Annual Report 2003
Connected
Principal and Registered office
FırstGroup plc
395 King Street
Aberdeen AB24 5RP
Telephone: 01224 650100
Facsimile: 01224 650140
Registered in Scotland 
number SC157176
London office
FırstGroup plc
3rd floor
E Block
Macmillan House
Paddington Station
London W2 1FG
Telephone: 020 7291 0505
Facsimile: 020 7636 1338
FırstGroup web site 
www.fırstgroup.com
FırstGroup plc Annual Report 2003
Designed and produced by Pauffley, London. Printed by Royle Corporate Print. Safety
Kids to school
Home to work
Business to business
Integrated transport
Staff and customers
Community and partnerships
Contents
Business overview 01
Financial highlights 02
Chairman’s statement 03
Chief Executive’s review 04
Financial review 12
Board of Directors 15
Corporate governance 16
Directors’ remuneration report 19
Directors’ report 26
Directors’ responsibilities 28
Independent auditors’ report 29
Consolidated profit and
loss account 30
Consolidated balance sheets 31
Consolidated cash flow 
statement 32
Reconciliation of net cash 
flows to movements in net debt 32
Consolidated statement of total
recognised gains and losses 33
Reconciliation of movements 
in shareholders’ funds 33
Notes to the financial statements 34
Group financial summary 56
Shareholder information 57
FIRST 57
Shareholder enquiries
The Company’s share register is maintained on our behalf by
Lloyds TSB Registrars, who are responsible for making dividend
payments and updating the register, including details of changes 
to shareholders’ addresses and purchases and sales of the
Company’s shares. If you have any questions about your
shareholding in the Company or need to notify any changes 
to your personal details you should contact: Lloyds TSB
Registrars, The Causeway, Worthing, West Sussex BN99 6DA.
Telephone: 0870 600 3973.
Employees with queries about shares held in the Company’s
employee share schemes should contact Lloyds TSB Registrars 
at the same address or by telephoning 0870 241 3938.
Duplicate shareholder accounts
If you receive more than one copy of Company mailings this may
indicate that more than one account is held in your name on the
Register. This happens when the registration details of separate
transactions differ slightly. If you believe more than one account
exists in your name you may contact the Registrars to request that
the accounts are combined. There is no charge for this service.
Direct dividend payments
If you would like your dividend to be paid directly into your bank 
or building society account, you should contact the Registrars or
complete the dividend mandate attached to your dividend cheque.
Mandating your dividends has a number of advantages. Firstly, the
dividend will go into your account on the payment date – there is
no chance of it being delayed in the post and you do not have to
wait for a cheque to clear. Secondly, the payment method is more
secure than receiving a cheque through the post. Thirdly, you still
receive tax information about the dividend, which is sent direct to
you at your registered address. 
Online information 
The Registrars also provide an online service enabling you 
to access details of your shareholding. To view your details 
and a range of general information about holding shares, 
visit www.shareview.co.uk 
FirstGroup policy on discounts for shareholders
Shareholders are reminded that it is not Group policy to offer 
travel or other discounts to shareholders, as they may be used
only by a small number of individuals. The Group would rather
maximise dividends, which are of benefit to all shareholders.
Unsolicited mail
As the Company’s share register is, by law, open to public
inspection, shareholders may receive unsolicited mail from
organisations that use it as a mailing list. To limit the amount 
of unsolicited mail you receive, write to the Mailing Preference
Society, FREEPOST 22, London W1E 7EZ or register online 
at www.mpsonline.org.uk
Shareholder profile
Number of Shares held
At 30 April 2003 holders % (m) %
By category
Individuals 44,147 95.2 70.6 17.1
Banks and nominees 2,015 4.3 333.6 80.7
Insurance and assurance 2 0.0 0.1 0.0
Other companies 207 0.5 9.1 2.2
Other institutions 3 0.0 0.0 0.0
46,374 100.0 413.4 100.0
By size of holding
1-1,000 34,109 73.5 8.6 2.1
1,001-5,000 9,544 20.6 21.0 5.1
5,001-10,000 1,471 3.2 10.2 2.5
10,001-100,000 915 2.0 24.0 5.8
Over 100,000 335 0.7 349.6 84.5
46,374 100.0 413.4 100.0
Financial calendar
Annual General Meeting 3 July 2003
Shares trade ex dividend 23 July 2003
Record date for final dividend* 25 July 2003
Final dividend paid 29 August 2003
Interim results announced November 2003
Interim dividend paid February 2004
Preliminary announcement of full year results May 2004
*Shareholders recorded on the register at this date will receive the final dividend.
Shareholder information FIRST 01
Connected
At First we want to make travel a great experience and always
try to exceed our customers’ expectations. We want to create
a total journey environment from first to last. To achieve this 
all the links need to join together – the planning and booking
as well as the journey itself. This report highlights how we 
are striving to make all the right connections and create the
perfect journey.
Business overview
UK Bus
We are the UK’s largest bus operator, running more than 
one in five of all local bus services and carrying over 2.7m
passengers every day. 75% of our operations are in urban
areas where the bus is the most effective means of tackling
traffic congestion. We are working in partnership with Local
Authorities and other stakeholders to provide the best possible
service for passengers.
UK Rail
We operate three passenger rail franchises in the UK
accounting for 15% of the market and carry around 280,000
passengers every day. Our operations include intercity (First
Great Western), London commuter (First Great Eastern) and
regional (First North Western). We have an important role to
play in the future development of Britain’s railways and are
bidding for a number of new and enlarged rail franchises.
North America
Headquartered in Cincinnati, Ohio our operations are spread
across the US and Canada.
First Student
We are the second largest provider of student transportation 
in North America with a fleet of some 15,500 yellow school
buses, carrying over 1 million students every day in the US 
and Canada.
First Transit
Our transit contracting and management operation is one of
the largest private sector providers of urban bus services in 
the US. We manage public transport systems on behalf of
cities such as Houston, Dallas and Denver.
First Services
Our services operation is the largest private sector provider 
of vehicle maintenance and ancillary services in the US. 
We maintain vehicle fleets and equipment primarily for 
public sector customers such as cities, counties, fire and
police departments. 02 FIRST
Financial highlights
2003 2002 %
Group turnover (£m) 2,291.0 2,164.1 +6
Group operating profit
1,2
(£m) 216.1 215.0 +1
Profit before tax
1
(£m) 159.8 156.7 +2
Adjusted basic earnings per share (pence) 26.8p 25.8p +4
Dividend per share (pence) 11.0p 10.3p +7
EBITDA
2,3
(£m) 315.3 310.1 +2
1
Before goodwill amortisation and exceptional items
2
Prior year restated
3
Group operating profit before goodwill amortisation and exceptional items, plus depreciation
Turnover (£m)
2,291.0
2,164.1
2,054.0
1,795.1
03 02 01 00
216.1 215.0 214.3
185.7
03 02 01 00
Operating Profit
1
 (£m)
UK Bus 859.4
UK Rail 842.3
North America 582.4
Turnover (£m)
year to 31 March 2003
UK Bus 111.7
UK Rail 61.3
North America 61.3
Operating Profit
1
 (£m) 
year to 31 March 2003 FIRST 03
Chairman’s statement
Martin Gilbert
Chairman
Across all our divisions safety is our highest priority. We
continue to reinforce a culture of safety throughout our
Company, changing attitudes through education and training
backed up by an ongoing programme of safety audits. During
the year we have made real progress in further strengthening
the business with successful initiatives in safety, staff training
and environmental management.
I am very pleased to report further increases in Group 
turnover and operating profit* that once again demonstrate 
the quality and cash generative nature of our business. With
over £300m of EBITDA (operating profit plus depreciation) 
we have continued to invest in our operations to deliver value
to shareholders through growth in the business, increased
dividends and the repurchase of shares. 
Turnover has increased by 6% to £2,291m (2002: £2,164m)
and profit before tax, goodwill amortisation and exceptional
items increased by 2% to £159.8m (2002: £156.7m). Adjusted
basic earnings per share has increased by 4% to 26.8p (2002:
25.8p) and the Board has proposed a final dividend, subject to
approval by shareholders, of 7.45p making a full-year payment
of 11p, an increase of 7%. The dividend is covered 2.1 times
and will be paid on 29 August 2003 to shareholders on the
register on 25 July 2003. The Group’s strong and sustainable
cash flows and profits give the Board confidence that they will
be able to continue to increase dividends at above the rate of
inflation going forward.
Since the Group’s formation eight years ago dividends have
increased each year giving a Compound Annual Growth Rate
(CAGR) of 13%. Over the same period, operating profit has
grown from £42m to £216m (CAGR 26%) and EBITDA has
grown from £62m to £315m (CAGR 26%). 
We continue to build on our successful strategy of focusing on
three business segments; North America, UK Bus and UK Rail. 
We are very pleased with the progress we have made in North
America. In US Dollar terms turnover has increased 16% and
profits have increased by 8%. Our student bus business has
continued to grow, with contracts in a number of new regions.
We have also seen growth in our transit and services divisions
and we are confident that there are further opportunities for
expansion in these businesses. Since acquisition in 1999,
operating profits from our North American operations have
grown by 50%. 
We are encouraged by the opportunities UK Bus offers for
further organic growth. Turnover in our business in London has
grown by £25m and we have seen passenger volume growth
of 1.5% in the rest of the country. Traffic congestion continues
to increase in towns and cities throughout the UK and we
believe that the bus provides the most cost-effective and
immediate solution. The early success of congestion charging
in London may offer further encouragement for other cities to
adopt a similar approach. 
In UK Rail we continue to build on our excellent record of
delivering benefits to passengers through improved operating
performance, enhanced service quality and the introduction 
of new rolling stock. We are bidding for a number of new rail
franchises which fit with our geographic and strategic profile 
of operations. 
I am pleased to announce the appointment of Martyn Williams
to the Board as a Non-Executive Employee Director. Martyn
works for our UK Bus division in Swansea and has over 25
years’ experience in the industry. At the end of March 2003,
Robbie Duncan, Business Change Director, retired from the
Group. I would like to thank Robbie for his contribution to the
development of the business since its formation eight years ago.
Exceptional customer service is fundamental to our business. 
I would like to thank all of our staff for their hard work and
continued commitment to the business, which has resulted 
in another successful year for the Group.
Our strategy is clear. We continue to focus on delivering
shareholder value by developing our business in markets which
offer the best opportunity for profitable growth and in areas
where we can utilise our core skills. We have a well-balanced
portfolio of businesses which are relatively resilient to economic
downturn and are not heavily impacted by macro economic
trends. The Group’s strong cash generation underpins the
continuing programme of investment in the business, share
repurchase and dividend growth. I believe that the prospects
for the Group are excellent.
Martin Gilbert
Chairman
*Operating profit referred to in this statement and in the Chief Executive’s review 
and Financial review refers to operating profit before goodwill amortisation and 
exceptional items. 04 FIRST
Chief Executive’s review
Moir Lockhead
Chief Executive
Overview
Safety
The safety of our staff and passengers is of fundamental
importance to us all and underpins everything that we do.
During the year we have continued to work with DuPont Safety
Resources with the aim of developing our total safety culture.
We are making good progress but continually strive to improve
safety awareness at all levels within our organisation. 
Results
I am pleased to report another encouraging set of results for
the Group with good progress in all areas of our operations.
Operating profit rose to £216.1m (2002: £215.0m). We have
seen continued growth in EBITDA (operating profit plus
depreciation) to £315.3m (2002: £310.1m), which has enabled
us to invest in the business with capital expenditure and
business acquisitions totalling £134.5m, together with a 7%
increase in dividend and the return of £17.1m to shareholders
through the continued repurchase of equity during the year.
North America
Results
Turnover from our three North American operations was
£582.4m (2002: £542.9m). The underlying increase at constant
exchange rates was 16%. Operating profit was £61.3m 
(2002: £60.8m). At constant exchange rates the increase 
was 8%. 
First Student
During the year growth continued at First Student with US
Dollar turnover increasing by 15%. The bidding market for
school bus contracts was more competitive in 2002, however
we retained approximately 90% of our existing school bus
contracts that came up for renewal during the period. Our
policy remains that we will not bid for new business at
unattractive margins. The division gained net new contracts 
for approximately 100 buses. We were delighted to make 
our first entry into the state of Tennessee with a contract win 
in Chattanooga.  FIRST 05
The majority of our expansion came from the purchase of
smaller operators which we were able to acquire on attractive
terms. Through this programme of strategic infill acquisitions
we purchased six small businesses adding 725 buses to 
our fleet. We strengthened our position in Florida with the
acquisition of a further school bus operator in Jacksonville
bringing our total fleet in the city to 740 buses. New school
bus businesses were also acquired in Massachusetts, 
New Jersey, Wisconsin and California. We now operate 
some 15,500 school buses across the US and Canada,
approximately 50% more than at the time of acquisition in
1999, and this growth trend is continuing.
We are encouraged by our progress in the current bidding
round for contracts to start in Autumn 2003. We have been
awarded a five-year management contract, requiring no vehicle
capital expenditure, to operate 683 school buses in Boston.
This will be our first management contract in the city and 
builds on our successful relationships with school boards in
New England. In addition we were awarded a contract in
Louisiana, our first entry into this state. Looking forward, we
have an encouraging pipeline of new contracts and business
acquisitions and we are confident that we will deliver another
year of continued growth in First Student. 
First Transit
In First Transit US Dollar turnover increased by 17%. We 
have won net new business with an annualised turnover of
approximately US$5m. Important new contracts were gained in
Maryland and California, and service expansions were added in
Alabama and Virginia. In March, First Transit completed the
acquisition of the transportation management division of
Dyntek Inc. Through this acquisition First Transit will assume
responsibility for non-emergency medical transport call centre
contracts in Connecticut, Illinois and Arlington County, Virginia.
This acquisition will strengthen First Transit’s expertise in this
growing market. 
The new business market has continued to be competitive. In
response, the division has reduced its cost base by improving
internal efficiencies to position itself as the lowest cost, best
value provider in the market, consistent with maintaining our
quality and customer service. We are focusing on bidding for
new business where our specific expertise, in areas such as
call centre management and paratransit services, will bring
additional value to customers.
First Services
First Services has also continued to expand with US Dollar
turnover increasing by 13%. We have completed a detailed
review of opportunities within the servicing and vehicle
management market. As a result First Services aims to
broaden its spread of business in both the public and 
private sector. During the year we won new business in
Washington DC, Puerto Rico and Georgia. Additionally, in
February 2003, we acquired a small specialist business that 
fits communications equipment into vehicles such as police
cars and emergency vehicles. This business complements 
and extends our existing operations. 
Margins
Margins across the division were adversely impacted by
increased fuel and insurance costs. In First Student the
incidence of a higher than average number of school days 
lost through very heavy snowfall during the winter also
impacted revenues and margins. Since the year end we have
put in place fuel hedging arrangements which will give us 
cover for 50% of our purchase requirements for up to four
years at competitive rates. Growth in insurance costs has 
also moderated and we are focusing on controlling claims
more effectively.
Outlook – North America
Our North American division is now self-funding for
maintenance and growth capital expenditure. The prospects
for our operations remain excellent in highly fragmented
markets, which also offer the prospect of further growth from
outsourcing. We are confident that this division will form a
growing proportion of the Group’s profits in the future.
Safety
Safety is paramount in our business. We are never
complacent about our obligations to staff and
passengers and are always seeking to improve the way
we operate. That’s why safety is at the top of every
agenda and we have appointed safety officers in all 
our divisions. Our aim is to imbed a total safety culture
across all our operations and for passengers to know
that when they travel with us they can have absolute
confidence in our services. 06 FIRST
UK Bus
Results
This was a year of considerable achievement in UK Bus.
Turnover increased by 6% to £859.4m (2002: £811.5m) and
operating profit before financing costs increased by 6% to
£111.7m (2002: £105.7m). The division generated over 
£150m of cash, of which a substantial amount was reinvested 
in the division.
London
In London, where we operate bus services on behalf of
Transport for London (TfL), we added 130 new vehicles in
support of TfL’s strategy to increase the number of buses and
services in preparation for the start of congestion charging. 
The scheme was successfully introduced in February 2003 and
the initial results show that car volumes within the charging zone
have been reduced by approximately 15% with consequent
improved journey times for buses. Our new and extended
contracts generated £25m of additional turnover in the year. 
We now operate 1,235 buses in London giving us a 16% market
share in the capital. Some 50% of our London business now
operates under quality-incentivised contracts and we are
performing well against these targets. For 2003/04 we have
already secured all major contract changes and in addition 
we are targeting a further increase in the number of buses 
we operate. 
Outside London
Outside London passenger volumes increased by 1.5%, 
with areas of particularly good growth where we continue 
to develop Quality Partnership programmes with Local
Authorities. We have continued to strengthen our partnerships
with transport authorities and other stakeholders to integrate
bus service improvements within wider transport policies 
which include parking and development strategies. This has
led to some important initiatives that have delivered improved
services for passengers and new alternatives to the private 
car. Growth was very encouraging in cities such as Aberdeen,
Glasgow, Manchester and York where we have introduced 
Chief Executive’s review
Kids to school
At First we know a thing or two about going to
school. With our 15,500 yellow school buses
operating every day across the US and Canada
almost a million parents can’t be wrong about
the safety and convenience of the school bus.
That’s why we’ve started to introduce them to
the UK. So far six schemes are up and running
and they have been hugely successful with 
the support of parents, teachers and Local
Authorities. So now our aim is to persuade
Government that these schemes can help to
reduce traffic congestion, road accidents and air
pollution and are by far the safest way of getting
our kids to school. FIRST 07
a range of benefits such as modernised route structures,
newer buses, simplified ticketing, park and ride schemes and
zonal fares. 
Partnerships
We are working closely with local authority partners to
accelerate the implementation of bus infrastructure
improvements at the conurbation level. In Sheffield we have
developed a pilot demographic mapping system that enables
us to measure customer response to service initiatives and to
better target changes to those areas of highest potential bus
usage, as well as helping us to address the Government’s
social inclusion agenda. This initiative is now being introduced
across other urban areas where we operate.
In the major cities where our operations are centred, we have
seen encouraging growth over the past two years. In Glasgow
we now carry 15.1m more passengers (12.7% growth), 
while in Manchester we carry 10.4m more passengers 
(13.1% growth).
In Yorkshire, in conjunction with South and West Yorkshire
Passenger Transport Executives we are developing the
‘Yorkshire Showcase’ which has a target to increase bus travel
in the region by 30% over the next five years.
In York we have worked closely with the City Council which
has introduced traffic restraint measures in the historic city
centre in conjunction with a growing park and ride network on
the periphery. In return we have introduced a brand new fleet
of 90 buses together with an Overground network, marketing
activities and investment in the Park and Ride. This has
resulted in a 12% turnaround in passenger numbers since the
start of the scheme and a reduction of road traffic in the city.
In the North West we have entered into an agreement with the
Greater Manchester Passenger Transport Authority, Bolton
Metro and Wigan Borough Councils to help fund a quality bus
corridor which will significantly improve the reliability of services
on an important arterial route in Greater Manchester.
In Glasgow, as part of a £1.5m investment package to improve
the quality of bus services, we introduced the UK’s first air-
conditioned double decker tri-axle buses capable of carrying
115 passengers, which has helped to deliver the continued
passenger volume growth in the city. 
Rural operations
We are also improving our bus services in rural areas. 
For example, in Devon and Cornwall we have carried out 
a comprehensive market research and passenger and
stakeholder consultation exercise, which has allowed us to
introduce more direct routes between main towns, providing
quicker journey times and enhanced services to over 40 towns
and villages. We have also reorganised our operating divisions
in the South West to deliver better customer service and
reduce overheads.
Marketing
Investment in marketing and customer service has been a
major priority throughout the year with the emphasis on
improving the precision of our bus marketing programme.
We continued to roll out the Overground, our successful
simplified route and fares structure, to new areas such as
Chelmsford, Halifax, Huddersfield, Wirral, North Staffordshire,
Northampton, Norwich and Redditch. We now operate 20
Overground networks throughout the UK. 
Technology
Across the division we have continued to implement
technology-based initiatives to improve customer service. 
