 After one year but not more than five years 4.1 63.3 5.5 48.8 More than five years –– 0.2 1.3 6.5 85.0 8.5 68.6 Performance bonds The Group has provided bank guaranteed performance bonds of £87.1m (2010: £111.0m), and season ticket bonds of £128.6m (2010: £116.7m) to the DfT in support of the Group’s rail franchise operations. These bonds are supported by a 65% several guarantee from The Go-Ahead Group plc and a 35% several guarantee from Keolis S.A. To support subsidiary companies in their normal course of business, the Group has indemnified certain banks and insurance companies who have issued certain performance bonds and a letter of credit. The letter of credit at 2 July 2011 is £38.0m (2010: £35.0m).

28. Pensions Retirement benefit obligations consist of the following:

2011 2010 Bus & Aviation Bus & Aviation Services Rail Total Services Rail Total £m £m £m £m £m £m Pre-tax pension liabilities (59.9) (17.0) (76.9) (96.9) – (96.9) Deferred tax asset 15.6 4.4 20.0 27.1 – 27.1 Post tax pension scheme liabilities (44.3) (12.6) (56.9) (69.8) – (69.8) Actuarial gains/(losses) on defined benefit pension plans 29.7 (16.8) 12.9 (28.6) 6.1 (22.5) Bus and aviation schemes The Go-Ahead Group Pension Plan For the majority of non-rail employees, the Group operates one main pension scheme, The Go-Ahead Group Pension Plan (the ‘Go-Ahead Plan’), which consists of a funded defined benefit scheme and a defined contribution section as follows: The defined contribution section of The Go-Ahead Plan is not contracted-out of the State Second Pension Scheme and is open to new entrants. The expense recognised for the defined contribution section of The Go-Ahead Plan is £5.2m (2010: £5.4m) being the contributions paid and payable. The defined benefit section of The Go-Ahead Plan is contracted-out of the State Second Pension Scheme and provides benefits based on a member’s final salary. The assets of the scheme are held in a separate trustee-administered fund. Contributions to this section are assessed in accordance with the advice of an independent qualified actuary. The section is effectively closed to new entrants. As a result, it can be expected that the service cost will increase in future as a percentage of payroll. However, this percentage is likely to be applied to a reducing total pensionable payroll. The Go-Ahead Plan is a Group plan for related companies where risks are shared. The overall costs of the Go-Ahead Plan have been recognised in the Group’s financial statements according to IAS 19. Each of the participating companies accounts on the basis of contributions paid by that company. The Group accounts for the difference between the aggregate IAS 19 cost of the scheme and the aggregate contributions paid. Wilts & Pension Scheme and Group Pension Plan Some employees of our Go South Coast operations participate in the Wilts & Dorset Pension Scheme or the Southern Vectis Group Pension Plan. These are defined benefit schemes which are externally funded and contracted-out of the State Second Pension Scheme. Contributions to the schemes are assessed in accordance with the advice of an independent qualified actuary. The schemes are closed to new entrants, however eligible employees can join the defined contribution section of The Go-Ahead Group Pension Plan. The expense recognised for the defined contribution section of the Wilts & Dorset Scheme and Southern Vectis Group Pension Plan is £0.1m (2010: £01.m) being the contributions paid and payable.

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Increase inlife expectancy ofpensionersornon-pensionersby1year Rate ofincreasepen views ofthefinancialmarkets(su acombinationof historical foreachassetclassreflects performanceanalysis, (i.e. equitiesandbonds).Theexpectedreturn the accountin The mostsi as shown. analysis oftheimpact ofthechan In makin Sensitivity analysis The expectedreturnon assets has been derivedasthe wei Non-pensioner Pensioner The discountrate is InexcessofanyGuaranteed MinimumPension(GMP)element. * Rate ofincreasepen salaries in ofincrease Rate Discount rate Consumer priceindexinflation Retail priceindex inflation A definedbenefitplanexistsforasmallnumber Other pension plans ThisincludesTheGo-AheadPlan’sliability driven investin * Cash/other* Property Bonds Equities Category ofassetsattheyearend Rate ofincreasein Price inflation –increaseof0.1% Discount factor– increase of0.1% are assessedinaccordance withthe adviceofanindependent qu Citybus haveentitlement toaDevon funded. Contributionstot CountyCouncildefinedbenefitplan.Bothschemesareexternally Summary ofyearendassumptions The expensereco A smallnumberofemployeesinavian Other pension arrangements g thevaluation, the above assu g nificant non-financial assump g assessments basedontheli g salaries –increaseof0.1% salaries nised for this is £nil (2010: £0.1m),bein nised forthisis£nil(2010: based ontheantici sions inpaymen sions inpayment gg g e in thekeyassumptions. Inisolation the followin ested by the yields available), andtheviewsested bytheyields ofinvestment or ce hadaccesstosepara mptions have For non-railbeen used. t –increaseof0.1% pated return of AA rated corporate pated returnofAArated and deferredpension* tion isthe assumed rateoflon fe expectancyofamalemembereach g portfolio, which was previouslyrecorded under ‘bonds’. of employees who transferred from East Thames Buses. Similarly transferred someemployees fromEastThames of employeeswho g g thecontributionspaid. hted avera te definedcontribu alified actuary.Bothschemes are nowclosed tonewentrants. g g e of the expected returns from each of themainasset classes returnsfromeach e oftheexpected evity. Thetablebelow shows the life expectancyassumptions used in

bonds withatermmatchin pension schemes,thefollowin tion pensionarran g pensionschemeat a adjustmentswould adjustthepension deficit andcost 6. 100.0 47.5 469.8 37.8 223.1 177.6 156.7 8.0 31.5 37.6 £m % 2011 [[[KSELIEHGSQ g anisations. g ements aspartofle g the maturity oftheschemeliabilities. g e 65. g isanapproximate sensitivity 2010 (Restated) £ % £m

420.0 100.0 39.9 167.6 43.1 181.0 3. 7.7 32.3 9.3 39.1 2011 Pension deficit g acy a 18.8 1.3 Years Years (9.5) (0.4) 2011 2011 the forwardlookin 5.4 0.3 2.0 0.1 2.7 4.7 5.6 2.7 3.7 8.7 – 20 19 £m % g reements. reements. he scheme of Plymouth Pension cost Years Years 2010 2010 n/a 3.3 4.3 5.3 3.3  20 19 £m g %

