Carr’s Milling Industries PLC
Old Croft, Stanwix
Carlisle CA3 9BA
www.carrs-milling.com
Carr’s Milling Industries PLC Annual Report & Accounts 2006
organic
growth
Carr’s Milling Industries PLC
Annual Report & Accounts 2006 Designed and produced by corporateprm, Edinburgh and London.  www.corporateprm.co.uk
01 Financial Highlights
02 Chairman’s Statement
04 Chief Executive’s Review
08 Operating and Financial Review
12 Board of Directors
12 Registered Office and Advisers
13 Directors’ Report
16 Corporate Governance
19 Independent Auditors’ Report
20 Directors’ Remuneration Report
24 Consolidated Income Statement
25 Consolidated and Company Statement
of Recognised Income and Expense
26 Consolidated and Company Balance
Sheet
27 Consolidated and Company Cash
Flow Statement
28 Principal Accounting Policies
33 Notes to the Financial Statements
73 Five Year Statement
75 Notice of Annual General Meeting
76 Directory of Operations
Financial Highlights
• Revenue up 26% to £242.6m
• Profit before tax down 39% at £6.3m
• Adjusted profit* before tax up 9% at £7.3m
• Basic earnings per share down 45% at 51.0p
• Adjusted earnings per share
*
up 17% to 59.7p
• Dividend up 13% to 18.0p per share
• Strong operating cash generation
* excluding non-recurring items and amortisation of intangible assets
agriculture
page 5
food
page 6
Carr’s Milling Industries activities are 
focussed on Agriculture, Food and
Engineering with increased Annual Sales of
£242.6m 01
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Statutory numbers are given in the Chairman’s Statement and reconciliations are given in the Notes to the Financial Statements
2002 - 2004 prepared under UKGAAP and 2005 - 2006 under IFRS
* excludes non-recurring items and amortisation of intangible assets
engineering
page 7
02 03 04 05 06
143
149
156
192
243
Revenue £m
02 03 04 05 06
3.3
4.6
5.1
6.7
7.3
Profit before tax * £m
02 03 04 05 06
33.3
34.7
39.9
50.9
59.7
Earnings per share * (p)
02 03 04 05 06
9.5
11.5
13.5
16.0
18.0
Dividends (p) 02
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Chairman’s Statement
Richard
Inglewood
It gives me great satisfaction to report to
Shareholders that Carr’s has once again raised
adjusted pre-tax profits to record levels, with a
9.2% increase to £7.3m. Growth in our existing
business and expansion in Germany reflects a
good performance from all three divisions. 
FINANCIAL OVERVIEW
The annual figures have, for the first time, been prepared under
International Financial Reporting Standards (“IFRS”) and those for 2005
have been restated on a comparable basis.
Revenue in the 52 weeks to 2 September 2006 rose 26.3% to £242.6m
(53 weeks to 3 September 2005: £192.1m), partially due to the inclusion
for the full year of the animal feed business acquired by our associate from
Pye in July 2005 and of the flour business acquired by Carr's Flour Mills
from Meneba in November 2004.
Profit before tax was £6.3m (2005: £10.4m). Profit before tax
excluding non-recurring items (principally the £4.1m gain on disposal of
the Bendall’s factory in the previous year) and amortisation of intangible
assets increased by 9.2% to £7.3m (2005: £6.7m). Adjusted earnings
per share, on a similar basis, rose 17.3% to 59.7p (2005: 50.9p) - an
eighth successive annual increase. Basic earnings per share was 51.0p
(2005: 92.1p).
Operating cash flow in the year was strong. Cash generated from
operations of £11.1m compared with £6.7m in the previous period. Net
debt reduced to £13.9m (2005: £14.9m), representing gearing of 68.3%
(2005: 73.9%). The net interest charge of £1.0m (2005: £1.2m) was
covered 7.9 times (2005: 6.7 times) by adjusted Group operating profit.
The results are considered in more detail in the Chief Executive’s Review.
DIVIDENDS
Reflecting the Group’s progressive dividend policy, its good performance
and its encouraging prospects, the Board is proposing an increase in the
final dividend of 13.6% to 12.5p per share. Along with the interim dividend
of 5.5p per share, paid in May 2006 (2005: 5.0p), this makes a total
dividend for the period of 18.0p per share, an increase of 12.5% on last
period’s 16.0p. The final dividend, if approved by Shareholders, will be paid
on 19 January 2007 to Shareholders on the register at the close of 03
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
expanding
in europe
business on 15 December 2006. Shares will be ex-dividend on 
13 December 2006.
DEVELOPMENT OF CARR’S AGRICULTURE BUSINESS
In anticipation of a decline in divisional profit in the face of a further
deterioration in the UK market for agriculture, during the period Carr’s
made various changes to its animal feed business.
As reported in the Interim Announcement of 26 April 2006, to address a
noticeable reduction in demand and serious industry over-production of
compound and blended feed, our associate’s compound feed mills at
Blackburn (Lancashire), Penrith (Cumbria), and Shrewsbury (Shropshire)
were closed. The remaining Pye animal feed business, is now fully
integrated into Carrs Billington Agriculture Operations. The integration of
the sales teams, systems and product ranges proved challenging, and it is
to the credit, and demonstrates the strength, of our management teams
that this is complete and the business is focussed on the challenges
ahead.
The animal feed business expanded into Wales with the formation in
September 2005 of a new joint venture company, Bibby Agriculture,
together with Wynnstay Group and Welsh Feed Producers; Carr's
Billington Agriculture Sales is a 50% shareholder. Bibby Agriculture 
traded profitably.
Since 2001, we have sold our Crystalyx low moisture feed blocks through
a large distributor in Germany, Agravis. Volumes have steadily increased
and reached a stage where it was viable to build a manufacturing plant in
Germany using our patented manufacturing process. A new company,
Crystalyx Products GmbH, jointly owned by Carr’s and Agravis, was formed
and the new plant was commissioned in January 2006. In the early
months, new sales outlets have been sourced and we are encouraged by
the performance to date.
In the US, we replaced a production line at our factory in Belle Fourche,
South Dakota, completing in November 2006. This new line incorporates
the new technology developed by our own engineering staff and is
designed to meet the expected increased demand.
BUSINESS OVERVIEW
The Pye acquisition in July 2005 nearly doubled Carr’s compound and
blended feed volumes. In the period there was a further deterioration in the
UK market for agriculture, including the Group’s principal trading area of
North West England and South West Scotland, as a result of delays in
farmers’ receiving subsidies (in the form of the initial Single Farm
Payment), the low price of milk and animals feeding outside in the mild
winter weather. In addition, margins were squeezed due to higher energy
costs. Consequently, Agriculture’s contribution reduced, as forecast in the
Interim Announcement.
The Meneba acquisitions, comprising mills at Kirkcaldy in Fife and Maldon
in Essex, more than doubled the size of Carr’s flour business, previously
comprising a single mill at Silloth in Cumbria. Demand for flour from both
bakers and biscuit producers was high throughout the period and, together
with the success in winning new customers, the three mills operated to
near capacity throughout the period. Accordingly, a substantial increase in
Food’s contribution to the Group’s profit before non-recurring items and
amortisation was achieved, as anticipated in the Interim Announcement.
The Bendalls engineering business re-located to its new factory in July
2005 and has benefited from the improved facilities and production layout.
The three engineering businesses made good progress in 2006.
BOARD
In September 2005, Alastair Wannop was appointed a non-executive
Director, bringing non-executive Directors to three and independent non-
executive Directors to two, and I succeeded David Newton as Chairman. 
As in previous years, the Board reviewed best practice Corporate
Governance policies and procedures and made changes to ensure the
Group remains where appropriate compliant, bearing in mind its size, with
the Combined Code.
OUTLOOK
In the 52 weeks to 2 September 2006, the performance of the business
continued to benefit from the strength of the management teams at the
Group’s operational activities. This attribute has enabled the Group to
continue its progress despite the difficulties posed by increased costs,
particularly energy, and the general trading environment. We expect these
challenges to continue into the current year. However, I can report that
trading in the opening weeks is in line with management’s expectations but
with the high cost increases being experienced the management will be
challenged to continue the Group’s growth.
Richard Inglewood
Chairman
21 November 2006 04
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Chief Executive’s Review
In the period to 2 September 2006, Carr’s both achieved an eighth
successive annual increase in adjusted earnings per share and further
strengthened its business. The two large acquisitions of the previous
year - the Meneba flour mills and the Pye feed mills by our associate -
were successfully incorporated into the Group activities and three joint
ventures, mainly in the area of manufacture and supply of animal feed,
were established.
Chris Holmes 05
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
agriculture
The Group’s Agriculture business comprises, in the UK primarily in the
North West of England and South West of Scotland, four related activities
- animal feed manufacture, fertiliser blending, agricultural retailing and oil
distribution - and, in the USA and Germany, animal feed manufacture.
Operating profit of £5.0m (2005: £5.9m) was achieved on a revenue of
£174.5m (2005: £132.7m).
UNITED KINGDOM 
Agriculture’s UK market place was even more challenging than last period.
In general, this reflected delays and uncertainty in farmers’ receiving the
initial Single Farm Payment (indeed, considerable sums are still outstanding
in respect of the 2005 harvest year), the unprecedented low farm gate
milk price and higher energy costs. 
Further problems specifically affecting the manufacture of compound
ruminant animal feed included the mild winter weather (enabling animals to
feed outside) and substantial over-production, reflecting reduced demand,
in the Group’s trading area.
In the latter context, the Group, together with its associate, took decisive
action (as it has often done when faced with adverse conditions). Within
months of the acquisition in July 2005 by the Group’s associate company,
Carr's Billington Agriculture Operations, of certain assets of W&J Pye 
(in Administration), compound feed mills were closed at Blackburn
(Lancashire), Penrith (Cumbria) and Shrewsbury (Shropshire). This left
Carr's Billington Agriculture Operations with four compound feed mills - 
at Carlisle (Cumbria), Langwathby (Cumbria), Lancaster (Lancashire) 
and Stone (Staffordshire) - and three blended feed mills - at Askrigg
(North Yorkshire), Kirkbride (Cumbria) and Lancaster. Notwithstanding,
manufacturing capacity remains in excess of demand. The rationalisation
and integration of the two entities has gone well as too has the capital
expenditure to improve the efficiency and quality of product at the
Lancaster Mill. 
In March 2006, Afgritech, a joint venture company in which Carr’s Milling
Industries is a 50% shareholder, was formed with Afgri Operations, one of
the largest South African agricultural companies. Afgritech has invested
£0.7m in a new plant at Langwathby to produce by-pass protein for
ruminant animals, which will initially be available exclusively to customers of
Carr's Billington Agriculture, simultaneously increasing labour productivity at
that plant. Production will start in November 2006.
The Caltech division, which has a plant at Silloth (Cumbria), again
increased revenue and profits from its manufacture of low-moisture feed
blocks for the domestic, agricultural livestock and equine market. The
successful launch of a new product, Garlyx, designed to repel biting insects
on cattle and horses, will fully benefit the new financial year.
Bibby Agriculture, the joint venture company formed in September 2005 in
which Carr's Billington Agriculture Sales is a 50% shareholder, has made a
good start selling in Wales animal feed manufactured by its shareholders,
fertiliser and other farming supplies. 
Fertiliser, produced at the Group’s three blending plants - at Invergordon
(Easter Ross), Montrose (Angus) and Silloth - marginally increased its
volumes, but profits slightly reduced. This reflected a difficult first half
and peak period of March/April, reflecting farmers’ reluctance to pay
energy-related higher prices. The Group’s unique range of
environmentally-protective fertiliser, New Choice, increased both
revenue, by 15%, and profit.
Carr’s agricultural retailing increased both revenue and profits from its 
14 branches, operating as Carr's Billington Agriculture, from Perth in the
North to Leek (Staffordshire) in the South, selling farm supplies. Carr’s
Machinery distributes new and used agricultural and groundcare machinery
from six of these branches, across the north of England and in Dumfries
and Galloway in South West Scotland. Sales of Massey Ferguson
machinery again exceeded expectations and the increased sales of parts
and workshop services again contributed to the result.
Wallace Oils, which was acquired in April 2005, supplies oils and lubricants
to a broad customer base out of three depots, located at Carlisle, Dumfries
and Stranraer, the latter two in Dumfries and Galloway.
In its first full year of ownership, Wallace Oils performed satisfactorily and
began to make inroads into the Group’s customer base.
OVERSEAS
In the US, our subsidiary, Animal Feed Supplement, which produces
Smartlic and Feed in a Drum low-moisture animal feed blocks at mills in
Belle Fourche (South Dakota) and Poteau (Oklahoma), substantially
increased its volumes, but profit margins were lower as a result of further
cost increases in the base raw material, molasses. The installation of a
new production line to replace the 1998 production line, the older of the
two, at Belle Fourche will be completed in November 2006 without
disrupting production.
In Germany, a 50:50 joint venture, Crystalyx Products, was established in
2005 in conjunction with Agravis, one of Germany’s largest agricultural
companies. In January 2006, a new low-moisture animal feed plant was
commissioned to manufacture Crystalyx in Oldenburg, North West
Germany for the domestic market. The business has commenced well,
breaking into new European markets.  06
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Chief Executive’s Review continued
food
Operating profit before non-recurring items and amortisation of
intangible assets of £3.3m (2005: £2.3m) was achieved on revenue of
£55.7m (2005: £48.0m).
Carr’s principal food businesses are Carr’s Flour Mills, with a flour mill at
Silloth, and, since November 2004, the two former Meneba flour mills,
Hutchisons at Kirkcaldy (Fife) and Greens at Maldon (Essex). The
Meneba acquisition more than doubled the size of Carr’s flour business.
In a favourable market for flour, all three mills worked near capacity
throughout the period and a price increase was implemented in
September 2005 partially offsetting increases in the cost of electricity
and distribution. Higher margin speciality flours are performing
particularly well. Silloth suffered no repetition of the previous period’s
three month loss of flour sales to United Biscuits’ factory in Carlisle, as
a result of flooding, and increased its sales to United Biscuits’ Tollcross
factory outside Glasgow. The Kirkcaldy and Maldon mills benefited from
a full year’s trading and the greater efficiencies implemented since
acquisition.
The Carr’s Breadmaker range of retail flours continues to sell well, with
listings in three major multiple retailers.  07
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Engineering operating profit totalled £1.1m (2005: £0.8m, before the gain
on disposal of property of £4.1m) on a revenue of £12.2m (2005: £11.2m).
Engineering comprises Bendalls and R Hind, which are based in
Carlisle, and Carr's MSM, which is based in Swindon (Wiltshire).
Bendall’s designs and manufactures specialist steel fabrications for the
global petrochemical, nuclear, renewable energy and process industries.
R Hind provides vehicle bodybuilding and accident repairs for cars and
commercial vehicles. Carr's MSM designs and manufactures master
slave manipulators, which are key components for many industries but
notably the nuclear industry.
Bendalls, which is much the largest of the three activities, benefited
from more efficient working conditions following the move into larger,
modern premises in July 2005. A £2.5m contract to supply to the
Azerbaijan oil pipeline pressure vessels was constructed and
successfully delivered in the year. The SeaGen next generation tidal
energy device, for which Bendalls has manufactured a part of the
structure, is expected to be delivered to Strangford Lough, outside
Belfast, and connected to the National Grid in January 2007. Prospects
for improved orders from British Nuclear Group at Sellafield are good as
its decommissioning programme progresses.
Of the smaller divisions, R Hind traded satisfactorily, whilst Carr's MSM
traded well gaining some new customers and enters the new year with
a strong order book.
STAFF
In October this year Carr’s celebrated its 175th Anniversary - a great
achievement, particularly made even more special by it being the eighth
year in a row of hitting new records of profitability and shareholder
returns.
This is a great achievement for the Company and I would like to pay
tribute to all my colleagues here in the UK, the USA and Europe for
their dedication and commitment to the continued growth of the
Company.
PROSPECTS
Market conditions for Agriculture are not getting any easier with the low
farm gate milk price and again unbelievable expected delays of the
Single Farm Payment. The massive increase in wheat prices combined
with high-energy costs will make it a tough year for the Food division.
Engineering made good progress this period, but this is unlikely to be
repeated in the current period. 
Given these trading environments, to achieve a ninth successive annual
increase in adjusted profit before tax will be challenging, despite the
greater strength of the business and Carr’s track record in successfully
combating adverse conditions.
Chris Holmes
Chief Executive Officer
21 November 2006
engineering Ron Wood
08
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Operating and Financial Review
The Group’s business
The Group’s operations are organised into three business divisions,
agriculture, food and engineering, and the performance of these three
divisions in the period is discussed in the Chief Executive’s Review on
pages 4 to 7. The agriculture business operates predominately in the
North of England, Wales and Scotland, in addition there are two animal
feed plants in the US and a plant in Germany. The flour and the
engineering business operate entirely within the UK although a proportion
of sales from the engineering business are export.
The markets in which all three businesses operate are competitive both in
terms of pricing from other suppliers and the retail environment in general
which has a direct impact on many of our customers. Despite this, Carr’s
businesses have a long record of increasing sales and profits through a
combination of investing in modern efficient factories, developing a range
of quality products and making sound acquisitions. The businesses are
under the control of stable, experienced and talented operational
management teams supported by a skilled workforce.  the group
09
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Business objectives
There are five key elements to the Group’s strategy for meeting its
objectives which are continuing growth and profitability:
• Deliver quality, innovative and cost-effective products and services to our
customers
• Organic growth
• Seek acquisitions to complement our existing businesses
• Maximise operational efficiency
• Securing employee health and safety
We monitor our performance against the strategy by means of key
performance indicators (‘KPIs’):
• Organic sales growth – year on year increase in sales revenue excluding
the impact of acquisitions and disposals
• Gross return on sales – gross profit as a percentage of sales revenue
• Net return on sales – operating profit before non-recurring items and
amortisation as a percentage of sales revenue
• Adjusted earnings per share – profit attributed to equity shareholders
before non-recurring items and amortisation divided by the weighted
average number of shares in issue during the period
• Return on net assets – profit before tax and before non-recurring items
and amortisation as a percentage of net assets
• Free cash flow – cash generated from operations less tax and net
interest paid
Business strategies
The Group’s market strategy is to focus on growing the quality end of the
markets in which we operate, to establish meaningful and long lasting
relationships with our customers by a combination of product development
and high service levels and to invest in quality facilities. Each business within
the Group is given the responsibility for developing its own plans to deliver
the objectives of the Group with particular emphasis on growing sales
through the supply of quality products, service and product innovation,
improving operational efficiency and securing employee health and safety.
The role of the Board in achieving Group objectives has been to support
operational management and to identify suitable acquisitions that will create
new customers to the Group or will secure existing market positions.
Performance against KPIs
2006 2005
Organic sales growth 5.3% 13.6%
Gross return on sales 14.8% 16.0%
Net return on sales 3.3% 4.2%
Adjusted earnings per share 59.7p 50.9p
Return on net assets 32.3% 27.8%
Free cash flow £7.2m £3.7m
FINANCIAL REVIEW
Basis of preparation
The full year accounts are being reported under IFRS for the first time. The
effect of the Group’s conversion to IFRS has already been communicated
to Shareholders in our statement in April 2006 together with the
reconciliations and accompanying narrative explaining the restatement of
the UK GAAP financial statements for 2005. As previously stated, the
impact on the Group’s results of the adoption of IFRS has not been
significant to the underlying business and the fundamentals of the Group’s
business and the way in which it is managed are unaltered by the change
in accounting regime. The main differences between IFRS and the former
UK GAAP which have affected the Group are in relation to business
combinations, pensions and deferred taxation.
Overview
Group revenue from activities during the period was £242.6 million
(2005: £192.1 million). The increase in revenue comprised a full years
trading of the animal feed business acquired by our associate from 
W & J Pye in July 2005 and the additional 11 weeks revenue from 
the two flour mills acquired in November 2004.
Profit before taxation and before non-recurring items and amortisation
of intangible assets increased to £7.3 million (2005: £6.7 million). 
Non-recurring items and amortisation are disclosed in Note 6 to the
financial statements.
Net finance costs were £1.0 million (2005: £1.2 million) and were
covered 7.9 times (2005: 6.7 times) by adjusted Group operating profits.
Taxation
The Group’s effective tax charge on profit from activities after net finance
costs was 31.5% (2005: 24.7%). A reconciliation of the actual total tax
charge to the standard rate of corporation tax in the UK of 30% is set out
in note 9 to the financial statements.
Earnings per share
The profit attributable to the equity holders of the Company amounted to
£4.2 million (2005: £7.5 million), and basic earnings per share was 51.0p
(2005: 92.1p). Adjusted earnings per share of 59.7p (2005: 50.9p) is
calculated by dividing the operating profit for the period, before non-
recurring items and amortisation of intangible assets, by the weighted
average number of shares in issue during the period. 10
Carr’s Milling Industries PLC
Annual Report & Accounts 2005
Operating and Financial Review continued 
The valuation under IAS19 accounting basis showed a deficit before
related deferred tax asset in the scheme at 2 September 2006 of £15.8
million (3 September 2005: £12.1 million). The movement in the current
period arose principally as a result of a re-assessment of the mortality
rates, applicable discount rates and inflation rates that caused a significant
increase in the deficit.
Following the triennial valuation at 1 January 2006, the trustees and the
company are considering a strategy designed to eliminate the deficit within
ten years.
Currently, the contributions paid by participating companies has increased
by £1.3 million to £2.6 million.
A Group subsidiary undertaking is a participating employer in a defined
benefit pension scheme of our associate. The IAS19 accounting basis
showed a total deficit, for that scheme, before related tax asset at 
2 September 2006 of £5.7 million (2005 : £6.5 million). The Group
recognises approximately 50% of the scheme deficit and related 
deferred tax asset in its investment in associate. The details of both
pension schemes are given on note 28 to the financial statements.
Treasury Policy
The Group’s policy is structured to ensure adequate financial resources are
available for the development of its business while managing its currency
and interest rate risks. The Group’s strategy, policy and controls are
developed centrally and approved by the Board. The Group does not
engage in speculative transactions.
The main elements of treasury activity are outlined below.
Foreign currency risk
The major foreign currency risk facing the Group is in the purchasing of
raw materials in the fertiliser and flour milling operations. The major
currency involved is the US dollar. The policy of the Group is to hedge
using forward foreign exchange contracts with UK banks as soon as
commitment has been given to the underlying transaction. 
The result of the foreign subsidiary is translated into sterling at the average
rate of exchange for the period concerned. As this translation has no
impact on cash flow, the Group chooses not to hedge its foreign subsidiary
earnings.
Balance sheet review
We have continued to invest in the business with total capital expenditure
in the year of £4.0 million, making our total capital expenditure since 2003
£13.8 million. In the current period we have continued to invest in
production facilities with £1.8 million spent on our flour mills and the
placement production line at our low moisture feed block plant in the US.