In Leicester we introduced ‘StarText’ a new system that
enables passengers to check the arrival times of local bus
services, at given bus stops across the network, using text
messaging on their mobile phones. In addition, we have been
developing the use of our ‘Tracker’ system which uses satellite
technology to track our buses through traffic and identify
congestion hotspots. This enables us to refine timetables and
work efficiently with Local Authorities to minimise disruption to
services as a result of traffic congestion.
Home to work
Commuting may not be fun, but at least we can make 
it more bearable. In many towns and cities where we
operate, an increasing number of people are finding that
it is much easier to let someone else do the driving
instead of sitting in a car in traffic. Our buses are bright
and comfortable, and with the new Overground colour
coded networks it’s simple to find your route. Guided
busways and bus lanes make our buses faster and more
reliable, so it’s quicker too. And many companies are
working with us to establish travel to work schemes
which give discounts for staff who transfer to the bus. 08 FIRST
Investment
We are committed to improving the performance and reliability
of our rail services. We have continued our programme of
introducing new rolling stock and investing in passenger
facilities. The full fleet of new Adelante class 180 high-speed
trains are scheduled to be in service at First Great Western
from the start of the summer timetable in May providing
additional capacity and passenger comfort on services to
Bristol and South Wales. The new fleet of class 175s, which
are now fully operational at First North Western are contributing
to a better travel experience for passengers. In addition, this
summer First Great Eastern will be phasing in its new fleet of
Desiro class 360 trains to replace old slam door rolling stock.
These trains are fully accessible for people with disabilities,
include on-board CCTV and will provide a quieter, smoother
ride for commuters at London’s Liverpool Street station. 
Looking further ahead we have an agreement with Siemens 
to develop a new generation of high-speed trains (HST) that
could enter passenger service within five years. The aim is to
develop a train that could replace the Intercity 125 HSTs on the
Great Western mainline from London Paddington. This next
generation of HSTs will set an even higher standard for intercity
rail travel in the UK.
We have made further investment to improve passenger
facilities and increase security at railway stations. At Swindon
we have contributed to the cost of building an additional
platform to ease the ‘bottleneck’ which causes frequent 
delays to train services through the station. At First Great
Eastern we have recently improved station security at
Chelmsford, Romford and Ilford which has been well received
by passengers and accredited under the British Transport
Police Secure Station Scheme.
Franchises
We continue to develop our proposals for new and renewed
passenger rail franchises. We currently have a balanced
portfolio of intercity, London commuter and regional railways
and are seeking to develop a similarly balanced portfolio of
operations under the SRA’s revised franchise plan. 
Chief Executive’s review
Yellow school bus in the UK
Our US style yellow school bus pilot programme in the UK has
been further expanded during the year to Aberdeen, Windsor,
Wokingham and Wrexham. We now operate a total of six
schemes and are actively pursuing opportunities to develop
this successful pilot further.
Outlook – UK Bus
We remain optimistic about the opportunities for further 
growth in our bus operations as traffic congestion continues 
to increase in major towns and cities throughout the UK. We
are very encouraged by the positive impact that congestion
charging has had on traffic in London and the success of bus
priority schemes across the country. The experience in London
could provide the impetus to introduce similar measures to
combat traffic congestion in other urban areas in the UK. 
UK Rail
Results
Turnover in the Group's three train operating companies was
£842.3m (2002: £802.9m), an increase of 5%. Operating profit
was £61.3m (2002: £66.8m) which is a creditable result given the
reduction in rail support grant for First Great Western and
increase in franchise payments for First Great Eastern totalling
£13.5m. All of our train franchises remain profitable and are
benefiting from substantial investment in new rolling stock and
passenger improvements. This is reflected in continuing high
levels of performance as shown in the Strategic Rail Authority’s
(SRA) public performance measures. In particular First Great
Eastern continues to be the best performing train operating
company in London and the South East. First Great Western
has also shown further improvements in punctuality and
reliability, particularly during the last six months, as a result of
improved infrastructure reliability and enhanced front-line
staffing levels at stations.
Passenger volumes have increased during the period by 5%
on First Great Western and 4% on First Great Eastern. At First
North Western, which we operate on behalf of the SRA, the
impact of industrial action last year resulted in passenger
volumes falling by 5%. 
Business to business
The train is the ideal way to get to a business
meeting on time and feeling refreshed. On First
Great Western we have upgraded our on-board
service and each train now carries a dedicated
train manager to look after passengers’ needs.
First Great Eastern, our London commuter
railway, has the best operating performance 
of any London passenger rail operator. We are
running 26% more metro high-frequency
services and have increased seating capacity 
on peak trains since we took over the franchise.
So we really are doing our best to make the 
train a great place to do business and a great
way to travel. FIRST 09
We are one of the final two bidders, with our partner Keolis, for
the TransPennine Express franchise which is due to commence
operation in early 2004. If selected for the franchise, we will be
able to offer significantly improved services between the major
centres in the North of England. We are currently working with
train manufacturers to develop rolling stock which will bring
new levels of passenger comfort to these services. In addition
we have pre-qualified for the Northern and Scotrail franchises
and we are now working on our detailed proposals to be
submitted to the SRA later in the year. 
In April this year we were invited by the SRA to put forward
proposals for the interim consolidation of the Thames Trains
franchise, which expires in 2004, with First Great Western
which does not expire until 2006. We will be able to offer
passengers a significantly enhanced level of service from
London Paddington on the suburban lines to Reading and to
the Cotswolds from 2004, through more efficient rolling stock
scheduling and timetabling of services. We expect to hear
whether our proposals have been successful later this year. 
We were extremely disappointed, as were a large number of
our customers and stakeholders, at the SRA’s decision not to
allow us to bid for the new Greater Anglia franchise. We are
working with the SRA to understand how they reached this
decision.
Network Rail
After an extremely difficult period in the autumn, we are now
encouraged by the progress that Network Rail is making to
address the backlog of infrastructure maintenance particularly
on the Great Western mainline between London Paddington
and Bristol. Significant works are scheduled to take place this
year and we are working closely with Network Rail to minimise
short-term disruption. These works will further improve the
infrastructure and have a positive impact on reliability.
Bus/Rail Integration
The Group’s scale of operations enables us to provide
unrivalled bus/rail integration opportunities. We now offer joint
bus/rail tickets for major parts of the South West, North West
Integrated transport
In Bristol the bus meets the train and whisks you
into the city; in York you can leave your car at
the park and ride and travel in comfort into the
historic centre; and in Truro you can jump off the
train and into our dedicated ‘+Bus’ chauffeur
service which will drop you at your door. You can
buy your train ticket on the bus or your bus
ticket on the train; or both over the phone or on
the internet. These are all examples of how we
are joining up the links to create integrated
journey opportunities making it more attractive
for people to leave their cars at home and 
travel with us. 10 FIRST
In the bus division we extended the successful pilot workplace
learning scheme started in Essex to locations in Yorkshire and
Scotland. We have also developed National Vocational
Qualifications (NVQ) and Business & Technology Education
Council (BTEC) qualifications for our drivers and introduced
new training programmes for managers. 
In our rail division we established a staff training academy in
Bristol which includes driver simulators. This will ensure that
our staff receive up-to-the-minute training and that key skills
are developed and practised. First Great Western has already
offered 900 staff the opportunity to achieve NVQ level
qualifications in job-related subjects. First Great Eastern has
developed and introduced a comprehensive series of training
programmes for both frontline staff and managers covering,
amongst other things, safety, customer service and conflict
management. In addition First Great Eastern has received
partial Investors in People (IIP) accreditation with special
commendation for its training and appraisal process and aims
to receive full accreditation by the end of 2003. First North
Western has launched a series of comprehensive customer
service training programmes for all frontline staff and managers
with the aim of improving the travel experience for customers.
Environment and Community
As the UK’s largest surface transport operator we can make a
major contribution to improving the environment by encouraging
the development of public transport and thereby reducing road
congestion, vehicle emissions and improving safety. We are
pleased to be taking part in the European Union’s Clean Urban
Transport Trial. We will be operating three fuel cell powered
buses in our East London operation, the only such trial in the
UK. These emission-free buses are virtually silent and have the
potential to make a significant difference to overall air quality.
We have improved environmental awareness and training
throughout the Group which has resulted in some encouraging
trends. For example in the bus division we have achieved an 8%
reduction in energy usage as a result of local depot initiatives. 
In addition we have invested £2m in partial water recycling bus
washes bringing our water consumption down by 14%. We
and East Anglia regions. We are also examining ways to
improve links between railway stations and bus networks.
Dedicated bus/rail links are in operation in Bristol and Taunton
and in Truro we operate a train taxi service. In East Anglia
innovative plans are being developed to create a network 
of buses to feed into train services at railheads throughout 
the region.
FirstInfo
Our call centre operation based in Plymouth now employs
some 500 staff who handle around 11m inbound calls per year.
They provide travel information, customer care and ticket sales
on behalf of our bus and rail operations and are one of the
national contractors to the National Rail Enquiry Service. 
In addition, FirstInfo now operates several Traveline national 
bus enquiry contracts.
Trams
Passenger volumes continue to show encouraging growth 
on Croydon Tramlink which is now carrying over 20m
passengers per annum. We are currently one of two finalists 
for the new Leeds Tram System. We expect to submit our
proposals with our partners Bombardier, Bouygues and Jarvis
later in 2003. 
Staff 
Once again I have been impressed by the commitment and
enthusiasm of our staff. Their continued dedication has
delivered another year of growth. Although the current rate of
bus driver turnover remains too high, we continue to target
further improvements. Our aim is to make First the employer of
choice and we are working hard to improve our understanding
of the needs and aspirations of our people so that they can
continue to develop and achieve their full potential. We
continue to target improved recruitment, training and retention
of staff. Our overall objective is to develop a workforce that is
highly motivated and customer focused. To achieve this we
believe we have to offer employees opportunities to develop
through training, on-the-job appraisal and the provision of
programmes such as lifelong learning. 
Staff and customers
Our staff are First to our passengers. We want
our employees to enjoy working for First and to
take pride in providing the best possible service
to customers. We are working hard to improve
the training we offer our staff. Workplace
learning schemes have been introduced and
many of our staff are taking NVQs through our
sponsored programmes. Regular contact with
our customers – through surveys on our buses
and trains – helps us to improve and deliver
even higher standards of service.
Chief Executive’s review FIRST 11
Community and partnerships
With more and more traffic on our roads it’s not getting 
any easier to protect the environment. As a public 
transport company we can play an active role in reducing
congestion, pollution and accidents. For example, a full 
bus can take up to 50 cars off the road. The use of modern
fuels and cleaner, more efficient engines helps to minimise
the environmental impact of our vehicles. In addition, our
partnerships with Local Authorities, transport organisations
and passenger groups ensure that we provide the best
possible service to the whole community helping to
address the Government’s social inclusion agenda.
were delighted to receive a Green Apple Award, one of the UK’s
leading environmental awards, for our work in reducing the
environmental impact of transport. Additionally, we received 
a Scotland plc Corporate Social Responsibility Award in
recognition of our successes in environmental and safety
improvements, community involvement and charitable projects.
During the year the Group and its staff in the UK and North
America have continued to support a number of local and
national charities. Further details of all these activities can be
found in our Corporate Responsibility Report which is 
published separately. 
Group Outlook 
The Group is well positioned in markets which are resilient 
and offer long-term growth prospects. We generate over 
£300m of EBITDA each year and our focus is to deliver
increased shareholder value through investment in the
business, continued dividend growth, debt reduction and
further repurchases of equity as appropriate. Trading in the
new financial year has started well and is in line with our
expectations.
Moir Lockhead
Chief Executive 12 FIRST
Overall
Group turnover in the year increased by £126.9m, or 6%, to
£2,291.0m. Group operating proﬁt, before goodwill amortisation
and exceptional items, was £216.1m, an increase of £1.1m,
or 1% on 2002.
Revenue in the UK Bus Division increased by £47.9m, or 5.9%
to £859.4m. In London where we operate contracts on behalf 
of Transport for London (TfL), revenues have increased by
£25.3m as a result of additional services provided in the run up
to congestion charging. Outside London passenger volumes
have increased by 1.5%. Operating proﬁt, before the ﬁnancing
element of operating leases, grew by £6.0m, or 5.7% and the
margin was maintained at 13.0% despite signiﬁcant cost
pressures most notably insurance, pensions and pay.
The ﬁnancing element of leases increased by £3.3m to £6.7m,
due to the full year effect of leases entered into during 2001/02
and additional leases entered into during the year for new
London tenders.
The North America Division’s turnover rose by £39.5m, or 
7.3% to £582.4m. At constant exchange rates the increase in
business was 15.8%. The majority of the new business was in
First Student where we added 825 new buses, of which 725
were acquired through the purchases of six small school bus
operators. Operating proﬁt increased to £61.3m (2002: £60.8m).
At constant exchange rates the increase was 8%. The operating
margin fell by 0.7% to 10.5% principally due to increased
insurance and fuel costs and a higher than usual number of
school days lost due to severe snow conditions.
Rail Division revenue increased by £39.4m, or 4.9% to £842.3m.
Passenger volumes were up 5% in First Great Western and 4%
in First Great Eastern. Operating proﬁt decreased by £5.5m to
£61.3m due to a combination of lower subsidies, reduced
performance regime receipts and cost pressures on insurance,
pensions and pay. The reduction in performance regime receipts
was partly mitigated by the release of the majority of the gauge
corner cracking compensation received in 2001/02.
Exceptional items
Exceptional items totalled £10.6m (2002: £20.5m) and include
acharge of £6.0m for UK Bus restructuring, £3.7m for claims
settlements in North America principally relating to a one-off
serious accident, £3.4m for bid costs incurred principally on Rail
franchises, less an exceptional gain of £2.5m from the disposal
of our interest in Tramtrack Croydon Limited.
Net gains on property disposals of £10.0m (2002: £1.0m) were
realised during the year. These disposals are part of a ﬁve year
property disposal programme which will release cash from prime
city centre sites, much of which will be reinvested in modern bus
depots, which will further enhance our UK Bus operations.
Goodwill amortisation
The goodwill charge was £25.8m (2002: £29.3m). The 
reduction is accounted for by goodwill on joint ventures and
associates (now written off) of £2.0m which was included in
2001/02 and, in addition, foreign exchange movements of
£1.9m. The balance is attributable to goodwill on acquisitions
made in the last two years.
Interest
Net interest payable was £56.3m (2002: £56.3m). This was
covered 5.6 times by earnings before interest, taxation,
depreciation and amortisation (EBITDA). A reduction in the
interest charge due to lower overall average borrowing levels,
greater use of US Dollar denominated debt and the foreign
exchange impact on the interest on US Dollar borrowings were
partly offset by the full year effect of the higher interest rate on
the bond. In the current year the Group will beneﬁt from a
reduced ongoing interest charge as set out below.
Acquisitions and disposals
During the year the Group acquired six school bus companies,
one transit and one service business in North America for a total
cash consideration of £28.1m (2002: £6.1m). Goodwill arising on
these acquisitions amounted to £18.2m (2002: £4.2m).
Year to 31 March 2003 Year to 31 March 2002
Operating Operating Operating Operating
Turnover proﬁt
1
margin
1
Turnover proﬁt
1
margin
1
Divisional results £m £m % £m £m %
UK Bus Division 859.4 111.7 13.0 811.5 105.7 13.0
North America Division 582.4 61.3 10.5 542.9 60.8 11.2
Rail Division 842.3 61.3 7.3 802.9 66.8 8.3
Financing elements of leases
2
– (6.7) – – (3.4) –
Other
3
6.9 (11.5) – 6.8 (14.9) –
Total Group 2,291.0 216.1 9.4 2,164.1 215.0 9.9
1
Before goodwill amortisation and exceptional items
2
Financing elements of UK Passenger Carrying Vehicle operating lease costs
3
Tram operations, central management and other items
Throughout the ﬁnancial review, operating proﬁt and operating margin are deﬁned as being before goodwill amortisation and exceptional items.
12 FIRST
Financial review FIRST 13
Taxation
The taxation charge on proﬁt before goodwill amortisation and
exceptional items was £47.9m (2002: £48.1m) representing an
effective rate of 30% (2002: 31%). Tax relief on goodwill
amortisation and exceptional items reduces the tax charge to
£35.8m (2002: £33.9m). No tax has been provided on property
gains as these do not give rise to a chargeable gain for tax
purposes.
The actual cash cost of taxation to the Group is £27.2m (2002:
£25.6m) which is 20% of proﬁt before tax (2002: 24%). A full
reconciliation of this rate to the UK standard rate of corporation
tax is set out in note 8 to the ﬁnancial statements.
EBITDA and investment in the business
EBITDA (operating proﬁt before goodwill amortisation
and exceptional items, plus depreciation) was £315.3m (2002:
£310.1m), an increase of 1.7%. Capital expenditure was
£106.4m (2002: £153.4m). The majority of capital expenditure
was in our bus operations with £60.6m spent in North America
and £37.6m in the United Kingdom. 
During the year there was an adverse working capital movement
of £82.7m principally due to an increase in debtors of £77.3m.
The majority of the working capital movement was due to
temporary timing issues such as the lag in receipt of £18m of
property disposals. The only longer-term timing difference is
considered to be pension prepayments of £13.7m.
Balance sheet
Net assets of the Group decreased from £420.0m to £402.8m.
The main elements of the movement were £52.0m of retained
proﬁt which was offset by a £53.2m adverse foreign exchange
movement and £17.1m of share repurchases. The adverse
foreign exchange movement is due primarily to the retranslation
of goodwill relating to the North American business which is
denominated in US Dollars. The Group’s net debt has reduced
by £28.1m to £624.4m. 
Pensions
Pension and post-retirement costs have been accounted for 
on a SSAP 24 basis. The total charge to the proﬁt and loss
account was £26.1m (2002: £19.5m). We have continued to
apply the transitional rules and disclosures under FRS 17. At
31 March 2003, after taking account of deferred taxation, the
FRS 17 net deﬁcit in the Group pension funds, excluding Rail,
was approximately £194m (2002: £33m). In addition, it should
be noted that a post-tax deﬁcit of £20m (2002: post tax surplus
of £7m) relates to Rail franchises where we believe that no
liability will be borne beyond the end of the franchise. Markets
have recovered substantially since the year-end and had
30 April 2003 market levels applied at 31 March 2003, the 
net FRS 17 deﬁcit excluding Rail would have been £166m, 
with the Rail net deﬁcit being £15m.
The performance of equity markets in the last few years has
impacted the pension funding requirements of the Group’s
deﬁned beneﬁt pension schemes. Recognising that this is
unlikely to be made up in the short term simply through a
recovery in asset values, in addition to the normal pension
contributions in 2002/03, the Group has made discretionary 
tax-deductible payments into the schemes of £14m, and
expects discretionary payments to continue over the 
coming years. 
During the year, the Group consulted with employees and Trade
Unions within UK Bus, and agreed the introduction of a new
pensions package in the occupational schemes. Beneﬁts for 
the majority of existing employees have been restructured and
employer and employee rates have been increased. For new
employees starting from April 2003, beneﬁts will be conﬁned 
to a money purchase and career average basis. In addition,
scheme management costs will be minimised through a
continuation of scheme mergers.
Funding and risk management
At the year end, total bank borrowing facilities amounted 
to £595m, of which £520m had more than two years to 
maturity. Of these, £326m were utilised at 31 March 2003. 
FIRST 13 14 FIRST
The maturity proﬁle of committed banking facilities is regularly
reviewed and well in advance of their expiry, such facilities are
extended or replaced. In December 2002 the Group entered 
into a new £400m, ﬁve year committed revolving credit and
guarantee facility which replaced existing bank facilities due to
expire by May 2004. This facility increased the medium-term
committed borrowing capability of the Group with improved
terms and competitive pricing. This was also arranged on a 
non-underwritten basis.
The bond issue in March 2002 has greatly improved the debt
maturity proﬁle which at the year end was 6.8 years, 3.1 years
higher than at 31 March 2001, the bond having been issued in
March 2002 on a weighted average basis for ﬁxed rate debt.
