Annual report 2005
Baking Great Cakes April
Acquisition of Crossfields Foods.
December
Acquisition of Lisa Bakery.
August
Raised £2.1m net of costs and
admitted to trading on AIM
(share price 110p).
March
Acquisition of Maid Marian.
1994 1995 1998 2000
IN PARTNERSHIP WITH OUR LEADING CUSTOMERS, WE HAVE BUILT A
REPUTATION FOR BEING A RESPONSIVE AND INNOVATIVE BUSINESS.
OUR STRENGTH GOING FORWARD IS FOUNDED ON DELIVERING HIGH
QUALITY SERVICE AND EXCELLENT VALUE FOR MONEY PRODUCTS TO
OUR MULTIPLE RETAIL CUSTOMERS. 2001 2003 2004 2005
January
New factory opened at 
Shadsworth, Blackburn.
Raised £5.3m net of costs
(share price 265p).
Acquisition of Newton House 
for £4m.
February
Acquisition of Cakes for the
Connoisseur for £2.7m.
March
Acquisition of the Creative Cake
Company for £5.4m.
June
Acquisition of William Lusty Ltd 
for £0.4m.
October
Named AIM Company of the Year.
January
Raised £6.1m net of costs
(share price 285p).
February 
Acquisition of Soreen for £8.4m.
January
Acquisition of Hoppers Farmhouse
Bakery for £5m.
Awarded the Licence for all Disney
‘small cakes’.
September 
Invested £2.6m in Europe’s most
efficient sweet pie line.
November 
Raised £8.0m (net of costs) for
future investments (share price 515p).
December
Acquisition of Cukiernia Mistrza Jana
for £1.12m.
January
Yorkshire Cottage
Bakeries for £12m.
The Creative Cake Company
Salisbury
Licensed Celebration Cakes
Speciality Cakes
Novelty Cakes
Old Trafford Bakery
Slab and Layer Cakes
Christmas Cakes
Rich Fruit Cakes
Oldham Bakery
Chocolate Mini Rolls
Swiss Rolls
Yule Logs
Heywood Bakery
Slab and Layer Cakes
Christmas Cakes
Tinned Cakes
Cakes for the Connoisseur
Huddersfield
Luton
Bristol
Hamilton
HQ & Blackburn Bakery
Fruit Pies
Flap Jacks
Tray Bakes
Sponge Cakes
Mince Pies
Herne Bay Bakery
Mince Pies
Tarts
Fruit Pies and Sundaes
Shadsworth Bakery
Bakewell Tarts
Fruit Pies
Mince Pies
Cukiernia Mistrza Jana
Poland
Jam Tarts, Swiss Rolls
Fruit Pies, Cake Bars
Cookies
City Bakery
Bradford
Fairy Cakes
Iced Cakes
Loaf Cakes
Bradford Bakery
Chocolate Mini Rolls
Swiss Rolls
Fairy Cakes
Ice Topped Buns
Soreen
Manchester
Fruit and Malt Loaves
Fruit Cereal Bars
Snack Lines Highlights 01
Executive Chairman’s Statement 02
Chief Executive’s Review 06
Finance Director’s Review 08
Corporate and Social Responsibilities 09
Directors 10
Advisers 11
Directors’ Report 12
Report on Directors’ Remuneration 15
Report of the Independent Auditors 18
Consolidated Profit and Loss Account 19
Balance Sheets 20
Consolidated Cash Flow Statement 21
Notes to the Financial Statements 22
Notice of Meeting 39
Five Year Review 41
CONTENTS 01 Inter Link Foods PLC
STRATEGIC HIGHLIGHTS
£18.7
2001 
£46.0
2002 
£51.4
2003 
£69.6
2004 
£98.1
2005
£1.8 
2001
£3.3
2002
£3.7
2003
£5.0
2004
£5.9
2005
TURNOVER
Increased by 40.9% to £98.1
million (2004: £69.6 million)
PROFIT BEFORE TAX 
AND GOODWILL
Increased by 18% to £5.9 million
(2004: £5.0 million)
£1.7
2001 
£2.7 
2002 
£3.0
2003 
£3.9 
2004 
£4.5 
2005
33.8p
2002
38.2p
2004
42.1p
2005
PROFIT BEFORE TAX
Increased by 14.4% to £4.5 million
(2004: £3.9 million)
ADJUSTED EARNINGS
PER SHARE
Up 10.2% to 42.1p per share
(2004: 38.2p)
21.2p
2001
25.2p
2002
26.3p
2003
27.5p
2004
29.1p
2005 
3.6p
2001
4.2p
2002
5.0p
2003
5.55p
2004
6.45p
2005 
BASIC EARNINGS PER SHARE
Increased by 5.8% to 29.1p 
(2004: 27.5p)
DIVIDENDS PER SHARE
Up 16.2% to 6.45p per share
(2004: 5.55p)
• SIXTH SUCCESSIVE YEAR OF RECORD TURNOVER, PROFITS AND 
EARNINGS PER SHARE.