Intangible assets increased in November 2004 as a result of the
acquisition of Meneba UK Limited and in 2006 £0.9 million was amortised.
Inventories have decreased by 8.0% from £12.9 million, mainly due to
lower engineering work in progress following the completion of contracts in
the last quarter.
Trade and other receivables have decreased by £1.65 million, principally
due to the decrease in trade receivables of £2.4 million arising from better
collections, particularly in agriculture.
Trade and other payables have decreased by £3.9 million due to a
decrease in trade payables of £2.2 million which is simply due to the timing
of payments. The retirement benefit obligation adverse movement of £3.7
million in the period is discussed in the section headed Pensions.
Overall net assets increased by £0.4 million to £22.3 million.
Cash flow and net debt
The Group’s operational cash generation increased in the period with cash
flows generated from operations in the current year of £11.1 million 
(2005: £6.7 million). This has assisted the Group in funding the capital
investment programme previously discussed, resulting in net cash
generated of £4.3 million (2005: £0.3 million) before investment and
financing activities. Dividend payments and loan repayments contributed to
a £4.9 million outflow in financing activities (2005: £3.3 million). 
Net debt at the year end was £13.9 million (2005: £14.9 million) with
gearing at 68.3% (2005: 73.9%). Net debt is expected to decrease over
the next couple of years excluding any acquisition funding.
Pensions
The Group operates its current pension arrangements on a defined benefit
and defined contribution basis. The defined benefit section is closed to new
members and has 125 active members, 147 deferred members and 146
current pensioners and the scheme received contributions from the Group
and members which almost match the pensions paid out in 2006. 11
Carr’s Milling Industries PLC
Annual Report & Accounts 2005
Manufacturing facilities
The Group has continued to invest in its production facilities in all three
divisions and it intends to continue investing to ensure that it maintains a
competitive edge. The investment in new premises and equipment for our
engineering business, Bendalls, in Carlisle in 2005 has improved
efficiencies.
Employees
While the Group continues to invest in facilities and equipment we also
continue to invest in our people. The Group offers training programmes
where additional skills are required to undertake their responsibilities. The
businesses have strategies for retaining staff, including the provision of
competitive terms and conditions, a contributory occupational pension
scheme and share options. The Group introduced a Savings–related Share
Option Scheme in May 2006.
Principal risks and uncertainties 
Each year the Group carries out a formal exercise to identify and assess
the impact of risks on its business and this year the exercise was carried
out in August 2006. The more significant risks and uncertainties faced by
the Group were identified as customer retention, employee retention,
margins, profitability and competition. The corporate governance statement
describes more about the Group’s risk management process.
On behalf of the Board
Ronald C Wood
Finance Director
21 November 2006
The balance sheet of the foreign subsidiary is translated into sterling at the
closing US dollar exchange rate. Any gains or losses on the translation of
the balance sheet into sterling are recorded in reserves. Currency
translation risks of net assets in the US subsidiary are not hedged.
Interest rate risk
The Board set the policy on interest rate risk and this was reviewed at the
time of the Meneba UK acquisition when borrowings increased significantly.
The policy is to cover approximately 50% of the risk and was implemented
by taking out interest cap and rate swap agreements with a UK bank. The
policy will be reviewed from time to time as circumstances change. The
monitoring of the interest rate risk is managed at head office based on
cash flow projections. 
Credit risk
Practically all sales are made on credit terms to an extensive range of
customers, UK food producers, agricultural merchants, farmers and the
nuclear industry. Overdue accounts are reviewed monthly at divisional
management meetings. Historically, the incidence of bad debts is low.
Funding
The Group has historically been cash generative. The bank position for
each operation is monitored on a daily basis and capital expenditure above
a certain level is approved at the monthly Group board meeting. Each
operation has access to the Group’s overdraft facility or has facilities
specific to that operation and all term debt is arranged centrally. The
current bank facilities available to the Group are a term loan of £2.0 million
repayable in October 2009, a revolving credit facility of £4.5 million and
overdraft facilities of £8.0 million. Unutilised facilities at 2 September 2006
were £10.9 million (2005: £14.6 million). 
Resources, risks and uncertainties
The Group aims to safeguard the assets that give it competitive advantage,
being its product quality, product innovation and service levels; its
operational management, skilled workforce and its modern well-equipped
factories.
Reputation
It is the responsibility of local operational management assisted by the
Group Health and Safety Manager to maintain and where possible
enhance the Group’s reputation for product quality, product innovation,
service levels and a culture of safe working. 12
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Board of Directors
Top, left to right:
Lord Inglewood
Non-Executive Chairman
Chris Holmes
Chief Executive Officer
Ron Wood
Finance Director
Bottom, left to right:
Robert Heygate
Non-Executive Director
Alistair Wannop
Non-Executive Director
Registered Office
Carr’s Milling Industries PLC
Old Croft, Stanwix
Carlisle CA3 9BA
Registered No. 98221
Independent Auditors
PricewaterhouseCoopers LLP 
89 Sandyford Road
Newcastle upon Tyne NE1 8HW
Bankers
Clydesdale Bank PLC
82 English Street
Carlisle CA3 8HP
The Royal Bank of Scotland plc
37 Lowther Street
Carlisle CA3 8EL
Financial Adviser and Broker
Investec Bank (UK) Limited 
2 Gresham Street
London EC2V 7QP
Solicitors
DLA
India Buildings
Water Street
Liverpool L2 ONH
Atkinson Ritson
15 Fisher Street
Carlisle CA3 8RW
Registrars
Capita Registrars 
Northern House
Woodsome Park
Fenay Bridge
Huddersfield HD8 0LA
Registered Office and Advisers 13
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Directors’ Report
The Directors submit their report and the audited accounts of the
Company for the period ended 2 September 2006.
PRINCIPAL ACTIVITIES, BUSINESS REVIEW AND FUTURE
DEVELOPMENTS
The Company’s activities are Agriculture, Food and Engineering. 
A review of the business and future development of the Group 
and a discussion of the principal risks and uncertainties faced by 
the Group is presented in the Chief Executive’s Review on pages 
4 to 7 and in the Operating and Financial Review on pages 8 to 11.
RESULTS AND DIVIDENDS
The profit before taxation was £6.3 million (2005: £10.4 million).
After taxation charge of £2.0 million (2005: £2.6 million), the profit
for the period is £4.3 million (2005: £7.8 million). An interim dividend
of 5.5p per ordinary share was paid on 31 May 2006. The Directors
recommend the payment of a final dividend for the period, which is
not reflected in these accounts, of 12.5p per ordinary share which,
together with the interim dividend, represents 18.0p per ordinary
share, totalling £1.5 million (2005: 16.0p per ordinary share, totalling
£1.3 million).
Subject to approval at the Annual General Meeting, the final
dividend will be paid on 19 January 2007 to members on the
register at the close of business on 15 December 2006. Shares 
will be ex-dividend on 13 December 2006.
FINANCIAL INSTRUMENTS
The Group’s risk management objectives and policy are discussed
in the Treasury Policy section of the Operating and Financial Review
on page 10.
DIRECTORS
The Directors of the Company currently in office are as stated on
page 12. Each of the current Directors served for the whole of the
period under review. W R Inglewood and A R Heygate retire in
accordance with the Articles of Association and, being eligible, each
offers himself for re-election.
Biographical details of the directors are shown below:
Non-executive directors
Lord Inglewood (55) was a Conservative member of the European
Parliament for ten years until his retirement in 2004, was a
Government Minister from 1995 to 1997 and has been a member 
of the House of Lords since 1989. He brings to the Board wide
experience, in particular of EU and Westminster politics, allied with 
a knowledge of farming and of Carr’s north-west England heartland.
He is also chairman of CN Group Limited the Carlisle based
regional media company.
Mr A R Heygate (61) is an executive director of Heygate & Sons
Limited, the UK’s largest independent flour miller, and is also
engaged in animal feed compounding and other agricultural
activities.
Mr A G M Wannop (44) is a director of English Food and Farming
Partnership and of Cumbria Vision. He has actively farmed in
Cumbria for many years.
Lord Inglewood, Mr A R Heygate and Mr A G M Wannop have two
year fixed term contracts which expire on 31 August 2007.
Executive directors
Mr C N C Holmes (55) was appointed to the Board in January
1992, and as CEO in September 1994. Previously he held senior
management positions in the agricultural division of J Bibby & Sons.
Mr R C Wood (58) was appointed to the Board as Finance Director
in January 1988 and is a member of the Chartered Institute of
Management Accountants. Mr R C Wood is also Company
Secretary.
The two executive directors have service contracts which provide for
a rolling two year notice period.
EMPLOYMENT POLICIES
The Company’s policy on employee involvement is to adopt an open
management style, thereby encouraging informal consultation at all
levels about aspects of the Company’s operations. Employees
participate directly in the success of the business by contributing to
the SAYE share option schemes.
Employment policies are designed to provide equal opportunities
irrespective of colour, ethnic or natural origin, nationality, sex,
religion, marital or disabled status. Full consideration is given to
applications for employment by and the continuing employment,
training and career development of disabled people.
POLITICAL AND CHARITABLE DONATIONS
During the period ended 2 September 2006 the Group contributed
£11,346 (2005: £12,443) in the UK for charitable purposes. There
were no political donations during the period (2005: Nil).
PAYMENT OF SUPPLIERS
Payment terms are agreed with each supplier and every endeavour
is made to adhere to the agreed terms. The average credit terms for
the Group as a whole, based on the year-end trade payables figure
and a 364 day year, is 42 days (2005: 42 days). The Company has
no outstanding trade payables at the end of the financial period.
SHARE CAPITAL
The movement in the share capital during the period is detailed in
note 29 to the financial statements. 14
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
AUDITORS
PricewaterhouseCoopers LLP have expressed their willingness to
continue in office and a resolution proposing their re-appointment
will be submitted at the Annual General Meeting.
DIRECTORS’ STATEMENT AS TO DISCLOSURE OF
INFORMATION TO AUDITORS
The Directors who were members of the Board at the time of
approving the Directors’ Report are listed on page 12. Having made
enquiries of fellow Directors and of the Company’s auditors, each of
these Directors confirm that:
• to the best of each Director’s knowledge and belief, there is no
audit information relevant to the preparation of their report of
which the Company’s auditors are unaware; and
• each Director has taken all the steps a director might
reasonably be expected to have taken to be aware of relevant
audit information and to establish that the Company’s auditors
are aware of that information.
DIRECTORS INTERESTS
The interests of the Directors, as defined by the Companies Act 1985, in the ordinary shares of the Company, other than in
respect of options to acquire ordinary shares (which are detailed in the analysis of options included in the Directors’
Remuneration Report on pages 20 to 23), are as follows:
on 2 September 2006 on 3 September 2005
Ordinary Shares Ordinary Shares
C N C Holmes 47,990 47,990
A R Heygate 37,225 37,225
R C Wood 25,090 25,090
W R Inglewood 3,510 1,250
A G M Wannop 2,261 2,261
All the above interests are beneficial. There have been no other changes to the above interests in the period from 3 September
2006 to 13 November 2006.
MAJOR SHAREHOLDERS
The Company has been informed of the following interests at 6 November 2006 in the 8,233,579 ordinary shares of the
Company, as required by the Companies Act 1985:
Percentage of 
Number of shares Issued share capital 
Heygate & Sons Limited 1,332,762 16.2%
T W G Charlton 1,177,500 14.3%
HSBC Global Custody Nominee (UK) Limited 350,000 4.0%
Chase Nominees Limited 325,548 4.0%
Directors’ Report continued 15
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
ANNUAL GENERAL MEETING AND SPECIAL BUSINESS TO BE
TRANSACTED AT THE ANNUAL GENERAL MEETING
The Notice convening the Annual General Meeting appears on page
75 and includes the following items of Special Business:
(i) Resolution 7 : Disapplication of pre-emption rights
The resolution renews the existing authority to the Directors
under Section 95 of the Companies Act 1985 to allot shares by
way of rights to shareholders and to allot shares for cash up to
a nominal value of £102,920 (representing 5 per cent of the
issued share capital) without first offering such shares pro rata
to existing shareholders, as would otherwise be required under
Section 89 of that Act. This will allow the Directors some
flexibility when considering how best to finance new business
opportunities. In accordance with the requirements of the
London Stock Exchange this resolution will come up for
renewal at the next Annual General Meeting.
(ii) Resolution 8 : Purchase its own shares
This resolution renews the existing authority to the directors to
buy, by way of market purchases, up to 823,358 of its own
shares (representing 10 per cent of the issued share capital).
The proposal should not be taken as an indication that the
Company will purchase its own shares. This authority will only
be exercised by the Directors if they are satisfied that it would
result in an increase in earnings per share and would be in the
best interest of shareholders generally.
DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable United
Kingdom law and those International Financial Reporting Standards
as adopted by the European Union.
The Directors are required to prepare financial statements for each
financial period which present fairly the financial position of the
Company and of the Group and the financial performance and cash
flows of the Company and 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;
• present information, including accounting policies, in a manner
that provides relevant, reliable, comparable and understandable
information;
• provide additional disclosures when compliance with the
specific requirements in IFRS is insufficient to enable users to
understand the impact of particular transactions, other events
and conditions on the entity’s financial position and financial
performance; and
• state that the company has complied with IFRS, subject to any
material departures disclosed and explained in the financial
statements.
The Directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and of the Group and enable them
to ensure that the financial statements comply with the Companies
Act 1985 and Article 4 of the IAS Regulation. They are also
responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The maintenance and integrity of the Carr’s Milling Industries
website is the responsibility of the directors; the work carried out by
the auditors does not involve consideration of these matters and,
accordingly, the auditors accept no responsibility for any changes
that may have occurred to the financial statements since they were
initially presented on the website.
Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in
other jurisdictions.
The requirements to provide an enhanced Directors’ Report under
Section 243ZZB of the Companies Act have been addressed in this
Report and the preceding Operating and Financial Review.
By Order of the Board
Ronald C Wood
Secretary
21 November 2006 16
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Corporate Governance
STATEMENT BY THE DIRECTORS ON COMPLIANCE WITH THE
PROVISIONS OF THE COMBINED CODE
PRINCIPLES OF GOOD GOVERNANCE
The Board is committed to high standards of corporate governance.
The adoption and maintenance of good governance is the
responsibility of the Board as a whole. This report, together with the
Directors’ Remuneration Report on pages 20 to 23, describes how
the Board applies the principles of good governance and best
practice as set out in the Combined Code on Corporate
Governance (the “Combined Code”). A statement of compliance
can be found at the end of this report.
THE BOARD
The Board consists of a non-executive Chairman, two executive
Directors and two other non-executives. A R Heygate is a non-
executive director and the Board considers him to be independent
although the Combined Code would not deem him independent due
to his long association with the Company and he represents a
significant shareholder. The Board believes that he acts in the best
interests of the Company and that his holding of shares in the
Company aligns his interests with that of the shareholders. A G M
Wannop is the senior independent non-executive director. The
Combined Code recommends that the Board of Directors of a UK
public company should include a balance of executive and non-
executive Directors (including independent non-executives) such that
no individual or small group of individuals can dominate the Board’s
decision-making. The Board is confident that it now meets the
requirements of the Combined Code with the exception of A R
Heygate as outlined above.
The Board meets nine times throughout the year to direct and
control the overall strategy and operating performance of the Group.
To enable them to carry out these responsibilities all Directors have
full and timely access to all relevant information. Training resources
are available to all Directors. A formal schedule of matters reserved
for decision by the Board covers key areas of the Group’s affairs
including acquisition and divestment policy, approval of budgets,
major capital expenditure projects, profit and cash flow performance
and general treasury and risk management policies. Responsibility
for the Group’s day to day operations is delegated to the Chief
Executive who, supported by the Finance Director and executive
management, implement the Board’s strategy and manage the
Group’s business. The roles of the Chairman and the Group Chief
Executive are separated and clearly defined. The Chairman’s overall
responsibility is to ensure that the Board carries out its
responsibilities. The Group Chief Executive’s responsibilities are to
direct and promote the operation and development of the Group.
Procedures are in place for Directors to seek both independent
advice at the expense of the Company and the advice and services
of the Company Secretary in order to fulfil their duties. The
Company Secretary is responsible to the Board for ensuring that
Board procedures are complied with and for advising the Board,
through the Chairman, on all governance matters. The appointment
and removal of the Company Secretary is determined by the Board
as a whole.
The Company’s Articles of Association provide that one third of the
Directors retire by rotation each year at the Annual General Meeting.
The Combined Code requires that Directors are required to present
themselves for re-election at intervals of no more than three years. It
is the Board’s intention to amend the Articles of Association at an
appropriate time to ensure compliance with this provision, but in the
interim, the Board intends to operate re-elections of Directors in a
manner to ensure compliance with the Combined Code. All new
Directors are subject to election by shareholders at the first
opportunity following their appointment.
Directors’ biographies and membership of the various committees
are shown on page 13. The formal terms of reference for the main
Board Committees together with the terms and conditions of
appointment of non-executive Directors are reviewed annually and
are available for inspection at the Company’s Registered Office and
at the Annual General Meeting.
BOARD COMMITTEES
Audit Committee
The Audit Committee currently comprises the three non-executives,
W R Inglewood, A R Heygate and A G M Wannop. The Committee
is chaired by A R Heygate. The Board considers that the Company
meets the main requirements of the Combined Code for a Company
of Carr’s size.
The board are responsible for assessing the Group’s internal
financial controls and meet with the external auditors as appropriate.
The external auditors have the opportunity for direct access to the
Committee without the executive Directors being present.
The Committee reviews the Group’s accounting policies and internal
reports on accounting and internal financial control matters together
with reports from the external auditors. The Audit Committee has
overall responsibility for monitoring the integrity of financial
statements and related announcements and for all aspects of
internal control and meets at least two times a year, which involve a
review of the Group’s interim and full year statements. The Audit
Committee is also responsible for recommendations for the
appointment, reappointment or removal of the external auditors and
for reviewing their effectiveness. It also approves the terms of
engagement and remuneration and monitors their independence
including the nature and levels of non-audit services.
The Chairman of the Audit Committee will be available at the Annual
General Meeting to respond to any shareholder questions that might
be raised on the Committee’s activities. 17
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Audit Remuneration
Board Committee Committee
No. of meetings 9 2 3
W R Inglewood 9 2 3
C N C Holmes 9 — —
R C Wood 8 — —
A R Heygate 8 2 3
A G M Wannop 9 2 3
MEETINGS ATTENDANCE
Details of the number of meetings and members’ attendance at, the Board, Audit and Remuneration Committees during the period are set
out in the table below.
Remuneration Committee
The Remuneration Committee currently comprises W R Inglewood
(Chairman), A R Heygate and A G M Wannop. It is a requirement of
the Combined Code that the Remuneration Committee should, in
the case of smaller companies, consist of at least two members who
are considered by the Combined Code to be independent. The
Company has complied with this. The Board is confident that the
Company complies with the requirements of the Combined Code in
terms of the required number of independent Directors for a
Company of Carr’s size. C N C Holmes, Chief Executive, attends
meetings of the Remuneration Committee by invitation and in an
advisory capacity. No Director attends any part of a meeting at
which his own remuneration is discussed. The Chairman and the
executive Directors determine the remuneration of the other non-
executive Directors.
The Committee recommends to the Board the policy for executive
remuneration and determines, on behalf of the Board, the other
terms and conditions of service for each executive Director. It
determines appropriate performance conditions for the annual cash
bonus and deferred bonus scheme and approves awards and the
issue of options in accordance with the terms of those schemes.
The executive directors’ contract periods are two years and the
Board has not set an objective on the reduction of these contract
periods to one year or less as it feels that this is the minimum
appropriate to retain the services of key executives with significant
knowledge of the business in which the Group trades. The
Remuneration Committee also monitors the level and structure of
remuneration of senior management below that of main board
Director. The Remuneration Committee has access to advice from
the Company Secretary and to detailed analysis of executive
remuneration in comparable companies. Details of the Committee’s
current remuneration policies are given in the Directors’
Remuneration Report on pages 20 to 23. 
The Chairman of the Remuneration Committee attends the Annual
General Meeting to respond to any shareholder questions that might
be raised on the Committee’s activities.
RELATIONS WITH SHAREHOLDERS
The Board recognises the importance of good communications with
all shareholders. The Company maintains dialogue with institutional
shareholders and analysts, and general presentations are made
when financial results are announced. Shareholders have access to
the Company’s website at www.carrs-milling.com.
The Annual General Meeting is the principal forum for all the
directors to engage in dialogue with private investors. All
shareholders are given the opportunity to raise questions at the
meeting. The Company aims to send notices of Annual General
Meetings to shareholders at least 20 working days before the
meeting, as required by the Combined Code, and it is the
Company’s practice to indicate the proxy voting results on all
resolutions at the meetings.
GOING CONCERN
The Directors have prepared the accounts on a going concern
basis, having satisfied themselves from a review of internal budgets
and forecasts and current bank facilities that the Group has
adequate resources to continue in operational existence for the
foreseeable future.
INTERNAL CONTROL
The Board of Directors has overall responsibility for the Group’s
systems of internal control, including financial, operational and
compliance controls and risk management, which safeguards the
shareholders’ investment and the Group’s assets, and for reviewing
its effectiveness. Such a system can only provide reasonable and
not absolute assurance against material misstatement or loss, as it is
designed to manage rather than eliminate the risk of failure to
achieve business objectives.
The Group operates within a clearly defined organisational structure
with established responsibilities, authorities and reporting lines to the
Board. The organisational structure has been designed in order to
plan, execute, monitor and control the Group’s objectives effectively
and to ensure that internal control becomes embedded in the
operations. The Board confirms that the key on-going processes and 18
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Corporate Governance continued
features of the Group’s internal risk based control system, which
accord with the Turnbull guidance, have been fully operative and up
to the date of the Annual Report being approved. These include: a
process to identify and evaluate business risk; a strong control
environment; an information and communication process; a
monitoring system and a regular Board review for effectiveness. The
Finance Director and Group Financial Accountant are responsible
for overseeing the Group’s internal controls. 
The Group does not have an internal auditor as the Board consider
that the Group has not yet reached a size where a separate internal
audit function would be an appropriate or cost effective method of
ensuring compliance with Group policies, and therefore does not
currently propose to introduce a Group internal audit function. This
area will be kept under review as part of the Board’s assessment of
the Group’s systems of internal control.
The management of the Group’s businesses identified the key
business risks within their operations, considered the financial
implications and assessed the effectiveness of the control processes
in place to mitigate these risks. The Board reviewed a summary of
the findings and this, along with direct involvement in the strategies
of the businesses, investment appraisal and budgeting process,
enabled the Board to report on the effectiveness of internal control.