As the Group is a net borrower, it minimises cash and bank
deposits, although it can only withdraw cash and bank deposits
from the Rail companies to the extent of retained proﬁts. The
Group limits deposits to short terms, and with any one bank 
to the maximum of £30m, depending upon the individual bank’s
credit rating, which must not be less than ‘A’ rated.
The Group does not enter into speculative ﬁnancial transactions
and uses ﬁnancial instruments for certain risk management
purposes only. With regard to net interest rate risk, the Group
reduces exposure by using interest rate derivatives to achieve an
overall hedged position of between 75% to 100%. Subsequent
to 31 March 2003 the Group’s interest hedging programme was
rebalanced to reduce future ongoing costs whilst retaining the
hedging target range of 75% to 100%. For the year to 31 March
2004, the impact of the rebalancing is estimated to be a saving
of £10.0m in the interest charge with declining beneﬁts in future
years. It involved the cancellation of certain interest rate swaps
for a total exceptional pre-tax item within the interest charge of
£19.0m. At the same time new US Dollar swaps were entered
into at an average interest rate of 2.85%. 
Fuel price risk is 100% hedged in both UK Bus and Rail by way
of a cap which expires in March 2005. In North America the
Group bears no fuel risk on approximately half of its contracts.
On the contracts where the Group bears fuel price risk, we
were unhedged for most of the year. However, since the year
end we have taken advantage of falling oil prices and hedged
50% of this exposure for a period of up to four years.
The Group hedges part of its exposure to the impact of
exchange rate movements on translation of foreign currency 
net assets by holding net borrowings in foreign currencies. 
Shares in issue
During the year 1.0 million shares were issued to satisfy Save 
As You Earn scheme maturities and 7.4 million shares were
repurchased and cancelled at a total cost of £17.1m.
Accordingly the total number of shares in issue decreased from
419.8 million to 413.4 million. For the purpose of the earnings
per share (EPS) calculation (excluding 0.4 million own shares
held in trust for employees), the average number of shares in
issue for the year was 416.7 million (2002: 419.8 million).
Foreign exchange
The proﬁts from the US have been translated at an average rate
of £1:$1.55 (2002: £1:$1.44). The year end rate was £1:$1.57,
compared with £1:$1.43 last year.
Accounting standards and policies
The Group has adopted UITF 34 ‘Pre-contract costs’. As a
result all general bid costs are expensed as incurred. Prior 
year ﬁgures have been restated to reﬂect this change in
accounting policy.
The Group has continued to account for pension costs under
SSAP 24. The application of SSAP 24 is likely to continue in 
light of the extended implementation period for FRS 17 and 
the review of IAS 19 ‘Employee Beneﬁts’. It is anticipated that
the change in accounting policy will take place in ﬁnancial year
2005/06.
Iain M Lanaghan
Finance Director
14 FIRST
Financial review
Fixed Variable Total
Analysis of net debt £m £m £m
Cash – 13.4 13.4
Rail ring fenced cash – 67.9 67.9
Sterling bank loans and overdrafts – (40.0) (40.0)
US Dollar bank loans – (276.2) (276.2)
Canadian Dollar bank loans – (10.6) (10.6)
Bond (2013: 6.875%) (295.1) – (295.1)
HP and ﬁnance leases (50.2) (11.7) (61.9)
Loan notes (8.9) (13.0) (21.9)
Interest rate swaps (208.8) 208.8 –
Total (563.0) (61.4) (624.4) FIRST 15 FIRST 15
Martin Gilbert LLD MA LLB CA
Chairman
Chairman of the Nomination Committee
1,3
One of the founding directors and Chief
Executive of Aberdeen Asset Management PLC,
he was appointed to the Board of GRT Bus
Group PLC at the time of the employee buy-out.
He is a director of a number of investment trusts
and is a non-executive director of Lombard
International Assurance SA, Primary Health
Properties PLC and Scottish Medicine PLC. 
Age 47.
Moir Lockhead OBE 
Deputy Chairman and Chief Executive
Chairman of the Safety Committee
3,4,5
Chief Executive and Deputy Chairman since
the Group’s formation in 1995 having led the
successful employee buy-out of GRT Bus Group
PLC. He has been a Non-Executive Director
of ASCO PLC since 1997. In 1996, he was
awarded the OBE for services to the bus
industry and he is a past President of the
Confederation of Passenger Transport. Age 58.
Robbie Duncan BCom CA
Business Change Director
4,5
Retired from the Group on 31 March 2003. He
was Acting President of FirstGroup America with
UK responsibilities for Change Management,
Property and Environment. He was previously
Director UK Bus since April 1997, having been
Group Managing Director of GRT Bus Group
PLC, which he joined as Finance Director in
1986. He is a Chartered Accountant having
qualiﬁed with Coopers & Lybrand in Glasgow.
Age 52.
Iain M Lanaghan MA CA
Finance Director
4,5
Appointed to the Board in 2000 as Finance
Director. He joined from Atlantic Power Group 
in Aberdeen where he was Finance Director.
Previously he was Finance Director of PowerGen
International. He is a Chartered Accountant,
having qualiﬁed with KPMG in London and
Europe. Age 47.
Mike Mitchell MA MBA PhD MCIT MILT
Chief Operating Ofﬁcer UK
4,5
Appointed Chief Operating Ofﬁcer in April 2001
with responsibility for all UK Bus and Rail
operations. After senior management roles within
the UK Bus division he was seconded to First
North Western and then transferred to First
Great Western as Managing Director. He was
subsequently appointed Managing Director, Rail
Division in January 1999, joining the plc Board
as Director, UK Rail in November 1999. Age 55.
David Dunn CA 
Senior Independent Non-Executive Director
Chairman of the Audit Committee
1,2,3
Appointed to the Board as a Non-Executive
Director in December 1999. He is a Chartered
Accountant and is Non-Executive Chairman of
Brammer plc. He is also a Non-Executive
Director of Croda International plc and 4imprint
Group plc. Age 58.
Jim Forbes CBE MSc BSc CEng MIEE
Non-Executive Director
Chairman of the Remuneration Committee
1,2,3
Former Chief Executive of Scottish and Southern
Energy plc. His career began with the South of
Scotland Electricity Board and he has since held
various senior posts in the electricity industry. 
Age 56.
John Sievwright MA CA 
Non-Executive Director
1,2,3
Appointed to the Board in May 2002. A
Chartered Accountant, he has held various
positions in banking. Most recently he was
President and Chief Operating Ofﬁcer, Merrill
Lynch Japan Securities in Tokyo. He retired in
2001 and now resides in the United States.
He is a member of the North American Board
of the Michael Smurﬁt Business School, Dublin.
Age 48.
Martyn Williams
Non-Executive Employee Director
1,2,3
Appointed to the Board as Employee Director in
January 2003. He is employed as a customer
services supervisor in Swansea and has worked
for the Group for 25 years. Age 48.
B Louise Ruppel
Company Secretary
Board of Directors
1
Member of the Audit Committee
2
Member of the Remuneration Committee
3
Member of the Nomination Committee
4
Member of the Safety Committee
5
Member of the Executive Committee 16 FIRST 16 FIRST
Corporate governance
The Board is committed to maintaining high standards of corporate governance throughout the Group. The Listing Rules of the
Financial Services Authority require the Board to report on the Group’s compliance throughout the year with the provisions set out in
Section 1 of the Combined Code Principles of Good Governance and Code of Best Practice (the Code).
The Directors believe that the Group has complied with the Code throughout the year with the exception that the Group’s Non-
Executive Employee Director (the Employee Director) is a member of the Remuneration Committee. The Code requires that the
Remuneration Committee should comprise only independent Non-Executive Directors (Code Provision B.2.1). As an employee of the
Group, the Employee Director cannot be regarded as independent under the Code. However, the Board believes that the Employee
Director should sit on the Board and its various committees in order to give the Group’s employees (who, through the Group’s
employee share schemes, represent a large proportion in number of the Company’s shareholders) a voice. The Employee Director is
elected by the Employee Directors’ Forum, which is comprised of the Employee Directors from the Group’s subsidiaries, and generally
serves a three-year term. Following the end of George Law’s three-year term, he was succeeded by Martyn Williams, who became the
Employee Director with effect from 1 January 2003.
The Board has considered the recommendations of the Higgs report on the role and effectiveness of Non-Executive Directors and 
the accompanying report by Sir Robert Smith on audit committee reform. The Company currently complies with many of the
recommendations in these reports. The Board will implement any changes it considers necessary or desirable following the resulting
amendments to the revised Code, when it is published.
This statement sets out how the principles in Section 1 of the Code have been applied.
The Board
Board balance
The Board currently comprises the Chairman, three Executive Directors and four Non-Executive Directors. Except as described above
in respect of the Employee Director, the Non-Executives are considered to be independent of management and have no business or
other relationships which could materially inﬂuence the exercise of their independent judgement. The names of the Directors and their
details are set out on page 15.
Re-election
As required by the Company’s articles of association, Directors offer themselves for re-election at least once every three years. 
Any Director appointed during the year is required to seek reappointment by shareholders at the next Annual General Meeting. 
Non-Executive Directors are appointed for an initial term of three years, subject to reappointment by shareholders. The Company’s
articles of association do not contain any age limits for directors.
Board procedure
Martin Gilbert, the Chairman, is responsible for the effective conduct of Board and shareholder meetings, and for ensuring that all
Directors are properly briefed to enable them to take a full part in Board discussions. Moir Lockhead, the Chief Executive, is
responsible for developing and implementing business strategy and processes and for the day-to-day management of the Group.
David Dunn, who chairs the Audit Committee, is the Senior Independent Non-Executive Director. The Board believes that together, 
the Directors possess the breadth of business, ﬁnancial and international experience necessary to manage effectively an organisation
of the size and complexity of the Group.
The Board critically examines the Group’s strategy, budget and business plan annually and meets at least eight times a year to
review the ﬁnancial performance of the Group, current trading and key business issues and initiatives. It also meets regularly to discuss
strategy and on an ad hoc basis as required. It has a schedule of matters reserved to it for decision, including items such as the
approval of the annual and interim ﬁnancial statements, ﬁnancing arrangements, material capital commitments, business acquisitions
and disposals, relationships with regulatory authorities and operating and accounting policies. The Board receives detailed papers on
the business to be conducted at each meeting well in advance and individual Board members have direct access to senior executives
should they wish to receive additional information on any items for discussion. All Directors have access to the advice and services of
the Company Secretary and can seek independent professional advice, at the Company’s expense, in the furtherance of their duties, 
if necessary.
The Board has delegated certain matters to committees of the Board. Details of the principal such committees are set out below:
Executive Safety Committee
The Executive Safety Committee (ESC) is chaired by Moir Lockhead and comprises the Executive Directors, other senior managers
and safety ofﬁcers. The ESC meets monthly to review the Group’s safety performance and practices, develop safety policies and
procedures and follow up on outstanding issues. The meetings are attended by representatives from DuPont Safety Resources.
Senior representatives of relevant industry bodies, such as Her Majesty’s Railway Inspectorate, also attend meetings of the ESC on 
a regular basis.
Executive Management Board
The Executive Management Board (EMB), under the chairmanship of Moir Lockhead, acts as a general operating management
committee and comprises all the Executive Directors and certain senior business managers. The EMB meets monthly with senior
corporate staff and business unit managing directors to review outstanding issues and to consider the Group’s ﬁnancial and
operational performance. FIRST 17 FIRST 17
Executive Committee
The Executive Committee, which comprises the Executive Directors, under the chairmanship of Moir Lockhead, has been established 
to meet on an ad hoc basis to consider and approve matters which arise in the ordinary course of the Group’s operations. The Board
has delegated speciﬁc powers to this committee within certain prescribed limits to deal with matters relating to the ordinary day-to-day
running of the Group’s operations and which need to be considered before the next scheduled EMB or Board meeting.
Audit Committee
The Audit Committee, which is chaired by David Dunn, includes Martin Gilbert, Jim Forbes, John Sievwright and Martyn Williams
and normally meets at least twice a year. George Law was a member until his retirement on 31 December 2002.
The Audit Committee, which has written terms of reference, monitors and reviews accounting policies and ﬁnancial reporting, 
the system of ﬁnancial and operational controls for the Group, and reviews the half-year and full-year ﬁnancial statements before they
are presented to the Group. It also considers the Group’s compliance with the Code and oversees the objectivity and effectiveness of
internal audit. It is also responsible for appointing the Group’s external auditors and for monitoring their independence and objectivity.
The Audit Committee can request the external auditors, Executive Directors and any other ofﬁcers of the Group to attend its meetings.
In addition, the Group’s internal and external auditors have direct access to the Audit Committee to raise any matters that may concern
them. The Audit Committee receives papers summarising the audits undertaken to date, an executive summary of each internal audit
report and, from time-to-time, various reports from the external auditors and management.
Nomination Committee
The Nomination Committee is chaired by Martin Gilbert and includes David Dunn, Jim Forbes, John Sievwright, Martyn Williams and
Moir Lockhead. George Law was a member until his retirement on 31 December 2002. The Nomination Committee has written terms
of reference and meets as required to discuss appointments to the Board of both Executive and Non-Executive Directors, with
recommendations being put to the full Board for its consideration. External search consultants are used to assist the process.
Remuneration Committee
The composition and terms of reference of the Remuneration Committee, under the chairmanship of Jim Forbes, are set out on pages 19
to 25 together with a statement of the Group’s remuneration strategy and policy. Full details of Directors’ remuneration appear on page 23.
Relations with shareholders
The Group recognises the importance of regular communication with all of its shareholders. The full Annual Report and Financial
Statements are made available to all shareholders and an Interim Report is published and sent to all shareholders at the half-year. 
These reports are intended to provide shareholders and other interested parties with a clear and balanced understanding of the 
Group’s operational performance and prospects and its ﬁnancial results and position.
All investors are kept informed of key business activities, decisions, appointments etc. via news releases and the Group’s web site.
There is also regular dialogue with institutional shareholders throughout the year and general presentations are made following the
release of the announcement of the preliminary and interim results. All shareholders have the opportunity to put questions to the
Directors at the Company’s Annual General Meeting (AGM), at which a report is made on the highlights of the key business
developments during the ﬁnancial year under review. Notice of the AGM is circulated to all shareholders at least 20 working days 
prior to the meeting.
Accountability and Audit
Financial reporting
The Directors have a commitment to best practice in the Group’s external ﬁnancial reporting in order to present a balanced and
understandable assessment of the Group’s ﬁnancial position and prospects to its shareholders, employees, customers, suppliers and
other third parties. This commitment encompasses all published information including, but not limited to, the year-end and interim
ﬁnancial statements, Stock Exchange announcements and other public information.
Going concern
After making enquiries, the Directors have formed a judgement, at the time of approving the ﬁnancial statements, that there is a
reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the
foreseeable future. For this reason, the Directors continue to adopt the going concern basis in preparing the ﬁnancial statements.
Internal Control
Introduction
The Board has established procedures to meet the requirements of the Code as extended by the Turnbull Report. These procedures,
which are subject to a regular review, provide an ongoing process for identifying, evaluating and managing any signiﬁcant risks faced 
by the Group.
Responsibility
The Board has overall responsibility for the system of internal control and assessing risk. The responsibility for establishing detailed
control and risk management procedures within each subsidiary unit lies with the Executive Directors and the subsidiary unit managing
directors. A sound system of internal control is designed to manage rather than eliminate the risk of failure to achieve business 18 FIRST
Corporate governance
objectives and can only provide reasonable and not absolute assurance against material misstatement or loss.
Control environment
The Board is committed to business integrity, high ethical and moral values and professionalism in all its activities, principles with which
managers and employees are required to comply.
There is a deﬁned divisional organisational structure with lines of responsibility and delegated authority which allows the Board to
plan, execute, control and monitor the business in a manner consistent with the achievement of the Group’s objectives. The day-to-
day business management is delegated to the Executive Directors and subsidiary unit managing directors under the direction of the
Chief Executive. As noted above, the Board retains certain key decisions to itself, enabling it to maintain control over the key business
decision-making processes and signiﬁcant transactions in terms of size, type or risk.
A number of the Group’s key functions, including treasury, taxation, insurance, corporate ﬁnance, legal, corporate communications
and procurement are dealt with centrally. Each of these functions has detailed procedures and is monitored by an Executive Director.
Monitoring
The Group adopts a professional approach to ﬁnancial reporting and information in compliance with generally accepted accounting
practice. The Group Finance Manual, circulated by the Group Finance function to all subsidiaries, details the Group accounting policies
and procedures with which subsidiaries must comply.
Budgets are prepared by subsidiary company management and are subject to review by both Group management and the
Executive Directors. Monthly forecasts are completed during the year and compared against budget. When setting budgets and
forecasts, management identiﬁes, evaluates and reports on the potential signiﬁcant business risks and actions required.
Each subsidiary unit prepares a monthly report of operating performance, with a commentary on variances against budget,
forecasts and prior year. Similar reports are prepared at a Group level. Key performance indicators, both ﬁnancial and operational, 
are monitored on a weekly basis. In addition, business units participate in strategic reviews which include consideration of long-term
ﬁnancial projections and the evaluation of business alternatives.
A process of annual self-assessment and hierarchical reporting provides for a documented and auditable trail of accountability
from the subsidiary units to senior management to the Executive Directors. This process includes an internal control questionnaire 
and risk assessment and is signed off by the subsidiary directors. This process and the supporting documentation are reviewed by
both the internal and external auditors. Detailed action plans are developed from these questionnaires to resolve any control
weaknesses or signiﬁcant risks identiﬁed.
Risk assessment
The Board has established an ongoing process for identifying, evaluating and managing the signiﬁcant risks faced by the Group. 
As an integral part of planning and review, management from each business area and major projects identify their risks, the probability
of the risks occurring, the impact on the business should the risks occur and the actions taken to manage the risks. The risks are
assessed on a continuous basis and could be associated with a variety of internal and external sources including political instability,
regulatory requirements, disruption to information systems, control breakdowns and social, ethical and environmental issues. Regular
performance reviews have been introduced in each of the Divisions to further embed the concept of risk management. The divisional
directors review the detailed risk management reports prepared by their subsidiary units which include updates of agreed action plans
arising from previous quarterly performance reviews.
Assurance
The work of the internal audit department is focused on areas of priority as identiﬁed by risk analysis and in accordance with an annual
audit plan approved by the Audit Committee and the Board. Reports are sent to senior executives of the Group and subsidiary units
and there is a follow-up process to ensure that actions to resolve identiﬁed control weaknesses are implemented.
The Audit Committee keeps under review the nature, scope and results of the external audit and the audits conducted by the
internal audit department. The independence and objectivity of the external auditors is also considered on a regular basis, with
particular regard to the level of non-audit fees. Details of the audit and non-audit fees, including a breakdown of the non-audit fee, are
set out in Note 7 to the ﬁnancial statements.
The Audit Committee reviews with management, a detailed analysis of the Group’s ﬁnancial information prior to completion and
announcement of the half-year and full-year results and receives a report from the external auditors on the audit process. The external
auditors also meet with the full Board and, if necessary, separately, with the Chairman, the Chief Executive and Finance Director. The
Annual Report and Financial Statements and interim results go through a detailed veriﬁcation and due diligence process involving
external advisers.
Effectiveness
The Directors conﬁrm that they have reviewed the effectiveness of the system of internal control for the year under review and to the
date of approval of the Annual Report and Financial Statements through the monitoring process described above.
In addition, the Directors conﬁrm that they have conducted a speciﬁc annual review of the effectiveness of the Group’s system of
internal control and risk management in operation during the period up to the date of this Annual Report and Financial Statements. FIRST 19
Directors’ remuneration report
FIRST 19
This report has been prepared in accordance with the Directors’ Remuneration Report Regulations 2002. It also meets the
requirements of the Listing Rules of the Financial Services Authority and describes how the Board has applied the Principles 
of Good Governance relating to Directors’ remuneration. A resolution to approve this report will be proposed at the Company’s
Annual General Meeting to be held on 3 July 2003.
