Stagecoach Group plc ("Stagecoach")

Annual Financial Report

Two copies of the following documents have been submitted to the UK Listing
Authority, and will shortly be available for inspection at the UK Listing
Authority's Document Viewing Facility at the address shown below:

Annual Report and Financial Statements for the year ended 30 April 2010
Notice of Annual General Meeting for 2010
Form of Proxy for the 2010 Annual General Meeting

UK Listing Authority, Document Viewing Facility
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone no. (0)20 7676 1000

The Annual Report and Financial Statements and Notice of Annual General Meeting
are also available on the Company's website www.stagecoachgroup.com. The direct
link to download the Annual Report and Financial Statements is
http://www.stagecoachgroup.com/scg/ir/finanalysis/reports/2010/ and the direct
link to download the Notice of Annual General Meeting is
http://www.stagecoachgroup.com/scg/ir/shareholder/agm/ .

At the Annual General Meeting ("AGM") it is proposed that the Company adopts new
Articles of Association ("New Articles"); a description of the material
differences between these and the Company's current Articles of Association
("Current Articles") is set out in the Notice of Annual General Meeting.

The Current Articles and the New Articles are available for inspection at the
offices of Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS
during usual business hours on any weekday (Saturdays, Sundays and public
holidays excluded) until the date of the AGM and also on the date and at the
place of the AGM for at least 15 minutes prior to the commencement of the
meeting until its conclusion.

A condensed set of Stagecoach's financial statements and information on
important events that have occurred during the financial year and their impact
on the financial statements were included in Stagecoach's preliminary results
announcement released on 23 June 2010. That information, together with the
information set out below, which is extracted from the 2010 Annual Report,
constitute the material required by Disclosure and Transparency Rule
6.3.5 which is required to be communicated in unedited full text through a
Regulatory Information Service. This announcement is not a substitute for
reading the full 2010 Annual Report. Page numbers and cross-references in the
extracted information below refer to references in the 2010 Annual Report.  The
responsibility statement contained in this announcement relates to the 2010
Annual Report rather than to this announcement in isolation.  The group headed
by Stagecoach Group plc is referred to below as "the Group".  The Group's UK Bus
Division is referred to below as "UK Bus".


Principal risks and uncertainties (page 15)
Like most businesses, there are a range of risks and uncertainties facing the
Group and the matters described below are not intended to be an exhaustive list
of all possible risks and uncertainties.

Generally, the Group is subject to risk factors both internal and external to
its businesses. External risks include global political and economic conditions,
competitive developments, supply interruption, regulatory changes, foreign
exchange, materials and consumables (including fuel) prices, pensions funding,
environmental risks, industrial action, litigation and the risk of terrorism.
Internal risks include risks related to capital expenditure, acquisitions,
regulatory compliance and failure of internal controls. Details of risk
management procedures are given on page 27.

The focus below is on those specific risks and uncertainties that the Directors
believe could have the most significant impact on the Group's performance.

Catastrophic events
There is a risk that the Group is involved (directly or indirectly) in a major
operational incident resulting in significant human injuries or damage to
property. This could have a significant impact on claims against the Group, the
reputation of the Group and its chances of winning and retaining contracts or
franchises.

The Group has a proactive culture that puts health and safety at the top of its
agenda in order to mitigate the potential for major incidents. In the unlikely
event that a major incident did occur, the Group has procedures in place for
responding to such incidents.

Terrorism
There have been multiple acts of terrorism on public transport systems and other
terrorist attacks that whilst not directly targeting public transport have
discouraged travel. There is a risk that the demand for the Group's services
could be adversely affected by a significant terrorist incident. Such a fall in
demand would have a negative effect on the Group's revenue and financial
performance. The Group has plans in place designed to reduce the financial
impact of a terrorist incident and these plans take account of the Group's
experience of managing the North American business during the period of
depressed demand following the major terrorist attack on 11 September 2001.