AUDITOR INDEPENDENCE
The Board is satisfied that PricewaterhouseCoopers LLP has
adequate policies and safeguards in place to ensure that auditor
objectivity and independence is maintained. The Company meets its
obligations for maintaining the appropriate relationship with the
external auditors through the Audit Committee whose terms of
reference include an obligation to consider and keep under review
the degree of work undertaken by the external auditors, other than
the statutory audit, to ensure such objectivity and independence is
safeguarded.
COMPLIANCE WITH THE REVISED COMBINED CODE
The Directors consider that the Company has, during the period
ended 2 September 2006, complied with the requirements of the
revised Combined Code other than as set out below.
• bonuses and benefits in kind paid to executive directors are
pensionable (Sch. A.6)
• the directors’ contract periods are two years (B.1.6)
• there are no specific provisions for compensation on early
termination (B.1.5)
• the Board did not have in place during the period a formal and
rigorous process of evaluation of its own performance and that
of its committees (A.6.1). Rigorous but informal evaluation has
historically been carried out by the Chairman and Chief
Executive, an evaluation of the performance of the individual
directors has also been carried out by the Remuneration
Committee
• there is no separate Nominations Committee (A.4.1) to assess
and recommend new directors. Instead the Board as a whole
considers these areas following initial scrutiny and
recommendations by the Chief Executive and Chairman
• there has been no formal review by the Audit Committee of the
arrangements by which staff of the Group may, in confidence,
raise concerns about possible improprieties in matters of
financial reporting or other matters (C.3.4). A review has been
undertaken and a procedure is to be issued.
By order of the Board
Ronald C Wood
Secretary
Carlisle
CA3 9BA
21 November 2006 19
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
We have audited the group and parent company financial statements
(the ‘‘financial statements’’) of Carr’s Milling Industries PLC for the
period ended 2 September 2006 which comprise the Consolidated
Income Statement, the Consolidated and Parent Company
Statements of Recognised Income and Expense, the Consolidated
and Parent Company Balance Sheets, the Consolidated and Parent
Company Cash Flow Statements, the principal accounting policies
and the related notes. These financial statements have been
prepared under the accounting policies set out therein. We have
also audited the information in the Directors’ Remuneration Report
that is described as having been audited.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND
AUDITORS
The directors’ responsibilities for preparing the Annual Report, the
Directors’ Remuneration Report and the financial statements in
accordance with applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union are set out in
the Statement of Directors’ Responsibilities.
Our responsibility is to audit the financial statements and the part of
the Directors’ Remuneration Report to be audited in accordance
with relevant legal and regulatory requirements and International
Standards on Auditing (UK and Ireland). This report, including the
opinion, has been prepared for and only for the company’s members
as a body in accordance with Section 235 of the Companies Act
1985 and for no other purpose. We do not, in giving this opinion,
accept or assume responsibility for any other purpose or to any other
person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
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 to be audited have
been properly prepared in accordance with the Companies Act
1985 and Article 4 of the IAS Regulation. We report to you whether
in our opinion the information given in the Directors’ Report is
consistent with the financial statements. We also report to you if, in
our opinion, 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 regarding directors’
remuneration and other transactions is not disclosed.
We review whether the Corporate Governance Statement reflects
the company’s compliance with the nine provisions of the 2003 FRC
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 other information contained in the Annual Report and
consider whether it is consistent with the audited financial
statements. The other information comprises only the financial
highlights, the Chief Executive’s Review, the Chairman’s Statement,
the Operating and Financial Review, the Directors’ Report, the
unaudited part of the Directors’ Remuneration Report and the
Corporate Governance Statement. We consider the implications for
our report if we become aware of any apparent misstatements or
material inconsistencies with the financial statements. Our
responsibilities do not extend to any other information.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with International Standards
on Auditing (UK and Ireland) 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 to be audited. It
also includes an assessment of the significant estimates and
judgments made by the directors in the preparation of the financial
statements, and of whether the accounting policies are appropriate
to the group’s and company’s circumstances, 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 to be 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 to be audited.
OPINION
In our opinion:
• the group financial statements give a true and fair view, in
accordance with IFRSs as adopted by the European Union, of
the state of the group’s affairs as at 2 September 2006 and of
its profit and cash flows for the period then ended;
• the parent company financial statements give a true and fair
view, in accordance with IFRSs as adopted by the European
Union as applied in accordance with the provisions of the
Companies Act 1985, of the state of the parent company’s
affairs as at 2 September 2006 and cash flows for the period
then ended;
• the financial statements and the part of the Directors’
Remuneration Report to be audited have been properly
prepared in accordance with the Companies Act 1985 and
Article 4 of the IAS Regulation; and
• the information given in the Directors’ Report is consistent with
the financial statements.
PricewaterhouseCoopers LLP
Chartered Accountants and Registered Auditors
Newcastle upon Tyne
21 November 2006
Independent Auditors’ Report 
to the Members of Carr’s Milling Industries PLC 20
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Directors’ Remuneration Report
REMUNERATION COMMITTEE
All matters relating to executive remuneration are determined by the
Remuneration Committee, a sub-committee of the Board of
Directors. The Remuneration Committee, comprises the Chairman,
A R Heygate and A G M Wannop. As appropriate, the Committee
may invite the Chief Executive Officer to participate in some of its
discussions. The Committee is responsible for determining the terms
and conditions of employment of executive directors. It is also
responsible for considering management recommendations for
remuneration and employment terms of the Company’s senior staff,
including incentive arrangements for bonus payments and grant of
share options.
The remuneration of the non-executive directors is determined by the
Chairman and the Chief Executive Officer and reflects the time,
commitment and responsibility of their roles.
The Remuneration Committee’s decisions are made on the basis of
rewarding individuals for the nature of jobs they undertake and their
performance therein. Proper regard is given to the need to attract
and retain high quality, well-motivated staff at all levels and to the
remuneration being paid by similar companies.
DETAILS OF REMUNERATION
The remuneration of directors is set out in detail on page 22. The
Company’s Remuneration Committee decides the remuneration
policy that applies to executive directors and the Group’s other
senior management.
Each of the executive directors has a two-year rolling contract. The
most recent executed contracts for the executive directors were
dated 10 June 2002. In the event of termination the executive
directors would be entitled to loss of salary, benefits and
pensionable service for the notice periods. The contracts of non-
executive directors of the Company are fixed for two years and the
most recent executed contracts for W R Inglewood, A R Heygate
and A G M Wannop were 1 September 2005.
The Company’s policy is that a proportion of the remuneration of the
executive directors should be performance related. As described
opposite, executive directors may earn annual incentive payments
together with the benefits of participation in Share Option Schemes.
CONSTITUENT ELEMENTS OF REMUNERATION PACKAGE
In applying the above principles to the determination of executive
director remuneration, the Remuneration Committee gives
consideration to several components which together comprise the
total remuneration package; these consist of the following:
• Basic Salary is determined by the Committee at the beginning
of each year. In deciding appropriate levels, the Committee
considers the position in the Group, personal and Company
performance and relies on information on a comparable group
of companies. Basic salaries were last reviewed in August
2006, with increases taking effect from 1 September 2006. The
next review will take place in August 2007. Executive directors’
contracts of service, which include details of remuneration, will
be available for inspection at the Annual General Meeting.
• Annual Bonus is paid up to a maximum of 50% of Basic Salary
on achievement of profit targets and is pensionable.
• Benefits in Kind comprise private healthcare which is
pensionable and critical illness/death in service cover. 
• Pension Contribution. The Company’s defined benefit pension
scheme aims at producing a pension of two-thirds final
pensionable salary at normal retirement age of 60. The two
executive directors are members of the pension scheme and
can opt, after age 50, to retire early without actuarial reduction
to their pension. Non-executive directors do not participate in
the scheme. Pension entitlement is calculated on the salary
element of remuneration plus the average of the last three
years’ bonuses and taxable benefits in kind. The executive
directors’ pension information is given in the section subject to
audit. 21
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
The pension entitlement is that which would be paid annually on
retirement based on service to the end of the period. Members of
the scheme have the option to pay additional voluntary contributions,
neither the contributions nor the resulting benefits are included in the
table on page 22.
The normal retirement age is 60 with a two-thirds surviving spouse’s
pension. On death in service a lump sum equal to four times
pensionable salary is payable together with a surviving spouse’s
pension of two-thirds of the director’s prospective pension. For
death after retirement a spouse’s pension of two-thirds of the
member’s pension is payable plus the balance of a five year
guarantee if applicable.
Pensions in payment are guaranteed to be increased annually by
5% or the increase in the Index of Retail Prices (RPI) if less.
Up to 5 April 2006 the Group had established for C N C Holmes a
funded unapproved retirement benefit scheme (FURBS) for the
element of gross salary in excess of the Inland Revenue limits. 
The enactment of the Pensions Act 2004 removes the need to
operate a FURBS. C N C Holmes’ pension arrangement is now
funded by the Group’s main pension scheme, the Carr’s Milling
Industries Pension Scheme 1993.
• Share Options. Salary and a bonus scheme are intended as the
most significant part of Directors’ remuneration; in addition,
executive share options can be proposed by the Remuneration
Committee and are granted periodically to promote the
involvement of senior management in the longer term success of
the Company. Options can only be exercised if certain
performance criteria are achieved by the Company. These
criteria are based on the growth in the Company’s adjusted
earnings per share in excess of the growth in the retail price
index over the performance period by an average 2% per
annum for each of the three years in the performance period.
PERFORMANCE GRAPH
The following graph illustrates the
Company’s total shareholder return
performance since 31 August 2001
relative to the FTSE All-share index.
The Company considers that the
FTSE All-share index to be the most
appropriate comparator group as it is
a broad index and reflects the
Company’s broad range of activities.
2002 2003 2004 2005 2006
Carr’s Milling Industries
FTSE All-Share Price Index
Source: Datastream
600
800
700
500
400
300
200
100
0 22
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Directors’ Remuneration Report continued 
DIRECTORS’ REMUNERATION
2006 2005
Gain on Gain on
Fees & Total Total 2006 2005 Exercise Exercise
Basic Annual Emoluments Emoluments Pension Pension of Share of Share
Salary Bonus Benefits 2006 2005 Contributions Contributions Options Options
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Executive directors
C N C Holmes 187 93 1 281 251 90 75 — 52
R C Wood 163 81 1 245 215 57 49 — 52
Non-executive directors
D A Newton — — — — 3 — — — —
W R Inglewood 40 — — 40 17 — — — —
A R Heygate 20 — — 20 17 — — — —
A G M Wannop 20 — — 20 — — — — —
430 174 2 606 503 147 124 — 104
NON-EXECUTIVE REMUNERATION
The remuneration of the non-executive directors is agreed by the Group Board taking into account a number of factors pertinent to their
position and role as non-executive directors.
Information subject to audit
EXECUTIVE DIRECTORS’ PENSION INFORMATION
C N C Holmes R C Wood
Age at 2 September 2006 54 58
£’000 £’000
Directors’ contributions during the period 1 15
Increase in accrued pension entitlement for the period
excluding inflation 71 19
including inflation 73 22
Total accrued pension entitlement 
At 2 September 2006 138 133
At 3 September 2005 120 111
Transfer value of pension
At 2 September 2006 2,237 2,614
At 3 September 2005 1,820 2,013
Increase in transfer value less contributions made by directors 1,203 586
Transfer value of the increase in accrued benefits less contributions made by directors 307 419
Notes
(a) The actuarial assumptions used for calculating transfer values for all members, including the directors, have been
amended since the 2005 disclosure. This was necessary to ensure that transfer values (i.e. the cash equivalent value of
the accrued benefits) account for recent improvements in life expectancy and the reduction in the long-term yields
expected on assets. As a result there is a larger increase in the transfer values than would otherwise be expected.
(b) C N C Holmes joined the approved pension scheme after 1 June 1989 and the part of his benefit promise that was
funded through this scheme was therefore previously restricted by the statutory Salary Cap (which was £105,600 for the
2005/06 tax year). The Salary Cap was lifted on 6 April 2006 as a consequence of tax simplification and the whole of
the benefit promise is therefore now provided through the approved scheme. The transfer value as at 3 September 2005
included that part of the unapproved benefit that was funded within a separate Funded Unapproved Retirement Benefit
Scheme (“FURBS”). 23
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
At 3 Granted At 2 Earliest date
September during September Exercise Date of from which Expiry
2005 period 2006 price Grant exercisable date
C N C Holmes 40,000 — 40,000 161.0p 1 May 2002 May 2005 April 2009
18,500 — 18,500 161.0p 1 May 2002 May 2005 April 2012
— 6,000 6,000 502.3p 20 February 2006 February 2009 February 2016
58,500 6,000 64,500
R C Wood 50,000 — 50,000 161.0p 1 May 2002 May 2005 April 2009
18,500 — 18,500 161.0p 1 May 2002 May 2005 April 2012
— 6,000 6,000 502.3p 20 February 2006 February 2009 February 2016
68,500 6,000 74,500
The middle market closing price of the shares at 2 September 2006 was 568.0p (2 September 2005: 558.5p) and the range
throughout the period was 456.5p to 568.5p.
SHARESAVE SCHEME 2006
At Granted At Average Exercise
3 September during 2 September exercise date
2005 period 2006 price
C N C Holmes — 1,951 1,951 479.0p May 2009
R C Wood — 1,951 1,951 479.0p May 2009
The Directors are eligible, as are other employees of the Group, to participate in the Sharesave scheme, which by its nature
does not have performance conditions.
On behalf of the Board
W R Inglewood
Chairman of the Remuneration Committee
21 November 2006
SHARE OPTIONS GRANTED TO DIRECTORS
The Company operates an Inland Revenue approved and an
unapproved share option scheme to reward employees’
performance and to incentivise at senior levels. Exercise is subject
to performance conditions.
For all options granted the exercise criterion has been that earnings
should achieve growth which exceeds the percentage growth in the
Retail Price Index by 2% or more. The rules of the schemes
conform to institutional investor guidelines.
The performance criterion, which applies to the executive directors
to whom options have been granted under the Schemes, was
chosen as it requires significant improvement in financial
performance. No options have been granted at a discount to the
market price at the date of their grant.
Options to acquire shares in the Company, granted to directors
under the Scheme but not exercised, as at 2 September 2006 are: 24
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Consolidated Income Statement
for the period ended 2 September 2006
52 week 53 week
period period
2006 2005
Notes £’000 £’000
2,3 Revenue 242,576 192,124 
3 Cost of sales (206,658) (161,296)
3 Gross profit 35,918 30,828 
3 Net operating expenses (28,802) (18,564)
3,4 Group operating profit 7,116 12,264 
Analysed as:
Operating profit before non-recurring items and amortisation 7,987 7,975
6 Non-recurring items and amortisation (871) 4,289
Group operating profit 7,116 12,264
8 Net finance costs (1,011) (1,198)
5,6 Share of post-tax profit/(loss) in associate and joint ventures 218 (697)
2 Profit before taxation 6,323 10,369
2,9 Taxation (1,989) (2,557)
Profit for the period 4,334 7,812
Profit attributable to minority interest 139 329
Profit attributable to equity shareholders 4,195 7,483
4,334 7,812
Earnings per share (pence)
11 Basic 51.0 92.1
11 Diluted 50.4 90.3
All of the above are derived from continuing operations. 25
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Group Company
52 week 53 week 52 week 53 week
period period period period
2006 2005 2006 2005
Notes £’000 £’000 £’000 £’000
Foreign exchange translation differences arising on 
30 translation of overseas subsidiaries (150) (80) — —
Actuarial (losses)/gains on retirement benefit obligation:
28 - Group (3,900) (1,543) (3,900) (1,543)
28 - Share of associate 206 (944) — —
Taxation credit/(charge) on actuarial movement 
on retirement benefit obligation:
19 - Group 1,170 463 1,170 463
- Share of associate (62) 283 — —
Net expenses recognised directly in equity (2,736) (1,821) (2,730) (1,080)
Profit for the period 4,334 7,812 5,536 2,105
30 Total recognised income for the period 1,598 5,991  2,806 1,025 
30 Attributable to minority interest 139 329 — —
30 Attributable to equity shareholders 1,459 5,662 2,806 1,025
1,598 5,991 2,806 1,025
Consolidated and Company Statement 
of Recognised Income and Expense 
for the period ended 2 September 2006 26
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Consolidated and Company Balance Sheet
As at 2 September 2006
Group Company
2006 2005 2006 2005
Notes £’000 £’000 £’000 £’000
Assets
Non-current assets
12 Goodwill 235 400 — —
12 Other intangible assets 802 1,738 — —
13 Property, plant and equipment 29,172 28,838 — —
14 Investment property 794 822 — —
15,18 Investment in subsidiary undertakings — — 12,864 13,072
15,16 Investment in associate 982 445 1,470 1,470
15,17 Interest in joint ventures 704 172 272 172
15 Other investments 254 255 201 202
Financial assets
27 - Derivative financial instruments 37 — 31 —
21 - Non-current receivables 208 223 — —
19 Deferred tax assets 5,162 3,962 4,761 3,672
38,350 36,855 19,599 18,588
Current assets
20 Inventories 11,944 12,947 — —
21 Trade and other receivables 33,546 35,197 14,325 14,048 
22 Current tax assets 1 87  900 602 
23 Cash and cash equivalents 2,292 3,149 — —
47,783 51,380 15,225 14,650 
Total assets 86,133 88,235  34,824 33,238 
Liabilities
Current liabilities
Financial liabilities
26 - Borrowings (9,682) (10,666) (4,251) (7,214)
27 - Derivative financial instruments (27) — (4) —
24 Trade and other payables (25,387) (29,318) (1,025) (665)
25 Current tax liabilities (1,324) (1,581) — —
(36,420) (41,565) (5,280) (7,879)
Non-current liabilities
Financial liabilities
26 - Borrowings (6,512) (7,399) (5,610) (6,503)
27 - Derivative financial instruments — (106) — (106)
28 Retirement benefit obligation (15,796) (12,119) (15,796) (12,119)
19 Deferred tax liabilities (3,600) (3,854) — —
24 Other non-current liabilities (1,524) (1,287) — —
(27,432) (24,765) (21,406) (18,728)
Total liabilities (63,852) (66,330) (26,686) (26,607)
Net assets 22,281 21,905  8,138 6,631 
Shareholders' equity
29 Ordinary shares 2,058 2,053 2,058 2,053 
30 Share premium 5,004 4,977 5,004 4,977 
30,31 Equity compensation reserve 22 — 27 —
30 Foreign exchange reserve (230) (80) — —
30 Other reserve 1,601 1,632 — —
30 Retained earnings 11,895 11,613 1,049 (399)
30 Total shareholders' equity 20,350 20,195 8,138 6,631
30 Minority interests in equity 1,931 1,710 — —
30 Total equity 22,281 21,905  8,138 6,631 
The financial statements set out on pages 24 to 72 were approved by the Board on 21 November 2006 and signed on its behalf by:
Christopher N C Holmes
Ronald C Wood 27
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Group Company
52 week 53 week 52 week 53 week
period period period period
2006 2005 2006 2005
Notes £’000 £’000 £’000 £’000
Cash flows from operating activities
33 Cash generated from/(used by) operations 11,069 6,663 (332) 363
Interest received 379 95 548 280
Interest paid (1,755) (1,195) (747) (641)
Tax (paid)/received (2,454) (1,855) (58) 44
Net cash generated from/(used by) operating activities 7,239 3,708  (589) 46
Cash flows from investing activities
Acquisition of subsidiaries (net of cash acquired) - group (3) (10,256) — —
Investment in subsidiaries - company — — — (5,527)
Proceeds from redemption of preference shares in subsidiaries — — 233 —
Investment in joint ventures (710) (172) (100) (172)
Dividends received from subsidiaries — — 3,629 2,152
Payment of loans to subsidiaries — — — (5,467)
Payment of loans to joint ventures (280) — (205) —
Purchase of intangible assets (9) — — —
Proceeds from sale of property, plant and equipment 192 3,114  — —
Purchase of property, plant and equipment (2,901) (3,396) — —
Proceeds from sale of investments 1 — 1 —
Purchase of investments — (2) — —
Net cash (used by)/generated from investing activities (3,710) (10,712) 3,558 (9,014)
Cash flows from financing activities
Net proceeds from issue of ordinary share capital 32 260 32 260
Net proceeds from issue of new bank loans and other borrowings — 13,668  — 6,965
Net proceeds from loans from subsidiaries — — 1,779 2,776
Finance lease principal repayments (1,047) (804) — —
Repayment of borrowings (2,487) (1,375) (2,550) (1,375)
Dividends paid to shareholders (1,358) (1,136) (1,358) (1,136)
Net cash (used by)/generated from financing activities (4,860) 10,613 (2,097) 7,490
Effects of exchange rate changes (88) (28) (25) 25
Net (decrease)/increase in cash and cash equivalents (1,419) 3,581 847 (1,453)
23 Cash and cash equivalents at beginning of the period 2,503 (1,078) (1,730) (277)
23 Cash and cash equivalents at end of the period 1,084 2,503 (883) (1,730)
Consolidated and Company Cash Flow Statement
For the period ended 2 September 2006 28
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Principal Accounting Policies
BASIS OF ACCOUNTING
The consolidated financial statements are prepared in accordance
with International Financial Reporting Standards (IFRS) and IFRIC
interpretations by the European Union (EU) and with those parts of
the Companies Act 1985 applicable to companies reporting under
IFRS.
The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions that affect the reported amounts of assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these
estimates are based on management’s best knowledge of the
amount, event or actions, actual results ultimately may differ from
those estimates.
The consolidated financial statements are prepared under historic
cost other than certain assets, which are deemed cost under the
transition rules, derivative financial instruments and share based
payments, which are included at fair value.
The consolidated financial statements for the period ended 2
September 2006 are the first financial statements to be prepared in
accordance with IFRS. IFRS 1 details the requirements and
guidance to be used by first time adopters of IFRS in preparing their
first IFRS accounts. IFRS 1 requires the Group to select accounting
policies at 4 September 2005 and to apply these policies
retrospectively from 29 August 2004, the date of transition.
IFRS 1 provides optional exemptions to first time adopters. The
exemptions adopted by the Group are as follows:
IFRS 3, Business combinations
Business combinations that took place prior to the date of transition
to IFRS have not been restated.
IAS 16, Property, plant and equipment
The Group has opted to use previous revaluations of property made
under UK GAAP as deemed cost.
IAS 19, Employee benefits
The Group has opted to recognise in equity all cumulative actuarial
gains and losses at the date of transition. The Group has also opted
to account for pension benefits under the amendment to IAS 19
issued in December 2004 in which all actuarial gains and losses are
recognised in the Statement of Recognised Income and Expense
(SORIE). This is consistent with the UK GAAP requirement under
FRS 17 ‘Retirement benefits’, the effect of which has been
disclosed previously in the Annual Report.