Unaudited information
Remuneration Committee
The Remuneration Committee (the Committee) is chaired by Jim Forbes. The other current members of the Committee are David
Dunn, John Sievwright and Martyn Williams, all of whom are Non-Executive Directors. Martyn Williams replaced George Law who
served as Non-Executive Employee Director until 31 December 2002. With the exception of Martyn Williams, none of the members
of the Committee has any personal ﬁnancial interest (other than as a shareholder) in the matters to be decided, conﬂict of interest
arising from cross-directorships or any involvement in the day-to-day running of the business. They do not hold any share options
nor do they participate in any Group share or pension schemes.
Martyn Williams is an employee of one of the Group’s operating subsidiaries. In that capacity, he is entitled to participate in
employee share schemes from time-to-time and to be a member of one of the Group’s pension schemes. Although he would
therefore not be regarded as independent in strict corporate governance terms, the Committee considers it very important that the
Group’s employees are given a voice on the Board and that employees’ views are taken into consideration, in particular when the
remuneration of the Executive Directors is determined.
The Committee, which has written terms of reference, generally meets at least once a year and also as required to consider
matters related to the remuneration of Executive Directors. In the year under review, it met six times and all its members attended
each of those meetings.
In determining the Executive Directors’ remuneration for the year, the Committee considered publicly available information,
including the remuneration packages of those holding equivalent posts at the Company’s peers within the transport industry and
the FTSE 250 generally. In addition, the Committee has also received advice in relation to certain speciﬁc remuneration and
pension-related matters from Watson Wyatt, a ﬁrm of independent remuneration consultants. Watson Wyatt also provided advice
to the Company during the year on remuneration and pension-related matters in respect of staff below main Board level.
Remuneration policy
Executive remuneration packages are designed to attract, motivate and retain individuals of the high calibre needed to maintain 
the Group’s position as a leader in the public transportation sector. There are four main elements of the remuneration package for
Executive Directors and senior management, namely basic salary, annual cash and deferred share bonus, share option incentives
and pension arrangements. The remuneration package for each Executive Director is viewed as a whole and the individual
elements making up the package are balanced to ensure that overall, the remuneration received by an executive is not excessive,
is competitive with the remuneration received by the individual’s equivalents in other similar quoted companies, contains an
appropriate balance of ﬁxed and variable (performance-related) compensation and provides longer-term share incentives designed
to align his interests with those of shareholders. A high proportion of the total remuneration package is performance-related.
Basic salary and other beneﬁts in kind
The basic salary and beneﬁts in kind for each Executive Director is determined by the Committee prior to the beginning of each
ﬁnancial year and when an individual changes position or responsibility. In deciding appropriate levels, the Committee considers 
the Group as a whole and also the packages received by similar individuals at the Company’s peers in the public transport sector
and the FTSE 250. Details of the salaries and beneﬁts in kind paid to each of the Executive Directors in the year are shown on
page 23. 20 FIRST 20 FIRST
Directors’ remuneration report
FirstGroup plc Executive Annual Bonus Plan
Payment of bonuses under this plan is linked to achievement of budgeted Group operating proﬁt targets and personal objectives
(including certain safety-linked targets). In the case of Mike Mitchell, the payment of a bonus is also linked to the proﬁtability of the
UK Bus and UK Rail Divisions. The Committee considers and agrees the Group objectives that must be met for each ﬁnancial year
for a bonus to become payable. The personal objectives for the Executive Directors are agreed with the Chief Executive.
Bonus payments comprise a mixture of cash and deferred share awards. Share awards, which are structured as nil-cost share
options, are deferred for three years and will lapse if the Director leaves the Group during that period for reasons other than
redundancy, retirement or ill-health. The Committee considers that it is appropriate for part of the annual bonus to be paid in 
the form of deferred shares as this more closely aligns Directors’ interests with those of shareholders and provides an incentive 
for the relevant executive to remain with the Group. As the award of any bonus is already dependent upon the achievement of
performance targets in a particular year, the Committee does not consider it appropriate to impose any further performance criteria
on vesting of the deferred share element of any bonus award, other than that the relevant Executive Director remains employed by
the Group and has not tendered his resignation at the end of that three-year period.
The Group sets yearly budget targets for the Group as a whole and for each business unit within the Group. These targets are,
of necessity, extremely challenging. The Committee has determined that bonuses would be payable for Group performance against
budget between 90% and 110%. The level of bonus payable is heavily skewed towards performance in excess of 100% 
of budget. However, even if the budgetary targets are met, a proportion of the bonus which would otherwise be payable is
dependent on personal performance. The maximum level of bonus payable to an Executive Director is 80% of basic salary,
although awards for the year ended 31 March 2003 were 58.85% for each Executive Director. The Committee has determined that
awards should be calculated on this basis for the 2003/04 ﬁnancial year and, going forward, will review on a yearly basis what
performance criteria are appropriate for future years.
Share Option Schemes
Executive Share Option Scheme (ESOS)
The Company operates an Executive Share Option Scheme for Executive Directors and other senior management. Under this
scheme, options to acquire ordinary shares in the Company may be awarded at the discretion of the Committee at levels of up to
200% of basic salary. The exercise price of the options granted under the scheme is based on the average of the middle market
quotations for shares in the Company for the three dealing days prior to the date of grant.
The Committee has agreed that the following performance targets should continue to apply for option grants made in the
2003/04 ﬁnancial year. Options will be exercisable if the growth in the Company’s annualised earnings per share (EPS) for the
three-year period following the ﬁnancial year ending before the date of grant exceeds the growth in the UK Retail Prices Index (RPI)
over the same period by an average of at least 3% per annum. If at the end of the three-year period the performance target has
not been met, EPS growth will be measured over an additional year and must show an average growth of 3% in excess of RPI
over the full four year period. If the EPS criterion is met, the option may be exercised at any time during the rest of its ten-year life,
without any further condition.
If the holder leaves the Group before the end of the performance period by reason of injury, ill-health, disability, redundancy 
or retirement, an option may be exercised within 12 months if the performance target has been satisﬁed at the date of such
cessation. Early exercise of options may also be permitted within speciﬁc periods in the event of a change of control of the
Company resulting from a takeover, reconstruction, amalgamation or voluntary winding-up of the Company but only to the extent
that any performance targets have then been achieved on a pro rata basis.
Grants for the 2002/03 ﬁnancial year were set at 1.33 times basic salary for Moir Lockhead and 1 times salary for other
Executive Directors. Going forward, the Committee will consider what performance criteria and levels of award are appropriate for
each ﬁnancial year.
The performance criteria and annual levels of grant have remained unchanged since the scheme was adopted in 2001. At that
time, the scheme was designed to attract and retain key individuals in the face of competition for talented and effective staff and
the performance criteria and levels of grant were considered appropriate to achieve this aim whilst better aligning the interests of
the individuals concerned with the longer-term interests of shareholders. The Committee believes that these performance criteria
and levels of grant remain appropriate for the current ﬁnancial year. In the current climate, the RPI-related target is a realistic
challenge and the overall levels of grant are not considered to be excessive when compared to the Group’s principal competitors
and FTSE 250 companies more generally. FIRST 21 FIRST 21
Save As You Earn (SAYE) Scheme
The Company also operates a Save As You Earn (SAYE) Share Option Scheme for eligible employees under which options may 
be granted on an annual basis at a discount of up to 20% of market value. The Executive Directors are eligible to participate in the
SAYE Share Option Scheme.
The Company no longer operates any long-term incentive schemes other than the share option schemes described above. 
No amendments are proposed to be made to the terms and conditions of any entitlement of a Director to share options.
Buy As You Earn (BAYE) Scheme
At the Company’s AGM in 2001, shareholders approved the establishment of a new all-employee Share Incentive Plan. This
replaced the Employee Share Ownership plan (ESOP). The Company was no longer able to operate the ESOP following a change
in the law governing approved proﬁt sharing schemes. The ﬁnal appropriation under the ESOP was made in June 2002 in respect
of the ﬁnancial year ended 31 March 2002. During the year, the Company launched the new Share Incentive Plan under the title
‘Buy as You Earn’. This scheme, which is open to all UK employees of the Group (including the Executive Directors), enables
employees to purchase partnership shares from their gross income (i.e. before income tax and National Insurance deductions). 
The Company provides one matching share for every two partnership shares bought by employees, subject to a maximum
Company contribution of shares to the value of £15 a month. The shares are held in trust for up to ﬁve years, in which case, no
income tax and national insurance will be payable. The matching shares will be forfeited if the corresponding partnership shares are
removed from trust within three years of award.
Retirement beneﬁts
Executive Directors are members of a number of deﬁned beneﬁt Group pension schemes. Their dependants are eligible for
dependants’ pensions and the payment of a lump sum in the event of death in service. Further details are set out on page 25.
Service contracts
It is the Company’s policy to restrict notice periods for Executive Directors to a maximum of 12 months. In line with this policy, 
all of the Executive Directors have service contracts with an undeﬁned term but which provide for a notice period of 12 months.
There are no contractual provisions governing payment on early termination of these contracts. If it becomes necessary to 
consider termination of a service contract, the Company will have regard to all the circumstances of the case, including mitigation,
when determining any compensation to be paid. Details of their contracts are set out below:
Date of Service Contract
Moir Lockhead 5 March 2001
Robbie Duncan
1
5 March 2001
Iain Lanaghan 29 November 2002
Mike Mitchell 2 July 1997
1
Retired as a Director on 31 March 2003
Executive Directors are permitted to accept a limited number of outside non-executive directorships, recognising that this is an
effective way to broaden their knowledge and expertise and, unless the appointment is in connection with Group business, the
individual Director is entitled to retain any fees received. No such appointment can be taken up without prior Board approval.
Non-Executive Directors
All Non-Executive Directors have a letter of appointment and their remuneration is determined by the Board based on independent
surveys of fees paid to non-executive directors of comparable companies. Non-Executive Directors cannot participate in any of 
the Company’s share option schemes and are not eligible to join the Company’s pension scheme. Each of the Non-Executive
Directors, other than Martyn Williams, has elected to receive 40% of his fees in the form of shares in order to ensure that their
interests are more closely aligned to those of the Company’s shareholders. The shares are purchased on a monthly basis in the
market. The appointment of each of the Non-Executive Directors is subject to early termination (without compensation) if he is 
not reappointed at an Annual General Meeting when he is up for re-election. 22 FIRST 22 FIRST
Directors’ remuneration report
Total shareholder return
The following graph shows, for the last ﬁve ﬁnancial years of the Company, the total shareholder return on a holding of shares in
the Company as against that of a hypothetical holding of shares made up of shares of the same kinds and number as those by
reference to which the FTSE 250 index and the FTSE All-Share transport index are calculated.
These indices were selected for this purpose as the Company believes that they are the most appropriate and representative
indices against which to measure the Company’s performance.
Audited Information
Directors’ remuneration
Details of the Directors’ remuneration for the year ended 31 March 2003 are set out on the following pages.
Total shareholder return index
Mar 03 Mar 98 Mar 99 Mar 00 Mar 01 Mar 02
0
20
40
60
80
100
120
140
31/03/98 = 100
Source: Thomson Datastream
FirstGroup plc Total Shareholder Return Index
FTSE All-Share Transport Total Shareholder Return Index
FTSE 250 Total Shareholder Return Index FIRST 23 FIRST 23
Directors’ emoluments and compensation
The total salaries, fees and beneﬁts paid to, or receivable by, each person who served as a Director of the Company at any time
during the year appear below. These include any and all payments for services as a Director of the Company, its subsidiaries or
otherwise in connection with the management of the Group.
Cash Beneﬁts
Salary bonus in kind Fees Total Total
2003 2003 2003 2003 2003 2002
£000 £000 £000
1
£000 £000 £000
Executive Directors
Moir Lockhead 351 136 23 – 510 494
Robbie Duncan
2
238 92 19 – 349 338
Iain Lanaghan 210 81 1 – 292 243
Mike Mitchell 236 92 20 – 348 336
Non-Executive Directors
Martin Gilbert – – – 100 100 63
David Dunn – – – 33 33 31
Jim Forbes – – – 33 33 31
George Law
3
––– 10 10 13
John Sievwright
4
––– 29 29 –
Martyn Williams
5
––– 3 3 –
1,035 401 63 208 1,707 1,549
1
In relation to the value of non-cash beneﬁts received, the values indicated relate to the following beneﬁts received by each Director: Moir Lockhead: £18,000 company 
car, £4,000 private fuel and £1,000 medical insurance for himself and spouse; Robbie Duncan: £14,000 company car, £4,000 private fuel and £1,000 medical insurance 
for himself and spouse; Iain Lanaghan: £1,000 medical insurance for himself and his family; Mike Mitchell: £15,000 company car, £4,000 private fuel and £1,000 medical
insurance for himself and his family
2
Retired as a Director on 31 March 2003
3
Retired as Employee Director on 31 December 2002
4
Appointed as a Director on 9 May 2002
5
Appointed as Employee Director on 1 January 2003 24 FIRST
Directors’ remuneration report
The outstanding share options under the Executive Share Option Scheme (ESOS), deferred share bonus, long-term incentive plan
(LTIP) and SAYE scheme granted to each of the serving Directors are as follows:
At
beginning Lapsed/
of year or Granted Exercised waived At end of 
date of during during during year or date
appointment the year the year the year of cessation Exercise Date
(number (number (number (number (number price from which Expiry
Scheme of shares) of shares) of shares) of shares) of shares) (pence) exercisable date
Current Directors
Moir Lockhead LTIP 2000
1
110,168––– 110,168 nil 31.3.03 3.7.07
ESOS 2001 130,985––– 130,985 346.5 15.8.04 15.8.11
ESOS 2002 – 173,784 – – 173,784 269 21.6.05 21.6.12
Deferred share bonus:
2001
2
31,633––– 31,633 nil 1.4.04 n/a
2002
2
– 25,080 – – 25,080 nil 1.4.05 n/a
Robbie Duncan LTIP 2000
1
74,576––– 74,576 nil 31.3.03 3.7.07
ESOS 2001 66,667––– 66,667 346.5 15.8.04 15.8.11
ESOS 2002 – 88,450 – – 88,450 269 21.6.05 21.6.12
Deferred share bonus:
2001
2
13,200––– 13,200 nil 1.4.04 n/a
2002
2
– 16,977 – – 16,977 nil 1.4.05 n/a
Iain Lanaghan LTIP 2000
1
55,932––– 55,932 nil 31.3.03 3.7.07
ESOS 2001 50,000––– 50,000 346.5 15.8.04 15.8.11
ESOS 2002 – 78,067 – – 78,067 269 21.6.05 21.6.12
Deferred share bonus:
2001
2
10,707––– 10,707 nil 1.4.04 n/a
2002
2
– 12,733 – – 12,733 nil 1.4.05 n/a
SAYE 2002/03 – 4,921 – – 4,921 192 1.2.05 31.8.05
Mike Mitchell LTIP 2000
1
67,796––– 67,796 nil 31.3.03 3.7.07
ESOS 2001 60,606––– 60,606 346.5 15.8.04 15.8.11
ESOS 2002 – 88,067 – – 88,067 269 21.6.05 21.6.12
Deferred share bonus:
2001
2
22,667––– 22,667 nil 1.4.04 n/a
2002
2
– 16,903 – – 16,903 nil 1.4.05 n/a
SAYE 2002/03 – 4,921 – – 4,921 192 1.2.05 31.8.05
Martyn Williams SAYE 2002/03 787––– 787 192 1.2.05 31.8.05
Former Directors
George Law SAYE 1995
3
1,303 – 1,303 – – 107.72 1.11.02 31.3.03
SAYE 1999 323 – – 323 – 359.73 1.9.02 28.2.03
1
The performance period for these LTIPs expired on 31 March 2003. The growth in the Company’s adjusted basic earnings per share having been at least equal to 
the increase in the retail prices index over the three-year performance period and the Company’s total shareholder return when compared with that of the FTSE 250
(excluding investment trusts) over the same period having been in the 25th percentile, the awards matured and the shares will be transferred to participants on exercise.
The number of shares in each grant was determined based on a share price of 236p at 30 June 2000. Based on the closing middle market share price of 239.5p on
31 March 2003 (the date on which the awards vested), the value of the shares comprised in the awards was Moir Lockhead: £263,852; Robbie Duncan: £178,610; 
Iain Lanaghan: £133,957 and Mike Mitchell: £162,371
2
The ﬁgures shown represent the number of nil-cost options which were granted under the deferred share element of the Executive Annual Bonus Plan in respect of the
2000/01 and 2001/02 ﬁnancial years. The cash values of the 2002/03 award are Moir Lockhead: £70,685; Robbie Duncan: £47,848; Iain Lanaghan: £42,231 and 
Mike Mitchell: £47,641. These awards will take the form of nil-cost options over shares which will, subject to satisfying the requirements of the Plan, vest on 31 March
2006. The number of shares under option will be ﬁxed based on the closing middle market price of FirstGroup plc shares at the close of business on 14 May 2003
3
Exercised on 6 November 2002 on maturity of the SAYE contract. The closing market price on the date of exercise was 231.25p. The notional pre-tax gain on exercise
was £1,609.59
Market price of FirstGroup plc shares
The market price of FirstGroup plc shares at 31 March 2003 was 239.50p and the range during the year was 200.00p to 338.75p. FIRST 25
Retirement beneﬁts
Moir Robbie Iain Mike
Lockhead Duncan
1
Lanaghan Mitchell
Scheme
2233
Normal retirement age 65 65 60 60
Directors’ contributions (£) 22,460 15,302 13,122 49,749
Increase in accrued pension during the year (net of inﬂation) (£ pa) 8,806 4,440 3,838 10,194
Increase in accrued pension (£ pa) 11,252 5,253 3,918 10,818
Accrued pension at 31 March 2003 (£ pa) 155,180 53,132 8,640 47,545
Value of increase in accrued pension (net of inﬂation) during the year (£) 161,657 48,542 26,461 98,930
Transfer value of accrued pension at 31 March 2002 (£) 2,605,321 662,556 45,596 388,425
Transfer value of accrued pension at 31 March 2003 (£) 2,848,743 580,899 59,568 424,767
Increase in transfer value over the year, net of Directors’ contributions (£) 220,962 (96,959) 850 (13,407)
Company contribution to FURBS during the year (£) – – 27,528 –
ˆ
1
Retired as a Director on 31 March 2003
2
Aberdeen City Council No.2 Pension Fund
3
FirstGroup Flexible Beneﬁts Scheme
The Group does not have one pension scheme but instead operates a number of different schemes. All of the schemes in which
the Executive Directors participate are deﬁned beneﬁt schemes, and are not limited in membership to Executive Directors. In
addition to their pension entitlement, Moir Lockhead and Robbie Duncan are entitled at retirement age to a lump sum from their
pension scheme of £465,539 (2002: £431,782) and £159,396 (2002: £142,636), respectively. Only Iain Lanaghan has accruing
beneﬁts which are subject to the Inland Revenue earnings cap.
This report was approved by the Board of Directors on 13 May 2003 and signed on its behalf by:
B Louise Ruppel
Company Secretary
13 May 2003 26 FIRST
Directors’ report
The Directors have pleasure in submitting their Annual Report and Financial Statements for the year ended 31 March 2003.
Principal activities
The principal activity of the Group is the provision of passenger transport services.
Review of the business
Reviews of the business and likely future developments are given in the Chairman’s Statement, Chief Executive’s Operating Review
and in the Financial Review.
Financial matters
The results for the year are given in the consolidated proﬁt and loss account on page 30.
The Directors recommend payment of a ﬁnal dividend of £30.8m (7.45p per share), which, with the interim dividend of £14.8m
(3.55p per share) paid on 12 February 2003, gives a total dividend of £45.6m (11.0p per share) for the year. The proposed ﬁnal
dividend, if approved, will be payable on 29 August 2003 to shareholders on the register at the close of business on 25 July 2003.
Share capital
Details of changes in share capital are set out in Note 22 to the accounts.
Fixed assets
In the opinion of the Directors, there were no material differences between the market value of the Group’s properties and their net
book values.