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

28. Pensions continued The weighted average expected long term rates of return were:

2011 2010 % p.a. % p.a. Weighted average rate of return 6.6 6.8 Funding position of the Group’s pension arrangements 2011 2010 2009 2008 2007 £m £m £m £m £m Employer’s share of pension scheme: Liabilities at the end of the year (529.7) (516.9) (428.7) (436.2) (404.5) Assets at fair value 469.8 420.0 352.7 376.8 380.0 Pension scheme liability (59.9) (96.9) (76.0) (59.4) (24.5) Pension cost for the financial year 2011 2010 £m £m Service cost 6.7 6.3 Interest cost on liabilities 27.2 26.6 Expected return on assets (28.7) (27.5) Pension costs 5.2 5.4 Curtailment gain (exceptional items) – (2.2) Total pension costs 5.2 3.2 Experience recognised in other comprehensive income 2011 2010 2009 2008 2007 £m £m £m £m £m Experience gains/(losses) on pension scheme liabilities 9.6 (68.6) 28.8 (10.5) 35.0 Experience gains/(losses) on assets 20.1 40.0 (49.7) (39.6) 25.6 Total gains/(losses) recognised in other comprehensive income during the year 29.7 (28.6) (20.9) (50.1) 60.6 The Directors were unable to determine how much of the pension scheme deficit recognised on transition to IFRSs and then taken directly to equity is attributable to actuarial gains and losses since the inception of the pension schemes. Consequently the Directors are unable to determine the amounts of actuarial gains and losses that would have been recognised in other comprehensive income before 3 July 2004. Analysis of the change in the pension scheme liabilities over the financial year 2011 2010 £m £m Employer’s share of pension scheme liabilities – at start of year 516.9 428.7 Service cost 11.8 12.1 Interest cost 27.2 26.6 Actuarial (gains)/losses* (9.6) 68.6 Benefits paid (16.6) (16.9) Curtailments – (2.2) Employer’s share of pension scheme liabilities – at end of year 529.7 516.9 * The actuarial gain of £9.6m in the year to 2 July 2011 includes the impact of an actuarial gain of £12.6m relating to the change from RPI to CPI. Analysis of the change in the pension scheme assets over the financial year 2011 2010 £m £m Fair value of assets – at start of year 420.0 352.7 Expected return on assets 28.7 27.5 Actuarial gains on assets 20.1 40.0 Company contributions 12.5 10.9 Employee contributions (including age related rebates) 5.1 5.8 Benefits paid (16.6) (16.9) Fair value of plan assets – at end of year 469.8 420.0

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views ofthefinancialmarkets(su acombinationof historical foreachassetclassreflects performanceanalysis, (i.e. equitiesandbonds).Theexpectedreturn the accountin The mostsi Category ofassetsattheyearend It isourexperience thatall pension obli matchinIn addition tothe defined benefitcost,BRASS open tonew ofeach entrants andtheassets andliabilities liabilities split60%/40%b is asharedcostsscheme,withassetsand The expectedreturnon assets has been derivedasthe wei Non-Pensioner Pensioner The discountrate is InexcessofanyGuaranteed MinimumPension(GMP)element. * Rate ofincreasepen salaries in ofincrease Rate Discount rate Consumer priceindexinflation Retail priceindex inflation Summary ofyearendassumptions schedule ofcontributions a The majorityofemployees The RailwaysPension Scheme(theRPS) Rail schemes Estimated totalcontributions infinancialyear2012 infinancial yearEstimated employeecontributions 2012 Estimated companycontributions infinancial year 2012 Estimated contributionsforfuture Wei The wei Cash Property Bonds Equities

obli into a franchise, theoperatorbecomesdesi other trainoperatin spite ofourpastexperienceandthat g g ations reco hted avera g hted avera g nificant non-financial assump g assessments basedontheli g g nised onthebalance sheetunderIAS19areonlythose thatareexpected tobefundeddurin e rateofreturn g based ontheantici e expectedlon sions inpayment g in ourtrainoperatin reed with the scheme trusteesandactuaries, inrespectofwhichnofundin reed withthescheme gg ested by the yields available), andtheviewsested bytheyields ofinvestment or g termratesofreturnwere: pated return of AA rated corporate pated returnofAArated g ations totheRPSceaseonexpiryoffranchises cashor without othersettlement, andthereforethe and deferredpension* tion isthe assumed rate oflon fe expectancyofamalemembereach g g nated employer for the term of the contract andunderthenated RPS rulesisobli employer forthetermofcontract companiesaremembersofsections g AVC company contributions of £0.9m (2010: £1.2m) were paid in the year. AVCcompanycontributions (2010:£1.2m)werepaidinthe of£0.9m year. company’s section are separately identifiable andse g g hted avera companies provin etween thefranchiseh g g e of the expected returns from each of themainasset classes returnsfromeach e oftheexpected evity. Thetablebelow shows the life expectancyassumptions used in

bonds withatermmatchin g otherwise, ourle ,2. 100.0 1,021.7 pensionschemeat a 1. 89.7 916.5 904.8 4.9 49.0 50.1 . 0.6 6.1 £m % the RPS,afundeddefinedben older/employee respectively.TheRPS 2011 [[[KSELIEHGSQ g anisations. g al obli g g cap issetoutinthefranchise contract. the maturity oftheschemeliabilities. g g e 65. ations arenotrestricted. Onenterin 2010 £ % £m

583 61.6 528.3 161 14.7 126.1 96.9 11.3 857.7 100.0 12.4 106.4 g g re the franchise term. However,in g ated forfundin efit scheme. TheRPS efit scheme. % p.a. years 2011 2011 2011 the forwardlookin 2.7 4.7 5.6 2.7 3.7 8.0 22 20 g % ed to meetthe ed £m sectionsareall g purposes. % p.a. 17.7 13.2 years 2010 2010 2010 n/a 3.3 4.5 4.3 5.3 3.3 7.5  22 20 g % g

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

28. Pensions continued Funding position of the Group’s pension arrangements 2011 2010 2009 2008 2007 £m £m £m £m £m Employer’s share of pension scheme: Liabilities at the end of the year (1,232.4) (1,195.2) (937.1) (1,026.5) (652.0) Assets at fair value 1,021.7 857.7 705.8 869.7 651.8 Gross deficit (210.7) (337.5) (231.3) (156.8) (0.2) Franchise adjustment 193.7 337.5 223.8 156.8 (2.1) Pension scheme liability (17.0) – (7.5) – (2.3) Pension cost for the financial year 2011 2010 £m £m Service cost 42.9 38.1 Interest cost on liabilities 45.4 40.8 Expected return on assets (38.7) (34.5) Interest on franchise adjustments (17.8) (13.5) Pension cost 31.8 30.9 Experience recognised in Other Comprehensive Income 2011 2010 2009 2008 2007 £m £m £m £m £m Experience gains/(losses) on pension scheme liabilities 96.4 (136.4) 89.6 (65.3) 4.8 Experience gains/(losses) on assets 48.3 41.9 (152.9) (81.5) 36.4 Franchise adjustment movement* (161.5) 100.6 57.3 152.3 (26.8) Total (losses)/gains recognised in other comprehensive income during the year (16.8) 6.1 (6.0) 5.5 14.4 * The franchise adjustment movement of £161.5m in the year to 2 July 2011 includes the impact of a franchise adjustment movement of £140.4m relating to the change from RPI to CPI. The Directors were unable to determine how much of the pension scheme deficit recognised on transition to IFRSs and then taken directly to equity is attributable to actuarial gains and losses since the inception of the pension schemes. Consequently the Directors are unable to determine the amounts of actuarial gains and losses that would have been recognised in other comprehensive income before 3 July 2004. Analysis of the change in the pension scheme liabilities over the financial year 2011 2010 £m £m Employer’s share of pension scheme liabilities – at start of year 1,195.2 937.1 Franchise adjustment (337.5) (223.8) 857.7 713.3 Liability movement for members’ share of assets 77.8 71.1 Service cost 42.9 38.1 Interest cost 45.4 40.8 Interest on franchise adjustment (17.8) (13.5) Actuarial (gains)/losses (96.4) 136.4 Benefits paid* (32.4) (27.9) Disposal of New Southern Railway Limited – (269.9) Addition of Southern Railway Limited – 269.9 Franchise adjustment movement 161.5 (100.6) 1,038.7 857.7 Franchise adjustment 193.7 337.5 Employer’s share of pension scheme liabilities – at end of year 1,232.4 1,195.2 * The actuarial gain of £96.4m in the year to 2 July 2011 includes the impact of an actuarial gain of £124.1m relating to the change from RPI to CPI.