IAS 21, The effects of changes in foreign exchange rates
IFRS 1 permits an exemption where the Group’s cumulative foreign
exchange translation differences are set to zero at the date of
transition. The Group has adopted this exemption. On subsequent
disposal of an overseas subsidiary, exchange differences arising
after the date of transition will be recycled through the income
statement.
IFRS 2, Share-based payments
IFRS 1 permits a company to apply IFRS 2 only to equity-settled
share-based awards granted on or after 7 November 2002, which
have not vested by the later of the date of transition to IFRS (29
August 2004) and 1 January 2005. The Group has taken advantage
of this exemption.
Tables setting out the reconciliation of opening UK GAAP balances
to IFRS are provided in note 40.
BASIS OF CONSOLIDATION
The consolidated financial statements comprise Carr’s Milling
Industries PLC and all its subsidiaries, together with the Group’s
share of the results of its associate and joint ventures. The financial
statements of the subsidiaries, associate and joint ventures are
prepared as of the same reporting date using consistent accounting
policies. Group inter-company balances and transactions, including
any unrealised profits arising from Group inter-company
transactions, are eliminated in full.
Results of subsidiary undertakings acquired during the previous
financial period were included in the financial statements from the
effective date of control. The separable net assets, both tangible and
intangible, of the acquired subsidiary undertakings were
incorporated into the financial statements on the basis of the fair
value as at the effective date of control.
Subsidiaries are entities where the Group has the power to govern
the financial and operating policies, generally accompanied by a
share of more than 50% of the voting rights. Subsidiaries are
consolidated from the date on which control is transferred to the
Group and are included until the date on which the Group ceases to
control them. Associates are entities over which the Group has
significant influence but not control, generally accompanied by a
share of between 20% and 50% of the voting rights. Joint ventures
are entities over which the Group has joint control, established by
contractual agreement. Investments in associates and joint ventures
are accounted for using the equity method. If the Group’s share of
losses in an associate or joint venture equals or exceeds its
investment in the associate or joint venture, the Group does not
recognise further losses, unless it has incurred obligations or made
payments on behalf of the associate or joint venture.
All business combinations are accounted for by applying the
purchase method. The cost of a business combination is measured
as the aggregate of the fair values, at the acquisition date, of the
assets given, liabilities incurred or assumed, and equity instruments
issued by the Group, together with any costs directly attributable to
the combination. The identifiable assets, liabilities and contingent
liabilities of the acquiree are measured initially at fair value at the
acquisition date, irrespective of the extent of any minority interest.
The excess of the cost of the business combination over the
Group’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities is recognised as goodwill. 29
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
CURRENCY TRANSLATION
The financial statements for the Group’s subsidiaries, associate and
joint ventures are prepared using their functional currency. The
functional currency is the currency of the primary economic
environment in which an entity operates. The presentation currency
of the Group and functional currency of Carr’s Milling Industries
PLC is Sterling.
Foreign currency transactions are translated into the functional
currency using exchange rates prevailing at the dates of the
transactions. Exchange differences resulting from the settlement of
such transactions and from the translation, at exchange rates ruling
at the balance sheet date, of monetary assets and liabilities
denominated in currencies other than the functional currency are
recognised in the consolidated income statement.
The balance sheets of foreign operations are translated into sterling
using the exchange rate at the balance sheet date and the income
statements are translated into sterling using the average exchange
rate for the period. Where this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, the exchange rate on the transaction date is used.
Exchange differences arising from 29 August 2004 are recognised
as a separate component of shareholders’ equity. On disposal of a
foreign operation any cumulative exchange differences held in
shareholders’ equity are transferred to the consolidated income
statement.
REVENUE RECOGNITION
Revenue from the sale of goods or services is measured at the fair
value of the consideration, net of rebates and excluding value added
tax. Revenue from the sale of goods or services is recognised when
the Group has transferred the significant risks and rewards of
ownership of the goods to the buyer, when the amount of revenue
can be measured reliably and when it is probable that the economic
benefits associated with the transaction will flow to the Group.
In respect of long-term contracts, revenue is calculated on the basis
of the stage of completion and the total sales value of each contract.
RETIREMENT BENEFIT OBLIGATIONS
The Group participates in two defined benefit pension schemes,
Carr’s Milling Industries Pension Scheme 1993 and Carrs Billington
Agriculture Pension Scheme. The Group also offers various defined
contribution schemes to its employees.
The assets of the above named schemes are held separately from
those of the Group and are invested with independent investment
managers.
Contributions to defined contribution schemes are charged to the
consolidated income statement in the period to which they relate.
The liability recognised in the consolidated balance sheet at the
period end in respect of defined benefit pension schemes is the
present value of the defined benefit obligation and future
administration costs at the balance sheet date less the fair value of
scheme assets. Independent actuaries calculate the defined benefit
obligation annually. The present value of the defined benefit
obligation is determined by discounting the estimated future cash
outflows using interest rates of high-quality corporate bonds that are
denominated in the currency in which the benefits will be paid, and
that have terms to maturity approximating to the terms of the related
pension liability.
The current service costs, past service costs and gains and losses
on settlements and curtailments are included in operating profit in
the consolidated income statement.
A charge is made within operating costs representing the expected
increase in the liabilities of the pension schemes during the period.
This arises from the liabilities of the schemes being one year closer
to payment.
A credit representing the expected return on the assets of the
pension schemes during the period is netted against the above
charge within operating costs. This is based on the market value of
the assets of the schemes at the start of the financial period.
Actuarial gains and losses are recognised in the consolidated
statement of recognised income and expense. The pension
schemes’ deficits or surpluses, to the extent that they are
considered recoverable, are recognised in full on the consolidated
balance sheet.
SHARE BASED PAYMENTS
The Group issues equity-settled share-based payments to certain
employees. Equity-settled share-based payments are measured at
fair value at the date of the grant. The fair value determined at the
grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the
Group’s estimate of shares that will eventually vest.
Fair value is measured by use of a valuation model. The expected
life used in the model has been adjusted, based on management’s
best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations.
INTEREST
Interest is recognised in the consolidated income statement on an
accruals basis using the effective interest method. 
SEGMENTAL REPORTING
The Group’s primary reporting format is business segments and its
secondary format is geographical segments. A business segment is
a component of the Group that is engaged in providing a group of
related products and is subject to risks and returns that are different
from those of other business segments. A geographical segment is
a component of the Group that operates within a particular
economic environment and this is subject to risks and returns that
are materially different from those of components operating in other
economic environments. 30
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Principal Accounting Policies continued
NON-RECURRING ITEMS AND AMORTISATION
Non-recurring items and amortisation that are material by size and/or
by nature are presented within their relevant income statement
category. Items that management consider fall into this category are
disclosed on the face of the consolidated income statement and
within a note to the financial statements. The separate disclosure of
non-recurring items and amortisation helps provide a better
indication of the Group’s underlying business performance. Events
which may give rise to non-recurring items and amortisation include
gains or losses on the disposal of businesses, the restructuring of
businesses, the integration of new businesses, asset impairments,
gains and losses on the disposal of property, plant and equipment,
amortisation of intangible assets, the recognition of deferred assets
on prior year business combinations and exchange gains and losses
on inter-company funding.
GOODWILL
Goodwill arising on consolidation represents the excess of the cost
of acquisition over the fair value of the identifiable assets, liabilities
and contingent liabilities of the acquired entity at the date of the
acquisition. 
At the date of acquisition, goodwill is allocated to cash generating
units for the purpose of impairment testing.
Goodwill is recognised as an asset and assessed for impairment
annually. Any impairment is recognised immediately in the income
statement. Once recognised, an impairment of goodwill is not
reversed under any circumstance.
Negative goodwill resulting from business combinations is credited
to the consolidated income statement in the period of acquisition.
Goodwill written off to reserves under UK GAAP prior to 31 August
1998 has not been reinstated and would not form part of the gain or
loss on the disposal of a business.
OTHER INTANGIBLE ASSETS
Other intangible assets are carried at cost less accumulated
amortisation. Amortisation commences when assets are available for
use and is calculated on a straight-line basis over their expected
useful lives which are generally as follows:
Customer relationships 3 - 5 years
Brands 20 years
Know-how 5 years
Patents and trademarks over contractual life
The cost of intangible assets acquired in a business combination is
the fair value at the acquisition date. The cost of separately acquired
intangible assets comprises the purchase price and any directly
attributable costs of preparing the assets for use.
All research costs are recognised in the consolidated income
statement as incurred. Development costs are recognised as an
asset only to the extent that specific recognition criteria, as set out in
IAS38 ‘Intangible assets’, relevant to the proposed application are
met and the amount recognised is recoverable through future
economic benefits.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is carried at cost less accumulated
depreciation and accumulated impairment losses. Cost comprises
purchase price and directly attributable costs.
Freehold land and assets under construction are not depreciated.
For all other property, plant and equipment, depreciation is
calculated on a straight-line basis to allocate cost less residual
values of the assets over their estimated useful lives as follows:
Freehold buildings up to 50 years
Leasehold buildings shorter of 50 years or lease term
Plant 5 to 20 years
Computer hardware/software 3 to 5 years
Vehicles 4 to 10 years
Fixtures and fittings 3 to 5 years
Residual values and useful lives are reviewed at each financial
period-end.
The cost of maintenance, repairs and minor equipment is charged to
the income statement as incurred; the cost of major renovations and
improvements is capitalised.
INVESTMENT PROPERTY
Investment properties are properties held for long-term rental yields.
Investment properties are carried in the balance sheet at cost less
accumulated depreciation. Freehold land is not depreciated. For all
other investment property, depreciation is calculated on a straight-
line basis to allocate cost less residual values of the assets over
their estimated useful lives as follows:
Freehold buildings up to 50 years
The cost of maintenance, repairs and minor equipment is charged to
the income statement as incurred; the cost of major renovations and
improvements is capitalised.
IMPAIRMENT OF ASSETS
At each reporting date, the Group assesses whether there is any
indication that an asset may be impaired. Where an indicator of
impairment exists, the Group makes an estimate of recoverable
amount. Where the carrying amount of an asset exceeds its
recoverable amount the asset is written down to its recoverable
amount. Recoverable amount is the higher of fair value less costs to
sell and value in use and is deemed for an individual asset. If the
asset does not generate cash flows that are largely independent of
those from other assets or groups of assets, the recoverable amount
of the cash generating unit to which the asset belongs is
determined. Discount rates reflecting the asset specific risks and the
time value of money are used for the value in use calculation.
INVENTORIES
Inventories are stated at the lower of cost and net realisable value.
Cost comprises direct materials and, where applicable, direct labour
costs and those overheads that have been incurred in bringing the
inventories to their present location and condition. Where
appropriate, cost is calculated on a specific identification basis.
Otherwise inventories are valued using the first-in first-out method.
Contract work in progress is measured at the selling price of the
work performed at the balance sheet date. The selling price is 31
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
measured by reference to the stage of completion at the balance
sheet date and total expected income from the contract work. 
The stage of completion is determined as the proportion that
contract costs incurred for work performed to date bear to the total
estimated total contract costs. Amounts invoiced for work completed
are deducted from the selling price, while amounts invoiced in
excess of work completed are recognised as current liabilities.
Net realisable value represents the estimated selling price less all
estimated costs to completion and costs to be incurred in marketing,
selling and distribution.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purposes of the consolidated
cash flow statement comprise cash at bank and in hand, money
market deposits and other short term highly liquid investments with
original maturities of three months or less and bank overdrafts. Bank
overdrafts are presented in borrowings within current liabilities in the
consolidated balance sheet.
GRANTS
Grants received on capital expenditure are recorded as deferred
income and taken to the consolidated income statement in equal
annual instalments over the expected useful lives of the assets
concerned. 
Revenue grants and contributions are taken to the consolidated
income statement in the period to which they apply.
PROVISIONS
Provisions are recognised when a present legal or constructive
obligation exists, as a result of past events, where it is more likely
than not that an outflow of resources will be required to settle the
obligation and the amount can be reliably measured.
Provisions for restructuring are recognised for direct expenditure on
business reorganisations where plans are sufficiently detailed and
well advanced, and where appropriate communication to those
affected has been undertaken on or before the balance sheet date.
Provisions are discounted where the time value of money is
considered material.
LEASES
Leases are classified as finance leases at inception where
substantially all of the risks and rewards of ownership are
transferred to the Group. Assets classified as finance leases are
capitalised on the consolidated balance sheet and are depreciated
over the expected useful life of the asset. The interest element of the
rental obligations is charged to the consolidated income statement
over the period of the lease using the actuarial method.
Rentals paid under operating leases are charged to the consolidated
income statement on a straight-line basis over the term of the lease.
Leasehold land is normally classified as an operating lease. Payments
made to acquire leasehold land are included in prepayments at cost
and are amortised over the life of the lease. Any incentives to enter into
operating leases are recognised as a reduction of rental expense over
the lease term on a straight-line basis.
TAX
Deferred tax is provided in full, using the liability method, on
temporary differences arising between the tax base of assets and
liabilities and their carrying amounts in the consolidated financial
statements. Deferred tax arising from initial recognition of an asset
or liability in a transaction, other than a business combination, that at
the time of the transaction affects neither accounting nor taxable
profit or loss, is not recognised. Deferred tax is measured using tax
rates that have been enacted or substantively enacted by the
balance sheet date and are expected to apply when the asset is
realised or the liability is settled.
Deferred tax assets are recognised to the extent that it is probable
that future taxable profit will be available against which the
temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on
investments in subsidiaries, associates and joint ventures, except
where the Group is able to control the timing of the reversal of the
temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
Tax is recognised in the consolidated income statement, unless the
tax relates to items recognised directly in shareholders’ equity, in
which case the tax is recognised directly in shareholders’ equity
through the consolidated statement of recognised income and
expense.
DIVIDENDS
Final equity dividends to the shareholders of the Company are
recognised in the period that they are approved by the shareholders.
Interim equity dividends are recognised in the period that they are
paid.
FINANCIAL INSTRUMENTS
Financial assets and liabilities are recognised on the Group’s
consolidated balance sheet when the Group becomes a party to the
contractual provisions of the instrument.
Trade receivables
Trade receivables are recorded at their nominal amount less an
allowance for doubtful debts.
Investments
Investments are initially measured at cost, including transaction
costs. They are classified as either ‘available-for-sale’, ‘fair values
through profit or loss’ or ‘held to maturity’. Where securities are
designated as ‘at fair value through profit or loss’, gains and losses
arising from changes in fair value are included in net profit or loss
for the period. For ‘available-for-sale’ investments, gains or losses
arising from changes in fair value are recognised directly in equity,
until the security is disposed of or is determined to be impaired, at
which time the cumulative gain or loss previously recognised in
equity is included in the net profit or loss for the period.
Equity investments that do not have a quoted market price in an
active market and whose fair value cannot be reliably measured by
other means are held at cost. ‘Held-to-maturity’ investments are
measured at amortised cost using the effective interest method.  32
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Principal Accounting Policies continued 
Financial liability and equity
Financial liabilities and equity instruments are classified according to
the substance of the contractual arrangements entered into. An
equity instrument is any contract that evidences a residual interest in
the assets of the Group after deducting all of its liabilities.
Bank borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds
received, net of direct issue costs. Finance charges, including
premiums payable on settlement or redemption and direct issue
costs, are accounted for on an effective interest method and are
added to the carrying amount of the instrument to the extent that
they are not settled in the period in which they arise.
Trade payables
Trade payables are stated at their nominal value.
Equity instruments
Equity instruments issued by the Company are recorded at the
proceeds received, net of direct issue costs.
Derivative financial instruments and hedging activities
The Group primarily uses interest rate swaps, caps and collars and
forward foreign currency contracts to manage its exposures to
fluctuating interest and foreign exchange rates. These instruments
are initially recognised at fair value and are subsequently re-
measured at their fair value at each balance sheet date. The Group
does not designate derivatives as hedge instruments and therefore
does not adopt hedge accounting. As a result changes in the fair
value of derivative financial instruments are recognised in the
consolidated income statement as they arise.
The Group does not use derivatives to hedge balance sheet and
income statement translation exposures. Where appropriate,
borrowings are arranged in local currencies to provide a natural
hedge against overseas assets.
IFRS NOT YET APPLIED
The following standards and interpretations, which are in issue at the
balance sheet date but not yet effective, have not been applied in
these financial statements:
IFRS 7 “Financial instruments: Disclosures”, and related amendment
to IAS 1 on capital disclosures, which is effective for periods
commencing on or after 1 January 2007.
Amendment to IAS 39 and IFRS 4 “Financial guarantee contracts”,
which is effective for periods commencing on or after 1 January
2006.
SIGNIFICANT JUDGEMENTS, KEY ASSUMPTIONS AND
ESTIMATES
Application of certain Group accounting policies requires
management to make judgements, assumptions and estimates
concerning the future as detailed below.
Valuation of pension obligations
The deficit on the Group’s defined benefit pension scheme is
determined each year following advice from the Group’s actuary and
can fluctuate based on a number of external factors over which
management have no control. Such factors include:
Major assumptions as shown in the table in note 28; and
Actual returns on scheme assets compared to those predicted in the
previous scheme valuation.
Valuation of share-based payments
The fair value of share-based payments is determined using
valuation models and is charged to the income statement over the
vesting period.
The valuation models require certain assumptions to be made as
shown in the tables in note 31. Estimations of vesting and
satisfaction of performance criteria are required to determine fair
value.
Impairment of goodwill
The carrying value of goodwill must be assessed for impairment
annually. This requires an estimation of the value in use of the cash
generating units to which goodwill is allocated. Value in use is
dependent on estimations of future cash flows from the cash
generating unit and the use of an appropriate discount rate to
discount those cash flows to their present value.
No impairment has been identified in the period.
Provision for impairment of trade receivables
The financial statements include a provision for impairment of trade
receivables that is based on management’s estimation of
recoverability. There is a risk that the provision will not match the
trade receivables that ultimately prove to be irrecoverable. 33
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
1 The Company has taken advantage of the exemption, under section 230 of the Companies Act 1985, from presenting its own income
statement. The profit after tax for the period dealt with in the accounts of the Company was £5,536,000 (2005: £2,105,000).
2 SEGMENTAL REPORTING
Primary reporting format - business segments
The segment results for the period ended 2 September 2006 are as follows:
Agriculture Food Engineering Other Group
£’000 £’000 £’000 £’000 £’000
Total gross segment revenue 174,793 55,703 12,345 213 243,054
Inter-segment revenue (301) (3) (174) — (478)
Revenue 174,492 55,700 12,171 213 242,576
Operating profit before retirement benefit charge* 4,954 2,506 1,055 (325) 8,190
Analysed as:
Before non-recurring items and amortisation 4,998 3,333 1,055 (325) 9,061
Non-recurring items and amortisation (44) (827)  — —  (871)
4,954  2,506  1,055 (325) 8,190
Retirement benefit charge* (1,074)
Net finance costs (1,011)
Share of post-tax profit of associate 393
Share of post-tax loss of joint ventures (175)
Profit before taxation 6,323
Taxation (1,989)
Profit for the period 4,334
Segment assets 39,974 28,723 8,341 784 77,822
Unallocated assets
- Investment in associate 982
- Investment in joint ventures 704
- Other investments 254
- Income tax assets 5,163
Total assets 84,925
Total assets in the above analysis represents total assets as disclosed in the balance sheet of £86,133,000 less bank overdrafts 
of £1,208,000.
Segment liabilities 18,643 5,128 1,979 1,188 26,938
Unallocated liabilities
- Group borrowings 14,986
- Retirement benefit obligation* 15,796
- Income tax liabilities 4,924
Total liabilities 62,644
Total liabilities in the above analysis represents total liabilities as disclosed in the balance sheet of £63,852,000 less bank overdrafts 
of £1,208,000.
Other segment items 
Capital expenditure
- Property, plant and equipment 1,782 2,029 141 53 4,005
- Other intangible assets 50 — — — 50
Depreciation 1,349 1,664 279 127 3,419
Loss/(profit) on the disposal of property,  
plant and equipment 16 10 (2) 3 27
Amortisation of intangible assets 128 826 32 — 986
* It is not possible to allocate the assets and liabilities of the defined benefit pension scheme across the segments. Therefore, this is
shown as a reconciling item.
Notes to the Financial Statements 34
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
2 SEGMENTAL REPORTING CONTINUED
Primary reporting format - business segments
The segment results for the period ended 3 September 2005 are as follows:
Agriculture Food Engineering Other Group
£’000 £’000 £’000 £’000 £’000
Total gross segment revenue 132,745  48,006  11,297  259  192,307
Inter-segment revenue (83) (2) (98) — (183)
Revenue 132,662 48,004  11,199  259  192,124
Operating profit before retirement benefit charge* 5,866  2,441  4,874 15 13,196
Analysed as:
Before non-recurring items and amortisation 5,866 2,262 764 15 8,907
Non-recurring items and amortisation —  179  4,110 —  4,289
5,866  2,441  4,874 15 13,196
Retirement benefit charge* (932)
Net finance costs (1,198)
Share of post-tax loss of associate:
- normal (70) 
- non-recurring (627)
Profit before taxation 10,369
Taxation (2,557)
Profit for the period 7,812
Segment assets 45,126 29,145 8,857 (460) 82,668
Unallocated assets
- Investment in associate 445
- Investment in joint ventures 172
- Other investments 255
- Income tax assets 4,049
Total assets 87,589
Total assets in the above analysis represents total assets as disclosed in the balance sheet of £88,235,000 less bank overdrafts of
£646,000.
Segment liabilities 21,757 5,529  2,641  784  30,711
Unallocated liabilities
- Group borrowings 17,419
- Retirement benefit obligation* 12,119
- Income tax liabilities 5,435
Total liabilities 65,684
Total liabilities in the above analysis represents total liabilities as disclosed in the balance sheet of £66,330,000 less bank overdrafts of
£646,000.
Other segment items 
Capital expenditure (including acquisitions)
- Property, plant and equipment  3,432  6,961  2,930  130  13,453
- Investment property — 657 — — 657
- Other intangible assets 172  2,451 — — 2,623
Depreciation 1,228  1,589  137  101  3,055
Loss/(profit) on the disposal of property,   
plant and equipment 11 (5) (4,131) (74) (4,199)
Amortisation of intangible assets —  997  32 — 1,029
* It is not possible to allocate the assets and liabilities of the defined benefit pension scheme across the segments. Therefore, this is
shown as a reconciling item. 35
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
2 SEGMENTAL REPORTING CONTINUED
Secondary reporting format - geographical segments
Revenue Segment assets Capital Expenditure
2006 2005 2006 2005 2006 2005
£’000 £’000 £’000 £’000 £’000 £’000
UK 231,810 184,721  74,984 79,772  3,609 16,617
Other  10,766 7,403  2,838 2,896  446 116
242,576 192,124  77,822 82,668  4,055 16,733
The geographical analysis of revenue is presented by revenue origin. There is no material difference between revenue by origin and
revenue by destination.