Directors
The Directors of the Company since 1 April 2002 were Robbie Duncan (retired 31 March 2003), David Dunn, Jim Forbes, Martin
Gilbert, Iain Lanaghan, George Law (retired 31 December 2002), Moir Lockhead, Mike Mitchell, John Sievwright (appointed 
9 May 2002) and Martyn Williams (appointed 1 January 2003).
In accordance with the Company’s Articles of Association, Martyn Williams, who has been appointed as a Director by the
Board since the date of the last Annual General Meeting (AGM), will be retiring and, being eligible, offers himself for election. In
addition, Mike Mitchell, David Dunn and Jim Forbes will be retiring by rotation at the forthcoming AGM and, being eligible, offer
themselves for re-election. Biographical details of the Directors to be elected or re-elected at the AGM are given in the Chairman’s
Letter and Notice of Meeting which accompany this Annual Report.
Details of the service contracts of the Executive Directors and the terms of appointment of the Non-Executive Directors are
given in the Directors’ remuneration report on pages 19 to 25.
Directors’ interests
The Directors who held ofﬁce at the end of the year had the following interests in the ordinary shares of the Company:
Ordinary 5p shares
At beginning of year
or subsequent appointment At end of year
Beneﬁcial Non-beneﬁcial Beneﬁcial Non-beneﬁcial
Robbie Duncan 3,828,234 – 3,828,234 –
David Dunn 8,000 – 12,532 –
Jim Forbes – – 4,532 –
Martin Gilbert 19,285 – 33,369 –
Iain Lanaghan 6,036 – 6,155 –
Moir Lockhead 1,440,723 470,690 1,440,723 470,690
Mike Mitchell 115,395 – 115,395 –
John Sievwright 7,500 – 12,032 –
Martyn Williams 965 – 965 –
Details of the Directors’ share options are given in the Directors’ remuneration report on pages 19 to 25. Moir Lockhead also holds
nominal non-beneﬁcial interests in a number of subsidiary undertakings.
Between 1 April and 13 May 2003, the following changes occurred to Directors’ interests: on 23 April 2003 Iain Lanaghan
acquired 62 shares pursuant to the Company’s Buy As You Earn Scheme. On 25 April 2003, Martin Gilbert acquired 1,494 shares,
and David Dunn, Jim Forbes and John Sievwright each acquired 482 shares pursuant to the standing arrangements whereby they
have each elected to receive 40% of their monthly fees in the form of shares in the Company. 
No Director is materially interested in any signiﬁcant contract or agreement with the Group, other than their service contracts. FIRST 27
Signiﬁcant interests
At 13 May 2003 the Company had been advised of the following notiﬁable interests in its issued ordinary share capital:
Ordinary 5p shares %
Legal & General Group plc 15,393,250 3.71
AEGON UK plc Group of Companies 12,965,919 3.14
Employees
The Group is committed to employee involvement and uses a variety of methods to inform, consult and involve its employees in
the business, details of which are given in the Chief Executive’s Operating Review. Employee newsletters are distributed regularly
throughout the year. The Group extends employee involvement by the appointment of Employee Directors nominated by the
workforce. There is one employee director on the Board of FirstGroup plc and one or two employee directors on the Boards of 
the majority of the Group’s UK subsidiary undertakings. 
The Group is committed to wide employee share ownership. During the year, the Group launched a Share Incentive Plan (the
Buy As You Earn Scheme) and also invited employees to participate in a Save As You Earn Scheme, details of which are given in
Note 31 to the ﬁnancial statements.
The Group recognises its obligations to give disabled persons full and fair consideration for all vacancies where possible.
Wherever reasonable and practicable, the Group will retain newly disabled employees and at the same time provide full and fair
opportunities for the career development of disabled people.
Corporate social responsibility
The system of internal control described on pages 17 and 18 covers signiﬁcant risks associated with social, environmental and
health and safety matters. The Group publishes a separate Corporate Responsibility Report, covering social, environmental and
health and safety matters, which will be available on our web site www.ﬁrstgroup.com.
Charitable and political contributions
The Group made various donations to UK charities totalling approximately £69,000 (2002: £143,000) during the year. There were
no payments made for political purposes. 
Creditors
It is the Group’s policy to abide by the payment terms agreed with suppliers whenever it is satisﬁed that the supplier has provided
the goods and services in accordance with agreed terms and conditions. A number of signiﬁcant purchases, such as fuel and 
tyres and commitments under hire purchase contracts, ﬁnance leases and operating leases are paid by direct debit. At 31 March
2003, the Group had 30 days’ (2002: 38 days’) purchases outstanding. The Company does not have any trade creditors in its
balance sheet.
Other issues
The introduction of the Euro has had minimal impact on the Group, as the Group does not trade in continental Europe. 
The Directors continue to monitor the situation with regard to the possible introduction of Euro notes and coins in the UK.
Annual General Meeting
The Annual General Meeting will be held at the Aberdeen Exhibition and Conference Centre, Bridge of Don, Aberdeen, Scotland
AB23 8BL on Thursday 3 July 2003 at 11.00 am. The Notice of Meeting is contained in a separate letter from the Chairman
accompanying this Annual Report.
Auditors
Deloitte & Touche have expressed their willingness to continue in ofﬁce as auditors and a resolution concerning their reappointment
and remuneration is to be proposed at the forthcoming Annual General Meeting.
By order of the Board 395 King Street
B Louise Ruppel Aberdeen
Company Secretary AB24 5RP
13 May 2003 28 FIRST
Directors’ responsibilities
United Kingdom company law requires that the Directors prepare ﬁnancial statements for each ﬁnancial year which give a true and
fair view of the state of affairs of the Company and the Group at the end of the ﬁnancial year and of the proﬁt or loss of the Group
for that period. In preparing those ﬁnancial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent; and
• state whether applicable accounting standards have been followed.
The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the
ﬁnancial position of the Company and the Group and to enable them to ensure that the ﬁnancial statements comply with the
Companies Act 1985. They are also responsible for the system of internal control, for safeguarding the assets of the Company 
and Group and hence for taking reasonable steps to prevent and detect fraud and other irregularities. FIRST 29
Independent auditors’ report to the members of
FirstGroup plc
We have audited the ﬁnancial statements of FirstGroup plc for the year ended 31 March 2003 which comprise the consolidated
proﬁt and loss account, the balance sheets, the consolidated cash ﬂow statement, the consolidated statement of total recognised
gains and losses, the reconciliation of movements in shareholders’ funds and the related notes 1 to 31. These ﬁnancial statements
have been prepared under the accounting policies set out therein. We have also audited the information in the part of the
Directors’ remuneration report that is described as having been audited.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state 
to them in an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, 
or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As described in the statement of Directors’ responsibilities, the Company’s Directors are responsible for the preparation of the
ﬁnancial statements in accordance with applicable United Kingdom law and accounting standards. They are also responsible 
for the preparation of the other information contained in the Annual Report including the Directors’ remuneration report. Our
responsibility is to audit the ﬁnancial statements and the part of the Directors’ remuneration report described as having been
audited in accordance with relevant United Kingdom legal and regulatory requirements, auditing standards and the Listing Rules 
of the Financial Services Authority.
We report to you our opinion as to whether the ﬁnancial statements give a true and fair view and whether the ﬁnancial
statements and the part of the Directors’ remuneration report described as having been audited have been properly prepared 
in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors’ report is not consistent with
the ﬁnancial statements, if the Company has not kept proper accounting records, if we have not received all the information and
explanations we require for our audit, or if information speciﬁed by law or the Listing Rules of the Financial Services Authority
regarding Directors’ remuneration and transactions with the Company and other members of the Group is not disclosed.
We review whether the corporate governance statement reﬂects the Company’s compliance with the seven provisions of the
Combined Code speciﬁed for our review by the Listing Rules of the Financial Services Authority, and we report if it does not. 
We are not required to consider whether the Board’s statements on internal control cover all risks and controls, or form an opinion
on the effectiveness of the Group’s corporate governance procedures or its risk and control procedures.
We read the Directors’ report and the other information contained in the Annual Report for the above year as described in the
contents section including the unaudited part of the Directors’ remuneration report and consider the implications for our report 
if we become aware of any apparent misstatements or material inconsistencies with the ﬁnancial statements.
Basis of audit opinion
We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit
includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the ﬁnancial statements and the 
part of the Directors’ remuneration report described as having been audited. It also includes an assessment of the signiﬁcant
estimates and judgements made by the Directors in the preparation of the ﬁnancial statements and of whether the accounting
policies are appropriate to the circumstances of the Company and the Group, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in
order to provide us with sufﬁcient evidence to give reasonable assurance that the ﬁnancial statements and the part of the Directors’
remuneration report described as having been audited are free from material misstatement, whether caused by fraud or other
irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the ﬁnancial
statements and the part of the Directors’ remuneration report described as having been audited.
Opinion
In our opinion: 
• the ﬁnancial statements give a true and fair view of the state of affairs of the Company and the Group as at 31 March 2003 
and of the proﬁt of the Group for the year then ended; and
• the ﬁnancial statements and part of the Directors’ remuneration report described as having been audited, have been properly
prepared in accordance with the Companies Act 1985.
Deloitte & Touche 
Chartered Accountants and Registered Auditors
London
13 May 2003 30 FIRST 30 FIRST
Consolidated proﬁt and loss account
For the year ended 31 March 2003
Before
Before goodwill Goodwill
goodwill Goodwill amortisation amortisation
amortisation amortisation and and
and and exceptional exceptional
exceptional exceptional items items Total
items items Total 2002 2002 2002
2003 2003 2003 Restated Restated Restated
Notes £m £m £m £m £m £m
Turnover
Continuing operations 2,277.6 – 2,277.6 2,164.1 – 2,164.1
Acquisitions 13.4 – 13.4 –––
Group turnover 2 2,291.0 – 2,291.0 2,164.1 – 2,164.1
Share of turnover of joint ventures ––– 0.1 – 0.1
Total turnover 2,291.0 – 2,291.0 2,164.2 – 2,164.2
Operating proﬁt
Continuing operations 213.2 (36.0) 177.2 215.0 (47.8) 167.2
Acquisitions 2.9 (0.4) 2.5 –––
Group operating proﬁt 2 216.1 (36.4) 179.7 215.0 (47.8) 167.2
Group operating proﬁt before goodwill amortisation
and exceptional items 216.1 – 216.1 215.0 – 215.0
Exceptional items, net 4 – (10.6) (10.6) – (20.5) (20.5)
Goodwill amortisation 2 – (25.8) (25.8) – (27.3) (27.3)
Group operating proﬁt 2 216.1 (36.4) 179.7 215.0 (47.8) 167.2
Share of operating losses of joint ventures ––– (1.6) – (1.6)
Share of operating losses of associate ––– (0.4) – (0.4)
Amortisation of goodwill on associate ––– – (1.4) (1.4)
Amortisation of goodwill on joint ventures ––– – (0.6) (0.6)
Total operating proﬁt 216.1 (36.4) 179.7 213.0 (49.8) 163.2
Proﬁt on disposal of ﬁxed assets – 10.0 10.0 – 1.0 1.0
Proﬁt on ordinary activities before interest 2 216.1 (26.4) 189.7 213.0 (48.8) 164.2
Net interest payable and similar charges 6 (56.3) – (56.3) (56.3) – (56.3)
Proﬁt on ordinary activities before taxation 7 159.8 (26.4) 133.4 156.7 (48.8) 107.9
Tax on proﬁt on ordinary activities 8 (47.9) 12.1 (35.8) (48.1) 14.2 (33.9)
Proﬁt on ordinary activities after taxation 111.9 (14.3) 97.6 108.6 (34.6) 74.0
Equity minority interests (0.1) – (0.1) (0.1) – (0.1)
Proﬁt for the ﬁnancial year 111.8 (14.3) 97.5 108.5 (34.6) 73.9
Equity dividends paid and proposed 9 (45.5) – (45.5) (43.1) – (43.1)
Retained proﬁt for the ﬁnancial year 23 66.3 (14.3) 52.0 65.4 (34.6) 30.8
Adjusted Actual Adjusted Actual
Basic earnings per share 10 26.8p 23.4p 25.8p 17.6p
Cash earnings per share 10 50.6p – 48.5p –
Diluted earnings per share – 23.4p – 17.5p FIRST 31
Group Company
2003 2002 2003 2002
Restated Restated
Notes £m £m £m £m
Assets employed:
Fixed assets
Intangible assets 11 496.7 547.0 – –
Tangible assets 12 775.8 797.5 – –
Investments 13 0.7 1.5 1,659.5 1,660.3
1,273.2 1,346.0 1,659.5 1,660.3
Current assets
Stocks 14 28.9 25.0 – –
Debtors 15 345.8 284.0 1,028.4 909.5
Investments 16 45.7 60.4 – 5.3
Cash at bank and in hand 17 35.6 41.0 7.2 1.4
456.0 410.4 1,035.6 916.2
Creditors: amounts falling due within one year 18 (571.5) (537.8) (961.8) (849.6)
Net current (liabilities)/assets
Due within one year (159.3) (157.4) 73.8 66.6
Amounts due after more than one year 15 43.8 30.0 – –
Net current (liabilities)/assets (115.5) (127.4) 73.8 66.6
Total assets less current liabilities 1,157.7 1,218.6 1,733.3 1,726.9
Creditors: amounts falling due after more than one year 18 (630.9) (687.9) (589.1) (611.6)
Provisions for liabilities and charges 20 (124.0) (110.7) – –
402.8 420.0 1,144.2 1,115.3
Financed by:
Capital and reserves
Called up share capital 22 20.7 21.0 20.7 21.0
Share premium account 23 238.8 236.7 238.8 236.7
Revaluation reserve 23 3.5 3.6 – –
Other reserves 23 3.8 3.5 261.3 261.0
Proﬁt and loss account 23 134.9 154.2 623.4 596.6
Equity shareholders’ funds 401.7 419.0 1,144.2 1,115.3
Equity minority interests 1.1 1.0 – –
402.8 420.0 1,144.2 1,115.3
These ﬁnancial statements were approved by the Board of Directors on 13 May 2003 and were signed on its behalf by:
Moir Lockhead Director
Iain M Lanaghan Director
Consolidated balance sheets
At 31 March 2003
FIRST 31 FIRST 31 32 FIRST
2002
2003 Restated
Notes £m £m
Net cash inﬂow from operating activities 24(a) 219.7 310.3
Returns on investments and servicing of ﬁnance 24(b) (31.0) (65.8)
Taxation
Corporation tax paid (23.6) (37.6)
Capital expenditure and ﬁnancial investment 24(c) (82.2) (140.3)
Acquisitions and disposals 24(d) (23.8) (14.0)
Equity dividends paid (44.0) (40.7)
Cash inﬂow before use of liquid resources and ﬁnancing 15.1 11.9
Management of liquid resources
Decrease/(increase) in bank deposits 14.7 (48.6)
Financing 24(e) (47.4) 13.8
Decrease in cash in year (17.6) (22.9)
Consolidated cash ﬂow statement
For the year ended 31 March 2003
Reconciliation of net cash ﬂows to movements 
in net debt
For the year ended 31 March 2003
2003 2002
Notes £m £m
Decrease in cash in year (17.6) (22.9)
Cash outﬂow/(inﬂow) from decrease/(increase) in debt and 
hire purchase contract and ﬁnance lease ﬁnancing 32.7 (21.5)
Movement in current asset investments (14.7) 48.6
Fees on issue of bond and loan facility 1.6 5.2
Amortisation of debt issuance fees (0.5) (1.1)
Foreign exchange difference 26.6 (0.1)
Movement in net debt in year 28.1 8.2
Net debt at beginning of year 25 (652.5) (660.7)
Net debt at end of year 25 (624.4) (652.5) FIRST 33
Group Company
1115505 1115505
2003 2002 2003 2002
Restated Restated
£m £m £m £m
Proﬁt/(loss) for the year attributable to shareholders 97.5 73.9 92.2 (13.5)
Foreign exchange differences (53.2) (3.2) (4.0) 0.5
Tax on foreign exchange – – 1.2 (0.1)
Total recognised gains and losses relating to the year 44.3 70.7 89.4 (13.1)
Prior period adjustment on adoption of UITF 34 (note 1) (2.3) (0.4)
Total recognised gains and losses since the last annual report 42.0 89.0
Consolidated statement of total recognised gains
and losses
For the year ended 31 March 2003
Reconciliation of movements in shareholders’ funds
For the year ended 31 March 2003
Group Company
1115505 1115505
2003 2002 2003 2002
Restated Restated
£m £m £m £m
Proﬁt/(loss) for the ﬁnancial year 97.5 73.9 92.2 (13.5)
Dividends (45.5) (43.1) (45.5) (43.1)
52.0 30.8 46.7 (56.6)
Shares issued to QUEST 2.1 – 2.1 –
Own shares purchased and cancelled (17.1) (7.7) (17.1) (7.7)
Write down of own shares held by QUEST (1.1) – – –
Foreign exchange differences (53.2) (3.2) (4.0) 0.5
Tax on foreign exchange – – 1.2 (0.1)
Net (deduction from)/addition to shareholders’ funds (17.3) 19.9 28.9 (63.9)
Shareholders’ funds at beginning of year 419.0 399.1 1,115.3 1,179.2
Shareholders’ funds at end of year 401.7 419.0 1,144.2 1,115.3
No note of historical cost proﬁts and losses is given as there were no material differences between the results as set out in the consolidated
proﬁt and loss account, and their historical cost equivalents. 34 FIRST
1 Principal accounting policies
The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the
Group’s ﬁnancial statements, with the exception of the adoption of UITF 34 ‘Pre-contract costs’.
UITF 34 ‘Pre-contract costs’ was adopted during the year. Pre-contract costs are now expensed as incurred, rather than the previous
policy of capitalisation. The impact of this change in accounting policy for the year to 31 March 2003 is an increase in exceptional costs 
of £0.8m and for the year to 31 March 2002 an increase in exceptional costs of £1.6m. The restatement of bid costs at 31 March 2002
has resulted in a reduction of £1.9m in other debtors and prepayments, an increase of £0.4m in accruals and deferred income, and a
reduction in equity shareholders’ funds of £2.3m to £419.0m.
(a) Basis of preparation
The ﬁnancial statements have been prepared under the historical cost convention, modiﬁed to include the revaluation of certain ﬁxed
assets, and in accordance with applicable United Kingdom accounting standards. 
(b) Basis of consolidation
The consolidated ﬁnancial statements incorporate the accounts of the Company and all of its subsidiary undertakings; all accounts are
made up to 31 March 2003.
The results of subsidiary undertakings are included in the ﬁnancial statements under the principles of FRS 6 from the date control
passes.
Undertakings, other than subsidiary undertakings, in which the Group has an investment, held for the long term, over which it
exercises signiﬁcant inﬂuence are treated as associates. Undertakings in which the Group has an investment that is held for the long term
and which are jointly controlled by the Group and one or more other venturers under a contractual arrangement are treated as joint
ventures. The Group’s share of proﬁts and losses of associates and joint ventures are included in the consolidated proﬁt and loss
account, and the Group’s share of their net assets is included in the consolidated balance sheet, based on the latest available accounts 
for these undertakings.
No proﬁt and loss account is presented for the Company as permitted by section 230 of the Companies Act 1985.
In the accounts of the Company, investments in subsidiary and associated undertakings are stated at cost less provision for
impairment. Dividends received and receivable are credited to the proﬁt and loss account to the extent that they represent a realised proﬁt
for the Company.
(c) Goodwill
Goodwill arising on acquisitions made after 1 April 1998 is shown on the balance sheet as an intangible ﬁxed asset.
Where capitalised goodwill is regarded as having a limited useful economic life, it is amortised over that life. Where capitalised goodwill
is regarded as having an indeﬁnite useful economic life, it is not amortised. Where capitalised goodwill is amortised over a life of greater
than 20 years, or is not amortised, annual impairment reviews are conducted to compare the book value with the recoverable amount.
If the recoverable amount has fallen below the book value, the goodwill is written down to the recoverable amount immediately.