• SUCCESSFUL ACQUISITION AND INTEGRATION OF CUKIERNIA 
MISTRZA JANA AND YORKSHIRE COTTAGE BAKERIES
23.6p
2001
35.5p
2004 02
EXECUTIVE CHAIRMAN’S STATEMENT
“AS RELATIONSHIPS WITH
CUSTOMERS ARE
STRENGTHENED AND WE
BECOME AN EVEN MORE
IMPORTANT SUPPLIER,
UNDERPINNED BY OUR
CULTURE OF GOOD SERVICE,
GOOD QUALITY AND VALUE
FOR MONEY, THE
OPPORTUNITIES FOR NEW
BUSINESS HAVE NEVER BEEN
STRONGER.”
I am pleased to announce that this is our
sixth successive record year of turnover,
profits and earnings per share since joining
AIM in August 1998. 
It has also been my first year as Chairman
and I take great pleasure in confirming that
we are now number two by turnover in the
UK Cake Market.
In partnership with our leading customers,
we have built a reputation for being a
responsive, innovative business. Our strength
going forward is founded on delivering high
quality service and excellent, value-for-money
products to our multiple retail customers and
ultimately the consumers.
It has been an unparalleled year of
substantial growth and progress in both
financial and strategic terms.
•
Turnover has increased by 40.9% to
£98.1m
•
Profit before tax has increased by 14.4%
to £4.5m
•
EBITDA has increased by 27.9% to £9.8m
•
EBITA has increased by 23.6% to £7.3m
•
Like for like sales growth excluding
acquisitions has risen by 14.1%
•
In December 2004, we acquired 
Poland-based Cukiernia Mistrza Jana.
Since acquisition, our focus has been 
to develop a range of products
manufactured in Poland for UK
distribution. This has been achieved,
resulting in eight products being
successfully launched by April and
ensuring substantial growth within 
this business. 
•
In January 2005 we acquired Yorkshire
Cottage Bakeries and Jessie Oldfield, 
and they have been trading well since
their acquisition.
•
We have entered into an agreement 
to lease a new 50,000 sq ft bakery in
Blackburn adjacent to our existing site. 
It will become operational at the beginning 
of August 2005. 
•
This year, we have successfully launched
over 200 new products into a highly
competitive marketplace. Our commitment
to innovation is central to our success and
has assisted us in achieving a 40.9%
increase in turnover. 
•
We expect to nearly double our mince pie
production for this forthcoming Christmas.
Hoppers (acquired in 2004), Jessie
Oldfield (acquired in 2005) and recent
capital expenditure have all added
significantly to our seasonality. In 2003,
Hoppers produced 35 million mince pies
which rose to 65 million in 2004 and our
confirmed orders for 2005 have already
topped 120 million.
•
This has been an unparalleled year for us
in terms of our trading achievements, but
it has also been a year in which we have
built the infrastructure, production
capability and skill base to enable us to
manage most effectively our high level of
growth. In summary, achievements in this
area include the following:
•
We have completed two acquisitions
that have brought additional profits and
capacity into the Group.
•
We have introduced the strategic
objective of consolidating our
operations onto fewer, more cost-
effective sites, the major benefits 
and savings from which will be
delivered over the next few years.
•
We have strengthened our Board of
directors with the appointment of 
Chris Thompson as Finance Director
and strong experienced management
have been introduced to manage our 
growth in all areas of the business.
•
We have finalised the planning for our
new Blackburn bakery and will start
production there in August 2005. 
•
We have maintained our capital
expenditure programme to enable us
to continue to be a low cost producer.
Inter Link Foods PLC •
New IT systems are now being
introduced into all areas of the
business — these will be fully in place
by January 2006 and will provide
significantly improved management
information.
•
A record number of new products
have been introduced throughout 
the Group. 