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If theGrouphadaccountedfor to existattheendoffranchisewhichGroup will notberequired tofundorbenefitfrom. The total surplus or deficitrecordedisadjustedbywayofa‘franch made tothefinancialstatements: prevent ordertoachieve afairpresentation ofthe departed fromtherequirementsofGroup’s obli IAS19in Fair value ofplan assets –atendofyear Members’ shareofmovementassets Limited Railway ofSouthern Addition Tax onactuarial losses/( Defined benefit pension plan Balance sheet the treatmentadoptedfornon-rail defined benefitschemes.Indoin constructive butnotitsle RPS toensurethatthefinancial statementspresentfairlytheGroup’s the termsofeach franchise a IAS 19would requiretheGroupto accountforitsle Estimated totalcontributions infinancial year2012 infinancial yearEstimated employeecontributions 2012 Estimated companycontributions infinancial year 2012 Estimated contributionsforfuture Disposal ofNew Souther Benefits paid Company contributions Actuarial Expected return onassets Fair valueofassets –atstartofyear Analysis ofthechange inthepension schemeassets overthefinancial year All ofthe aboveplans have beenaccounted for under IAS19coverin IAS 19disclosures Operatin Income statement Actuarial (losses)/ Other comprehensiveincome

Intan Deferred taxasset Intan Deferred taxchar g g ible assetamortisation ible asset g g g ains arisin costs– franchise adjustment ains on assets g g ains g e on transfer ofthe existin on transfer g ains) n RailwayLimited g al RPSdefinedbenefitobli g reement. Followin rail schemesinaccordance withthe g RPSdeficitstoanew franchise owner at exit. g industry practice, theGrouphasconcl industry practice, g g ations. In all other respectstheGroup’saccountin al obli g ation under theformaltermsation oftheRPSanditsconstructiveobli ise adjustment’, which is thatportion ofthe deficitors g so, theGrouphasapp g financial position, employee benefits. full provisionsofIAS19thefollowin financial performance uded thatthe appropriate accountin lied theprovisionsofpara [[[KSELIEHGSQ g ations re g policy with isconsistent IAS19and g

and cashflows, adjustments wouldhavebeen g ardin g its rail schemes and itsrail g raph 17 ofIAS1and 1,021.7 (161.5) (133.5) (193.7) (119.5) 857.7 urplus projected (32.4) (17.8) (10.3) 77.8 31.6 48.3 38.7 42.0 13.3 46.9 2011 2011 3.9 3.6 is toreco £m £m g – – policyforthe g £m

ation under g nise its (269.9) (230.6) (337.5) 857.7 269.9 705.8 100.6 (27.9) (28.2) (13.5) 53.9 71.1 21.5 32.4 32.3 41.9 34.5 72.4 17.2 89.7 2010 2010 (6.8) 4.0 2.7  £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

29. Related party disclosures and Group undertakings The consolidated financial statements include the financial statements of The Go-Ahead Group plc and the following material Group undertakings:

% equity interest Name Country of incorporation 2011 2010 Principal Subsidiaries Go-Ahead Holding Limited United Kingdom* 100 100

Go North East Limited United Kingdom 100 100 Transport Services Limited United Kingdom 100 100 Bus Company Limited United Kingdom 100 100 Dockland Buses Limited United Kingdom 100 100 Buses Limited United Kingdom 100 100 Metrobus Limited United Kingdom 100 100 Brighton & Hove Bus and Coach Company Limited United Kingdom 100 100 City of Motor Services Limited United Kingdom 100 100 Go South Coast Limited United Kingdom 100 100 Plymouth Citybus Limited United Kingdom 100 100 Konectbus Limited United Kingdom 100 100 Thames Travel (Wallingford) Limited United Kingdom 100 –

New Southern Railway Limited United Kingdom** 65 65 London and South Eastern Railway Limited United Kingdom** 65 65 London and Birmingham Railway Limited United Kingdom** 65 65 Southern Railway Limited United Kingdom** 65 65 Govia Limited United Kingdom** 65 65

Abingdon Bus Company Limited United Kingdom 100 100 aviance UK Limited United Kingdom 100 100 Reed Aviation Limited United Kingdom – 100 Meteor Parking Limited United Kingdom – 100 Nikaro Limited United Kingdom – 100

Go-Ahead Leasing Limited United Kingdom 100 100

Go-Ahead Holding LLC United States of America 100 100 Jointly controlled entities Go-Ahead North America LLC United States of America 50 50 * Held by The Go-Ahead Group plc. All other companies are held through subsidiary undertakings. ** The rail companies are 65% owned by The Go-Ahead Group plc and 35% owned by Keolis S.A. and held through Govia Limited. Transactions with other related parties The Group meets certain costs of administering the Group’s retirement benefit plans, including the provision of meeting space and office support functions to the trustees. Costs borne on behalf of the retirement benefit plans amounted to £0.4m (2010: £0.3m). Compensation of key management personnel of the Group The key management are considered to be the Directors of the Group.

Restated 2011 2010 £m £m Salaries 1.4 1.3 Bonus 1.0 1.1 Pension contributions 0.1 0.1 Share based payments – – 2.5 2.5

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we haveformed. as abody,forourauditwork,this report,orfortheopinions to anyoneotherthanth extent permitted bylaw,wedonot acceptorassumeresponsibility them inanauditors’ re the Company’smembersthosematterswe mi we sothat undertaken been has work audit Our 16oftheCompaniesAct2006. accordance with Chapter3ofPart This reportismadesolelytoth Standards (United Kin with the Auditin • and adequatelydisclosed; thereasonableness ofsi parent company’s circumstances and havebeen consistently applied assessment of:whethertheaccountin orerror.Thisincludesan misstatement, whethercausedbyfraud assurance thatthe disclosures inthe financial statementssufficient to An audit involves obtainin Scope oftheauditfinancial statements Auditin in accordance with applicable law and International Standards on and expressanopinion on theparentcompanyfinancial statements that they of theparentcompany financial statements andforbein set outonpa As explainedmorefullyinthe Respective responsi preparation isapplicablelaw andUnitedKin The financial reportin the parentcompanybalancesheet and therelatednotes 1to15. Go-Ahead Group Plcfortheyearended2July2011 which comprise We have audited theparentcompanyfinancial statements ofthe GO-AHEAD GROUPPLC INDEPENDENT AUDITORS’REPORT TOTHEMEMBERSOF FINANCIAL STATEMENTS • • In our opinion the parentcompanyfinancial statements: Opinion onfinancial statements or inconsistencies weconsiderthe If webecomeawareofany material inconsistencies withthe auditedfinancialstatements. annu the in information financial financial statements. In addition, wereadallthe financial and non- theoverall presentation ofthe estimates madebytheDirectors;and    Companies Act 2006. with therequirementshave beenpreparedinaccordance ofthe Generally AcceptedAccountin have been properly prepared in accordance withUnited Kin have beenproperlypreparedin as at2July2011; g ive atrueand fair viewofthestate oftheCompany’s affairs g (UKandIreland).Thosestan g ive atrue andfair view. Ourresponsibility istoaudit g e 80, theDirectorsareresponsibleforpreparation g Practices Board’sEthical financial statements arefreefrommaterial g g framework that has beenapplied intheir and for no other purpose. Tothefullest no otherpurpose. port andfor dom Generally AcceptedAccountindom Generally e Company andtheCompany’smembers bilities of Directors and Auditor g evidence abouttheamountsand apparent materia Directors’ Responsibilities Statement e Company’s members, asabody,in e Company’smembers, al report and acco al reportand g implications forourreport. Practice;and g dards requireustocomply policies areappropriate tothe StandardsforAuditors. g are required tostate dom Accountin l misstatements g g unts to identify unts toidentify nificant accountin ive reasonable g ht state to state ht g satisfied g Practice). g