The Companies Act 1985 normally requires goodwill that is treated as an asset to be amortised systematically over a ﬁnite period. In
order to show a true and fair view of the Group’s results, goodwill arising on the acquisitions of Mainline and Capital Citybus is not being
amortised because of a number of factors that mean that the goodwill has an indeﬁnite life. These include the stability of the bus industry,
its lack of fundamental change and the Group’s track record in maintaining and enhancing the values of its businesses. This treatment of
goodwill as having an indeﬁnite life is in accordance with FRS 10. It is not possible to quantify the effect on the Group’s results if the Act
were to be followed, as it would depend on the ﬁnite life that was used.
Capitalised goodwill arising on other acquisitions is being amortised over a period of up to 20 years on a straight line basis.
Capitalised goodwill arising on foreign acquisitions is denominated in the currency in which the acquired company’s assets and
liabilities are recorded.
Fair value accounting adjustments are made in respect of acquisitions. In the year of acquisition, some adjustments are made using
provisional estimates, based on information available at the time the ﬁnancial statements are prepared, and amendments are sometimes
necessary in the following accounting period, with a corresponding adjustment to goodwill, when the information necessary to determine
these estimates is available.
Prior to 1 April 1998, all goodwill arising on acquisitions was written off to reserves. This goodwill has not been reinstated on the
balance sheet. On disposal of the businesses concerned this goodwill is included in determining the gain or loss on disposal in the proﬁt
and loss account.
(d) Turnover
Turnover represents the amounts receivable for services supplied to customers during the year and includes rail support grants and
amounts receivable for tendered services and concessionary fare schemes.
Notes to the ﬁnancial statements
34 FIRST 34 FIRST FIRST 35
1 Principal accounting policies continued
(e) Fixed assets and depreciation
Depreciation is provided to write off the cost or valuation less residual value of tangible ﬁxed assets over their estimated useful economic
lives as follows:
Freehold buildings – 50 years straight line
Long leasehold buildings – 50 years straight line
Short leasehold properties – period of lease
Passenger carrying vehicles – 7 to 15 years straight line
Other plant and equipment – 3 to 25 years straight line
No depreciation is provided on freehold land, the land element of long leasehold properties or on assets in course of construction.
Surpluses or deﬁcits arising on the revaluation of tangible ﬁxed assets are credited or debited to a revaluation reserve. On a subsequent
disposal of a revalued asset, the revaluation surplus or deﬁcit relating to this asset is transferred to the proﬁt and loss account reserve.
From 1 April 1999 the Group’s policy has been not to revalue tangible ﬁxed assets. Properties that had been revalued before that date
retained their book value, in accordance with the transitional rules of FRS 15.
(f) Hire purchase contracts and leases
Assets held under hire purchase contracts and under ﬁnance leases, which are those leases where substantially all the risks and rewards
of ownership of the asset have passed to the Group are recorded in the balance sheet as tangible ﬁxed assets. Depreciation is provided
on these assets over their estimated useful lives or lease term, as appropriate.
Future obligations under hire purchase contracts and ﬁnance leases are included in creditors, net of ﬁnance charges. Payments are
apportioned between the ﬁnance element, which is charged to the proﬁt and loss account as interest, and the capital element, which
reduces the outstanding obligations. The ﬁnance charges are calculated in relation to the reducing amount of obligations outstanding and
are charged to the proﬁt and loss account on the same basis.
All other leases are operating leases and the rental charges are taken to the proﬁt and loss account on a straight line basis over the life
of the lease.
(g) Government grants and subsidies
Rail support grants and amounts receivable for tendered services and concessionary fare schemes are included in turnover and are
recognised in the proﬁt and loss account as the related expenditure is incurred. 
(h) Stocks and work in progress
Stocks are valued at the lower of cost and net realisable value.
(i) Foreign currencies
Assets and liabilities denominated in foreign currencies are translated into sterling at rates of exchange ruling at the year end and results of
foreign enterprises are translated at the average rates of exchange during the year. Differences on exchange arising on the retranslation of
net investments in foreign enterprises and from the translation of results at an average rate are taken to reserves. Where foreign currency
borrowings are used to ﬁnance or hedge investments in foreign enterprises, the gain or loss on translation is also taken to reserves. 
All other exchange differences are dealt with through the proﬁt and loss account.
(j) Taxation
The charge for taxation is based on the proﬁt for the year and takes into account taxation deferred because of timing differences between
the treatment of certain items for taxation and accounting purposes. Provision is made for deferred tax on all timing differences except
those arising from the revaluation of ﬁxed assets for which there is no binding agreement to sell or on the undistributed proﬁts of overseas
subsidiaries, associates and joint ventures. Deferred tax is calculated at the rates at which it is estimated the tax will arise. Deferred tax
assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. The deferred tax provision is not
discounted to net present value.
(k) Pension costs
Retirement beneﬁts are provided for most employees of the Group by means of deﬁned beneﬁt pension schemes. These are funded 
by contributions from the Group and employees. The Group’s contributions are charged to the proﬁt and loss account, based on
recommendations by independent actuaries, in such a way as to provide for the liabilities evenly over the average remaining working lives
of the employees. The difference between the charge to the proﬁt and loss account and the contributions paid by the Group is shown as
an asset or a liability in the balance sheet and the tax effect of this timing difference is included in deferred taxation.  36 FIRST
1 Principal accounting policies continued
(l) Financial instruments
Derivative instruments utilised by the Group are interest rate and forward exchange contracts. The Group does not enter into speculative
derivative contracts. All such instruments are used for hedging purposes to alter the risk proﬁle of an existing underlying exposure of the
Group, in line with the Group’s risk management policies. Amounts payable or receivable in respect of interest rate swaps and caps are
recognised as adjustments to interest expense over the period of the contracts.
(m) Insurance
The Group’s policy is to self-insure high frequency, low value claims within the businesses. To provide protection above these types of
losses, cover is obtained through third-party insurance policies. Provision is made for the estimated cost of settling insurance claims for
incidents occuring prior to balance sheet date.
Total Total
Continuing 2003 2002
2Proﬁt and loss account analysis
operations Acquisitions Restated
and segmental information £m £m £m £m
Group turnover 2,277.6 13.4 2,291.0 2,164.1
Group operating costs
– General (2,064.4) (10.5) (2,074.9) (1,949.1)
– Goodwill amortisation (25.4) (0.4) (25.8) (27.3)
– Exceptional items, net (note 4) (10.6) – (10.6) (20.5)
Total Group operating costs (note 3) (2,100.4) (10.9) (2,111.3) (1,996.9)
Group operating proﬁt 177.2 2.5 179.7 167.2
Turnover Proﬁt before interest Net assets/(liabilities)
2003 2002 2003 2002 2003 2002
Restated Restated
Segmental information is as follows: £m £m £m £m £m £m
UK Bus 859.4 811.5 109.7 102.9 267.2 238.4
UK Rail 842.3 802.9 58.5 64.9 (37.9) 2.0
North America 582.4 542.9 32.4 27.3 483.5 521.9
Group items 6.9 6.8 (10.9) (30.9) (310.0) (342.3)
2,291.0 2,164.1 189.7 164.2 402.8 420.0
All of the Group turnover and Group operating proﬁt for the year was generated in the United Kingdom, except that shown above as being
generated in North America.
Total Total
Continuing 2003 2002
operations Acquisitions Restated
3Operating costs £m £m £m £m
Materials and consumables 233.9 1.5 235.4 233.0
Staff costs (note 5) 1,003.1 6.8 1,009.9 945.0
External charges 739.7 1.3 741.0 688.5
Depreciation, amortisation and other amounts written off ﬁxed assets 123.7 1.3 125.0 130.4
2,100.4 10.9 2,111.3 1,996.9
UK North
Bus Rail America Other Total Total
2003 2003 2003 2003 2003 2002
Restated
4Exceptional items, net £m £m £m £m £m £m
Restructuring costs 6.0––– 6.0 7.4
St Louis strike ––––– 1.5
Provision against cost of investment in joint ventures ––––– 8.0
Bid costs – 2.8 – 0.6 3.4 3.6
Claims settlements –– 3.7 – 3.7 –
Gain on disposal of Tramtrack Croydon Limited ––– (2.5) (2.5) –
6.0 2.8 3.7 (1.9) 10.6 20.5
The tax effect in 2003 was a credit of £3.1m (2002: credit of £5.2m) of the above exceptional items.
Notes to the ﬁnancial statements FIRST 37
5Employees’ and Directors’ remuneration
2003 2002
The average number of persons employed by the Group (including Directors) during the year was as follows: No. No.
Operational 52,257 50,928
Administration 4,862 4,857
57,119 55,785
2003 2002
The aggregate payroll costs of these persons were as follows: £m £m
Wages and salaries 923.6 866.5
Social security costs 60.2 59.0
Other pension costs 26.1 19.5
1,009.9 945.0
Disclosures on Directors’ remuneration, share options, long-term incentive schemes and pension entitlements required by the Companies
Act 1985 and those speciﬁed for audit by the Financial Services Authority are contained in the tables/notes within the Directors’
remuneration report on pages 19 to 25 and form part of these audited ﬁnancial statements.
2003 2002
6 Net interest payable and similar charges £m £m
Bond and bank facilities 47.6 43.8
Loan notes 1.9 2.1
Finance charges payable in respect of hire purchase contracts and ﬁnance leases 6.5 11.0
56.0 56.9
Income from short-term deposits and other investments (2.6) (2.8)
Notional interest on provisions 2.9 2.2
Total 56.3 56.3
7Proﬁt on ordinary activities before taxation
2003 2002
Proﬁt on ordinary activities before taxation is stated after charging/(crediting) the following: £m £m
Depreciation and other amounts written off tangible ﬁxed assets 99.2 95.1
Goodwill amortisation 25.8 27.3
Rentals payable under operating leases – plant and machinery 17.2 9.1
– track and station access 278.4 280.0
– hire of rolling stock 71.8 68.5
– other assets 11.4 9.6
Net rents receivable from property (0.1) (0.3)
Deloitte & Touche audit fee 0.4 0.4
Deloitte & Touche and associates’ non-audit fees 0.4 0.3
The Company’s audit fee amounted to £0.1m (2002: £0.1m).
Non-audit fees comprised of due diligence on North American acquisitions of £203,000 (2002: £nil), other assurance services including
the review of the interim accounts of £179,000 (2002: £258,000), tax advisory services of £nil (2002: £40,000) and other non-audit services
of £42,000 (2002: £26,000). 38 FIRST
2003 2002
8Tax on proﬁt on ordinary activities £m £m £m £m
Current taxation
UK corporation tax charge for the year 26.4 25.9
Adjustment in respect of prior years (0.4) (0.5)
Recoverable ACT previously written off – (1.1)
26.0 24.3
Overseas taxation charge
Current year 1.2 1.0
Prior years – 0.3
1.2 1.3
Total current taxation 27.2 25.6
Deferred taxation
Origination and reversal of timing differences 7.9 9.1
Adjustment in respect of prior years 0.7 (0.8)
8.6 8.3
Tax on proﬁt on ordinary activities 35.8 33.9
The standard rate of taxation for the year, based on the UK standard rate of corporation tax is 30%. The actual current tax charge for the
current and previous year differed from the standard rate for the reasons set out in the following reconciliation: 
2003 2002
Restated
% %
Standard rate of taxation 30.0 30.0
Factors affecting charge
Disallowable expenses 2.3 2.5
Property disposals (2.2) (0.3)
Capital allowances in excess of depreciation (13.8) (21.0)
Other timing differences (4.4) (4.6)
Gain on disposal of Tramtrack Croydon Limited (0.6) –
Share of operating losses of associates and joint ventures – 0.5
Provision against cost of investment in joint ventures – 2.2
Foreign tax charged at different rates 2.0 2.4
Utilisation of tax losses brought forward – (1.2)
Unrelieved tax losses carried forward 7.4 14.4
Prior years’ tax charge (0.3) (0.2)
Recoverable ACT previously written off – (1.0)
Current taxation rate for year 20.4 23.7
No provision has been made for deferred tax on revalued property. The tax on the gains arising would only become payable if the property
were sold without rollover relief being available. The tax which would be payable under such circumstances is estimated to be £0.6m
(2002: £2.0m). These assets are expected to be used in the continuing operations of the business and, therefore no tax is expected to be
paid in the foreseeable future.
No deferred tax has been provided on the future remittance of overseas reserves as it is not expected that the reserves will be
repatriated to the UK in the foreseeable future.
Notes to the ﬁnancial statements FIRST 39
2003 2002
9 Equity dividends £m £m
Ordinary shares of 5p each
– Interim paid 3.55p (2002: 3.3p) per share 14.8 13.9
– Final proposed 7.45p (2002: 7.0p) per share 30.8 29.3
– Adjustment to prior year dividend in respect of shares cancelled (0.1) (0.1)
45.5 43.1
10 Earnings per share
Basic earnings per share is based on earnings of £97.5m (2002: £73.9m) and on the weighted average number of ordinary shares of
416.7m (2002: 419.8m) in issue. Diluted earnings per share is based on the same earnings and on the weighted average number of
ordinary shares of 417.4m (2002: 421.4m).
2003 2002
Number Number
A reconciliation of the number of shares used in the basic and diluted measures is set out below: (m) (m)
Weighted average number of shares used in basic calculation 416.7 419.8
SAYE share options 0.6 1.0
Executive share options – 0.3
Long-term incentive plan awards 0.1 0.3
417.4 421.4
The adjusted basic earnings per share and adjusted cash earnings per share measures are intended to demonstrate recurring elements of
the results of the Group before goodwill amortisation and exceptional items. Both the adjusted basic and cash measures of earnings per
share use the same weighted average number of ordinary shares as the basic earnings per share measure. A reconciliation of the earnings
used in these measures is set out below:
2002
2003 Earnings per
Earnings per share (p)
£m share (p) £m Restated
Proﬁt for basic earnings per share calculation 97.5 23.4 73.9 17.6
Goodwill amortisation 25.8 6.2 29.3 7.0
Taxation effect of this adjustment (9.0) (2.2) (9.0) (2.2)
Exceptional items, net 10.6 2.5 20.5 4.9
Taxation effect of this adjustment (3.1) (0.7) (5.2) (1.2)
Proﬁt on disposal of ﬁxed assets (10.0) (2.4) (1.0) (0.3)
Proﬁt for adjusted basic earnings per share calculation 111.8 26.8 108.5 25.8
Depreciation 99.2 23.8 95.1 22.7
Proﬁt for adjusted cash earnings per share calculation 211.0 50.6 203.6 48.5 40 FIRST
11 Intangible ﬁxed assets
Goodwill
Group £m
Cost
At beginning of year 616.0
Additions (note 27) 18.2
Exchange rate differences (49.4)
At end of year 584.8
Amortisation
At beginning of year 69.0
Charge for the year 25.8
Exchange rate differences (6.7)
At end of year 88.1
Net book value
At 31 March 2003 496.7
At 31 March 2002 547.0
Passenger Other
Land and carrying plant and 
12 Tangible ﬁxed assets
buildings vehicle ﬂeet equipment Total
Group £m £m £m £m
Cost or valuation 
At beginning of year 124.8 1,126.0 136.6 1,387.4
Businesses acquired 0.2 11.5 0.3 12.0
Additions 10.4 79.7 16.3 106.4
Disposals (5.4) (41.6) (7.8) (54.8)
Exchange rate differences (1.6) (41.1) (3.1) (45.8)
At end of year 128.4 1,134.5 142.3 1,405.2
Depreciation 
At beginning of year 18.6 491.1 80.2 589.9
Charge for the year 2.9 82.1 14.2 99.2
Disposals (1.2) (36.8) (4.0) (42.0)
Exchange rate differences (0.4) (15.9) (1.4) (17.7)
At end of year 19.9 520.5 89.0 629.4
Net book value
At 31 March 2003 108.5 614.0 53.3 775.8
At 31 March 2002 106.2 634.9 56.4 797.5
2003 2002
The net book value of land and buildings comprises: £m £m
Freehold 93.5 90.4
Long leasehold 11.2 10.6
Short leasehold 3.8 5.2
108.5 106.2
Depreciation is not provided on the land element of freehold and long leasehold property which amounts to £32.4m (2002: £31.7m).
Notes to the ﬁnancial statements FIRST 41
12 Tangible ﬁxed assets continued
2003 2002
The assets that have been revalued comprise the following land and buildings: £m £m
At 1993 professional valuations 14.9 14.9
Aggregate depreciation thereon (1.4) (1.3)
Net book value 13.5 13.6
Historical cost of revalued assets 13.1 13.1
Aggregate depreciation based on historical cost (3.1) (3.1)
Historical net book value 10.0 10.0
The 1993 professional valuations were carried out by Chesterton International Limited, International Property Consultants, and Messrs
Graham and Sibbald, Chartered Surveyors (RICS), on the basis of open market value for existing use.
£189.8m (2002: £247.0m) of the net book value of tangible ﬁxed assets was acquired under hire purchase contracts and ﬁnance
leases. The depreciation charge on these assets during the year was £24.8m (2002: £28.9m).
Other Own
13 Fixed asset investments
Associates investments shares Total
Group £m £m £m £m
Cost
At beginning of year 7.5 0.5 2.3 10.3
Additions –– 2.2 2.2
Disposals – (0.5) (3.3) (3.8)
Reclassiﬁcation as other investment (7.5) 7.5 – –
At end of year – 7.5 1.2 8.7
Provision
At beginning of year (7.5) (0.5) (0.8) (8.8)
Provided during year –– (1.1) (1.1)
Disposals – 0.5 1.4 1.9
Reclassiﬁcation as other investment 7.5 (7.5) – –
At end of year – (7.5) (0.5) (8.0)
Net book value
At 31 March 2003 –– 0.7 0.7
At 31 March 2002 –– 1.5 1.5
Unlisted
subsidiary Other Own
undertakings investments Associates shares Total
Company £m £m £m £m £m
Cost
At beginning of year 1,664.2 – 8.1 2.3 1,674.6
Additions ––– 2.2 2.2
Disposals ––– (3.3) (3.3)
Reclassiﬁcation as other investment – 8.1 (8.1) – –
At end of year 1,664.2 8.1 – 1.2 1,673.5
Provision
At beginning of year (5.4) – (8.1) (0.8) (14.3)
Provided during year – – – (1.1) (1.1)
Disposals ––– 1.4 1.4
Reclassiﬁcation as other investment – (8.1) 8.1 – –
At end of year (5.4) (8.1) – (0.5) (14.0)
Net book value
At 31 March 2003 1,658.8 – – 0.7 1,659.5
At 31 March 2002 1,658.8 – – 1.5 1,660.3 42 FIRST
13 Fixed asset investments continued
Subsidiary undertakings
The principal subsidiary undertakings of FirstGroup plc at the end of the year were:
UK local bus and coach operators First Midland Red Buses Limited Transit contracting and ﬂeet 
CentreWest London Buses Limited First PMT Limited maintenance
First Aberdeen Limited+ First South Yorkshire Limited First Transit, Inc†
First Beeline Buses Limited First Wessex National Limited 
First Bristol Buses Limited First West Yorkshire Limited Rail companies
First Capital East Limited First Western National Buses Limited Great Eastern Railway Limited 
First Capital North Limited First York Limited Great Western Trains Company Limited 
First Cityline Limited Leicester CityBus Limited (94%) North Western Trains Company Limited
First Cymru Buses Limited Northampton Transport Limited FirstInfo Limited
First Eastern Counties Buses Limited 
First Edinburgh Buses Limited+ North America school bus operators Property
First Essex Buses Limited First Student, Inc† FB Properties Limited
First Glasgow (No. 1) Limited+ FirstBus Canada Limited‡
First Glasgow (No. 2) Limited+ FirstGroup America, Inc†
First Hampshire Limited FirstGroup USA, Inc†
First Manchester Limited 
All subsidiary undertakings are wholly owned at the end of the year except where percentage of ownership is shown above. All these
companies above are incorporated in Great Britain and registered in England and Wales except those marked + which are registered 
in Scotland, those marked † which are incorporated in the United States of America and that marked ‡ which is registered in Canada.
All shares held in subsidiary undertakings are ordinary shares, with the exception of Leicester CityBus Limited where the Group owns
100% of its redeemable cumulative preference shares, as well as 94% of its ordinary shares.