Economy
The economic environment in the geographic areas in which the Group operates
affects the demand for the Group's bus and rail services. In particular, the
revenue of the Group's UK rail operations is historically correlated with
factors such as UK GDP and Central London Employment. In North America, a
greater proportion of the revenue is derived from tour, charter and sightseeing
services than in the UK and these services tend to be more susceptible to
economic changes. The revenue and profit of the Group could therefore be
positively or negatively affected by changes in the economy.

Management monitors actual and projected economic trends in order to match
capacity to demand and where possible, minimise the impact of adverse economic
trends on the Group.

Rail cost base
A substantial element of the cost base in the Group's UK Rail Division is
essentially fixed because under its UK rail franchise agreements, the Group is
obliged to provide a minimum level of train services and is therefore unable to
flex supply in response to short-term changes in demand. In addition, a
significant part of the cost base is comprised of payments to the infrastructure
provider, Network Rail, and payments under train operating leases which are
committed and do not vary with revenue. Accordingly, a significant proportion of
any change in revenue (for example, arising as a result of the risks described
in sections 3.10.2 and 3.10.3) will impact profit in the UK Rail Division.

Sustainability of rail profits A significant element of the Group's revenue and
profit is generated by UK rail franchises. There is a risk that the Group's
revenue and profit could be significantly affected (either positively or
negatively) as a result of the Group winning new franchises or failing to retain
its existing franchises. In order to manage the risks, the Group has devoted
significant management resource and financial investment to bidding for new rail
franchises.

Appropriately experienced personnel are retained to work on rail bids and third
party consultants are engaged to provide additional expertise. The Board
approves the overall rail bidding strategy and the key parameters for each bid.

Breach of franchise
The Group is required to comply with certain conditions as part of its rail
franchise agreements. If it fails to comply with these conditions, it may be
liable to penalties including the potential termination of one or more of the
rail franchise agreements. This would result in the Group losing the right to
continue operating the affected operations and consequently, the related
revenues and cash flows. The Group may also lose some or all of the amounts set
aside as security for the shareholder loan facilities, the performance bonds and
the season ticket bonds. The Group can do more to prevent breaches of franchise
where it has sole control than where it has joint control. As the holder of a
49% joint venture interest in Virgin Rail Group, the Group has less control over
the joint venture's operations and that means the Group's management may be less
able to prevent a breach of the Virgin Rail Group franchise agreement.

Our UK Rail businesses are subject to complex contractual arrangements.
Contractual management is an important part of our rail activities because the
way in which contracts are managed can be a significant determinant of financial
performance.

Compliance with franchise conditions is closely managed and monitored and
procedures are in place to minimise the risk of non-compliance.

Pension scheme funding
The Group participates in a number of defined benefit pension schemes. There is
a risk that the cash contributions required to these schemes increases or
decreases due to changes in factors such as investment performance, the rates
used to discount liabilities and life expectancies. Any increase in
contributions will reduce the Group's cash flows.

Decisions on pension scheme funding, asset allocation and benefit promises are
taken by management and/or pension scheme trustees in consultation with trade
unions and suitably qualified advisors. A Pensions Oversight Committee has been
established comprising the Finance Director, a Non-Executive Director and other
senior executives, to oversee the Group's overall pensions strategy. The Board
participates in major decisions on the funding and design of pension schemes.

Insurance and claims environment
The Group receives claims in respect of traffic incidents and employee claims.
The Group protects itself against the cost of such claims through third party
insurance policies. An element of the claims is not insured as a result of the
"excess" on insurance policies.

There is a risk that the number or magnitude of claims are not as expected and
that the cost to the Group of settling these claims is significantly higher or
lower than expected. In the US, in particular, there is a risk that given the
size of the "excess", that a small number of large-value claims could have a
material impact on the Group's financial performance and/or financial position.