g dom g

1. Notes: 31 Au London for andonbehalf of Ernst&Youn Kathryn Barrow(Seniorstatutoryauditor) We have nothin Matters onwhich wearerequired to report byexception • • In our opinion: Act2006 Companies Opinion onothermatterprescribed by the of the Go-Ahead Group plc for theyearended2July of theGo-Ahead 2011. Group plcfor the Groupfinancial statements We havereported separatelyon Other matter • • • • in ouropinion: where the CompaniesAct2006requires ustoreportyouif, 2.         website is the responsibility of the Directors; theworkcarriedout website istheresponsibilityof The maintenance andinte with theparent company financial statements. year forwhich the financial statementsconsistent arepreparedis information the Act 2006;and accordance withtheCompanieshas beenproperly preparedin the partofDirectors’RemunerationReporttobeaudited we requireforouraudit. we havenotreceived allthe information and explanations law arenotmade; or certain disclosures ofDirectors’remuneration specified by in a tobe auditedarenot the Directors’Remuneration Report the parentcompanyfinancial statements andthepartof notvisitedbyus;or not beenreceived frombranches parent company, or returnsadequate forouraudit have adequate accountin other jurisdictions. dissemination offinancialstatements maydifferfromle Le they wereinitially presented onthe website. chan and, accordin by theauditorsdoesnotinvolve consideration ofthesematters g g ust 2011 islation inthe United Kin g reement with theaccountin g es that may have occurredtothefinancial statements since g to reportinrespectofthefollowin g ly, theauditors noresponsibilityforany accept g [[[KSELIEHGSQ iven in the Directors’ Report for the financial iven intheDirectors’ Reportforthe g recordshave notbeenkeptbythe g rity oftheGo-Ahead Groupplc g dom g LLP, Statutory Auditor g recordsandreturns; or g overnin

g thepreparation and g matters g islation in 

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS PARENT COMPANY BALANCE SHEET AS AT 2 JULY 2011

Restated 2011 2010 Notes £m £m Fixed assets Tangible assets 2 82.5 83.3 Investments 3 151.9 151.9 Financial assets 0.8 4.3 235.2 239.5

Current assets Debtors: amounts falling due within one year 4 553.1 559.4 Cash on deposit – – Financial assets 8.8 3.3 561.9 562.7

Creditors: amounts falling due within one year 5 (121.0) (126.4)

Net current assets 440.9 436.3

Total assets less current liabilities 676.1 675.8

Creditors: amounts falling due after more than one year 5 (199.9) (200.6) Provisions for liabilities: deferred taxation 6 – (0.1) Provisions for liabilities: other 7 (9.5) (8.5)

Net assets 466.7 466.6

Capital and reserves Share capital 9, 10 4.7 4.7 Share premium 10 67.4 67.4 Revaluation reserve 10 10.3 10.3 Other reserve 10 8.8 8.8 Capital redemption reserve 10 0.7 0.7 Reserve for own shares 10 (69.8) (69.0) Profit and loss account 10 444.6 443.7 Equity shareholders’ funds 466.7 466.6

Keith Down, Group Finance Director 31 August 2011

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website. Le the corporateand financial information included onthe Company’s The Directorsare responsibleforthe maintenance and inte of fraudandother irre hence fortakin other jurisdictions. and disseminationoffinancia and re and thefinancial statements inaccordance with applicable law The Directorsare responsibleforpreparin STATEMENTS FINANCIAL PARENT COMPANY DIRECTORS’ RESPONSIBILITIESINRELATIONTOTHE FINANCIAL STATEMENTS are alsoresponsible forsafe theCompaniesAct 2006. They financial statementscomplywith position oftheCompany andtoenablethemensure thatthe and disclosewith reasonable accur show that aresufficient and explaintheto Company’stransactions The Directorsare responsibleforkeepin • • • • In preparin of theCompanyfor thatperiod. Company andoftheprofitorloss that they must notapprove thefinancial statements unlessthey aresatisfied Standards andapplicable la Generally AcceptedAccountin prepare thefinancial statementsinaccordancewithUnitedKin law the Directors have electedto for eachfinancialyear.Underthat Company lawrequirestheDirectors topreparefinancialstatements     continue inbusiness. unless itisinappropriatetopr prepare thefinancial statements onthe explained inthe financialstatements; and followed, subjecttoanymateria state whether applicableUKAccountin and prudent; make jud consistently; select suitable accountin g ulations. g ive atrue andfair view of thestateofaffairs ofthe g g these financialstatements, theDirectorsarerequiredto: islation inthe United Kin g ements andaccountin g reasonable steps for theprevention reasonable steps anddetection g ularities. w). Under companylawtheDirectors g g l statementsmaydifferfromle uardin policies and then applythem g Practice (UnitedKin Practice esume thatthe Companywill acy atanytimethe financial g theassetsof Company and l departuresdisclosed and g g estimates that arereasonable dom g properaccountin g g g theAnnual Report g overnin Standards have been oin g concern basis g g thepreparation dom Accountin g g g islation in rity of records g dom g