3 REVENUE, COST OF SALES, OTHER OPERATING INCOME AND NET OPERATING EXPENSES
2006 2005
£’000 £’000 £’000 £’000
Revenue 242,576 192,124
Cost of sales (206,658) (161,296)
Gross profit 35,918 30,828
Net operating expenses:
Distribution costs (17,192) (13,188)
Administrative expenses - normal (10,739) (9,665)
- non-recurring items
and amortisation (see note 6) (871) 4,289
(11,610) (5,376)
(28,802) (18,564)
Group operating profit 7,116 12,264 
4 GROUP OPERATING PROFIT 2006 2005
£’000 £’000
Group operating profit is stated after charging/(crediting):
Amortisation of grants (18) (50)
Profit on disposal of investments (1) —
Loss/(profit) on disposal of property, plant and equipment 27 (4,199)
Depreciation of property, plant and equipment held under finance lease 746 558
Depreciation of owned property, plant and equipment 2,645 2,490
Depreciation of owned investment property 28 7
Amortisation of intangible assets 986 1,029
Foreign exchange gains (86) (28)
Derivative financial instruments losses 27 6
Operating lease charges:
Plant and machinery 604 233
Other 25 12
Auditors remuneration:
Audit services (Company £10,000; 2005 £10,000) 179 149 
Accounting advisory services (IFRS transition) 32 —
Tax services (including IFRS transition services) 92 71
Included within group operating profit is the following in respect of investment property:
Rental income 33 33
Operating expenses (65) (46)
(32) (13) 36
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
5 SHARE OF POST-TAX PROFIT/(LOSS) IN ASSOCIATE AND JOINT VENTURES 2006 2005
£’000 £’000
Share of post-tax profit/(loss) in associate - normal 393 (70)
- non-recurring items and amortisation (see note 6) — (627)
393 (697) 
Share of post-tax loss in joint ventures - normal (46) —
- non-recurring items and amortisation (see note 6) (129) —
(175) —
Total share of post-tax profit/(loss) in associate and joint ventures 218 (697)
6 NON-RECURRING ITEMS AND AMORTISATION 2006 2005
Amount Tax credit Amount Tax credit
£’000 £’000 £’000 £’000
Group operating profit:
Cost of reorganising food division — — (350) 105
Profit on disposal of property, plant and equipment —— 4,110 (719)
Immediate recognition of negative goodwill 77 — 1,526  —
Amortisation of intangible assets (948) 284 (997) 299
(871) 284 4,289 (315)
Share of post-tax (loss)/profit in associate and joint ventures:
Cost of reorganising associate, net of tax —— (627) —
Amortisation of intangible asset and impairment of goodwill 
recognised in joint ventures, net of tax (129) — ——
Total non-recurring items and amortisation (1,000) 284 3,662 (315)
Profit before taxation 6,323 10,369
Non-recurring items and amortisation (1,000) 3,662
Adjusted profit before taxation 7,323 6,707
Group operating profit 7,116 12,264
Non-recurring items and amortisation (871) 4,289
Adjusted Group operating profit 7,987 7,975
7 STAFF COSTS 2006 2005
£’000 £’000
Wages and salaries 17,888 15,398
Social security costs 1,782 1,653
Other pension costs 2,120 1,912
Cost of share based awards 27 —
21,817 18,963
Included within other pension costs is £1,074,000 (2005: £932,000) in respect of the defined benefit pension scheme.
The average monthly number of employees, including directors and key management personnel, during the period was made up as
follows:
2006 2005
Number Number
Sales, office and management 433 365
Manufacture and distribution 304 294
737 659
Full details of the directors' emoluments, pension benefits and share options are given in the Directors' Remuneration Report. 37
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
8 NET FINANCE COSTS 2006 2005
£’000 £’000
Interest expense
Interest payable on bank overdrafts (355) (515)
Interest payable on bank loans and other borrowings (939) (437)
Interest payable on finance leases and hire purchase contracts (128) (111)
Other interest (110) (122)
Total interest expense (1,532) (1,185)
Other finance income/(costs)
Movement in fair value of interest related derivative instruments (note 27) 143 (106)
Total other finance income/(costs) 143 (106)
Interest income
Bank interest 366 75
Other interest 12 18
Total interest income 378 93
Net finance costs (1,011) (1,198)
9 TAXATION 2006 2005
£’000 £’000
(a) Analysis of the charge in the period
Current tax:
UK corporation tax 
Current period 1,861 1,797
Prior period (711) 24
Foreign tax
Current period 514 270
Consortium relief 
Prior period 625 —
Group current tax 2,289 2,091
Deferred tax:
Origination and reversal of timing differences (300) 466
Group deferred tax (300) 466
Tax on profit on ordinary activities 1,989 2,557
(b) Factors affecting tax charge for the period
The tax assessed for the period is higher (2005: lower) than the rate of corporation tax in the UK (30%). The differences are explained
below:
2006 2005
£'000 £'000
Profit before tax 6,323 10,369
Tax at 30% 1,897 3,111
Effects of:
Tax effect of share of (loss)/profit in associate and joint ventures (65) 209
Tax effect of expenses/(income) that are not deductible/(allowable) in determining taxable profit 204 (1,510)
Tax on rolled over gain — 719
Effects of different tax rates of foreign subsidiaries 11 30
Effects of changes in tax rates of subsidiaries (3) (43)
(Over)/under provision in prior years (55) 16 
Other — 25 
Total tax charge for the period 1,989 2,557  38
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
10 DIVIDENDS 2006 2005
Equity £’000 £’000
Final dividend for the period ended 3 September 2005 of 11.0p per 25.0p share (2004: 9.0p) 905 730
Interim paid of 5.5p per 25.0p share (2005: 5.0p) 453 406 
1,358 1,136
The proposed dividend to be considered by shareholders at the Annual General Meeting is £1,029,197, being 12.5p per share, making a
total for the year of 18.0p.
11 EARNINGS PER ORDINARY SHARE
Earnings per share are calculated by reference to a weighted average of 8,227,329 shares (2005: 8,127,328) in issue during the period.
Non-recurring costs and amortisation that are charged or credited to profit do not relate to the profitability of the Group on an ongoing
basis. Therefore an adjusted earnings per share is presented as follows:
2006 2005
Earnings Earnings
Earnings per share Earnings per share
£’000 pence £’000 pence
Earnings per share - basic 4,195 51.0 7,483  92.1
Non-recurring items and intangible asset amortisation:
Cost of reorganising food division —— 350  4.3
Cost of reorganising associate, net of tax — — 627 7.7
Profit on disposal of property, plant and equipment —— (4,110) (50.5)
Immediate recognition of negative goodwill (77) (0.9) (1,526) (18.8)
Amortisation of intangible asset 948 11.5 997  12.2
Amortisation of intangible asset and impairment of goodwill 
recognised in joint ventures, net of tax 129 1.6 — —
Taxation arising on non-recurring items (284) (3.5) 315 3.9
Earnings per share - adjusted 4,911 59.7 4,136 50.9
For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all
dilutive potential ordinary shares. The potentially dilutive ordinary shares, where the exercise price is less than the average market price
of the Company's ordinary shares during the period, are disclosed in note 31.
2006 2005
Weighted Earnings Weighted Earnings
Earnings average number per share Earnings average number per share
£’000 of shares pence £’000 of shares pence
Earnings per share 4,195 8,227,329 51.0 7,483  8,127,328  92.1
Effect of dilutive securities:
Options — 97,288 (0.6) — 158,591 (1.8)
Save as you earn (SAYE) — 3,949 — —— —
Diluted earnings per share 4,195 8,328,566 50.4 7,483  8,285,919 90.3 39
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
12 GOODWILL AND OTHER INTANGIBLE ASSETS
Customer Patents and
Goodwill relationships Brands Know-how trademarks Total
Group £’000 £’000 £’000 £’000 £’000 £’000
Cost
As at 29 August 2004 173 — — 160 — 333
Additions 360 2,266 357 — — 2,983
Disposals (73) — — — — (73)
At 3 September 2005 460 2,266 357 160 — 3,243
Re-assessment of deferred consideration (245) — — — — (245)
Additions 80———50130
As at 2 September 2006 295 2,266 357 160 50 3,128
Amortisation
At 29 August 2004 133 — — 16 — 149
Charge for the period — 969 28 32 — 1,029
Disposals (73) — — — — (73)
At 3 September 2005 60 969 28 48 — 1,105
Charge for the period — 913 35 32 6 986
At 2 September 2006 60 1,882 63 80 6 2,091
Net book value
At 28 August 2004 40 — — 144 — 184
At 3 September 2005 400 1,297 329  112 — 2,138
At 2 September 2006 235 384 294 80 44 1,037
Goodwill of £80,000 arose during the period on the purchase of further shares in Northern Feeds Solutions Limited. 
Goodwill brought forward at 4 September 2005 includes deferred consideration of £322,000 on the acquisition of Wallace Oils Holdings
Limited. The directors estimate that the likelihood of the deferred consideration becoming payable is now remote. This has resulted in the
creation of negative goodwill of £76,810 which has been credited to the income statement during the period. This change in accounting
estimate has been accounted for prospectively in accordance with IAS 8.
Goodwill is tested annually for impairment, or more frequently if there are indications that goodwill might be impaired. No impairment has
been identified in the period.
Customer relationships are being amortised in line with the profit streams generated over the life of the relationship. The life of the
relationships range between three and five years.
Brands are being amortised on a straight line basis over a twenty year period, being the directors' estimate of the useful economic life.
Know-how is being amortised on a straight line basis over five years, being the directors' estimate of the useful economic life. 
Patents and trademarks are being amortised over their contractual life.
There is no goodwill or intangible assets in the company. 40
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
13 PROPERTY, PLANT AND EQUIPMENT
Assets in 
Land and Plant and course of
buildings equipment construction Total
Group £’000 £’000 £’000 £’000
Cost
At 29 August 2004 11,692  24,973  567  37,232
Exchange differences (24) (86) (4) (114)
Subsidiaries acquired 4,214  9,411  —  13,625 
Additions 2,740  2,245  1,154  6,139 
Disposals (1,276) (1,390) — (2,666)
Reclassifications 31  1,216 (1,247) —
At 3 September 2005 17,377  36,369  470  54,216 
Exchange differences (27) (5) — (32) 
Additions 285 3,358 362 4,005
Disposals (22)(1,957)—(1,979) 
Reclassifications 456 9 (465) —
At 2 September 2006 18,069  37,774  367  56,210
Depreciation
At 29 August 2004 2,160  15,512  —  17,672 
Exchange differences (6) (43) — (49)
Subsidiaries acquired 369  5,942  —  6,311 
Charge for the period 520  2,528  —  3,048 
Disposals (371) (1,233) — (1,604)
At 3 September 2005 2,672  22,706  — 25,378
Exchange differences (6) 34 — 28 
Charge for the period 518 2,873 — 3,391 
Disposals (22) (1,737) — (1,759) 
At 2 September 2006 3,162 23,876  — 27,038
Net book value
At 28 August 2004 9,532 9,461  567  19,560 
At 3 September 2005 14,705 13,663 470  28,838
At 2 September 2006 14,907  13,898  367  29,172
Freehold land amounting to £2,261,045 (2005: £2,261,045) has not been depreciated.
Land and buildings acquired from business combinations in the prior period were professionally valued as part of the fair value
accounting.
As permitted under IFRS1, the Group has opted to treat previous revaluations of property made under UK GAAP as deemed cost at the
date of transition.
2006 2005
£’000 £’000
The net book value of land and buildings comprises:
Freehold 11,694 11,369
Long leasehold 3,213 3,336
The net book value of plant and equipment includes £2,723,049 (2005: £2,535,253 ) in respect of assets held under finance leases.
The company has no property, plant and equipment. 41
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
14 INVESTMENT PROPERTY
Land and
buildings
Group £’000
Cost
At 29 August 2004 211 
Subsidiaries acquired 685  
At 3 September 2005 and 2 September 2006 896 
Depreciation
At 29 August 2004 39 
Subsidiaries acquired 28 
Charge for the period 7
At 3 September 2005 74
Charge for the period 28
At 2 September 2006 102 
Net book value
At 28 August 2004 172 
At 3 September 2005 822
At 2 September 2006 794
Included within investment property are properties occupied by life tenants. The net book value of these properties at 2 September 2006
is £242,000 (2005: £251,000).
The directors do not consider that the fair value of investment properties differs materially from carrying value. 
There is no investment property in the company. 42
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
15 INVESTMENTS
Joint Other
ventures Associate investments Total
Group £’000 £’000 £’000 £’000
Cost
At 4 September 2005 172 445  273  890
Exchange difference (3) — — (3)
Additions 710 — — 710
Disposals — — (10) (10)
Share of post-tax (loss)/profit (175) 393 — 218
Share of recognised gains — 144 — 144
At 2 September 2006 704  982  263 1,949 
Provision for impairment
At 4 September 2005 — — 18 18
Disposals — — (9) (9)
At 2 September 2006 —  —   9 9 
Net book value
At 3 September 2005 172  445  255  872
At 2 September 2006 704  982  254  1,940
Joint Shares in Other
ventures Associate subsidiaries investments Total
Company £’000 £’000 £’000 £’000 £’000
Cost
At 4 September 2005 172  1,470  18,158  211  20,011  
Share awards granted to 
employees of subsidiary
undertakings — — 25 — 25
Additions 100 — — — 100
Disposals — — — (10) (10)
Redemption of preference shares — — (233) — (233)
At 2 September 2006 272  1,470    17,950  201  19,893
Provision for impairment
At 4 September 2005 — — 5,086 9 5,095
Disposals — — — (9) (9)
At 2 September 2006 —  —    5,086  —  5,086
Net book value
At 3 September 2005 172 1,470   13,072 202  14,916
At 2 September 2006 272  1,470  12,864 201 14,807
Other investments comprise shares in several private limited companies. As a result of adoption of IAS32 and IAS39, these investments
have been classified as unquoted investments for which fair value cannot be reliably measured and are held at cost. There has been no
impact on the total value of these assets.
During the period a new joint venture company was formed, Bibby Agriculture Limited, with Carrs Billington Agriculture (Sales) Limited
being a 50% shareholder and Wynnstay Group PLC and Welsh Feed Producers Limited each having a 25% shareholding. The joint
venture markets and sells animal feed, fertilisers and other farm requirements in Wales. 
During the period a new joint venture company was formed, Afgritech Limited, with Carr's Milling Industries PLC being a 50%
shareholder and Afgri Operations SA being the other 50% shareholder. The joint venture will produce ingredients for animal feed. 
During the period preference share capital in several subsidiaries were redeemed at par.
The Group’s investment in the associate at 4 September 2005 has been revised from £800,000, which was disclosed in the Group’s
IFRS transition document issued in April 2006, to £445,000 following the finalisation of the fair values of the assets and liabilities
acquired from W & J Pye Limited in 2005 and adjustments made to taxation in the associate on transition to IFRS. 43
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
16 INVESTMENT IN ASSOCIATES
The associated undertakings at 2 September 2006 are:
Group and company
Proportion 
of shares held
Ordinary Country of
Name % incorporation Activity
Carrs Billington Agriculture (Operations) Limited 49 England Manufacture of 
animal feed
Associates are accounted for using the equity method.
The aggregate amounts relating to associates, of which the group recognises 49%, are:
2006 2005 
£'000 £'000 
Total assets 22,367 27,350 
Total liabilities (22,864) (28,942)
Revenues 69,744 45,775 
Profit/(loss) after tax 803 (1,423)
17 INTEREST IN JOINT VENTURES
The joint ventures at 2 September 2006 are:
Group
Proportion of shares held
Ordinary Preference Country of
Name % % incorporation Activity
Crystalyx Products GmbH 50 — Germany Manufacture of animal feed blocks
Bibby Agriculture Limited 26 17 England Sale of agricultural products
Afgritech Limited 50 — England Producers of ingredients of animal feed
Crystalyx Products GmbH has a 31 December accounting period end.
Interests in the joint ventures listed above are held directly by the holding company with the following exception: Carrs Billington 
Agriculture (Sales) Limited holds 50% of the ordinary share capital and 33% of the preference share capital in Bibby Agriculture Limited.
Joint ventures are accounted for using the equity method.
The aggregate amounts included in the financial statements relating to the Group’s share of joint ventures are:
2006 2005 
£'000 £'000 
Non-current assets 1,629 172
Current assets 1,542 —
Current liabilities (2,116) —
Non-current liabilities (931) —
Income 8,045 —
Expenses (8,197) —
Net finance costs (23) — 44
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
18 INVESTMENT IN SUBSIDIARY UNDERTAKINGS
Proportion of 
Shares Held
Ordinary Country of
Name % incorporation Activity
Carrs Agriculture Ltd. 100  England Manufacture of animal 
feed blocks and fertiliser 
Carrs Billington Agriculture (Sales) Ltd. 51  England Agricultural retailers 
Animal Feed Supplement Inc. 100  USA Manufacture of animal feed blocks 
Northern Feeds Solutions Ltd. 51  England Agricultural retailers 
Carr's Flour Mills Ltd. 100 England Flour milling 
Carrs Engineering Ltd. 100  England Engineering 
Bowie and Aram Ltd. 100  Scotland Travel agents 
B.R.B. Trust Ltd. 100  England Financial services 
Carrs Properties Ltd. 100  England Property holding
Investments in the subsidiaries listed above are held directly by the holding company with the following exceptions: Northern Feeds
Solutions Limited is held by Carrs Billington Agriculture (Sales) Limited. 
During the period Carrs Billington Agriculture (Sales) Limited increased its shareholding in Northern Feeds Solutions Limited to 100%.
Dormant subsidiaries are not shown above because disclosure would be excessively lengthy. A full list of subsidiary undertakings will be
annexed to the Company's next annual return.
19 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
2006 2005 2006 2005 2006 2005
Group £’000 £’000 £’000 £’000 £’000 £’000
Accelerated tax depreciation — — (2,692) (2,846) (2,692) (2,846)
Employee benefits 4,739 3,636  — — 4,739 3,636 
Other 423 326  (908) (1,008) (485) (682)
Tax assets/(liabilities) 5,162 3,962  (3,600) (3,854)  1,562 108
Movement in deferred tax during the period
At At
4September Exchange Recognised Recognised 2 September
2005 differences in income in equity 2006
£’000 £’000 £’000 £’000 £’000
Accelerated tax depreciation (2,846) — 154 — (2,692)
Employee benefits 3,636 — (67) 1,170 4,739
Other (682) (16) 213 — (485)
108 (16) 300 1,170 1,562
Movement in deferred tax 
during the prior period At At
29 August Exchange In respect of Recognised Recognised 3 September
2004 differences acquisitions in income in equity 2005
£’000 £’000 £’000 £’000 £’000 £’000
Accelerated tax depreciation (1,073) — (2,067) 294 — (2,846)
Employee benefits 3,282 — — (109) 463 3,636 
Other (25)(12)6(651)  —(682)
2,184 (12) (2,061) (466) 463 108  45
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
19 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
Assets
2006 2005
Company £’000 £’000
Employee benefits 4,739 3,636
Other 22 36
Tax assets 4,761 3,672  
Movement in deferred tax during the period At At
4September Recognised Recognised 2 September
2005 in income in equity 2006
£’000 £’000 £’000 £’000
Employee benefits 3,636 (67) 1,170 4,739
Other 36 (14) — 22
3,672 (81) 1,170 4,761
Movement in deferred tax At At
during the prior period 29 August Recognised Recognised 3 September
2004 in income in equity 2005
£’000 £’000 £’000 £’000
Accelerated tax depreciation 1 (1) — —
Employee benefits 3,282 (109) 463  3,636
Other — 36 — 36
3,283 (74) 463  3,672 46
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
20 INVENTORIES 2006 2005
Group £’000 £’000
Raw materials and consumables 5,364 4,574
Work in progress 695 1,784
Finished goods and goods for resale 5,885 6,589
11,944 12,947
Inventories is stated after a provision for impairment of £276,000 (2005: £232,000).
Cost of sales consists of the following:
Material cost 191,362 148,586
Processing cost 5,024 4,690
Other 10,272 8,020
206,658 161,296
The company has no inventories.
21 TRADE AND OTHER RECEIVABLES Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current:
Trade receivables 29,704 32,042  — —
Amounts recoverable on contracts 22 189  — —
Amounts owed by Group undertakings (note 39) — — 13,933 13,913 
Amounts owed by other related parties (note 39) 616 409  209 —
Other receivables 2,029 1,172  36 47 
Prepayments and accrued income 1,175 1,385  147 88
33,546 35,197  14,325 14,048
Non-current:
Other receivables 208 223  — —
208 223  — —
The directors consider that the carrying amount of trade and other receivables approximates to their fair value.
Trade receivables is stated after a provision for impairment of £3,061,000 (2005: £2,761,000).
22 CURRENT TAX ASSETS Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Corporation tax recoverable 1 87 657 410
Group taxation relief — — 243 192  
1 87  900 602 47
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
23 CASH AND CASH EQUIVALENTS AND BANK OVERDRAFTS Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Cash and cash equivalents per the balance sheet 2,292 3,149  — —
Bank overdrafts (note 26) (1,208) (646) (883) (1,730)
Cash and cash equivalents per the cash flow statement 1,084 2,503 (883) (1,730)
24 TRADE AND OTHER PAYABLES Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current:
Trade payables 15,034 17,242  — —
Payments on account 1,100 1,481  — —
Amounts owed to Group undertakings (note 39) — — 18 122 
Amounts owed to other related parties (note 39) 3,499 5,787  — —
Other taxes and social security payable 1,370 1,214  213 136 
Other payables 1,640 1,310  200 67 
Accruals and deferred income 2,744 2,284 594 340 
25,387 29,318  1,025 665
Non-current:
Other payables 1,358 1,103 — —
Accruals and deferred income 166 184 — —
1,524 1,287  — —
The directors consider that the carrying amount of trade and other payables approximates to their fair value.
Included within non-current accruals and deferred income is the following in respect of government grants:
Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
At the beginning of the period 184 244  — —
Arising on acquisitions — 25 — —
Amortisation in the period (18) (50) — —
Provision for repayment — (35) — —
At the end of the period 166 184  — —
25 CURRENT TAX LIABILITIES Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current tax 722 1,581 — —
Consortium tax relief 602 — — —
1,324 1,581  — — 48
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
26BORROWINGS Group Company
2006 2005 2006 2005
£’000 £’000 £’000 £’000
Current:
Bank overdrafts 1,208 646  883 1,730  
Bank loans and other borrowings 6,409 7,995  893 1,293 
Loans from group undertakings — — 2,475 4,191 
Other loans 1,225 1,225  — —
Finance leases 840 800 — —
9,682 10,666 4,251 7,214
Non-current:
Bank loans 5,610 6,503  5,610 6,503  
Other loans 30 31  — —
Finance leases 872 865  — —
6,512 7,399 5,610 6,503
Borrowings are repayable as follows:
On demand or within one year 9,682 10,666 4,251 7,214 
In the second year 1,082 1,493 493 893 
In the third to fifth years inclusive 5,430 5,906  5,117 5,610 
16,194 18,065  9,861 13,717
Group and company borrowings are shown in the balance sheet net of arrangement fees of £22,458 of which £7,000 is deducted from
current liabilities (2005: £29,459 of which £7,000 is deducted from current liabilities).