Your Board is pleased to propose a final
dividend of 4.3p (2004: 3.7p) per share
making a total for the year of 6.45p (2004:
5.55p), an increase of 16.2%. Subject to
approval at the Annual General Meeting, the
final dividend will be paid on 16 September
2005 to those shareholders on the register 
at 19 August 2005.
RESULTS
•
Turnover increased by 40.9% to £98.1m
(2004: £69.6m)
•
Profit before tax has increased by 14.4%
to £4.5m (2004: £3.9m)
•
EBITDA increased by 27.9% to £9.8m
(2004: £7.7m)
•
EBITA increased by 23.6% to £7.3m
(2004: £5.9m)
•
Profit before tax and goodwill increased by
18% to £5.9m (2004: £5.0m)
•
Adjusted earnings per share up 10.2% to
42.1p (2004: 38.2p)
•
Basic earnings per share increased by
5.8% to 29.1p (2004: 27.5p)
•
Dividend per share up 16.2% to 6.45p
(2004: 5.55p)
STRATEGY
Since flotation in 1998, we have successfully
acquired nine businesses, all of which have
shown strong organic growth. We will further
our acquisitions strategy by continuing to
search for businesses where we can add
value, at a realistic cost to our business.
STRENGTHENING OUR TEAM
We have strengthened our Board of
directors and strong experienced
management have been introduced to
manage our growth in all areas of 
the business.
03 Annual report 2005 04
EXECUTIVE CHAIRMAN’S STATEMENT (continued)
However, we now believe that the core
strategy that we have maintained in our early
years of maintaining small, autonomous units
may have run its course — it is now
appropriate for us to introduce some
consolidation of our sites in order to allow
more focused investment and to simplify the
management task. Our medium-term target is
therefore a reduction in the number of
operating sites. The consolidation process
has already commenced and this will result in
considerable cost savings which will be
realised over the coming years. We are ever
mindful of our reputation as a low cost
producer and consolidation will provide
efficiency benefits and increased productivity. 
I am delighted to report that we have
achieved our aim of becoming number two
cake supplier by turnover in the UK. Our new
critical mass is highly beneficial to the
business in terms of our buying power and it
enhances our reputation with customers as a
leading fast growing bakery business.
Innovation is the lifeblood of our business;
it is where we add volume, value and margin.
We have launched more products this year
than ever before and our acquisitions have
grown through timely new product
development. The acquisition of Cukiernia
Mistrza Jana provided an enormous
opportunity for new products. We are
growing this business through capital
expenditure and sales introductions and have
already launched eight products for
distribution throughout the UK. We continue
to invest in innovation and as a result, our
New Product Development teams across the
Group have almost doubled in size this year.
Our team at Creative Cake Company
continue to negotiate for the best licences for
all Group businesses. This year they have
secured the exclusive licences for Scooby
Doo, Batman and Jacqueline Wilson.
As our technical teams have been
strengthened, we welcome Behi Barzegar to
the Group as Technical Director. We place as
paramount, our responsibility to manufacture
food within the correct hygiene and food
safety procedures. Technical competence is
imperative to the future growth of the
business, and this inspires confidence both
within the business and with our customers.
We are investing £0.6m over 3 years in
improving our IT and management information
systems. From July 2005, all managers will
be able to access additional new data. These
systems are being implemented at all levels
across the business and the benefits will
include improved planning and loading of
factories, reduced labour costs, increased
productivity and lower waste. 
TRADING
During the year, our like for like sales have
increased by 14.1%. This continues to
demonstrate our ability to grow our core
businesses. I am also delighted to report that
the two new acquisitions are proving to be
highly successful. Cukiernia Mistrza Jana is a
70,000 sq ft, well-invested site with a highly
skilled and dedicated workforce. Our strategy
is to continue to grow this business by
serving European retail multiples and also
producing products for the UK. This business
is now largely integrated within the Group and
is successfully serving our customers. We
have already launched, in record time, eight
new products into the UK — products that
would have generated very low margins if
manufactured within the UK. With more
anticipated, this business can look forward to
considerable growth. Yorkshire Cottage
Bakeries, based in Bradford, West Yorkshire
and purchased in January 2005, is proving 
to be an excellent acquisition. As part of our
strategy, we have nearly completed the
process of transferring Newton House Bakery
to this site, the benefits of which include
lower operating costs and increased
productivity. Jessie Oldfield, a subsidiary of
Yorkshire Cottage Bakeries is also showing
strong growth. This business is very
seasonally biased and I am pleased to report
that orders for this forthcoming Christmas are
well ahead of last year. As a result of the
transfer of production from the Newton
House Bakery business to Yorkshire Cottage
taking place earlier than planned, and other
Inter Link Foods PLC production moves to Jessie Oldfield, these
businesses have performed better than we
had anticipated at the time of their
acquisition.