[[[KSELIEHGSQ 

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS

1. Parent company accounting policies Share based payments Basis of preparation Amendment to FRS 20 The separate financial statements of the Company are presented as The amendment clarifies the accounting for Group cash-settled share required by the Companies Act 2006 and were approved for issue based payment transactions, where a subsidiary receives goods or on 31 August 2011. They have been prepared in accordance with services from employees or suppliers but the parent or another entity applicable United Kingdom Generally Accepted Accounting Practice. in the Group pays for those goods or services. No profit and loss account is presented by the Company as Adoption of the amendment to FRS 20 did not have a material permitted by Section 408 of the Companies Act 2006 and the impact on the financial performance or position of the Company. Company has taken the exemptions under FRS 1 to not present The Company has taken advantage of the transitional provision a cashflow statement. of FRS 20 and has applied FRS20 only to those options granted The Company has taken advantage of the exemption available to after 7 November 2002. The cost of options granted to employees parent companies under FRS 29 Financial Instruments: Disclosures so is measured by reference to the fair value at the date at which they as not to provide the information otherwise required by the standard, are granted, determined by an external valuation using an appropriate as the Group’s consolidated financial statements, in which the pricing model. In valuing equity-settled options, no account is taken Company is included, provide equivalent disclosures for the Group of any performance conditions, other than conditions linked to the under IFRS 7 Financial Instruments: Disclosures. price of the shares of The Go-Ahead Group plc (‘market conditions’), to conditions not related to performance or service (‘non-vesting Tangible fixed assets conditions’) and to earnings per share criteria. Property, plant and equipment is stated at cost or deemed cost less accumulated depreciation and any impairment in value. Freehold land The cost of options is recognised in the profit and loss account is not depreciated. over the period from grant to vesting date, being the date on which the relevant employees become fully entitled to the award, with a Assets held under finance leases are depreciated over the shorter corresponding increase in equity. The cumulative expense recognised, of their expected useful lives and the lease terms. at each reporting date, reflects the extent to which the period to Depreciation is charged to the profit and loss account based on cost vesting has expired and the Directors’ best estimate of the number or valuation, less estimated residual value of each asset evenly over of options that will ultimately vest or, in the case of an instrument its expected useful life as follows: subject to a market or non-vesting condition, be treated as vesting as described above. This includes any award where non-vesting Short leasehold land and buildings The life of the lease conditions within the control of the Group or the employee are Freehold buildings and not met. long leasehold land and buildings Over 10 to 100 years No cost is recognised for awards that do not ultimately vest except Plant and equipment Over 3 to 15 years for awards where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or The carrying values of items of property, plant and equipment not the market or non-vesting condition is satisfied, provided that all are reviewed for impairment when events or changes in other performance conditions are satisfied. Where an equity-settled circumstances indicate the carrying value may not be recoverable. award is cancelled, it is treated as if it had vested on the date of If any such indication exists the assets are written down to their cancellation, and any cost not yet recognised for the award is recoverable amount. recognised immediately. Investments Deferred tax Fixed asset investments in subsidiaries and associates are shown at The charge for taxation is based on the profit for the year and takes cost less provision for impairment. into account taxation deferred because of timing differences between Pension benefits the treatment of certain items for taxation and accounting purposes. The Company is a member of The Go-Ahead Group Pension Plan Deferred taxation is provided on all timing differences which have operated by The Go-Ahead Group plc for the majority of its originated but not reversed at the balance sheet date. Except where employees. This defined benefit scheme is a multi-employer scheme otherwise required by accounting standards, no timing differences are for which the individual employer’s share of the underlying assets and recognised in respect of: liabilities cannot be identified and accordingly the Company accounts for them as defined contribution schemes. • property revaluation surpluses where there is no commitment to sell the asset; For the defined contribution schemes, the amount charged to the profit and loss account in respect of pension costs and other post- • gains on sale of assets where those gains have been rolled over retirement benefits is the contributions payable in the year. into replacement assets; Differences between contributions payable in the year and • deferred tax assets except to the extent that it is more likely than contributions actually paid are shown as either accruals or not that they will be recovered. prepayments in the balance sheet. Deferred tax is calculated at the enacted rates at which it is estimated the tax will be payable. The deferred tax provision is not discounted to net present value.

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subsequently remeasu Financial assetsare initially reco Financial assetsare accountedfor inaccordancewith FRS 26. Financial assets for ownsharestoprofitandloss. cancellation ofthe Company’sshares istransferredfromthereserve for ownshares.Any costs arealsoreco are deductedfromequity.Consideration paidandthe associated Re-acquired sharesin Treasury shares income statement. in notes 5and7.Thereisnoeffect on amounts reported inthe The impactofthis reclassification onthebalancesheet issetout effect of these chan been restatedtoshow the aids comparability with ourpeers this chan utilisation andre-measurementoftheseobli The Companyuses ener transaction priceplusdirectlyattributable transaction costs. and accompanied by the provision. Asaresult,this liability is now classified within provisions of certaintytoclassify allofthisliabili isnolon the Grouphasdeterminedthatthere nature ofclaimsandtheincreasin in thebalance sheet. Inli we have As partofourre classified this liability asan accrualwithin thecurrent liabilities. mana and evaluation The Grouphasaccumulated considerable experience inthe been reportedtotheCompany. sheet datebutthat havenotyet that willbemadeinrespectofincidents occurrin settlement onknown claims,to professional advice andisbasedonanassessmentoftheexpected The estimation of this liability ismadeaftertakin subject totheoverall stoploss. settle claimsforincidentsoccurrin A liability isreco an annuala These provideindividual claim cover, subjecttohi public liability claims throu The Companylimits costofmotor,employerand itsexposureto the Uninsured liabilities

fair value by reference to market values for similar instruments, and values forsimilar fair valuebyreferencetomarket with fuel pricefluctuations. Such derivatives areinitially reco g g e in presentation provides morerelevantinformation and iven full consideration to the classification of thisliability gg re g g ate stoplossfortotalclaimswithin the excesslimits. g nised fortheestimatedcostto Companyto ular review ofreportin ular g nised in shareholders’ fundsasaseparate reserve nised inshareholders’ g g ement of such claims and has historically historically has and ofsuch claims ement ain or loss on the purchase,sale,ain orloss issueor the Company,which remainuncancelled, red atfairvalueeach balance sheetdate. g g disclosures relatin ht ofdevelopin y derivatives tohed g h insurance policiesissued bythirdparties. g g nised atfairvalue, bein ether with an estimate ofsettlements g g in theindustry. Comparatives have timeinvolvedintheirresolution, prior to thebalancesheetdate, ty asanaccrualrather thanasa g g practicesandpolicies, trendsrelatin g totheircreation, g ations. We believethat g e itsrisksassociated g g er asufficient de es. g g appropriate g priortothebalance h excess limitsand g g the the to the g nised at g ree and effectiveashed Chan and lossaccount. or otherdereco is nolon related non-financial asset as describedabove.Ifahed and lossaccount or included inthe initial carryin the forecasttransaction occurs,at which pointitistakentothe profit reco in time,anycumulative immediately intheprofitandlossa portionisreco comprehensive incomeandtheineffective liabilities andany amortised costusin Followin fair valueofthe consideration receivedafterdeduction ofissuecosts. Debt isinitially stated attheamount ofthenetproceeds, bein Debt profit andlossaccount onastrai incentives andinitial directcostsinsecurin Rentals payableunderoperatin are classifiedasoperatin ownership areretained bythelessor Leases whereasi Leasing commitments and lossaccount. reco or otherwisenolon is sold,terminated orexercised withoutreplacement or rollover, Hed profit andlossaccount astheyarise. at thetime reco thatasset orliabilityis results inthe reco or lossesarisin For derivativesthatdonotqualifyforhed hed reco reco non-financial asset orliability. Forhed comprehensive incomeareincluded losses onthederivative that had previously beenreco g g g g g g ed itemaffects netprofitorloss. g e accountin nised inother comprehensive incomeistransferred totheprofit nised inother comprehensive incom nised intheprofitandlossaccou nition ofanassetoraliabi es in thefair valueoffinancial instruments thataredesi g g initial reco er expected tooccur,the netcumulative g fromchan g g nition ofdebtarereco g g g isdiscontinuedwhenthe derivative expiresor ains andlossesarisin nificant portion of alltherisks andrewardsof nition ofanon-financial assetoraliability, then g g g g the effectiveinterestmethod.Amortisationof es of futurecashflows arereco es er qualifies for hed [[[KSELIEHGSQ nition thecarryin g ain orloss on the hed g es infair value aretaken directly tothe g lity, amounts deferredinequityare leases, andtheamortisation oflease g ht-line basisovertheleaseterm. ccount. Whenth in theinitial measurement ofthat g es thatdonot resultin the g nt inthe periodinwhichthe g g amount ismeasuredat g on therepurchase, settlement nised, theassociated g e accountin nised directlyintheprofit g g e iskeptin equity until e accountin leases, are char g in g amount ofthe g instrument g g e cashflow hed e cashflow g ain orloss nised inother . Atthatpoint g g g nised inother ed transaction , any g nised g ed tothe g g g g ains ains or nated g leases. the  g e