All of these subsidiary undertakings are owned via intermediate holding companies except Great Eastern Railway Limited, which is
owned by FirstGroup plc.
There are, in addition to those listed above, a number of subsidiary undertakings which are mostly intermediate holding companies 
or were dormant throughout the year. A full list of subsidiary undertakings is ﬁled with the Annual Return to the Registrar of Companies.
Other investments
The interest in other investments at the end of the year includes a 6% interest in the ordinary share capital of Prepayment Cards Limited,
which is incorporated in Great Britain and registered in England and Wales. This has been reclassiﬁed from an associate as the
shareholding was diluted from 20% to 6% during the year. 
Own shares
Details of the number and market value of own shares held in the FirstGroup plc ESOP and other employee trusts are as follows:
2003 2002
Number (m) £m Number (m) £m
Own shares held by trustees 5.1 12.3 6.8 20.6
Own shares vested unconditionally (4.7) (11.4) (5.8) (17.5)
0.4 0.9 1.0 3.1
The number of own shares held by the Group at the end of the year was 382,015 (2002: 1,010,837) FirstGroup plc ordinary shares of
5p each. Of these, 319,956 (2002: 567,450) were held by the FirstGroup plc Employee Beneﬁt Trust and 62,059 (2002: 443,387) by the
FirstGroup plc Qualifying Employee Share Ownership Trust (QUEST). The shares held by the QUEST are being used to satisfy exercises of
savings related share options. Both trusts have waived the rights to dividend income from the FirstGroup plc shares. The market value of
the shares at 31 March 2003 was £0.9m (2002: £3.1m).
Notes to the ﬁnancial statements FIRST 43
Group
2003 2002
14 Stocks £m £m
Spare parts and consumables 23.1 23.1
Property development work in progress 5.8 1.9
28.9 25.0
There is no material difference between the balance sheet value of stocks and their replacement cost.
Group Company
2003 2002 2003 2002
Restated Restated
15 Debtors £m £m £m £m
Amounts due within one year
Trade debtors 190.5 177.9 – –
Amounts due from subsidiary undertakings – – 1,021.7 900.6
Corporation tax recoverable – – 5.7 8.7
Other debtors 44.5 19.1 0.4 –
Deposit paid for rolling stock – 16.7 – –
Pension fund prepayments 8.1 5.7 – –
Other prepayments and accrued income 58.9 34.6 – –
Deferred taxation – – 0.6 0.2
302.0 254.0 1,028.4 909.5
Amounts due after more than one year
Pension fund prepayments 42.4 28.3 – –
Other prepayments and accrued income 1.4 1.7 – –
43.8 30.0 – –
345.8 284.0 1,028.4 909.5
Group Company
2003 2002 2003 2002
16 Current asset investments £m £m £m £m
Bank deposits 45.7 60.4 – 5.3
Group Company
2003 2002 2003 2002
17 Cash at bank and in hand £m £m £m £m
Ring fenced cash 22.2 36.2 – –
Other cash 13.4 4.8 7.2 1.4
35.6 41.0 7.2 1.4
Under the terms of the franchise agreements cash can only be distributed by the train operating companies up to the amount of retained
proﬁts. The ring fenced cash represents that which is not available for distribution at the year end. 44 FIRST
Group Company
2003 2002 2003 2002
Restated
18 Creditors £m £m £m £m
Amounts falling due within one year
Bank loans and overdrafts 40.0 7.5 138.0 91.6
Obligations under hire purchase contracts and ﬁnance leases 34.2 57.3 – –
Loan notes 0.6 1.2 0.4 –
Trade creditors 102.9 122.8 – –
Amounts due to subsidiary undertakings – – 761.0 719.9
Corporation tax 27.2 23.8 – –
Other tax and social security 18.5 16.4 – –
Other creditors 33.0 21.9 – 0.8
Pension fund creditors 11.3 8.5 – –
Accruals and deferred income 235.0 210.6 31.4 7.9
Season ticket deferred income 37.8 38.4 – –
Proposed dividends 31.0 29.4 31.0 29.4
571.5 537.8 961.8 849.6
Group Company
2003 2002 2003 2002
£m £m £m £m
Amounts falling due after more than one year
Bank loans
Due in more than one year but not more than two years – 24.2 – 24.2
Due in more than two years but not more than ﬁve years 286.8 283.4 286.8 283.4
Obligations under hire purchase contracts and ﬁnance leases
Due in more than one year but not more than two years 21.5 34.3 – –
Due in more than two years but not more than ﬁve years 6.1 27.6 – –
Due in more than ﬁve years 0.1 0.4 – –
Loan notes
Due in more than one year but not more than two years 21.3 23.2 7.2 9.2
£300.0m bond – 6.875% 2013 295.1 294.8 295.1 294.8
630.9 687.9 589.1 611.6
Bond
The bond is repayable in March 2013 and is shown net of £4.9m (2002: £5.2m) of issue-related costs which are being amortised over the
term of the bond. Certain subsidiaries have issued guarantees to the Company’s bondholders. These guarantees rank pari passu with
guarantees provided by those subsidiaries to the Group’s other major unsecured lenders.
Bank loans and overdrafts
Whilst advances under bank facilities and overdrafts are generally repayable within a few months of the balance sheet date, they have
been classiﬁed by reference to the maturity date of the longest reﬁnancing permitted under these facilities as permitted under FRS 4. 
The bank advances and overdrafts are unsecured.
2003 2002
The maturity proﬁle of the undrawn committed borrowing facilities is as follows: £m £m
Facilities maturing:
Within one year 40.0 87.5
Between one and two years – 30.8
More than two years 205.6 131.6
245.6 249.9
Hire purchase contracts and ﬁnance leases
Hire purchase contracts and ﬁnance lease liabilities are secured on the assets to which they relate. The contracts vary in length between 
4 and 12 years and had a remaining weighted average duration of 1.8 years as at 31 March 2003. 
Notes to the ﬁnancial statements FIRST 45
18 Creditors continued
Loan notes
The loan notes have been classiﬁed by reference to the earliest date on which the loan note holders can request redemption. Loan notes
of £20.6m (2002: £21.7m) are supported by bank guarantees.
19 Financial assets and liabilities
Foreign currencies
At 31 March 2003, the Group’s proﬁt and loss account was not exposed to material exchange rate risk from monetary assets and liabilities
denominated in foreign currencies as all such material balances are used to hedge the Group’s overseas net assets.
Fixed rate liabilities
Weighted
Total average Weighted
ﬁnancial Floating Fixed interest average
Interest rates
liabilities rate rate rate period
Details of the interest rates payable on ﬁnancial liabilities are as follows: £m £m £m % Years
At 31 March 2003
Sterling 417.2 13.2 404.0 7.53 8.9
US Dollars 277.9 117.4 160.5 6.22 1.7
Canadian Dollars 10.6 10.6–––
705.7 141.2 564.5
At 31 March 2002
Sterling 487.3 87.5 399.8 8.03 10.2
US Dollars 259.1 79.8 179.3 6.27 2.5
Canadian Dollars 7.5 7.5–––
753.9 174.8 579.1
The weighted average ﬁxed interest rates of 7.53% and 6.22% on the respective Sterling and US Dollar liabilities include ﬁxed rates under
the Group’s interest rate hedging programme, which accounts for 0.3% of Sterling ﬁxed rate debt and 6.18% of US Dollar ﬁxed rate debt.
Sterling ﬁxed rate debt includes an all-in cost of 7.14% relating to the £300m Sterling bond. 
Bank margins negotiated on ﬂoating rate debt range from 0.2% to 1.0% over Sterling LIBOR and US Dollar LIBOR where applicable, 
or the bank base rate for the currency concerned. 
Financial assets, which consist wholly of cash on deposit and in hand of £81.3m (2002: £101.4m), are all denominated in Sterling
except £3.1m (2002: £6.1m) in US Dollars and £1.5m (2002: £0.6m) in Canadian Dollars. Deposited cash earns interest at commercial
short-term rates negotiated with counterparty banks.
Fair values
Details of the book values and fair values of the ﬁnancial assets and liabilities are as follows:
2003 2002
Book value Fair value Book value Fair value
£m £m £m £m
Bank deposits 45.7 45.7 60.4 60.4
Cash at bank and in hand 35.6 35.6 41.0 41.0
Bank loans and overdrafts (326.8) (326.8) (315.1) (315.1)
Obligations under hire purchase contracts and ﬁnance leases (61.9) (62.7) (119.6) (121.7)
Loan notes (21.9) (27.1) (24.4) (29.3)
Interest rate swaps – (24.5) – (19.3)
Fuel derivatives – 8.8 –14.3
Bond (295.1) (323.8) (294.8) (299.3)
(624.4) (674.8) (652.5) (669.0)
In order to protect the Group’s ﬁnancial position and performance against net interest rate risk, a signiﬁcant element of such risk is
eliminated using interest rate swaps and ﬁxed rate debt. As a result of movements in interest rates, differences arise between book values
and fair values, which are categorised as unrecognised gains and losses as required under FRS 13. 46 FIRST
19 Financial assets and liabilities continued
The Group also protects its ﬁnancial position and performance against fuel price risk using a range of fuel derivatives. Movements in fuel
prices relative to the prices enabled by the derivatives gives rise to differences between book and fair values which are categorised
as unrecognised gains and losses as required under FRS 13.
Fair values for derivatives and the bond have been supplied externally by the respective counterparties and banks using market rates
prevailing at year end. The book value of the bond is stated at its par value less issue costs of £4.9m (2002: £5.2m) as required by
FRS 4. Fair values for hire purchase debt and loan notes have been determined by discounting future cash ﬂows that will arise under
these liabilities. 
The movement in net unrecognised gains and losses on instruments used to hedge interest rate risk and commodity price risk are
as follows:
Net unrecognised
gains/(losses)
2003 2002
£m £m
At beginning of year (5.0) (0.9)
Arising in previous years but recognised in the year 5.1 4.4
Arising before beginning of year and remaining at the end of the year 0.1 3.5
Arising in the year (15.8) (8.5)
At end of year (15.7) (5.0)
It is expected that £15.7m of the net unrecognised losses (2002: £5.1m) will be recognised in the following year as part of exceptional
costs within the interest charge (£19.0m) relating to the termination of certain interest rate swaps, as part of the interest charge (£1.2m)
and as a credit to operating proﬁt (£4.5m).
Further information on ﬁnancial instruments is given in the Financial review on pages 12 to 14.
20 Provisions for liabilities and charges
Deferred Insurance
tax claims Pensions Total
Group £m £m £m £m
At beginning of year 79.6 24.9 6.2 110.7
Provided in the year 8.6 14.3 – 22.9
Utilised in the year – (10.1) (0.4) (10.5)
Notional interest – 2.7 0.2 2.9
Exchange rate differences – (2.0) – (2.0)
At end of year 88.2 29.8 6.0 124.0
Most of the insurance claims are expected to be settled within four years. The pensions payments will be spread over several decades.
21 Deferred tax
2003 2002
Group £m £m
Capital allowances in excess of depreciation 116.2 101.1
Other timing differences 16.0 11.1
Trading losses (44.0) (32.6)
Deferred tax provision 88.2 79.6
22 Called up share capital
2003 2002
Group and Company £m £m
Authorised
Ordinary shares of 5p each 30.0 30.0
Allotted, called up and fully paid
Ordinary shares of 5p each 20.7 21.0
Notes to the ﬁnancial statements FIRST 47
22 Called up share capital continued
Number
The changes in the number and amount of issued share capital during the year are set out below: (m) £m
At beginning of year 419.8 21.0
Shares issued to QUEST 1.0 0.1
Shares cancelled (7.4) (0.4)
At end of year 413.4 20.7
Between 7 June 2002 and 17 February 2003, 7,434,626 ordinary shares were repurchased at a total cost of £17.1m and cancelled.
During the year 1,000,000 ordinary shares were issued to the FirstGroup plc Qualifying Employee Share Ownership Trust (QUEST)
(2002: nil shares). The shares held by the QUEST are held in trust and are being used to satisfy exercises of savings related share options
(note 31).
23 Reserves 
Share premium Revaluation Proﬁt and
account reserve loss account
Group £m £m £m
At beginning of year as previously reported 236.7 3.6 156.5
Prior year adjustment –– (2.3)
At beginning of year as restated 236.7 3.6 154.2
Cancellation of shares (i) –– (17.1)
Retained proﬁt for the year –– 52.0
Foreign exchange differences –– (53.2)
Shares issued to QUEST 2.1 – (1.1)
Transfer of realised revaluation reserve – (0.1) 0.1
At end of year 238.8 3.5 134.9
Capital
redemption Capital Total other
reserve reserves reserves
£m £m £m
At beginning of year 0.8 2.7 3.5
Cancellation of shares (i) 0.3 – 0.3
At end of year 1.1 2.7 3.8
Notes:
(i) 7,434,626 ordinary shares were repurchased at a total cost of £17.1m and cancelled.
The cumulative amount of positive and negative goodwill arising from acquisitions of subsidiary and associates written off at the end of the
year was £429.6m and £4.7m respectively (2002: £429.6m and £4.7m).
Share premium Proﬁt and
account loss account
Company £m £m
At beginning of year as previously reported 236.7 597.0
Prior year adjustment – (0.4)
At beginning of year as restated 236.7 596.6
Cancellation of shares – note 23 (i) above – (17.1)
Retained proﬁt for the year –46.7
Foreign exchange differences – (4.0)
Shares issued to QUEST 2.1 –
Tax on foreign exchange – 1.2
At end of year 238.8 623.4 48 FIRST
Capital Total
23 Reserves continued
redemption Capital Merger other
reserve reserves reserve reserves
Company £m £m £m £m
At beginning of year 0.8 93.8 166.4 261.0
Cancellation of shares – note 23 (i) above 0.3 – – 0.3
At end of year 1.1 93.8 166.4 261.3
2002
2003 Restated
24 Notes to the consolidated cash ﬂow statement £m £m
(a) Reconciliation of operating proﬁt to net cash inﬂow from operating activities
Operating proﬁt 179.7 167.2
Depreciation and other amounts written off tangible ﬁxed assets 99.2 95.1
Amortisation charges 25.8 27.3
Write down of investment in joint venture and associate – 8.0
Proﬁt on sale of investment in joint venture (2.5) –
Loss/(proﬁt) on sale of non-property ﬁxed assets 0.2 (0.7)
Increase in stocks – (2.1)
Increase in debtors (77.3) (11.6)
(Decrease)/increase in creditors and provisions (5.4) 64.1
FNW Franchise amendment payment – (37.0)
Net cash inﬂow from operating activities 219.7 310.3
(b) Returns on investments and servicing of ﬁnance
Interest received 2.7 2.8
Interest paid (25.1) (52.0)
Interest element of hire purchase contract and ﬁnance lease payments (7.0) (11.5)
Fees on issue of bond and loan facility (1.6) (5.1)
Net cash outﬂow from returns on investments and servicing of ﬁnance (31.0) (65.8)
(c) Capital expenditure and ﬁnancial investment
Purchase of tangible ﬁxed assets (107.4) (154.7)
Sale of ﬁxed asset properties 4.4 2.1
Sale of other tangible ﬁxed assets 4.1 5.7
Deposits for rolling stock 16.7 6.6
Net cash outﬂow from capital expenditure and ﬁnancial investment (82.2) (140.3)
(d) Acquisitions and disposals
Purchase of subsidiary undertakings – (1.0)
Purchase of businesses (28.1) (6.1)
Net cash acquired with purchase of businesses 1.8 –
Purchase of investment in joint ventures – (4.9)
Purchase of investment in associate – (2.0)
Sale of investment in joint venture 2.5 –
Net cash outﬂow from acquisitions and disposals (23.8) (14.0)
(e) Financing
Issue of share capital 2.5 –
Own shares repurchased (17.1) (7.7)
Bond 2013 – 300.0
New bank loans 312.1 77.5
Repayment of amounts borrowed – bank loans (285.1) (277.7)
– other loans (2.5) (11.5)
Capital element of hire purchase contract and ﬁnance lease payments (57.3) (66.8)
Net cash (outﬂow)/inﬂow from ﬁnancing (47.4) 13.8
Notes to the ﬁnancial statements FIRST 49
At Other
beginning Cash non-cash At end
of year ﬂow changes of year
25 Analysis of net debt £m £m £m £m
Current asset investments 60.4 (14.7) – 45.7
Cash at bank and in hand 41.0 (7.6) 2.2 35.6
Bank overdrafts – (10.0) – (10.0)
Cash 41.0 (17.6) 2.2 25.6
Bank loans due within one year (7.5) (27.0) 4.5 (30.0)
Bank loans due after one year (307.6) 1.3 19.5 (286.8)
Bond 2013 (294.8) 0.2 (0.5) (295.1)
Obligations under hire purchase contracts and ﬁnance leases (119.6) 57.3 0.4 (61.9)
Loans and loan notes (24.4) 2.5 – (21.9)
Financing (753.9) 34.3 23.9 (695.7)
Net debt (652.5) 2.0 26.1 (624.4)
Current asset investments represent unencumbered bank deposits of maturity of less than one year.
26 Major non-cash transactions
There were no major non-cash transactions in the current or prior ﬁnancial year.
Total Total
2003 2002
27 Summary of purchase of businesses £m £m
Fair value of net assets acquired:
Tangible ﬁxed assets 12.0 3.6
Other current assets 1.6 –
Cash at bank and in hand 1.8 –
Other creditors (5.5) (1.7)
9.9 1.9
Goodwill 18.2 4.2
28.1 6.1
Satisﬁed by cash paid and payable 28.1 6.1
There was no material difference between the book value and the fair value of the net assets acquired.
The businesses acquired during the year contributed £4.2m (2002: £1.2m) to the Group’s net operating cash ﬂows, paid £nil (2002: £nil) 
in respect of net returns on investments and servicing of ﬁnance, paid £nil (2002: £nil) in respect of taxation, utilised £nil (2002: £nil) for
capital expenditure and paid £nil (2002: £nil) in respect of ﬁnancing.
The businesses acquired during the year and dates of acquisition were:
Northside Bus Service 15 July 2002
Taranto Bus Corp 31 July 2002
Bergen Passaic Transport Service Inc 15 August 2002
R&D Transportation Services LLC 20 August 2002
London Transportation Inc 18 September 2002
West Jacksonville LLC 26 October 2002
L&E Mobile Computers & Mounts Inc 28 February 2003
Dyntek Inc (a division thereof) 14 March 2003 50 FIRST
28 Commitments 
Capital commitments
Capital commitments at the end of the year for which no provision has been made are as follows:
2003 2002
£m £m
Contracted for but not provided
Year to 31 March 2003 – 28.3
Year to 31 March 2004 31.6 –
31.6 28.3
Operating leases
The rail businesses have contracts with Network Rail for access to the railway infrastructure (track, stations and depots). They also have
contracts under which they lease rolling stock.
Commitments for payments in the next year under these operating leases are as follows:
2003 2002
£m £m
Operating leases which expire:
Within one year 215.8 17.4
From one to ﬁve years 123.7 198.7
Over ﬁve years – 125.8
339.5 341.9
Commitments for payments in the next year under other operating leases are as follows:
Land and Land and
buildings Other buildings Other
2003 2003 2002 2002
£m £m £m £m
Operating leases which expire:
Within one year 1.9 3.5 1.6 2.3
From one to ﬁve years 8.7 11.8 5.8 10.5
Over ﬁve years 1.3 5.3 1.6 1.1
11.9 20.6 9.0 13.9
29 Contingent liabilities
To support subsidiary undertakings in their normal course of business, the Company has indemniﬁed certain banks and insurance
companies who have issued performance bonds for £149.8m as at 31 March 2003 (2002: £142.9m) and letters of credit for £93.0m as 
at 31 March 2003 (2002: £52.0m). The performance bonds relate to the North American businesses (£80.1m) and the UK Rail franchise
operations (£69.7m). The letters of credit relate to insurance arrangements in the UK and North America.