Finance leases are repayable as follows:
On demand or within one year 840 800  — —
In the second year 559 569  — —
In the third to fifth years inclusive 313 296  — —
1,712 1,665 — —
The net borrowings are:
Borrowings as above 16,194 18,065  9,861 13,717 
Cash and cash equivalents (2,292) (3,149) — —
Net borrowings 13,902 14,916  9,861 13,717
Finance lease obligations are secured on the assets to which they relate. Bank loans and other borrowings includes an amount of
£5,516,000 (2005: £6,703,000) which is secured on trade debtors. The Company, together with certain subsidiaries, act as guarantors
on the bank loans.
Other loans are non-interest bearing and have no fixed date for repayment. The bank loans are repayable by instalments and the overdraft
is repayable on demand.
Non-current bank loans includes a revolving credit facility of £4.5 million which is not repayable until October 2009. 49
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
27 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS
The main risk from the Group's financial instruments are interest rate risk, liquidity risk and foreign currency risk. The Board reviews
and agrees policies for managing each of these risks and they are summarised below. These policies have remained unchanged
throughout the period.
Interest rate risk
The Group finances its operations through a mixture of retained earnings and bank borrowings. The Group borrows in the desired
currencies at fixed and floating rates of interest and then uses interest rate caps and swaps to manage the Group's exposure to
interest rate fluctuations. At the period end £6.5 million (2005: £6.6 million) of the Group's borrowings were at a fixed rate of interest. 
Liquidity rate risk
As regards liquidity, the Group's policy throughout the period has been to maintain a mix of short and medium term borrowings. Short-
term flexibility is achieved by overdraft facilities. In addition it is the Group's policy to maintain committed undrawn facilities in order to
provide flexibility in the management of the Group's liquidity. 
Foreign currency risk
The Group's subsidiary, Animal Feed Supplement Inc., operates in the USA and its revenues and expenses are denominated
exclusively in US dollars. 
Crystalyx Products GmbH, a joint venture of the Group, operates in Germany and its revenues and expenses are denominated
exclusively in Euros. 
Effective interest rates at the balance sheet date and borrowing maturity
Weighted Weighted
average 2006 average 2005
effective Within One to Two to effective Within One to Two to
interest one two five interest one two five
rate Total year years years rate Total year years years
Group % £’000 £’000 £’000 £’000 % £’000 £’000 £’000 £’000
Bank overdrafts 5.75 1,208 1,208 — — 5.50 646  646  — —
Bank loans and other borrowings 6.08 12,019 6,409 493 5,117 5.74 14,498  7,995  893  5,610 
Other loans — 1,255 1,225 30 — — 1,256  1,225  31  — 
Finance lease liabilities 6.90 1,712 840 559 313 6.90 1,665  800 569  296
16,194 9,682 1,082 5,430 18,065  10,666  1,493  5,906
Fixed rate 6,712 840 559 5,313 6,665  800  569  5,296 
Floating rate 8,227 7,617 493 117 10,144  8,641  893  610 
Non-interest bearing 1,255 1,225 30 — 1,256  1,225  31  —
16,194 9,682 1,082 5,430 18,065  10,666  1,493  5,906
The effect of the Group's interest rate swap is to classify £5 million (2005: £5 million) of floating rate borrowings in the above table as
fixed rate.
The floating rate financial liabilities bear interest determined as follows:
Bank overdrafts Base rate + 1% margin; US prime rate + 1% margin
Bank loans and other borrowings Libor + 1.25% or + 1.125%; Base rate + 1.25% margin 50
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
27 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS (CONTINUED)
Weighted Weighted
average 2006 average 2005
effective Within One to Two to effective Within One to Two to
interest one two five interest one two five
rate Total year years years rate Total year years years
Company % £’000 £’000 £’000 £’000 % £’000 £’000 £’000 £’000
Bank overdrafts 5.75 883 883 — — 5.50 1,730 1,730 — —
Bank loans and other borrowings 6.14 6,503 893 493 5,117 5.73 7,796 1,293 893 5,610
Loans from group undertakings 4.78 2,475 2,475 — — 5.34 4,191 4,191 — —
9,861 4,251 493 5,117 13,717 7,214 893 5,610
Fixed rate 5,000 — — 5,000 5,000 — — 5,000
Floating rate 4,861 4,251 493  117 8,717 7,214 893 610
9,861 4,251 493 5,117 13,717 7,214 893 5,610
The effect of the Company's interest rate swap is to classify £5 million (2005: £5 million) of floating rate borrowings in the above table as fixed rate.
The Company's floating rate financial liabilities bear interest determined as follows:
Bank overdrafts Base rate + 1% margin
Bank loans and other borrowings Libor + 1.25% or + 1.125%
Analysis of borrowings by currency:
2006 2005
US US
Sterling Dollar Euro Total Sterling Dollar Euro Total
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Bank overdrafts 1,006 186 16 1,208 601  45  —  646 
Bank loans and other borrowings 12,019 — — 12,019 14,498  —  —  14,498   
Other loans 1,225 — 30 1,255 1,225  — 31  1,256 
Finance leases 1,712 — — 1,712 1,665 — —  1,665
15,962 186 46 16,194 17,989 45  31  18,065
Company 
Bank overdrafts 867 — 16 883 1,730  — —  1,730 
Bank loans and other borrowings 6,503 — — 6,503 7,796  —  —  7,796   
Loans from group undertakings 114 2,361 — 2,475 2,839  1,352  —  4,191 
7,484 2,361 16 9,861 12,365 1,352  — 13,717
Borrowing facilities
The Group had various undrawn committed facilities. The facilities available at 2 September 2006, in respect of which all conditions
precedent had been met, were as follows:
2006 2005 
Floating rate Floating rate
£'000 £'000
Expiring in one year or less 10,928 14,630 
The Company’s overdraft is within a group facility and it is therefore not possible to determine the Company’s undrawn committed
facilities at the balance sheet date.
Derivative financial instruments
The Group and Company does not adopt hedge accounting. Any gains or losses on derivative financial instruments have been
recognised in the Income Statement in the period they arise. 51
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
27 DERIVATIVES AND OTHER FINANCIAL INSTRUMENTS (CONTINUED)
Currency derivatives
The Group and Company uses forward foreign currency contracts to manage its exchange risk exposure. At the balance sheet date, the
fair value of outstanding forward foreign currency contracts are as below: 
Group Company
2006 2005 2006 2005 
£'000 £'000 £'000 £'000
At beginning of period — 6 — —
Losses during the period (27) (6) (4) —
At end of period (27) — (4) —
Fair value has been determined by reference to the value of equivalent forward foreign currency contracts at the balance sheet date.
All forward foreign currency contracts have a maturity of less than one year after the balance sheet date. Gains and losses on currency
related derivatives are included within operating profit.
Interest rate derivatives
The Group uses interest rate caps and swaps to manage its interest rate risk exposure. At the balance sheet date, the fair value of these
instruments are as below: 
Interest rate cap Interest rate swap
Group Company Group Company
2006 2005 2006 2005 2006 2005 2006 2005 
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At beginning of period — — — — (106) — (106) —
Gains/(losses) during the period 6 — — — 137 (106) 137 (106)
At end of period 6 — — — 31 (106) 31 (106)
Fair value has been determined by reference to the value of equivalent instruments at the balance sheet date. Gains and losses on
interest related derivatives are included within net finance costs in the income statement.
The interest rate cap has a notional value of £3,500,000 and a strike rate of 5.5%. The date of maturity is 30 September 2008.
The interest rate swap has a notional value of £5,000,000 and a fixed interest rate of 4.88%, with interest payments being made at
quarterly intervals. The date of maturity is 10 December 2009. 
Fair values of financial assets and financial liabilities
Group Company
2006 2005 2006 2005
Book Fair Book Fair Book Fair Book Fair
value value value value value value value value
£'000 £'000 £'000  £'000 £'000 £'000 £'000  £'000
Assets
Other investments 254 254 255  255 201 201 202 202
Non-current derivatives 37 37 —— 31 31 ——
Non-current receivables 208 208 223  223 — — — —
Current trade and other 
receivables 33,546 33,546 35,197  35,197 14,325 14,325 14,048 14,048
Cash and cash equivalents 2,292 2,292 3,149  3,149  —— —
36,337 36,337 38,824  38,824 14,557 14,557 14,250 14,250
Liabilities
Current borrowings 9,682 9,682 10,666  10,666 4,251 4,251 7,214 7,214
Current derivatives 27 27 — — 4 4 — —
Trade and other payables 25,387 25,387 29,318  29,318 1,025 1,025 665 665
Non-current borrowings 6,512 6,532 7,399  7,541 5,610 5,691 6,503 6,686
Non-current derivatives — — 106  106 — — 106 106
Other non-current liabilities 1,524 1,524 1,287  1,287   —— ——
43,132 43,152 48,776  48,918 10,890 10,971 14,488 14,671
Other investments consist of investments in unquoted companies, which are held at cost due to the lack of reliable measurability.
Derivative instruments are recognised in the balance sheet at fair value. 
The fair value of current assets and current liabilities are assumed to approximate to book value due to the short term maturity of the instrument. 
Where market values are not available, fair values have been calculated by discounting expected cash flows at prevailing interest and
exchange rates. 52
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
28 RETIREMENT BENEFIT OBLIGATION
The Group participates in two defined benefit pension schemes, Carr's Milling Industries Pension Scheme 1993 and Carrs Billington
Agriculture Pension Scheme.
Carr's Milling Industries
The Company sponsors the Carr's Milling Industries Pension Scheme 1993 and offers a defined contribution and a defined benefit
section. The assets of the scheme are held separately from those of the Group and are invested with independent investment managers.
The pension expense for the defined contribution section of the scheme for the period was £181,000 (2005: £177,000). Contributions
totalling £8,141 (2005: £8,000) were payable to the fund at the period end and are included in creditors.
During the period contributions were payable to a Group Personal Pension plan for certain employees of Carr’s Flour Mills Limited. 
The pension expense for this scheme for the period was £260,000 (2005: £173,000).
The defined benefit section of the scheme is funded to cover future pension liabilities (including expected future earnings and pension
increases). It is subject to an independent valuation on a triennial basis by a qualified actuary who determines the rate of the employer's
contribution. The most recent valuation of the scheme was at 1 January 2006 and adopted the Projected Unit Method. It was assumed
that the investment returns would be 6.5% per annum and that the salary increases would average 4.0% per annum. It was also
assumed that present and future pensions, in excess of the Guaranteed Minimum Pension (GMPs), would increase once in payment at
the lesser of 5.0% per annum and price inflation and that GMPs would increase at the rate of 3.0% per annum.
The actuarial valuation as at 1 January 2006 shows that the market value of assets relating to the defined benefit section of the scheme
was £29,104,000 and that the actuarial value of those assets represented 68.0% of the actuarial value of benefits that had accrued to
members, after allowing for expected future increases in earnings. At 1 January 2006, the scheme showed a deficit of £13,541,000.
The pension contribution made by the Group over the period to the defined benefit section was £1,297,000 (2005: £1,296,000).
The following disclosures relate to the defined benefit section. The last full actuarial valuation of this scheme was carried out by a
qualified independent actuary as at 1 January 2006 and updated on an approximate basis to 2 September 2006.
Major assumptions:
2006 2005
£’000 £’000
Inflation 3.0% 2.75%
Salary increases 4.0% 3.75%
Rate of discount 5.1% 5.4%
Pension in payment increases:   
Pre 1 September 2001 3.25% 3.0%   
Post 1 September 2001 3.0% 2.75%
Revaluation rate for deferred pensioners for pensions revaluing at 5.0% per annum or RPI if less 3.0% 2.75%
Amounts recognised in the Income Statement in respect of defined benefit schemes:
2006 2005
£’000 £’000
Current service cost 714 513 
Interest on pension scheme liabilities 2,131 2,037 
Expected return on pension scheme assets (1,771) (1,618) 
1,074 932 
The expense is recognised within the Income Statement as shown below:
2006 2005
£’000 £’000
Cost of Sales 399 355 
Administrative expenses 675 577  
1,074 932 
Actuarial losses of £3,900,000 (2005: £1,543,000) have been reported in the Statement of Recognised Income and Expense. 53
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
28 RETIREMENT BENEFIT OBLIGATION (CONTINUED)
Amounts included in the Balance Sheet:
2006 2005
£’000 £’000
Present value of defined benefit obligations (45,794) (39,556)
Fair value of scheme assets 29,998 27,437 
Deficit in scheme (15,796) (12,119)
Past service cost not yet recognised in the balance sheet — —
Total liability recognised in the balance sheet (15,796) (12,119)
Amount included in current liabilities — —
Amount included in non-current liabilities (15,796) (12,119)
Movements in the present value of defined benefit obligations:
2006 2005
£’000 £’000
At the beginning of the period 39,556 33,991 
Current service cost 714 513 
Interest cost 2,131 2,037 
Changes in assumptions underlying the defined benefit obligation 4,258 3,561 
Benefits paid (865) (546)
At the end of the period 45,794 39,556 
Movements in the fair value of scheme assets:
2006 2005
£’000 £’000
At the beginning of the period 27,437 23,051 
Expected return on scheme assets 1,771 1,618 
Actual return less expected return on scheme assets 358 2,018 
Contributions by employer 1,297 1,296 
Benefits paid (865) (546)
At the end of the period 29,998 27,437 
Analysis of the scheme assets, expected rate of return and actual return:
Expected return Fair value of assets
2006 2005 2006 2005
% % £’000 £’000
Equity instruments 7.5 7.5  15,776 14,520 
Debt instruments 4.75 5.0  11,936 10,629 
Property 7.0 6.5  1,831 1,665 
Other assets 4.75 4.5 455 623   
6.3 6.4  29,998 27,437 
Actual return on scheme assets 2,129 3,636 
The expected long term return on cash is equal to bank base rates at the balance sheet date. The expected return on bonds is
determined by reference to UK long dated gilt and bond yields at the balance sheet date. The expected rate of return on equities and
property have been determined by setting an appropriate risk premium above gilt/bond yields having regard to market conditions at the
balance sheet date. 54
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
28 RETIREMENT BENEFIT OBLIGATION (CONTINUED)
History of scheme:
2006 2005 2004 2003 2002
£'000 £'000 £'000 £'000  £'000
Present value of the defined benefit obligation (45,794) (39,556) (33,991) (32,068) (27,396)
Fair value of scheme assets 29,998 27,437  23,051  21,315  19,802
Deficit (15,796) (12,119) (10,940) (10,753) (7,594)
Difference between expected and actual returns on scheme assets:
Amount £'000 358 2,018 (397) (280) (3,784)
Percentage of scheme assets 1.2% 7.4% 1.7% 1.3% 19.1%
Experience gains and losses on scheme liabilities:
Amount £'000 (4,258) (3,561) (227) (3,303) (1,232)
Percentage of scheme liabilities 9.3% 9.0% 0.7% 10.3% 4.5%
The Group expects to contribute approximately £2,600,000 to the defined benefit scheme in the next financial period.
The Company expects to contribute approximately £2,082,000 to the defined benefit scheme in the next financial period.
Carrs Billington Agriculture
Carrs Billington Agriculture (Sales) Limited, one of the Group's subsidiary undertakings, is a participating employer of the Carrs Billington
Agriculture Pension Scheme, another funded defined benefit scheme.
The pension contribution made by Carrs Billington Agriculture (Sales) Limited over the period to the Carrs Billington Agriculture Pension
Scheme was £84,000 (2005: £295,000).
The actuarial valuation as at 31 December 2003 shows that the market value of assets relating to the scheme was £14,600,000 and the
actuarial value of those assets represented 81% of the actuarial value of benefits that had accrued to members, after allowing for
expected future increase in earnings. The assumptions used in arriving at the valuations were a real rate of return over salary increases
on funds invested of 2% and rate increase in present and future pensions of 2.65%. At 31 December 2003, the scheme showed a
deficit of £3,500,000.
Carrs Billington Agriculture (Sales) Limited offers a Group Personal Pension Plan to its employees and the pension expense for this plan
in the period was £70,000 (2005: £39,000). 
During the period contributions were also payable to a defined contribution pension scheme for certain employees of Carrs Billington
Agriculture (Sales) Limited. The pension expense for this scheme for the period was £9,000 (2005: £3,000).
The following disclosures relate to the defined benefit section. The last full actuarial valuation of this scheme was carried out by a
qualified independent actuary as at 31 December 2003 and updated on an approximate basis to 2 September 2006. 
It is not possible to identify the underlying share of the pension scheme assets and liabilities that relate to Carr's Milling Industires PLC.
Approximately 50% of the assets and liabilities of the pension scheme relate to Carr's Milling Industries PLC and under IFRS
approximately 50% of the assets and liabilities are included in the Group's financial statements through the investment in associate. 55
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
28 RETIREMENT BENEFIT OBLIGATION (CONTINUED)
Major assumptions:
2006 2005
£’000 £’000
Inflation 3.0% 2.73%
Salary increases 3.5% 3.5%
Rate of discount 5.1% 4.88%
Pension in payment increases 3.0% 2.73%
Revaluation rate for deferred pensioners for pensions revaluing at 5.0% per annum or RPI if less 3.0% 2.73%
Amounts recognised in the Income Statement of the associate in respect of defined benefit schemes:
2006 2005
£’000 £’000
Current service cost 157 130 
Interest on pension scheme liabilities 1,150 1,086 
Expected return on pension scheme assets (1,033) (965) 
274 251
The Group's share of the expense is recognised within the Income Statement through the share of post-tax profit/(loss) in associate.
The Group's share of the actuarial gains of £419,000 (2005: losses £1,925,000) have been reported in the Statement of Recognised 
Income and Expense.
Amounts included in the Balance Sheet of the associate:
2006 2005
£’000 £’000
Present value of defined benefit obligations (24,698) (23,943)
Fair value of scheme assets 19,008 17,466
Deficit in scheme (5,690) (6,477)
Past service cost not yet recognised in the balance sheet — —
Total liability recognised in the balance sheet (5,690) (6,477)
The Group's share of the deficit is recognised within the Balance Sheet through the investment in associate.
Movements in the present value of defined benefit obligations:
2006 2005
£’000 £’000
At the beginning of the period 23,943 19,677 
Current service cost 157 130 
Interest cost 1,150 1,086 
Changes in assumptions underlying the defined benefit obligation 364 3,613 
Benefits paid (916) (563)
At the end of the period 24,698 23,943 
Movements in the fair value of scheme assets:
2006 2005
£’000 £’000
At the beginning of the period 17,466 14,820 
Expected return on scheme assets 1,033 965 
Actual return less expected return on scheme assets 783 1,688 
Contributions by employer 642 556 
Benefits paid (916) (563)
At the end of the period 19,008 17,466 56
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
28 RETIREMENT BENEFIT OBLIGATION (CONTINUED)
Analysis of the scheme assets, expected rate of return and actual return:
Expected return Fair value of assets
2006 2005 2006 2005
% % £'000 £'000
Equity instruments 6.7 6.7  13,459 12,288 
Debt instruments 4.1 4.2  4,991 4,194 
Other assets 4.1 4.2  558 984 
5.9 6.0  19,008 17,466 
Actual return on scheme assets 1,816 2,653 
The expected rates of return on scheme assets are determined by reference to relevant indices. The overall rate of return is calculated by 
weighting the individual rates in accordance with the anticipated balance in the plan's investment portfolio.
History of scheme:
2006 2005 2004 2003 2002
£'000 £'000 £'000 £'000  £'000
Present value of the defined benefit obligation (24,698) (23,943) (19,677) (17,576) (15,853)
Fair value of scheme assets 19,008 17,466  14,820  14,116  13,582 
Deficit (5,690) (6,477) (4,857) (3,460) (2,271)
Difference between expected and actual returns on scheme assets:
Amount £'000 783 1,688  100  136 (2,866)
Percentage of scheme assets 4.1% 9.7% 0.7% 1.0% 21.0%
Experience gains and losses on scheme liabilities:
Amount £'000 (364) (3,613) (1,628) (1,326) (631)
Percentage of scheme liabilities 1.5% 15.1% 8.3% 7.5% 4.0%
It is expected that contributions of approximately £700,000 will be paid to the defined benefit scheme in the next financial period.
29 CALLED-UP SHARE CAPITAL 2006 2005
Group and Company £'000 £'000
Authorised:
10,500,000 ordinary shares of 25p each (2005: 10,500,000) 2,625 2,625 
Allotted and fully paid: 8,233,579 ordinary shares of 25p each (2005: 8,213,579) 2,058 2,053 
For details of share option and share save schemes see note 31. 57
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
30 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY AND MINORITY INTEREST
Share Equity Foreign Total
Share Premium Compensation Exchange Other Retained Shareholders’ Minority
Capital Account Reserve Reserve Reserves Earnings Equity Interest Total
Group £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 
29 August 2004 2,018  4,752 —  —  1,663  7,382 15,815  1,272  17,087 
Total recognised 
income and expense 
for the period —  —  — (80) —  5,742 5,662 329  5,991 
Dividends —  — — — — (1,136)(1,136) — (1,136)
Share options exercised 
by employees 35  225  —  —  —  — 260  —  260 
Elimination of goodwill 
arising on prior years' 
acquisitions —  — — — — (406) (406) — (406)
Minority interest on 
increase in shareholding 
in subsidiary —  —  — —  —  — —  109  109 
Transfer — — —  —  (31) 31 —  — —
Balance at 
3 September 2005 2,053  4,977 — (80) 1,632 11,613 20,195  1,710  21,905
Balance at 
4 September 2005 2,053  4,977  — (80) 1,632  11,613 20,195 1,710 21,905 
Total recognised 
income and expense 
for the period — — — (150) — 1,609 1,459 139 1,598
Dividends — — — — — (1,358) (1,358) — (1,358)
Equity settled share-
based payment 
transactions, net of tax —— 22——— 22 5 27
Share options exercised 
by employees 5 27 — — — — 32 — 32
Minority interest on 
increase in shareholding 
in subsidiary — — — — — — — 77 77
Transfer — — — — (31) 31 — — —
Balance at 
2 September 2006 2,058 5,004 22 (230) 1,601 11,895 20,350 1,931 22,281
Retained earnings at 29 August 2004 have been revised from £7,502,000, which was disclosed in the Group’s IFRS transition document
issued in April 2006, to £7,382,000 following adjustments made to taxation in the associate at the transition date.