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

2. Tangible fixed assets Freehold land Leasehold Plant and and buildings properties equipment Total £m £m £m £m Cost or valuation: At 3 July 2010 78.5 5.8 11.3 95.6 Additions 1.1 0.2 1.9 3.2 Disposal of Meteor (0.5) – – (0.5) At 2 July 2011 79.1 6.0 13.2 98.3

Depreciation: At 3 July 2010 7.5 1.3 3.5 12.3 Charge for the year 0.5 0.2 2.8 3.5 At 2 July 2011 8.0 1.5 6.3 15.8

Net book value: At 2 July 2011 71.1 4.5 6.9 82.5 At 3 July 2010 71.0 4.5 7.8 83.3 Freehold land and buildings include non-depreciable land amounting to £27.6m (2010: £27.8m). The net book value of leasehold properties comprises:

2011 2010 £m £m Leases with 50 or more years unexpired 1.2 1.2

3. Fixed asset investments Shares in Group companies £m Cost or valuation: At 3 July 2010 & 2 July 2011 151.9

Provisions: At 3 July 2010 & 2 July 2011 –

Net carrying amount: At 3 July 2010 & 2 July 2011 151.9 For details of the principal operating subsidiary undertakings as at 2 July 2011, refer to note 29 of the Group financial statements. As permitted under Section 410 (1) and (2) of the Companies Act 2006, the information is given only for the undertakings whose results or financial position, in the opinion of the Directors, principally affect the figures shown in the financial statements.

4. Debtors Amounts falling due within one year 2011 2010 £m £m Amounts owed by Group companies 543.9 555.4 Corporation tax 5.5 0.5 Other debtors 3.7 3.5 553.1 559.4

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Uninsured claims of £8.5m at 3 July 2010, previously included within creditorsarenow shown asprovisions.Uninsured claimsof£8.5mat3July 2010, previously includedwithin claims. Itisestimatedthatthemajority ofunin Other financial liabilities Other financial liabilities Other creditors Capital allowances inadvance ofdepreciation Deferred taxation providedattheenacted rateisasfollows: At 2July2011 Provided directlytoequity Provided durin At 3July2010 6. Deferred taxation The Companyhas nosecurityoveritsliabilities. In morethan5years In morethantwo years butno In morethanoneyearbutno Sterlin Amounts falling dueaftermorethanoneyear creditorsarenow shown asprovisions.Uninsured claimsof£8.5mat3July 2010, previously includedwithin Amounts owedto Groupundertakin Bank loansandoverdrafts Amounts falling duewithinoneyear 5. Creditors Followin As at2July2011 Utilised Provided As at3July2010(restated) 7. Other provisions Other timin g 7.5yearbondrepayable: g amana g differences g theyear g ement review,itwasdecidedthatunin t more thantwoyears t more thanfiveyears g s sured claimswillbesettledwi sured claimsbeclassi thin thenextsixyears. fied asprovisions [[[KSELIEHGSQ g iven the expected timin

199.9 121.0 195.7 g andnature ofthese 16.2 98.8 (0.1) 2011 2011 2011 0.4 1.7 3.8 4.3 0.1 £m £m £m – –

9.5

Deferred tax Uninsured Restated 200.6 126.4 103.5 196.6 claims 2010 2010 2010 (0.1) (0.4) (0.1) (0.2) 4.0 8.1 9.7 0.1 5.1 1.4 8.5 0.1  £m £m £m £m £m – – – –

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

8. Pension commitments Defined contribution: The Company participates in the defined contribution scheme of The Go-Ahead Group Pension Plan. This scheme is not contracted-out of the State Second Pension Scheme and is open to new entrants. The expense recognised in these accounts for the year is £0.2m (2010: £0.1m) being the contributions paid and payable. Defined benefit: The Company participates in a scheme which is part of The Go-Ahead Group Pension Plan. The assets of the scheme are held separately from those of the Company in an independently administered fund. The most recent actuarial valuation of the scheme was at 31 March 2009 and was updated by Towers Watson LLP to take account of the requirements of FRS 17 in order to assess the liabilities of the scheme at 2 July 2011 and 3 July 2010. The contributions paid to the scheme are paid in line with the schedule of contributions, being 13.3% and 11.2% of pensionable salaries paid to upper and lower tier sections respectively. The defined benefit scheme is effectively closed to new entrants. As a result it can be expected that the service cost will increase in future, as a percentage of payroll. However, this percentage is likely to be applied to a reducing total pensionable payroll. The scheme is a multi-employer scheme and in accordance with FRS 17, the Company has accounted for its contributions to the scheme as if it were a defined contribution scheme because it is not possible to identify the Company’s share of the net assets and liabilities in the scheme on a consistent and reasonable basis due to the high volume of members/pensioners and the historic interaction between Group companies. The following disclosures provide details of the entire defined benefit scheme. The main assumptions are:

2011 2010 % % Rate of increase in salaries 4.7 4.3 Rate of increase in deferred pensions 2.7 3.3 Discount rate 5.6 5.3 Retail price index inflation 3.7 3.3 Consumer price index inflation 2.7 n/a The fair value of the scheme assets and the expected rate of return, the present value of the scheme liabilities and the resulting deficit are:

2011 2010 Long term rate of Long term rate of return expected Value return expected Value % £m % £m Equities 7.9 139.2 7.9 147.8 Bonds 5.7 235.1 5.3 190.4 Properties 7.3 31.3 7.4 32.3 Cash 3.7 6.3 3.9 0.7 Total market value of assets 411.9 371.2 Present value of scheme liabilities (456.3) (444.3) Pension liability before deferred tax (44.4) (73.1) Related deferred tax asset 11.5 20.5 Net pension liability (32.9) (52.6)

9. Called up share capital Allotted, called up and fully paid 2011 2010 Millions £m Millions £m As at 3 July 2010 & 2 July 2011 46.9 4.7 46.9 4.7 The Company has one class of ordinary shares which carry no right to fixed income.

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in favourofonetheGrou which 132,427 areheld sharecapital),of The reserveforownsharesisinrespect of 4,034,657ordinaryshares(8.6%total At 2July2011letters ofcreditamountin schemes were£44.4masat2July2011 (2010:£69.8m). The auditfeepayableinrespectoftheCompanywas £0.1m(2010:£0.1m). is providedinthe Directors’ Report. t2Jl 01 . 6. 038807(98 446466.7 444.6 (69.8) 466.6 0.7 443.7 8.8 (69.0) 10.3 0.7 466.2 The Company’sannual 67.4 8.8 11. Operating lease commitments 443.3 4.7 (68.8) 10.3 0.7 67.4 4.7 8.8 10.3 The cumulativeamountof At 2July2011 67.2 char payment based Share AcquisitionOther reco 4.7 DividendsProfitAt 3July2010 Arisin ReserveAcquisitionOther reco DividendsProfitAt 27June2009 10. Share capitalandreserves for transfer for – the of – the year own of––––– – ––––0.1 – ––––– 16.316.3 year own––––– shares – ––––– (0.1)– 34.034.0 (23.8)(23.8) shares (45.7)(45.7) – ––––(0.8) – ––––(0.3) –(0.8) –(0.3) The Companyhas issued The Companyprovides liabilities 13. Contingent There werenocapitalcommitments at2July2011(2010: £nil). commitments 12. Capital In secondtofifth years Within oneyear The informationrequ the year(2010:noshares). (2010: £0.3m)includin and Directors’ bonus plans that mayvest(2010: 26,447shares)forpotential inthefuture.LTIP awards A consideration of£0.8 in appropriatecircumstances. Durin as treasuryshares for re-issue arran LTIP and plans bonus Group Pension Plan,andWilt g on shares issued for share options – 0.2–––– –0.2 g g nisednised losses losses – ––––– 8.08.0 – ––––– 12.212.2 ired bySchedule8ofthe Lar g commitmentsundernon-cancellable operatin expenses was made for the shares purchased durin thesharespurchased expenseswasmadefor g uarantees in respectofbankand uarantees g g uarantees dated30March2006 toparticipatin g g e – ––––– 0.40.4 oodwill written offtotheprofitandlossreserveof theCompanyoodwill at2July2011 is£0.2m(2010:£0.2m). ements. The remainin The ements. p’s insurers, liabilitiesoftheCompanyanditssubsidiaries. tocover s & Dorset Pension Scheme in respect ofschemeliabilitiess &DorsetPension arisin Scheme inrespect g