The Company has provided a £9.0m (2002: £9.0m) unsecured loan facility to Great Eastern Railway Limited (GER), a £15.5m (2002:
£15.5m) unsecured loan facility to Great Western Trains Company Limited (GWT) and a £6.5m (2002: £6.5m) unsecured loan facility to
North Western Trains Company Limited (NWT) as required by the Director of Passenger Rail Franchising. Neither of the GER or GWT loans
were drawn at 31 March 2003 nor 31 March 2002, while the NWT loan was fully drawn at 31 March 2003 and undrawn at 31 March 2002.
The Company is party to the guarantees granted to banks for overdraft and cash management facilities provided to itself and
subsidiary undertakings. The Company has given guarantees for the liabilities of its subsidiary undertakings arising under certain loan
notes, hire purchase contracts, ﬁnance leases, operating leases and supply contracts. It also provides cross guarantees to certain
subsidiary undertakings as required by VAT legislation.
Certain of the Company’s subsidiaries have issued guarantees to the Company’s bondholders. These guarantees rank pari passu with
guarantees provided by those subsidiaries to the Group’s other major unsecured lenders.
Notes to the ﬁnancial statements FIRST 51
30 Pension schemes
The Group operates or participates in a number of pension schemes which cover the majority of UK employees and certain North
American employees. These are principally deﬁned beneﬁt schemes under which beneﬁts provided are based on employees’ number 
of years of service and ﬁnal salary. The scope of beneﬁts varies between schemes. The assets of the schemes are held in separately
administered trusts which are managed independently of the Group’s ﬁnances by investment managers appointed by the schemes’
trustees.
Formal independent actuarial valuations are undertaken at least triennially.
The various deﬁned beneﬁt schemes include ﬁve UK Bus Division schemes where the subsidiary undertaking is a participating
employer in a scheme operated by a local authority. These schemes are subject to relevant local government regulations. Great Eastern
Railway Limited, Great Western Trains Company Limited and North Western Trains Company Limited are members of the Railways
Pension Scheme (RPS) which is an industry-wide arrangement for employees of those companies previously owned by British Railways
Board. All other Group schemes are self-administered.
At their last triennial valuations, the deﬁned beneﬁt schemes had funding levels between 78% and 118%. For those schemes that 
do not meet the minimum funding requirement, additional payments totalling £4.0m per annum are being made. The market value of the
assets at 31 March 2003 for all deﬁned beneﬁt schemes totalled £934m (2002: £1,142m). 
Contributions are paid to all deﬁned beneﬁt schemes in accordance with rates recommended by the schemes’ actuaries. The total
charge to the proﬁt and loss account in the year in respect of deﬁned beneﬁt schemes was £24.1m (2002: £18.2m).
The valuation assumptions used for accounting purposes have been made uniform to Group standards, as appropriate, when each
scheme is actuarially valued. For these new valuations (excluding the local government and RPS schemes), the assumptions which are
being used are that the rate of return on investment will be 6.5% pre-retirement, and 5.5% post-retirement, the rate of earnings growth 
will be 4.0%, and the rate of inﬂation will be 2.5%. These new valuations are made using the projected unit method.
Prepayment
A net prepayment of £33.2m (2002: £19.3m) is included in the Group’s consolidated balance sheet in respect of the sum of the cumulative
differences between contributions paid by the Group into the schemes and the charge to the proﬁt and loss account under SSAP 24, and
the surpluses and deﬁcits that have been recognised on acquisition.
Deﬁned contribution schemes
In addition, the Group operates some deﬁned contribution schemes, the assets of which are held in separately administered trusts. The
cost of these in the year was £2.0m (2002: £1.3m).
The Group pays certain costs on behalf of the various pension schemes and then re-charges the costs to the schemes.
Transitional FRS 17 disclosures
The additional disclosures required by FRS 17 during the transitional period for the deﬁned beneﬁt schemes are set out below. They are
based on the most recent actuarial valuations described above, which have been updated by independent professionally qualiﬁed
actuaries to take account of the requirements of FRS 17.
The main ﬁnancial assumptions (per annum) used in this update were as follows:
2003 2002
% %
Rate of increase in salaries 3.6 4.0
Rate of increase of pensions in payment* 2.1 2.5
Rate of increase of pensions in deferment 2.1 2.5
Discount rate 5.7 6.0
Inﬂation assumption 2.1 2.5
*Certain in-house bus schemes’ pensions in payment receive LPI increases of 2.1% (2002: 2.4%) and LPI increases with a minimum of 3% (2002: 3.3%) 52 FIRST
30 Pension schemes continued
The value of the schemes’ assets and the expected rates of return as at 31 March 2003 were:
Expected rate 
of return UK Bus Rail US Total 
%£m£m£m£m
Equities 8.8 469.8 146.8 6.5 623.1
Bonds 4.5 184.7 18.5 2.8 206.0
Property 6.7 46.5 14.6 – 61.1
Other 3.6 42.2 – 1.5 43.7
743.2 179.9 10.8 933.9
Total market value of assets 743.2 179.9 10.8 933.9
Present value of scheme liabilities (1,006.4) (209.1) (27.3) (1,242.8)
Pension deﬁcits (263.2) (29.2) (16.5) (308.9)
Related deferred tax asset 79.0 8.8 6.4 94.2
Net pension deﬁcit (184.2) (20.4) (10.1) (214.7)
As noted in the Financial review, the net FRS 17 deﬁcit of £214.7m at 31 March 2003 comprises £194.3m (2002: £32.8m deﬁcit) relating
to non-Rail schemes and £20.4m (2002: surplus of £6.7m) relating to Rail franchises where we believe that no liability will be borne beyond
the period of the franchise.
The value of the schemes’ assets and the expected rates of return as at 31 March 2002 were:
Expected rate
of return UK Bus Rail US Total 
%£m£m£m£m
Equities 8.0 647.8 201.8 8.1 857.7
Bonds 5.1 160.0 24.3 4.6 188.9
Property 6.6 32.2 14.1 – 46.3
Other 4.5 48.9 – 0.5 49.4
888.9 240.2 13.2 1,142.3
Total market value of assets 888.9 240.2 13.2 1,142.3
Present value of scheme liabilities (928.4) (230.6) (21.6) (1,180.6)
Pension surpluses 43.7 9.6 – 53.3
Pension deﬁcits (83.2) – (8.4) (91.6)
Net pension (deﬁcit)/surplus (39.5) 9.6 (8.4) (38.3)
Related deferred tax asset/(liability) 11.9 (2.9) 3.2 12.2
Net pension (deﬁcit)/surplus (27.6) 6.7 (5.2) (26.1)
If FRS 17 had been adopted in these ﬁnancial statements, the Group’s net assets and proﬁt and loss reserve would have been as follows:
2003 2002
£m £m
Net assets excluding pension liability 402.8 420.0
Pension liability (214.7) (26.1)
188.1 393.9
Less: SSAP 24 items included in net assets that will be reversed on implementation of FRS 17 (23.2) (13.5)
Net assets on FRS 17 basis 164.9 380.4
Notes to the ﬁnancial statements FIRST 53
2003 2002
30 Pension schemes continued £m £m
Proﬁt and loss reserve excluding pension liability 134.9 154.2
Pension reserve (214.7) (26.1)
(79.8) 128.1
Less: SSAP 24 items included in net assets that will be reversed on implementation of FRS 17 (23.2) (13.5)
Proﬁt and loss reserve on FRS 17 basis (103.0) 114.6
It should be noted that the £103.0m proﬁt and loss deﬁcit above is on a consolidated basis. As at 31 March 2003 FirstGroup plc had
£623.4m of retained proﬁts available for distribution.
Had the Group adopted FRS 17 the amounts charged to the proﬁt and loss account would have been as follows:
Analysis of amount charged to operating proﬁt:
2003
£m
Current service costs 39.1
Past service costs –
Gain/(loss) on settlements and curtailments –
Total operating charge 39.1
Analysis of amount credited to net ﬁnance charges:
2003
£m
Expected return on pension scheme assets (77.2)
Interest on pension scheme liabilities 67.3
Net return (9.9)
Analysis of the actuarial gain in the statement of total recognised gains and losses (STRGL):
2003
£m
Actual return less expected return on pension scheme assets (300.2)
Experience gains and losses arising on scheme liabilities 26.8
Changes in assumptions underlying the present value of scheme liabilities (9.5)
Actuarial loss recognised in STRGL (282.9)
Movement in schemes’ deﬁcit during the year:
2003
£m
Deﬁcit at 1 April 2002 (38.3)
Movement in year: 
Current service cost (39.1)
Contributions 41.5
Past service costs –
Net ﬁnance income 9.9
Actuarial loss (282.9)
Deﬁcit at 31 March 2003 (308.9) 54 FIRST
30 Pension schemes continued
2003
History of experience gains and losses £m
Difference between the expected and actual return on scheme assets:
Amount (£m) (300.2)
Percentage of scheme assets (%) 32.1
Experience gains on scheme liabilities:
Amount (£m) 26.8
Percentage of the present value of scheme liabilities (%) 2.2
Total actuarial loss in the statement of total recognised gains and losses:
Amount (£m) (282.9)
Percentage of the present value of scheme liabilities (%) 22.8
31 Share option schemes
(a) Savings related share option scheme 
The Company operates an Inland Revenue approved savings related share option scheme. Grants were made in October 1995 and June
1999 and a further grant was made in December 2002. The scheme is based on eligible employees being granted options and their
agreement to opening a sharesave account with a nominated savings carrier and to save weekly or monthly over a speciﬁed period.
Sharesave accounts are held with Halifax plc for the 1995 and 1999 grants and are held with Lloyds TSB for the 2002 grant. The right to
exercise the option is at the employee’s discretion at the end of the period previously chosen for a period of six months.
The ﬁrst options under the scheme were granted on 5 October 1995 and were exercisable after either ﬁve or seven years. Options
granted in June 1999 and December 2002 are exercisable after three years.
The number of options outstanding under each grant at the end of the year was as follows:
2003 2002
Earliest
Number of Ordinary 5p Number of Ordinary 5p Exercise exercise 
Grant date employees shares employees shares price (p) date
October 1995 55 64,204 956 1,459,146 107.72 November 02
June 1999 68 19,059 7,427 2,095,644 359.73 September 02
December 2002 5,865 6,642,805 –– 192.00 February 06
5,988 6,726,068 8,383 3,554,790
During the year, the Company launched a Share Incentive Plan, the Buy As You Earn scheme (BAYE). BAYE enables eligible employees to
purchase shares from their gross income. The Company provides one matching share for every two shares bought by employees, subject
to a maximum Company contribution of shares to the value of £15 per month. The shares are held in trust for up to ﬁve years, in which
case, no income tax and national insurance will be payable. The matching shares will be forfeited if the corresponding partnership shares
are removed from trust within three years of award.
At 31 March 2003 there were 3,058 participants in the BAYE scheme who have purchased 92,570 shares with the Company
contributing 29,261 matching shares. 
(b) Executive share option schemes
A new executive share option scheme was approved by shareholders at the 2001 Annual General Meeting. This new scheme, together with
the deferred share element of the Executive Bonus Scheme which was also introduced during 2001/02, replaces the LTIP described below.
The ﬁrst grant of options under the new scheme was made in August 2001 to Directors and senior executives. Options are exercisable
between three and ten years of the date of grant provided that the pre-determined performance criteria are met. Further details of the
scheme including the performance criteria, are included in the Directors’ remuneration report.
Details of executive share options outstanding at 31 March 2003 are set out below:
Ordinary 5p shares
Date original
2003 2002 Exercise option 
Scheme No. No. price (p) granted
FirstGroup Executive Share Option Scheme 756,562 811,000 346.50 August 01
FirstGroup Executive Share Option Scheme 1,261,651 – 269.00 May 02
Tony Osbaldiston options – 147,059 Nil February 00
2,018,213 958,059
Notes to the ﬁnancial statements FIRST 55
31 Share option schemes continued
(c) Long-term incentive plan
The Group operates a long-term incentive plan for senior executives. The exercise of awards under the scheme is conditional upon 
the attainment of performance targets. To achieve the maximum value under an award, the Company’s total shareholder return over a
performance period (of not less than three years) must be such to place the performance relative to the returns earned by the companies
in the top 25% of companies in the FTSE 250 Share Index (excluding investment trusts). An award is not exercisable if the Company’s
performance would place the Company below the 50th percentile of the index. Performance between the 25th percentile and the 50th
percentile of the index results in a proportion of the award being exercisable in accordance with a sliding scale. Regardless of performance
relative to the index, an award will not be exercisable unless growth in earnings per share has been greater than RPI over the performance
period.
The price payable for shares upon the exercise of any award is ﬁxed at the date of grant. Awards are, in effect, exercisable at no cost
(other than any tax charges) to the participant. 
The award prices and the maximum number of shares subject to awards are as follows:
Ordinary 5p shares
2003 2002 Award
Date of award No. No. price (p)
12 August 1997 – 145,268 190.42
3 July 2000 935,960 1,046,534 236.00
935,960 1,191,802
For the ﬁve-year performance period ended 31 March 2002, FirstGroup plc’s total shareholder return was 7.8%, which was the 32.4th
percentile of the index. As a result, participants in the 1997 LTIP were entitled to 156% of the 1997 award, which is equivalent to 78% 
of the maximum number of shares. Executive Directors previously waived their entitlement to the 1997 award.
For the three-year period ended 31 March 2003, FirstGroup plc’s total shareholder return was 10.7%, which was the 16.6th percentile 
of the index. As a result participants are entitled to 200% of the 2000 award which is equivalent to the maximum number of shares.  56 FIRST
2003 2002 2001 2000 1999
Consolidated proﬁt and loss accounts £m £m £m £m £m
Group turnover 2,291.0 2,164.1 2,054.0 1,795.1 1,470.4
Operating proﬁt before goodwill amortisation and 
exceptional items 216.1 215.0 214.3 185.7 139.8
Goodwill amortisation (25.8) (27.3) (25.9) (13.0) –
Exceptional items, net* (10.6) (20.5) (53.5) (11.6) (17.9) 
Operating proﬁt* 179.7 167.2 134.9 161.1 121.9
Proﬁt before interest* 189.7 164.2 201.3 165.5 123.5
Net interest payable (56.3) (56.3) (64.5) (44.0) (28.3)
Proﬁt before taxation* 133.4 107.9 136.8 121.5 95.2
Taxation (35.8) (33.9) (55.2) (32.0) (30.4)
Proﬁt after taxation* 97.6 74.0 81.6 89.5 64.8
Earnings per share pence pence pence pence pence
Adjusted basic 26.8 25.8 23.4 25.3 20.4
Basic* 23.4 17.6 18.4 21.6 17.4
Cash 50.6 48.5 44.1 42.6 33.5
Dividend per share 11.0 10.3 9.4 8.5 7.3
Consolidated balance sheets £m £m £m £m £m
Fixed assets 1,273.2 1,346.0 1,327.7 1,289.9 590.6
Net current liabilities* (115.5) (127.4) (210.6) (153.1) (168.5)
Creditors: amounts due after more than one year (630.9) (687.9) (622.6) (750.9) (338.1)
Provisions for liabilities and charges (124.0) (110.7) (93.8) (85.5) (68.3)
Equity minority interest (1.1) (1.0) (0.9) (9.8) (7.6)
Equity shareholders’ funds* 401.7 419.0 399.8 290.6 8.1
Share data
Number of shares in issue million million million million million
At year end 413.4 419.8 422.4 433.5 355.9
Average 416.7 419.8 422.2 396.8 353.3
Share price pence pence pence pence pence
At year end 240 302 305 174 397
High 339 365 312 399 489
Low 200 243 140 152 327
Market capitalisation £m £m £m £m £m
At year end 992 1,268 1,288 754 1,414
*Restated for adoption of UITF 34
Group ﬁnancial summary Safety
Kids to school
Home to work
Business to business
Integrated transport
Staff and customers
Community and partnerships
Contents
Business overview 01
Financial highlights 02
Chairman’s statement 03
Chief Executive’s review 04
Financial review 12
Board of Directors 15
Corporate governance 16
Directors’ remuneration report 19
Directors’ report 26
Directors’ responsibilities 28
Independent auditors’ report 29
Consolidated profit and
loss account 30
Consolidated balance sheets 31
Consolidated cash flow 
statement 32
Reconciliation of net cash 
flows to movements in net debt 32
Consolidated statement of total
recognised gains and losses 33
Reconciliation of movements 
in shareholders’ funds 33
Notes to the financial statements 34
Group financial summary 56
Shareholder information 57
FIRST 57
Shareholder enquiries
The Company’s share register is maintained on our behalf by
Lloyds TSB Registrars, who are responsible for making dividend
payments and updating the register, including details of changes 
to shareholders’ addresses and purchases and sales of the
Company’s shares. If you have any questions about your
shareholding in the Company or need to notify any changes 
to your personal details you should contact: Lloyds TSB
Registrars, The Causeway, Worthing, West Sussex BN99 6DA.
Telephone: 0870 600 3973.
Employees with queries about shares held in the Company’s
employee share schemes should contact Lloyds TSB Registrars 
at the same address or by telephoning 0870 241 3938.
Duplicate shareholder accounts
If you receive more than one copy of Company mailings this may
indicate that more than one account is held in your name on the
Register. This happens when the registration details of separate
transactions differ slightly. If you believe more than one account
exists in your name you may contact the Registrars to request that
the accounts are combined. There is no charge for this service.
Direct dividend payments
If you would like your dividend to be paid directly into your bank 
or building society account, you should contact the Registrars or
complete the dividend mandate attached to your dividend cheque.
Mandating your dividends has a number of advantages. Firstly, the
dividend will go into your account on the payment date – there is
no chance of it being delayed in the post and you do not have to
wait for a cheque to clear. Secondly, the payment method is more
secure than receiving a cheque through the post. Thirdly, you still
receive tax information about the dividend, which is sent direct to
you at your registered address. 
Online information 
The Registrars also provide an online service enabling you 
to access details of your shareholding. To view your details 
and a range of general information about holding shares, 
visit www.shareview.co.uk 
FirstGroup policy on discounts for shareholders
Shareholders are reminded that it is not Group policy to offer 
travel or other discounts to shareholders, as they may be used
only by a small number of individuals. The Group would rather
maximise dividends, which are of benefit to all shareholders.
Unsolicited mail
As the Company’s share register is, by law, open to public
inspection, shareholders may receive unsolicited mail from
organisations that use it as a mailing list. To limit the amount 
of unsolicited mail you receive, write to the Mailing Preference
Society, FREEPOST 22, London W1E 7EZ or register online 
at www.mpsonline.org.uk
Shareholder profile
Number of Shares held
At 30 April 2003 holders % (m) %
By category
Individuals 44,147 95.2 70.6 17.1
Banks and nominees 2,015 4.3 333.6 80.7
Insurance and assurance 2 0.0 0.1 0.0
Other companies 207 0.5 9.1 2.2
Other institutions 3 0.0 0.0 0.0
46,374 100.0 413.4 100.0
By size of holding
1-1,000 34,109 73.5 8.6 2.1
1,001-5,000 9,544 20.6 21.0 5.1
5,001-10,000 1,471 3.2 10.2 2.5
10,001-100,000 915 2.0 24.0 5.8
Over 100,000 335 0.7 349.6 84.5
46,374 100.0 413.4 100.0
Financial calendar
Annual General Meeting 3 July 2003
Shares trade ex dividend 23 July 2003
Record date for final dividend* 25 July 2003
Final dividend paid 29 August 2003
Interim results announced November 2003
Interim dividend paid February 2004
Preliminary announcement of full year results May 2004
*Shareholders recorded on the register at this date will receive the final dividend.
Shareholder information Annual Report 2003
Connected
Principal and Registered office
FırstGroup plc
395 King Street
Aberdeen AB24 5RP
Telephone: 01224 650100
Facsimile: 01224 650140
Registered in Scotland 
number SC157176
London office
FırstGroup plc
3rd floor
E Block
Macmillan House
Paddington Station
London W2 1FG
Telephone: 020 7291 0505
Facsimile: 020 7636 1338
FırstGroup web site 
www.fırstgroup.com
FırstGroup plc Annual Report 2003
Designed and produced by Pauffley, London. Printed by Royle Corporate Print.