Retained earnings at 3 September 2005 have been revised from £11,967,000, which was disclosed in the group’s IFRS transition
document issued in April 2006, to £11,613,000 following the finalisation of the fair values of the assets and liabilities acquired from 
W & J Pye Limited by the Group’s associate in 2005. 58
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
30 STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (CONTINUED)
Share Equity
Share Premium Compensation Retained Total
Capital Account Reserve Earnings Equity
Company £’000 £’000 £’000 £’000 £’000
Balance at 
29 August 2004 2,018  4,752 —  (288) 6,482
Total recognised 
income and expense 
for the period —  —  —  1,025  1,025
Dividends —  —  —  (1,136) (1,136)
Share options 
exercised by employees 35  225  —  — 260
Balance at 
3 September 2005 2,053  4,977  —  (399) 6,631
Balance at 
4 September 2005 2,053  4,977  —  (399) 6,631
Total recognised income 
and expense for the
period — — — 2,806 2,806
Dividends — — — (1,358) (1,358)
Equity settled share-based 
payment transactions, 
net of tax — — 27 — 27
Share options exercised
by employees 5 27 — — 32
Balance at
2 September 2006 2,058 5,004 27 1,049 8,138
31 SHARE-BASED PAYMENTS
The Group operates five share based payment schemes. Two schemes, the Executive Scheme 1996 and the Company Plan 1996, were
granted before 7 November 2002, the recognition and measurement principles in IFRS2 have not been applied in accordance with the
transitional provisions in IFRS1 and IFRS2. Disclosure in respect of these two schemes is as follows:
Option Schemes
Outstanding share options 2006 2005 Price Dates of
Range Grant
Executive Scheme 1996 90,000 90,000 161p 2002
Company Plan 1996 37,000 57,000 161p 2002
During the period 20,000 (2005: 139,980) shares were issued under these share option schemes.
Options granted on the Company Plan 1996 are normally exercisable 3-10 years from the date of the grant. Options granted in the
Executive Scheme 1996 are normally exercisable 3-7 years from the date of the grant. 59
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
31 SHARE-BASED PAYMENTS (CONTINUED)
New Schemes
Group
During the period the Group entered into three new schemes, an Inland Revenue approved discretionary employee share option scheme,
an unapproved discretionary share option scheme and a share save scheme.
Both the approved and unapproved share options were granted to certain senior employees and directors. Options are exercisable
between three and ten years from the date of grant, subject to the movement of the Group's adjusted earnings per share over the three
years to 31 August 2008 exceeding that of the RPI by an average of 2% per annum.
All employees, subject to eligiblity criteria, may participate in the share save scheme. Under this scheme employees are offered savings
contracts for both 3 year and 5 year vesting period plans. The exercise period is 6 months from the vesting date.
The fair value per option granted and the assumptions used in the calculation of fair values are as follows:
Approved and Unapproved Share Save Share Save
Executive Share Option Scheme 2006 Scheme 2006
Scheme 2006 (3-Year Plan) (5-Year Plan)
2006 2005 2006 2005 2006 2005
Grant date (approved) 24/2/06 — 1/6/06 — 1/6/06 —
Grant date (unapproved) 20/2/06 — — — — —
Share price at grant date 
(weighted average) £4.78 — £4.64 — £4.64 —
Exercise price (weighted average) £4.78 — £4.79 — £4.79 —
Number of employees 30 — 56 — 73 —
Shares under option (approved) 132,000 — 27,117 — 66,515 —
Shares under option (unapproved) 12,000 — — — — —
Vesting period (years) 3 — 3 — 5 —
Model used for valuation Binomial — Black Scholes — Black Scholes —
Expected volatility 22.44% — 20.18% — 21.37% —
Option life (years) 10 — 3.5 — 5.5 —
Expected life (years) 6.5 — 3.25 — 5.25 —
Risk-free rate 4.224% — 4.683% — 4.623% —
Expected dividends expressed 
as a dividend yield 3.36% — 3.56% — 3.56% —
Expectations of vesting 100% — 75% — 75% —
Expectations of meeting 
performance criteria 100% — N/A — N/A —
Fair value per option £0.99 — £0.60 — £0.78 —
The expected volatility is based on historical volatility calculated over the weighted average remaining life of the award being valued. The
expected life is the average expected period to exercise. The risk-free rate of return is the implied yield of zero-coupon UK Government
bonds with a remaining term equal to the expected term of the award being valued. 60
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
31 SHARE-BASED PAYMENTS (CONTINUED)
Approved and Unapproved Executive Share Option Scheme 2006
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period —— — —
Granted during the period 4.78 144 — —
Exercised during the period —— — —
Lapsed during the period —— — —
Outstanding at the end of the period 4.78 144 — —
Exercisable at the end of the period —— ——
At the period end the weighted average remaining contractual life of the options is 9.5 years with a weighted average remaining expected
life of 6 years.
Share Save Scheme 2006 - 3 Year Plan
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period — — — —
Granted during the period 4.79 27 ——
Exercised during the period —— ——
Lapsed during the period — — — —
Outstanding at the end of the period 4.79 27 ——
Exercisable at the end of the period —— ——
At the period end the weighted average remaining contractual life of the options is 3.25 years with a weighted average remaining
expected life of 3 years.
Share Save Scheme 2006 - 5 Year Plan
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period —— ——
Granted during the period 4.79 67 ——
Exercised during the period — — — —
Lapsed during the period —— ——
Outstanding at the end of the period 4.79 67 ——
Exercisable at the end of the period — — — —
At the period end the weighted average remaining contractual life of the options is 5.25 years with a weighted average remaining
expected life of 5 years. 61
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
31 SHARE-BASED PAYMENTS (CONTINUED)
The total expense recognised for the period arising from share based payments are as follows:
2006 2005
£’000 £’000
Approved and Unapproved Executive Share Option Scheme 2006 24 —
Share Save Scheme 2006 - 3 Year Plan 1 —
Share Save Scheme 2006 - 5 Year Plan 2 —
27 —
New Schemes
Company
During the period the company entered into three new schemes, an Inland Revenue approved discretionary employee share option
scheme, an unapproved discretionary share option scheme and a share save scheme.
Both the approved and unapproved share options were granted to certain senior employees and directors. Options are exercisable
between three and ten years from the date of grant, subject to the movement of the Group's adjusted earnings per share over the three
years to 31 August 2008 exceeding that of the RPI by an average of 2% per annum.
All employees, subject to eligiblity criteria, may participate in the share save scheme. Under this scheme employees are offered savings
contracts for both 3 year and 5 year vesting period plans. The exercise period is 6 months from the vesting date.
The fair value per option granted and the assumptions used in the calculation of fair values are as follows:
Unapproved Share Save Share Save
Executive Share Option Scheme 2006 Scheme 2006
Scheme 2006 (3-Year Plan) (5-Year Plan)
2006 2005 2006 2005 2006 2005
Grant date 20/2/06 — 1/6/06 — 1/6/06 —
Share price at grant date £5.02 — £4.64 — £4.64 —
Exercise price £5.02 — £4.79 — £4.79 —
Number of employees 2 — 6 — 1 —
Shares under option 12,000 — 6,133 — 1,344 —
Vesting period (years) 3 — 3 — 5 —
Model used for valuation Binomial — Black Scholes — Black Scholes —
Expected volatility 22.44% — 20.18% — 21.37% —
Option life (years) 10 — 3.5 — 5.5 —
Expected life (years) 6.5 — 3.25 — 5.25 —
Risk-free rate 4.224% — 4.683% — 4.623% —
Expected dividends expressed 
as a dividend yield 3.36% — 3.56% — 3.56% —
Expectations of vesting 100% — 75% — 75% —
Expectations of meeting 
performance criteria 100% — N/A — N/A —
Fair value per option £0.99 — £0.60 — £0.78 —
The expected volatility is based on historical volatility calculated over the weighted average remaining life of the award being valued. The
expected life is the average expected period to exercise. The risk-free rate of return is the implied yield of zero-coupon UK Government
bonds with a remaining term equal to the expected term of the award being valued. 62
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
31 SHARE-BASED PAYMENTS (CONTINUED)
Unapproved Executive Share Option Scheme 2006
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period —— — —
Granted during the period 5.02 12 — —
Exercised during the period —— — —
Lapsed during the period —— — —
Outstanding at the end of the period 5.02 12 — —
Exercisable at the end of the period —— ——
At the period end the weighted average remaining contractual life of the options is 9.5 years with a weighted average remaining expected
life of 6 years.
Share Save Scheme 2006 - 3 Year Plan
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period — — — —
Granted during the period 4.79 6 ——
Exercised during the period —— ——
Lapsed during the period — — — —
Outstanding at the end of the period 4.79 6 ——
Exercisable at the end of the period —— ——
At the period end the weighted average remaining contractual life of the options is 3.25 years with a weighted average remaining
expected life of 3 years. 63
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
31 SHARE-BASED PAYMENTS (CONTINUED)
Share Save Scheme 2006 - 5 Year Plan
The number and weighted average exercise prices are as follows:
2006 2005
Weighted Weighted
average average
exercise Number of exercise Number of
price options price options
£ ('000) £ ('000)
Outstanding at the beginning of the period —— ——
Granted during the period 4.79 1 ——
Exercised during the period —— ——
Lapsed during the period —— ——
Outstanding at the end of the period 4.79 1 — —
Exercisable at the end of the period —— ——
At the period end the weighted average remaining contractual life of the options is 5.25 years with a weighted average remaining
expected life of 5 years.
The total expense recognised for the period arising from share based payments are as follows:
2006 2005
Unapproved Executive Share Option Scheme 2006 2 —
Share Save Scheme 2006 - 3 Year Plan — —
Share Save Scheme 2006 - 5 Year Plan — —
2 —
Share based payments awarded to employees of subsidiary undertakings and recognised as an investment in subsidiary undertakings in
the company are as follows:
2006 2005
Unapproved Executive Share Option Scheme 2006 22 —
Share Save Scheme 2006 - 3 Year Plan 1 —
Share Save Scheme 2006 - 5 Year Plan 2 —
Total carrying amount of investments 25 —
32 ACQUISITIONS
Wallace Oils Holdings Limited
In 2005 Carrs Billington Agriculture (Sales) Limited acquired the whole of the issued share capital of Wallace Oils Holdings Limited for a
total consideration including costs of £1,746,000. This consideration included £322,000 of deferred consideration, payable over two
years on achievement of profit targets, which was provided in the period ended 3 September 2005.
The directors estimate that the likelihood of the deferred consideration becoming payable is now remote. This has resulted in negative
goodwill of £76,810 arising on the acquisition which has been recognised immediately in the income statement for the period ended 
2 September 2006.
Other acquisitions
On 5 June 2006 Carrs Billington Agriculture (Sales) Limited increased its shareholding in Northern Feeds Solutions Limited to 100% for
a cash consideration of £3,200 generating goodwill of £79,992. This transaction has increased the Group's effective shareholding in
Northern Feeds Solutions Limited to 51%. 64
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
33 CASH GENERATED FROM/(USED BY) OPERATIONS Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Profit for the period 4,334 7,812 5,536 2,105 
Adjustments for:
Tax 1,989 2,557 (159) (108)
Dividends received from subsidiaries — — (5,754) (2,152)
Depreciation 3,419 3,055 — —
Loss/(profit) on disposal of property, plant and equipment 27 (4,199) — —
Profit on disposal of investments (1) — (1) —
Immediate recognition of negative goodwill (77) (1,526) — —
Intangible asset amortisation 986 1,029 — —
Provision against investment in/loans to subsidiaries — — — 87
Net fair value losses on derivative financial instruments in operating profit 27 6 4 —
Net fair value loss on share based payments 27 — 2 —
Net foreign exchange differences 14 19 (93) (24)
Net finance costs:
Interest income (378) (93) (436) (389)
Interest expense and borrowing costs 1,539 1,191  695 679 
Net fair value (gains)/losses on derivative financial instruments (143) 106 (137) 106
Share of (profit)/loss from associate and joint ventures (218) 697 — —
Changes in working capital (excluding the effects of acquisitions)
Decrease/(increase) in inventories 1,003 (1,009) — —
Decrease/(increase) in receivables 1,903 (6,595) (183) 280 
(Decrease)/increase in payables (3,382) 3,613 194 (221)
Cash generated from/(used by) continuing operations 11,069 6,663  (332) 363 
34 ANALYSIS OF NET DEBT
At 4 Other At 2
September non-cash Exchange September
2005 Cash flow  changes movements 2006
Group £'000 £'000 £'000 £'000 £'000
Cash and cash equivalents 3,149 (857) — — 2,292
Bank overdrafts (646)  (474) — (88) (1,208)
2,503 (1,331) — (88) 1,084
Loans and other borrowings:  
- current (9,220)  2,487 (901) — (7,634)
- non-current (6,534) — 894 — (5,640)
Finance leases:   
- current (800)   1,047 (1,087) — (840)
- non-current (865) — (7) — (872)
(14,916) 2,203 (1,101) (88) (13,902)
Other non-cash changes relate to finance leases and transfers between categories of borrowings. It also includes the release of
borrowing costs to the income statement. 65
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
35 CASH FLOWS RELATING TO NON-RECURRING ITEMS AND AMORTISATION
Cash generated from/(used by) operations includes an outflow of £nil (2005: £350,000) which relates to the non-recurring cost of
reorganising the Food Division. The cash consideration received on the disposal of the Bendall's site on London Road, Carlisle was £nil 
(2005: £2,846,000) net of expenses. 
There are no cash flows in respect of the immediate recognition of negative goodwill and amortisation of intangible assets.
36 CAPITAL COMMITMENTS 2006 2005
Group £'000 £'000
Capital expenditure that has been contracted for but has not been provided for in the accounts 182 225  
The Company has no capital commitments.
37 OTHER FINANCIAL COMMITMENTS
Group
At 2 September 2006 the Group had commitments under non-cancellable operating leases as follows:
Land and buildings Other
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Within one year — — 464 138 
Within two and five years inclusive — — 423 271 
After five years — — 4 7
— — 891 416 
Company
At 2 September 2006 the Company had commitments under non-cancellable operating leases as follows:
Land and buildings Other
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Within one year — — 1 1
Within two and five years inclusive — — 4 4
After five years — — 3 4
— — 8 9
38 FINANCIAL GUARANTEES
The Company, together with certain subsidiary undertakings, has entered into a guarantee with Clydesdale Bank PLC in respect of the
Group loans and overdraft with that bank, which at 2 September 2006 amounted to £nil (2005: £nil).
The Company, together with certain subsidiary undertakings, has a £1.25 million (2005: £1 million) letter of credit by Clydesdale Bank
PLC in favour of Crystalyx Products GmbH, a joint venture arrangement.
The Company, together with certain subsidiary undertakings, has entered into a guarantee with Royal Bank of Scotland PLC in respect of
the overdraft with that bank, which at 2 September 2006 amounted to £573,000 (2005: £601,000).
One of the Group's bankers in the normal course of business, enters into certain specific guarantees with some of a subsidiary's
customers. All these guarantees allow the bank to have recourse to the Company if a guarantee is enforced. The total outstanding of
such guarantees entered into by the bank at 2 September 2006 was £1,200,737 (2005: £429,000).
A subsidiary undertaking of the Company, together with an associated undertaking of the Company, has entered into a guarantee with
Royal Bank of Scotland PLC in respect of a loan with that bank. The Group's exposure to this liability at 2 September 2006 amounts to 
£2,250,000 (2005: £2,500,000). 66
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
39 RELATED PARTIES
Group and Company
Identity of related parties
The Group has a related party relationship with its subsidiaries, associate and joint ventures and with its directors. The balances and
transactions shown below were all undertaken on an arms’ length basis.
Transactions with key management personnel
Key management personnel are considered to be the directors and their remuneration is disclosed within the Directors' Remuneration Report.
Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Balances reported in the Balance Sheet
Amounts due from key personnel (in a trading capacity)
Trade receivables 94 18  — —
94 18    — —
Transactions reported in the Income Statement:
Revenue 352 52   — —
Purchases (4) (4)   — —
348 48   — —
Transactions with subsidiaries Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Balances reported in the Balance Sheet
Amounts due from subsidiary undertakings:
Loans — — 13,618 13,618
Trade receivables — — 315 295  
— — 13,933 13,913
Amounts due to subsidiary undertakings:
Loans — — (2,475) (4,191)
Trade payables — — (18) (122)   
— — (2,493) (4,313)
Transactions reported in the Income Statement
Management charges receivable — — 1,522 1,432 
Dividends received — — 5,754 2,152 
Interest receivable — — 402 377 
Interest payable — — (167) (154)   
— — 7,511 3,807 
Transactions with associate Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Balances reported in the Balance Sheet
Amounts due from associate:
Trade and other receivables 241 391  3 —
241 391  3 —
Amounts due to associate:
Trade payables (3,499) (5,787) — —
(3,499) (5,787) — — 67
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
39 RELATED PARTIES (CONTINUED)
Transactions reported in the Income Statement Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Revenue 824 380  — —
Rental income 17 17 — —
Net management charges (payable)/receivable (368) (69)  14 13 
Purchases (58,171) (39,826) — —
(57,698) (39,498) 14 13
Transactions with joint ventures Group Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Balances reported in the Balance Sheet
Amounts due from joint ventures:
Loans 280 — 205 —
Other receivables 1 — 1 —
281 — 206 —
Transactions reported in the Income Statement
Management charges receivable 50 — — —
50 — — —
Transactions with other related parties
During the period the Company issued a management charge of £nil (2005: £20,000) to Edward Billington & Son Limited, the ultimate
parent of Carrs Billington Agriculture (Operations) Limited. This was in respect of services on the acquisition of the assets of W & J Pye
Limited by Carrs Billington Agriculture (Operations) Limited 68
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
40 EXPLANATION OF TRANSITION TO IFRS
The selection of IFRS accounting policies as required by IFRS 1 creates a number of adjustments that are required to transition from UK
GAAP to IFRS. Each of these is discussed in turn below in the context of the appropriate standard and the guidance it gives:
EMPLOYEE BENEFITS (IAS 19)
IAS 19 is more encompassing than the UK equivalent FRS 17. Specifically, IAS 19 covers all employee benefits, which include post
retirement benefits such as pensions and medical care and short-term employee benefits payable in employment such as holiday pay.
Under UK GAAP, the pension costs associated with the defined benefit scheme were accounted for under SSAP 24 ‘Accounting for
pensions costs’ and detailed disclosures were provided in accordance with the transitional provisions of FRS 17. 
In terms of the initial recognition of the pension deficit, IAS 19 and FRS 17 are similar however, under FRS17, the pension scheme
liability is shown net of the deferred tax asset.
FINANCIAL INSTRUMENTS (IAS 32 and IAS 39)
IFRS requires derivative financial instruments to be recorded in the balance sheet at fair value with any change in fair value charged or
credited to the income statement. Previously under UK GAAP these were not required to be recorded in the balance sheet.
DEFERRED AND INCOME TAX (IAS 12)
IAS 12 is more encompassing than FRS 19 ‘Deferred tax’, in that it requires deferred tax to be provided on all temporary differences
rather than just taxable timing differences.
IAS 12 also requires that deferred tax assets should be presented within non-current assets and deferred tax liabilities within non-current
liabilities. They are only offset on the balance sheet if the entity has a legally enforceable right to set off current tax assets against current
tax liabilities and they are levied by the same tax authority on either the same taxable entity or different taxable entities which intend to
settle current tax liabilities and assets on a net basis.
INTANGIBLE ASSETS (IAS 38)
IAS 38 prohibits the amortisation of goodwill. Instead goodwill is subject to an annual impairment review. The Group has opted to apply
IFRS 3 prospectively from the date of transition. Goodwill has been frozen at 29 August 2004.
Under UK GAAP, capitalised computer software is classified within tangible fixed assets. Under IFRS, computer software that is not
integral to an item of property, plant or equipment must be classified as an intangible asset. The value of capitalised computer software is
deemed immaterial and has not been classified as an intangible asset.
IMPAIRMENT OF ASSETS (IAS 36)
IAS 36 requires that at each balance sheet date all tangible and intangible assets should be reviewed for indication of impairment.
IFRS 1 requires that an impairment review of goodwill should be conducted in accordance with IAS 16 at the date of transition and at the
balance sheet date. The Group has performed this review and no material adjustment is required for 2004/05. There is no impact on the
2004/05 opening balance sheet or on the income statement for 2004/05. 69
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
40 EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
LEASES (IAS 17)
IFRS requires property leases to be split into their separate land and building elements with leasehold land normally treated as an
operating lease.
A detailed review of the company’s lease portfolio has resulted in one lease being reclassified as an operating lease, and being classified
on the balance sheet as prepaid leases and amortised over the life of the lease.
SHARE-BASED PAYMENTS (IFRS 2)
IFRS 2 requires that share-based payment transactions be expensed to the income statement. The expense is calculated with reference
to the fair value of the award on the date of the grant and is recognised over the vesting period of the scheme, with adjustments being
made to reflect actual and expected levels of vesting. 
IFRS 1 permits a company to apply IFRS 2 only to equity settled share-based awards granted on or after 7 November 2002, which have
not vested by the later of the date of transition of IFRS (29 August 2004) and 1 January 2005. The Group has taken advantage of this
exemption and as such there is no impact on the 2004/05 opening balance sheet. 
PROPERTY, PLANT AND EQUIPMENT (IAS 16)
The Group has opted to use previous revaluations of property made under UK GAAP as deemed cost. The impact on 2004/05 opening
balance sheet is a reclassification from the revaluation reserve to other reserves. There is no impact on the income statement for
2004/05.
No adjustment has been made to the carrying value on plant and equipment in the 2004/05 opening balance sheet.
POST BALANCE SHEET EVENTS (IAS 10)
IAS 10 requires that dividends declared after the balance sheet date should not be recognised as a liability at that date as the dividend
does not represent a present obligation. Under UK GAAP, the period-end balance sheet includes an accrual for the proposed final
dividend.
BUSINESS COMBINATIONS (IFRS 3)
IFRS requires the acquirer of a business to identify and value acquired intangible assets. This has resulted in the recognition of customer
relationships and brands on the face of the balance sheet.
IFRS 3 requires negative goodwill (excess of acquirer’s interest in the fair value of acquiree’s identifiable assets, liabilities and contingent
liabilities over costs) arising on the acquisition of a business to be recognised immediately in the income statement.
CUMULATIVE TRANSLATION DIFFERENCES (IAS 21)
IAS 21 requires cumulative translation differences arising from translation of foreign operations to be recorded separately within equity
and included in the gain or loss on disposal when the operation is sold.