to£38.0m(2010:£35.0m)wereprovidedbyaCompanybanker, capital Share g g shareswerepurchasedinordertoenhanceshareholders’ returnsandare bein £m e andMedium-sizedCompanies Groups (AccountsandReports)Re equipment finance borrowin premium Share £m g the year ended 2 July 2011 theCompany hasrepurchased the yearended2July2011 58,632 shares g leases areasfollows: Revaluation g reserve subsidiariesofTheGo-Ahead Group Pension Plan,Southern Vectis g the year, The Companyhasnotcancelled theyear,anysharesdurin The £m reserve g Other s ofthesubsidiaries £m g . Totalliabilities inrespectof these [[[KSELIEHGSQ redemption reserve Capital £m of TheGo-AheadGroupplc. g Property Reserve for uaranteed bytheCompany, own shares £m Profit andloss 2011 2.1 1.8 0.3 £m g reserve for Directors’ ulations 2008 m £m g g uaranteed held held g

capital & reserves Total 2010 2.1 1.2 0.9  £m £m

*MRERGMEP7XEXIQIRXW FINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS CONTINUED

14. Share based payments Sharesave Scheme Full disclosures of the Group’s sharesave scheme, SIP and LTIP are given in note 6 to the Group financial statements.

15. Related party transactions The Company has taken advantage of the exemption under FRS 8, ‘Related party disclosures’, and transactions with 100% subsidiaries of The Go-Ahead Group plc have not been disclosed. The Company owns 65% of the ordinary shares in Govia Limited. Thameslink Rail Limited, New Southern Railway Limited (‘Southern’), London and Southeastern Railway Limited (‘Southeastern’) and London and Birmingham Railway Limited (‘London Midland’) are 100% owned by Govia Limited and hence the Company owns a 65% interest.

GOVIA LSER London Midland Thameslink New Southern Southern 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 2011 2010 Dividends paid by related party 9.0 12.2 – – – – – – – – – – Interest paid to related party 0.3 0.3 – – – – – – – – – – Loans to related party (27.0) (66.4) – – – – – – – – – – Repayment of loan from related party 26.0 58.2 – – – – – – – – – – Management charges – – 0.8 0.7 0.7 0.8 – – – 0.2 0.8 0.7 Amounts owed from related party 44.4 42.8 – – 17.5 24.8 – – – – 0.6 2.3 Amounts owed to related party – – 49.8 37.1 – – 0.6 0.7 19.9 31.9 – – During the year Southern, Southeastern and London Midland have traded with wholly owned subsidiaries of the Company; £4.4m (2010: £8.2m) of costs were incurred by Southern, Southeastern and London Midland on an arm’s length basis.

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW

7,%6),30()6-2*361%8-32

1EREKMRK]SYVWLEVIW 7LEVILSPHIVWIGYVMX] 8LI'SQTER]´WVIKMWXVEV)UYMRMXMMWVIWTSRWMFPIJSVQEMRXEMRMRK 7LEVILSPHIVWEVIEHZMWIHXSFII\XVIQIP]GEYXMSYWSJER] XLI'SQTER]´WVIKMWXIVSJQIQFIVW7LEVILSPHIVW[MXLUYIVMIW YRWSPMGMXIHEHZMGISJJIVWXSFY]WLEVIWEXEHMWGSYRXSVSJJIVWSJ VIPEXMRKXSXLIMVWLEVILSPHMRKWLSYPHGSRXEGX)UYMRMXMHMVIGXP] JVIIVITSVXWEFSYXXLI'SQTER]8LI'SQTER]HSIWRSXIRHSVWI YWMRKXLIHIXEMPWSRTEKI ER]WTIGM½GWLEVIHIEPMRKJEGMPMXMIWERH[MPPRSXTEWWSRWLEVILSPHIV MRJSVQEXMSRXSER]XLMVHTEVX]LS[IZIVXLI'SQTER]´WVIKMWXIVMW 7LEVILSPHIVWGERWMKRYTJSVE7LEVIZMI[TSVXJSPMS[LMGLIREFPIW F]PE[STIRXSTYFPMGMRWTIGXMSR%R]VIUYIWXWJSVEGGIWWXSXLI ]SYXSZMI[MRJSVQEXMSRVIKEVHMRK]SYVLSPHMRKGLERKI]SYV VIKMWXIVEVIWYFNIGXXS³TVSTIVTYVTSWI´VIUYMVIQIRXWXSIRWYVI EHHVIWWERHFEROHIXEMPWSRPMRIERHIZIRWIPPSVTYVGLEWIWLEVIW XLEXXLIMRJSVQEXMSRMWRSXYWIHYRPE[JYPP] MRXLI'SQTER]SRPMRI+SXS[[[WLEVIZMI[GSYOERHGPMGO SR³6IKMWXIV´MRXLIXSTPIJXGSVRIVXSWMKRYTJSVXLIWIWIVZMGIW 7LEVILSPHIVMRJSVQEXMSR ;LIRGSQTPIXMRK]SYVHIXEMPW]SY[MPPRIIH]SYVWLEVILSPHIV VIJIVIRGIRYQFIV[LMGLMWXLIIPIZIRHMKMXRYQFIVJSYRHSR]SYV 7LEVILSPHIVTVS½PIF]WM^ISJLSPHMRKEWEX.YP] PEXIWXXE\ZSYGLIVSVWLEVIGIVXM½GEXI4PIEWIRSXIXLEX]SYVWLEVI 2SSJ GIVXM½GEXIQE]WXEXIERIMKLXHMKMXWLEVILSPHIVVIJIVIRGIRYQFIV LSPHMRKW 7LEVIWLIPH [LMGLMWRS[MRZEPMH ¯     'SVTSVEXI[IFWMXI[[[KSELIEHGSQ ¯     ¯     3YVGSVTSVEXI[IFWMXITVSZMHIWE[IEPXLSJMRJSVQEXMSRSR ¯     XLI'SQTER]ERHMXWEGXMZMXMIW-RJSVQEXMSREZEMPEFPISRXLIWMXI 3ZIV     MRGPYHIWLEPJ]IEVVIWYPXWERHMRXIVMQQEREKIQIRXWXEXIQIRXW 8SXEP     [LMGLEVIRSXWIRXXSWLEVILSPHIVWEW[IPPEWWLEVITVMGIHEXE HMZMHIRHMRJSVQEXMSRERHXLI½RERGMEPGEPIRHEV=SYGERVIKMWXIV XSVIGIMZIIQEMPEPIVXW[LIRRI[MXIQWEVIEHHIHXSXLI[IFWMXI 7LEVILSPHIVTVS½PIF]GEXIKSV]EWEX.YP] )PIGXVSRMGGSQQYRMGEXMSRW 2SSJ LSPHMRKW 7LEVIWLIPH %WJEVEWTSWWMFPI+S%LIEHTVSZMHIWWLEVILSPHIVHSGYQIRXW 8VIEWYV]WLEVIW     ZMEXLI'SQTER]´W[IFWMXI[[[KSELIEHGSQ6IGIMZMRKXLI (MVIGXSVW     'SQTER]´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³1EREKMRK]SYVWLEVIW´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½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