The Group has a proactive culture that puts health and safety at the top of its
agenda and this helps mitigate the potential for claims arising. Where claims do
arise, they are managed by dedicated insurance and claims specialists in order
to minimise the cost to the Group. Where appropriate, legal advice is obtained
from appropriately qualified advisors. The balance between insured and retained
risks is re-evaluated at least once a year and insurance and claims activity is
monitored closely.

Regulatory changes and availability of public funding
Public transport is subject to varying degrees of regulation across the
locations in which the Group operates. There is a risk that changes to the
regulatory environment could impact the Group's prospects.

Similarly, many of the Group's businesses benefit from some form of financial
support from government including direct financial support, the provision of
equipment, government contracts and concessionary fare schemes. There is a risk
that the availability of sufficient government financial support changes due to
regulatory or other reasons. The new UK Government's stated policy to reduce
spending has increased the likelihood of this risk crystallising. The UK Bus
profit for the year ended 30 April 2010 included £80.0m of Bus Services
Operators Grant, £230.0m of concessionary revenue and £106.3m of tendered and
school bus revenue.

In the UK, the study of the UK bus market by the competition authorities is an
example of a regulatory matter affecting our business. Whilst at this stage, we
do not expect this to have a material impact on the Group's financial
performance or financial position, we continue to monitor developments closely.
We will also scrutinise European Commission proposals on passenger rights
particularly where there is a potential financial impact on the Group.

Management closely monitors relevant proposals for changes in the regulatory
environment and communicates the Group's views to key decision makers and
bodies. The Group actively participates in various industry and national trade
bodies along with domestic and international government forums. The Group seeks
to maintain good, co-operative relationships with all levels of government, by
developing and promoting ideas that offer cost effective ways of improving
public transport.

Management and Board succession
The Group values the continued services of its senior employees, including its
Directors and management who have operational, marketing, engineering,
technical, project management, financial and administrative skills that are
important to the operation of the Group's business.

Succession planning for the Directors and senior management is an important
issue and as such is considered by the Nomination Committee (as described in
section 8.3) and the Board. The appropriate level of management deals with
recruitment and retention of other staff.

Disease
There have been concerns in recent years about the risk of a swine flu pandemic,
which follows previous concerns over bird flu and SARS. There is a risk that
demand for the Group's services could be adversely affected by a significant
outbreak of disease. Such a fall in demand would have a negative impact on the
Group's revenue and financial performance. The Group has plans in place to
respond to any significant outbreak of disease.

Treasury risks
Details of the Group's treasury risks are discussed in note 29 to the
consolidated financial statements, and include the risks arising from movements
in fuel prices.


Going concern (page 23)

On the basis of current financial projections and the facilities available, the
Directors are satisfied that the Group has adequate resources to continue for
the foreseeable future and, accordingly, consider it appropriate to adopt the
going concern basis in preparing the financial statements. As part of the
assessment of going concern, executive management provided a paper to the Audit
Committee covering matters such as financial projections, sensitivity analysis,
available debt facilities, credit ratings, financial risk management and bank
covenants. The Board's assessment of going concern takes account of its view of
the principal business risks facing the Group. Section 3.8.9 of this Annual
Report comments on liquidity, a key element of the Directors' assessment of
going concern.

Responsibility statement (page 39)

The Directors confirm that to the best of their knowledge:

  * The consolidated financial statements, prepared in accordance with the
    applicable United Kingdom law and in conformity with IFRS, as adopted by the
    European Union, give a true and fair view of the assets, liabilities,
    financial position and profit of the Group and the undertakings included in
    the consolidation taken as a whole; and


  * The Chairman's statement, Chief Executive's review and Directors' report
    (incorporating the Operating and Financial Review) include a fair review of
    the development and performance of the business and the position of the
    Group and the undertakings included in the consolidation taken as a whole,
    together with a description of the principal risks and uncertainties that
    they face.


Signed on 23 June 2010 on behalf of the Board by:


Brian Souter       Martin A Griffiths
Chief Executive     Finance Director





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