The Group has adopted the exemption from reflecting this aspect of IAS 21 retrospectively as permitted by in IFRS 1. 70
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
40 EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
Reconciliation of profit for the 53 week period ended 3 September 2005 UK GAAP Effect of
in IFRS transition
format to IFRS IFRS
Group £'000 £'000 £'000
Revenue
Continuing operations 158,876 —    158,876 
Acquisitions - Meneba UK Holdings Limited 26,299 —    26,299    
- Wallace Oils Holdings Limited 6,949 —    6,949 
Total revenue 192,124  —    192,124 
Cost of sales (161,532) 236 (161,296)
Gross profit 30,592  236  30,828 
Net operating expenses (19,666) 1,102 (18,564)
Group operating profit 10,926 1,338  12,264 
Analysed as:
Operating profit before non-recurring items and amortisation 7,166  809 7,975 
Non-recurring items and amortisation 3,760 529    4,289 
Group operating profit 10,926  1,338  12,264 
Net finance costs (1,092) (106) (1,198)
Share of post-tax loss in associate and joint ventures (531) (166) (697)
Profit before taxation 9,303  1,066  10,369 
Taxation (1,912) (645) (2,557)
Profit for the period 7,391 421  7,812 
Profit attributable to minority interest 276  53  329 
Profit attributable to equity shareholders 7,115 368  7,483  
7,391  421 7,812 
Company £'000
Profit after taxation under UK GAAP 5,326 
Effect of transition to IFRS:
- Employee benefits 657
- Dividends receivable from subsidaries (3,602)
- Movement in fair value of derivative financial instruments (106)
- Deffered taxation (170)
Profit after taxation under IFRS 2,105 71
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
40 EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
Reconciliation of total equity
29 August 2004 3 September 2005
UK GAAP Effect of UK GAAP Effect of
in IFRS transition in IFRS transition
format to IFRS IFRS format to IFRS IFRS
Group £'000 £'000 £'000 £'000 £'000 £'000
Assets
Non-current assets
Negative goodwill —  —  —   (539) 539  —   
Goodwill 40  —  40  422 (22) 400 
Other intangible assets 144  —  144  112  1,626  1,738 
Property, plant and equipment 20,474 (988) 19,486  30,232 (1,394) 28,838 
Investment property —  246  246  —  822  822 
Investment in associate 3,217 (1,414) 1,803  2,686 (2,241) 445
Interest in joint venture —  —  —    172  —  172 
Other investments 253  —  253  255  —  255
Financial assets
-Non-current receivables 200 — 200 223 — 223
Deferred tax assets 170  3,376  3,546 204  3,758  3,962  
24,498  1,220  25,718  33,767 3,088  36,855 
Current assets
Inventories 10,387  — 10,387  12,947 — 12,947 
Financial assets 
- Derivative financial instruments — 6 6 — — —
Trade and other receivables 19,491  742  20,233 34,463 734  35,197 
Current tax assets 82  — 82 87 — 87 
Cash and cash equivalents 1,091 — 1,091  3,149  — 3,149  
31,051 748  31,799  50,646 734  51,380
Total assets 55,549  1,968 57,517 84,413  3,822 88,235 
Liabilities
Current liabilities
Financial liabilities
- Borrowings (4,013) — (4,013) (10,666) — (10,666)
Trade and other payables (20,308) 1,160 (19,148) (30,983) 1,665 (29,318)
Current tax liabilities (944) — (944) (1,581) — (1,581)
(25,265) 1,160 (24,105) (43,230) 1,665 (41,565)
Non-current liabilities
Financial liabilities
-Borrowings (2,836) — (2,836) (7,399) — (7,399)
- Derivative financial instruments — — — — (106) (106)
Retirement benefit obligation — (10,940) (10,940) — (12,119) (12,119)
Deferred tax liabilities (951) (411) (1,362) (1,226) (2,628) (3,854)
Other non-current liabilities (1,187) — (1,187) (1,287) — (1,287)
(4,974) (11,351) (16,325) (9,912) (14,853) (24,765)
Total liabilities (30,239) (10,191) (40,430) (53,142) (13,188) (66,330)
Net assets 25,310 (8,223) 17,087  31,271 (9,366) 21,905 
Shareholders' equity
Ordinary shares 2,018  — 2,018  2,053  — 2,053 
Share premium 4,752  — 4,752 4,977  — 4,977 
Revaluation reserve 1,663 (1,663) — 1,632 (1,632) —
Foreign exchange reserve — — — — (80) (80)
Other reserve — 1,663  1,663  — 1,632  1,632 
Retained earnings 15,605 (8,223) 7,382  20,952 (9,339) 11,613
Total shareholders' equity 24,038 (8,223) 15,815 29,614 (9,419) 20,195
Minority interests in equity 1,272  — 1,272  1,657 53  1,710 
Total equity 25,310 (8,223) 17,087  31,271 (9,366) 21,905  72
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notes to the Financial Statements continued 
40 EXPLANATION OF TRANSITION TO IFRS (CONTINUED)
Reconciliation of total equity
29 August 2004 3 September 2005
UK GAAP Effect of UK GAAP Effect of
in IFRS transition in IFRS transition
format to IFRS IFRS format to IFRS IFRS
Company £'000 £'000 £'000 £'000 £'000 £'000
Assets
Non-current assets
Investment in subsidiaries 7,370  — 7,370  13,072 —  13,072 
Investment in associate 1,470 —  1,470  1,470  —  1,470 
Interest in joint venture —  —  —    172  —  172 
Other investments 202  —  202  202  —  202 
Deferred tax assets 148  3,136  3,284 242  3,430  3,672  
9,190  3,136  12,326  15,158  3,430  18,588 
Current assets
Trade and other receivables 11,169 (2,152) 9,017  19,802 (5,754) 14,048 
Current tax assets 463  — 463 602 — 602   
11,632 (2,152) 9,480  20,404 (5,754) 14,650
Total assets 20,822  984 21,806  35,562 (2,324) 33,238 
Liabilities
Current liabilities
Financial liabilities
-Borrowings (2,490) — (2,490) (7,214) — (7,214)
Trade and other payables (1,709) 1,215 (494) (2,349) 1,684 (665)
(4,199) 1,215 (2,984) (9,563) 1,684 (7,879)
Non-current liabilities
Financial liabilities
- Borrowings (1,400) — (1,400) (6,503) — (6,503) 
- Derivative financial instruments — — — — (106) (106)
Retirement benefit obligation  — (10,940) (10,940) — (12,119) (12,119)
(1,400) (10,940) (12,340) (6,503) (12,225) (18,728)
Total liabilities (5,599) (9,725) (15,324) (16,066) (10,541) (26,607)
Net assets 15,223 (8,741) 6,482  19,496 (12,865) 6,631  
Shareholders' equity
Ordinary shares 2,018 — 2,018  2,053  — 2,053 
Share premium 4,752 — 4,752  4,977 — 4,977 
Retained earnings 8,453 (8,741) (288) 12,466 (12,865) (399)
Total shareholders' equity 15,223 (8,741) 6,482  19,496 (12,865) 6,631
Minority interests in equity — — — — — —
Total equity 15,223 (8,741) 6,482  19,496 (12,865) 6,631   73
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
UK GAAP (in IFRS format) IFRS
2002 2003 2004 2005 2006
Revenue and results £'000 £'000 £'000 £'000 £'000
Revenue 143,378  148,688  155,749  192,124 242,576
Group operating profit 4,062  4,011  5,036  12,264 7,116
Analysed as:
Operating profit before non-recurring items
and amortisation 3,755  4,011  5,036  7,975 7,987 
Non-recurring items and amortisation 307 — —  4,289 (871)
Group operating profit 4,062  4,011  5,036  12,264 7,116
Net finance costs (822) (584) (575) (1,198) (1,011)
Share of post-tax profit/(loss) in associate 
and joint ventures 604  693  531 (697) 218
Profit before taxation 3,844  4,120  4,992  10,369 6,323
Taxation (647) (1,331) (1,498) (2,557) (1,989)
Profit for the period 3,197  2,789 3,494  7,812 4,334
Ratios
Operating margin (excluding 
non-recurring items and amortisation) 2.6% 2.7% 3.2% 4.2% 3.3%
Return on net assets (excluding 
non-recurring items and amortisation)   16.6% 17.7% 19.7% 27.8% 32.3%
Earnings per share - basic 36.3p 30.5p 39.9p 92.1p 51.0p
- adjusted 33.3p 34.7p 39.9p 50.9p 59.7p
Dividends per ordinary share 9.5p 11.5p 13.5p 16.0p 18.0p
Five Year Statement 74
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Five Year Statement continued
UK GAAP (in IFRS format) IFRS
2002 2003 2004 2005 2006
Net assets employed £'000 £'000 £'000 £'000 £'000
Non-current assets
Goodwill 96 63  40 400 235
Other intangible assets —  —  144  1,738 802
Property, plant and equipment 19,232  19,723  20,474  28,838 29,172
Investment property — —  — 822 794
Investments 2,146  2,839  3,470  872 1,940
Financial assets
- Derivative financial instruments —  — —  — 37
- Non-current receivables 17  8  5  223 208
Deferred tax assets 47 172  170  3,962  5,162
21,538  22,805  24,303  36,855 38,350
Current assets
Inventories 9,057  9,123  10,387  12,947 11,944
Trade and other receivables 18,411 18,240 19,686  35,197 33,546
Current tax assets 222  274  82 87 1
Cash and cash equivalents 856  1,472  1,091  3,149  2,292
28,546  29,109  31,246  51,380 47,783
Total assets 50,084  51,914  55,549  88,235 86,133
Current liabilities
Financial liabilities
- Borrowings (2,373) (3,627) (4,013) (10,666) (9,682)
- Derivative financial instruments — — — — (27)
Trade and other payables (20,010) (18,592) (20,308) (29,318) (25,387)
Current tax liabilities (554) (793) (944) (1,581) (1,324)
(22,937) (23,012) (25,265) (41,565) (36,420)
Non-current liabilities
Financial liabilities
- Borrowings (4,470) (3,460) (2,836) (7,399) (6,512)
- Derivative financial instruments — —  — (106) —
Retirement benefit obligation — — — (12,119) (15,796)
Deferred tax liabilities (1,129) (1,099) (951) (3,854) (3,600)
Other non-current liabilities (179) (1,108) (1,187) (1,287) (1,524)
(5,778) (5,667) (4,974) (24,765) (27,432)
Total liabilities (28,715) (28,679) (30,239) (66,330) (63,852)
Net assets 21,369  23,235  25,310  21,905 22,281 75
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Notice of Annual General Meeting
Notice is hereby given that the Ninety Eighth Annual General Meeting of Carr's Milling Industries PLC will be held at the Crown Hotel, Wetheral,
Carlisle on Tuesday 9 January, 2007 at 11.30 a.m. for the transaction of the following business.
ORDINARY BUSINESS
1. To adopt the Report of the Directors and Financial Statements for the period ended 2 September 2006
2. To approve the Remuneration Committee’s Report for the period ended 2 September 2006
3. To declare a final dividend of 12.5p per share on the Ordinary Share Capital
4.    To re-elect as a Director W R Inglewood who retires by rotation
5.     To re-elect as a Director A R Heygate who retires having been appointed to the Board since the last Annual General Meeting
6. To re-appoint PricewaterhouseCoopers LLP as Auditors and to authorise the Directors to fix their remuneration
SPECIAL BUSINESS
7. Disapplication of pre-emption rights
To resolve as a special resolution that the directors of the Company be and are hereby empowered pursuant to section 95 of the Companies
Act 1985 to allot equity securities (as defined in sub-section (2) of section 94 of the Companies Act 1985) pursuant to the authority conferred
on them for the purposes of section 80 of the Act by the special resolution of the Company passed on 6 January 2005 as if section 89(1) of
the said Act did not apply to such allotment provided that this power is limited to:
(i) the allotment of equity securities in connection with a rights issue in favour of the holders of ordinary shares in the capital of the Company
where the equity securities attributable to the interests of such holders are proportionate (as nearly as may be) to the respective number of
such ordinary shares held by them, subject only to such exclusions or other arrangements as the directors feel necessary or expedient to deal
with fractional entitlements or legal or practicable problems arising under the laws or the requirements of any recognised regulatory body; and
(ii) the allotment (otherwise than pursuant to sub-paragraph (i) above) of equity securities up to an aggregate nominal amount of £102,920, and
shall expire at the conclusion of the next Annual General Meeting of the Company or 15 months from the date hereof, whichever is the earlier,
save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after
such expiry and the Board may allot equity securities in pursuance of such offer or agreement as if the power conferred hereby had not
expired.
8.     Company’s authority to purchase its own shares
To resolve as a special resolution that in accordance with Chapter VII of the Companies Act 1985, the Company be generally and
unconditionally authorised to make market purchases (as defined in section 163(3) of that Act) of its own ordinary shares of 25p each
(“ordinary shares”) on such terms and in such manner as the directors may, from time to time, determine provided that:
(i) The maximum number of ordinary shares hereby authorised to be purchased is 823,358;
(ii) the minimum price which may be paid for any ordinary share is 25 pence (excluding expenses);
(iii) the maximum price which may be paid for any ordinary share is an amount equal to 105 per cent of the average of the middle market
quotations for an ordinary share as derived from the London Stock Exchange Daily Official List for the five business days immediately
preceding the day on which the share is contracted to be purchased (excluding expenses); and
(iv) the authority hereby conferred shall expire at the conclusion of the annual general meeting of the Company to be held in 2008, if earlier, on 8
April 2008, but a contract of purchase may be made before such expiry which will or may be executed wholly or partly thereafter and a
purchase of shares may be made in pursuance of any such contract.
Stanwix By Order of the Board
Carlisle CA3 9BA Ronald C Wood
21 November 2006 Secretary
There will be available for inspection at the registered office of the Company during normal business hours from the date of this notice until
the date of the Annual General Meeting:
(a) register of directors’ interests
(b) copies of all contracts of service relating to directors employed by the Company.
These documents will also be available for inspection during the Annual General Meeting and for at least fifteen minutes before it begins. 76
Carr’s Milling Industries PLC
Annual Report & Accounts 2006
Directory of Operations
Carr’s Milling Industries PLC
Old Croft, Stanwix, Carlisle,
Cumbria CA3 9BA
Tel: 01228 554600
Fax: 01228 554601
Website: www.carrs-milling.com
Animal Feed Supplements Inc
East Highway 212, 
PO Box 188, Belle Fourche, 
South Dakota 57717 USA
Tel: 00 1 605 892 3421
Fax: 00 1 605 892 3473
Animal Feed Supplements Inc
PO Box 105, 
101 Roanoke Avenue, Poteau,
Oklahoma 74953 USA
Tel: 00 1 918 647 8133
Fax: 00 1 918 647 7318
Caltech
Solway Mills, Silloth, Wigton,
Cumbria CA7 4AJ
Tel: 016973 32592
Fax: 016973 32339
Crystalyx Products GmbH**
Am Stau 199-203, 26122,
Oldenburg, Germany
Tel: 00 49 441 2188 92142
Fax: 00 49 441 2188 92177
Carrs Billington Agriculture
(Operations)*
Parkhill Road, 
Kingstown Industrial Estate,
Carlisle CA3 0EX
Tel: 01228 529 021
Fax: 01228 554 397
Carrs Billington Agriculture
(Operations)*
Lansil Way, Lancaster LA1 3QY
Tel: 01524 597 200
Fax: 01524 597 219
Carrs Billington Agriculture
(Operations)*
High Mill, Langwathby, Penrith, 
Cumbria CA10 1NB
Tel: 01768 889 800
Fax: 01768 889 807
Carrs Billington Agriculture
(Operations)*
Cold Meece, Stone, 
Staffordshire ST15 0QW
Tel: 01785 760 535
Fax: 01785 760 888
Carrs Billington Agriculture
(Operations)*
Powhill, Kirkbride, 
Cumbria CA5 5AJ
Tel: 01697 352 229
Fax: 01697 352 248
Carrs Billington Agriculture
(Operations)* 
Uredale Mill, Askrigg, Leyburn, 
North Yorkshire DL8 7HZ
Tel: 01969 650 229
Fax: 01969 650 770
Carrs Fertilisers, Invergordon
Inverbreakie Industrial Estate,
Invergordon, Ross-shire IV18 0QN
Tel: 01349 853 745
Fax: 01349 854 066
Carrs Fertilisers, Montrose
River Street, Montrose, 
Angus DD10 9RT
Tel: 01674 678 400
Fax: 01674 671 318
Carrs Fertilisers, Silloth
The Wath, Silloth, Wigton,
Cumbria CA7 4PH
Tel: 016973 32333
Fax: 016973 32279
Carrs Billington Agriculture
(Sales), Annan
25 High Street, Annan,
Dumfriesshire DG12 6AE
Tel: 01461 202 772
Fax: 01461 202 712
Carrs Billington Agriculture
(Sales), Barnard Castle
Montalbo Road, Barnard Castle,
Co Durham DL12 8ED
Tel: 01833 637 537
Fax: 01833 638 010
Carrs Billington Agriculture
(Sales), Buchlyvie
Main Street, Buchlyvie, 
Stirling FK8 3NQ
Tel & Fax: 01360 850 372
Carrs Billington Agriculture
(Sales), Carlisle
Montgomery Way, Rosehill
Estate, Carlisle CA1 2UY
Tel: 01228 520 212
Fax: 01228 512 572
Carrs Billington Agriculture
(Sales), Cockermouth
Unit 5, Lakeland Agricultural
Centre, Cockermouth CA13 0QQ
Tel: 01900 824 105
Fax: 01900 826 860
Carrs Billington Agriculture
(Sales), Hexham
Tyne Mills Industrial Estate,
Hexham, 
Northumberland NE46 1XL
Tel: 01434 605 371
Fax: 01434 608 938
Carrs Billington Agriculture
(Sales), Milnathort
Stirling Road, Milnathort, 
Kinross KY13 9UZ
Tel: 01577 862 381
Fax: 01577 863 057
Carrs Billington Agriculture
(Sales), Morpeth
20c Coopies Lane Industrial
Estate, Morpeth, 
Northumberland NE61 6JN
Tel: 01670 503 930
Fax: 01670 504 404
Carrs Billington Agriculture
(Sales), Perth
Highland House, 
St Catherine’s Road, 
Perth PH1 5YA
Tel & Fax: 01738 643 022
Carrs Billington Agriculture
(Sales), Brock
Brockholes Way, 
Claughton Trading Estate,
Lancaster Old Road,
Claughton on Brock, 
Preston PR3 0PZ
Tel: 01995 643 200
Fax: 01995 643 220
Carrs Billington Agriculture
(Sales), Gisburn
Pendle Mill, Mill Lane, Gisburn,
Clitheroe, Lancashire BB7 4ES
Tel & Fax: 01200 445 491
Carrs Billington Agriculture
(Sales), Hawes
Burtersett Road, Hawes, 
North Yorkshire DL8 3NP
Tel: 01969 667 334
Fax: 01969 667 335 
Carrs Billington Agriculture
(Sales), Leek
Macclesfield Road, Leek,
Staffordshire ST13 8NR
Tel & Fax: 01538 383 277
Wallace Oils, Carlisle
Stephenson Industrial Estate,
Willowholme, Carlisle,
Cumbria CA2 5RN
Tel: 01228 534 342
Fax: 01228 590 820
Wallace Oils, Dumfries
Heath Hall, Dumfries,
Dumfriesshire DG1 3NX
Tel: 01387 250 525
Fax: 01387 250 656
Wallace Oils, Stranraer
Droughduil, Dunragit,
Stranraer DG9 8QA
Tel & fax: 01581 400 356
Afgritech**
Old Croft
Stanwix, Carlisle 
Tel: 01228 554600
Fax: 01228 554601
Bibby Agriculture**
Dairy Centre
Fair Lane, Carmarthen
SA31 1RX 
Tel: 01267 232 041
Fax: 01267 232 374
Bibby Agriculture**
1A Network House
Badgers Way
Oxon Business Park
Shrewsbury, Shropshire
SY3 5AB
Tel: 01743 237 890
Fax: 01743 351 552
Bendalls
Brunthill Road,
Kingstown Industrial Estate,
Carlisle CA3 0EH
Tel: 01228 526 246
Fax: 01228 525 634
R Hind
Kingstown Broadway, 
Kingstown Industrial Estate,
Carlisle CA3 0HA
Tel: 01228 523 647
Fax: 01228 512 712
Carrs MSM
Unit 1 Spitfire Way,
Hunts Rise,
South Marston Park,
Swindon, Wiltshire SN3 4TX
Tel: 01793 824 891
Fax: 01793 824 894
Carrs Flour
Solway Mills, Silloth, Wigton,
Cumbria CA7 4AJ
Tel: 016973 31661
Fax: 016973 32543
Greens Flour
Station Road, Maldon, 
Essex CM9 4LQ
Tel: 01621 852 696
Fax: 01621 854 525
Hutchisons Flour
East Bridge, Kirkcaldy, 
Fife KY1 2SR
Tel: 01592 267 191
Fax: 01592 641 805
John Stronach
Solway Mills, Silloth, Wigton,
Cumbria CA7 4AJ
Tel: 016973 31456
Fax: 016973 32808
B&A Travel
18 Main Street, Beith, 
Ayrshire KA15 2AA
Tel: 01505 504 547
Fax: 01505 504 812
* associate company
** joint venture company Designed and produced by corporateprm, Edinburgh and London.  www.corporateprm.co.uk
01 Financial Highlights
02 Chairman’s Statement
04 Chief Executive’s Review
08 Operating and Financial Review
12 Board of Directors
12 Registered Office and Advisers
13 Directors’ Report
16 Corporate Governance
19 Independent Auditors’ Report
20 Directors’ Remuneration Report
24 Consolidated Income Statement
25 Consolidated and Company Statement
of Recognised Income and Expense
26 Consolidated and Company Balance
Sheet
27 Consolidated and Company Cash
Flow Statement
28 Principal Accounting Policies
33 Notes to the Financial Statements
73 Five Year Statement
75 Notice of Annual General Meeting
76 Directory of Operations
Financial Highlights
• Revenue up 26% to £242.6m
• Profit before tax down 39% at £6.3m
• Adjusted profit* before tax up 9% at £7.3m
• Basic earnings per share down 45% at 51.0p
• Adjusted earnings per share
*
up 17% to 59.7p
• Dividend up 13% to 18.0p per share
• Strong operating cash generation
* excluding non-recurring items and amortisation of intangible assets
agriculture
page 5
food
page 6
Carr’s Milling Industries activities are 
focussed on Agriculture, Food and
Engineering with increased Annual Sales of
£242.6m Carr’s Milling Industries PLC
Old Croft, Stanwix
Carlisle CA3 9BA
www.carrs-milling.com
Carr’s Milling Industries PLC Annual Report & Accounts 2006
organic
growth
Carr’s Milling Industries PLC
Annual Report & Accounts 2006