[[[KSELIEHGSQ  '36436%8)-2*361%8-32

[[[KSELIEHGSQ  IRUYMVMIW$KSELIEHGSQ 7IGVIXEV]ERH6IKMWXIVIH3J½GI .SMRX'SVTSVEXI&VSOIV 'EVSP]R7ITLXSR -RZIWXIG&EROTPG 8LI+S%LIEH+VSYTTPG +VIWLEQ7XVIIX VH*PSSV+VI]7XVIIX 0SRHSR)':54 2I[GEWXPIYTSR8]RI2))) 8IP .SMRX'SVTSVEXI&VSOIV 6&7,SEVI+SZIXX0XH ,IEH3J½GI &MWLSTWKEXI 8LI+S%LIEH+VSYTTPG 0SRHSR)'1%% XL*PSSV;EV[MGO6S[ 0SRHSR7;))6 4VMRGMTEP&EROIV 8IP 8LI6S]EP&EROSJ7GSXPERHTPG 'SVTSVEXI&EROMRK 6IKMWXVEV XL*PSSV&MWLSTWKEXI )UYMRMXM0XH 0SRHSR)'196 %WTIGX,SYWI7TIRGIV6SEH 0ERGMRK *MRERGMEP46%HZMWSVW ;IWX7YWWI\&2(% 'MXMKEXI(I[I6SKIVWSR 8IP 0SRHSR;EPP&YMPHMRKW    SZIVWIEW 0SRHSR;EPP 0SRHSR)'17= %YHMXSVW )VRWX =SYRK004 1SVI0SRHSR4PEGI 0SRHSR7)%*

'EPPWXSXLMWRYQFIVEVIGLEVKIHEXTTIVQMRYXIJVSQE&8PER  HPMRI SXLIVXIPITLSRITVSZMHIV GSWXWQE]ZEV]0MRIWEVISTIREQXSTQ1SRHE]XS*VMHE]

 8LI+S%LIEH+VSYTTPG%RRYEP6ITSVXERH%GGSYRXW *36136)-2*361%8-32:-7-8;;;+3%,)%('31

3RPMRI%RRYEP6ITSVX 8LI%RRYEP6ITSVXERH%GGSYRXW GERFIJSYRHSRSYV[IFWMXI MR4(*JSVQEX

3YV'SVTSVEXI 6IWTSRWMFMPX]6ITSVX =SYGEREGGIWWE4(*SJXLI+VSYT 'SVTSVEXI6IWTSRWMFMPMX]6ITSVXSRXLI [IFWMXIEXXLIIRHSJ7ITXIQFIVEW[IPP EWEHHMXMSREPMRJSVQEXMSR[MXLMR 'SVTSVEXI6IWTSRWMFMPMX]'IRXVI

%GGIWWXLI2SXMGISJ1IIXMRK 8LI2SXMGISJ%RRYEP+IRIVEP 1IIXMRK[MPPFIEZEMPEFPISRPMRIEXXLI IRHSJ7ITXIQFIV

4VMRXIHF]4EVO'SQQYRMGEXMSRWSR*7'GIVXM½IH :IVM½GEXMSRSJ'SVTSVEXI6IWTSRWMFMPMX]HEXE TETIV4EVOMWE'EVFSR2IYXVEP‹GSQTER]ERHMXW )RZMVSRQIRXEP1EREKIQIRX7]WXIQMWGIVXM½IHXS *SVXLIXLMVH]IEV&YVIEY:IVMXEW9/0XHLEW[SVOIH 0MROWXSJYVXLIVMRJSVQEXMSR -73 SJXLIMROWYWIHEVIZIKIXEFPISMP [MXLXLI+S%LIEH+VSYTTPG +S%LIEH XSZIVMJ] FEWIH SJTVIWWGLIQMGEPWEVIVIG]GPIHERHSR ERHXSTVSZMHIERMRHITIRHIRXSTMRMSRSRWIPIGXIH =SYGER½RHSXLIVYWIJYPMRJSVQEXMSRMR GSVTSVEXIVIWTSRWMFMPMX] '6 OI]TIVJSVQERGI EZIVEKI SJER][EWXIEWWSGMEXIH[MXLXLMW XLI-RZIWXSV6IPEXMSRW'IRXVISRSYV TVSHYGXMSR[MPPFIVIG]GPIH MRHMGEXSVW /4- HEXEGSRXEMRIH[MXLMRXLI+S%LIEH +VSYT´W'SVTSVEXI6IWTSRWMFMPMX]6ITSVX [IFWMXIMRGPYHMRKWLEVITVMGIHEXE 8LMWHSGYQIRXMWTVMRXIHSR6IZMZIERH941 3JJWIX6IZMZIGSRXEMRW VIG]GPIH½FVI   8LIMRJSVQEXMSRERHHEXEVIZMI[IHJSVXLMWZIVM½GEXMSR HMZMHIRHMRJSVQEXMSRSYVPEXIWX TSWXGSRWYQIV[EWXIERH TVIGSRWYQIV[EWXI  TVSGIWWVIPEXIWXSXLITIVMSHSJ.YP]XS.YP] TVIWIRXEXMSRWERHYWIJYPJEGXWLIIXW ERH ZMVKMR½FVIWSYVGIHJVSQ[IPPQEREKIH 8LIZIVM½GEXMSRMRGSVTSVEXIHWMXIZMWMXWMRXIVZMI[W WYWXEMREFPI*7'GIVXM½IHJSVIWXW8LITYPTYWIHMR HSGYQIRXVIZMI[ERHGLIGOMRKSJ+VSYTERHSTIVEXMRK 6IZMZIMWFPIEGLIHYWMRKER)PIQIRXEP'LPSVMRI GSQTER]HEXE *VII )'* TVSGIWW9413JJWIXGSRXEMRWZMVKMR½FVI WSYVGIHJVSQ[IPPQEREKIHWYWXEMREFPI*7' GIVXM½IHJSVIWXW

'SRWYPXERG]HIWMKRERHTVSHYGXMSRF]&PEGO7YR4PG [[[FPEGOWYRTPGGSQ

[[[KSELIEHGSQ  8LI+S%LIEH+VSYTTPG 6IKMWXIVIH3J½GI VH*PSSV ¯+VI]7XVIIX 2I[GEWXPI9TSR8]RI 2)))

8IPITLSRI *EGWMQMPI

8LI+S%LIEH+VSYTTPG ,IEH3J½GI XL*PSSV ;EV[MGO6S[ 0SRHSR 7;))6

8IPITLSRI *EGWMQMPI )QEMPIRUYMVMIW$KSELIEHGSQ

[[[KSELIEHGSQ