One of the most important developments
this year has been the construction of a new
50,000 sq ft factory, adjacent to our existing
site in Blackburn, for which we have signed
an agreement to lease. The investment in this
site includes a £3.3m automated plant to
satisfy an unprecedented demand for our
products. It will enhance our reputation as a
leading UK supplier, able to consistently
deliver high quality products at low unit cost. 
STAFF
With such high sales growth, it has been
necessary to appoint additional, high calibre
staff, to ensure we manage this growth
effectively. To this end we have therefore
significantly strengthened our teams in the
following areas — Technical, New Product
Development, Finance, Planning,
Commercial, Supply Chain, Customer
Service, Operational Management, Process
Improvement and Central Purchasing.
I’d like to take this opportunity to thank all
our employees within each business. It is
through their hard work, loyalty and
commitment that we continue to grow this
business. There is always a very positive,
‘can do’ attitude and a will to win that will see
us through the next stage of our development. 
The company’s 11th year was recognised
in the North West of England by winning 
the prestigious Manchester Evening News
Business of the Year award for 2004.
Numerous industry awards have flowed
through the years but this one is particularly
valued by everyone involved in the company.
Since joining AIM in 1998 our sales have
increased by 1040% from £8.6 million to
£98.1 million.
SUPPLIERS
I should also like to thank our suppliers for
their support and hard work in a period that
has provided a challenging trading
environment. We have worked with many of
them throughout our period as a public
company and we are very grateful for their
high degree of commitment to us.
PROSPECTS
As relationships with customers are
strengthened and we become an even more
important supplier, underpinned by our
culture of good service, good quality and
value for money, the opportunities for new
business have never been stronger. We
remain in a strong position to capture
opportunities and realise our potential.
During the first two months of this current
year, sales have been very strong, showing
32.2% year on year growth and 9.1% like for
like growth. We can look forward to the year
ahead with optimism and confidence,
assured in the knowledge that we have the
correct strategy and resources in place to
enable us to continue to grow.
Alwin Thompson
Executive Chairman
13 July 2005 
05 Annual report 2005 06
CHIEF EXECUTIVE’S REVIEW
“OUR RELENTLESS FOCUS ON
‘BAKING GREAT CAKES’
PROVIDES EVERYONE IN THE
GROUP WITH A SINGLE
PURPOSE AND FOCAL POINT TO
ACHIEVE THE BEST WE CAN . . .”
INTRODUCTION
The Group has continued to enjoy significant
success in pursuing its strategy. During the
year the Group became number two in cake
supply by turnover in the UK. This has been
achieved following a 40.9% increase in sales
and a 18% increase in profits before tax and
goodwill amortisation. The business
continues to benefit from an ongoing capital
expenditure programme which again helped
to deliver double digit like for like sales
performance, driven by higher levels of
innovation and greater productivity. The
acquisition of Cukiernia Mistrza Jana, our first
venture into Eastern Europe, in December
and of Yorkshire Cottage Bakeries in January
contributed to encouraging sales growth.
However, the best is yet to come. The most
significant achievement was the pleasing
14.1% like for like increase in sales, which
was made at a time when the retail market
experienced tougher trading conditions
alongside stronger comparative figures from
the previous year. 
Our relentless focus on “Baking Great
Cakes” provides everyone in the Group with
a single purpose and focal point to achieve
the best we can — no matter how tough the
challenge. This inbred culture of stretching
and striving and always finding a better way
of doing practically anything is at the heart of
the Group and serves us well.
THE MARKET
(TNS data 52 weeks w/e 24 April 2005)
The total cake market (ambient and chilled) is
showing steady growth in value terms of 6%.
This growth has been driven by an increase
in average price and a continuing shift
towards premium products within the market.
This trend is set to continue as focus is
directed at added value product
opportunities. Trends also suggest that
consumers are increasing their frequency of
purchase of cakes and are actually doing so
at a higher price. In-store bakery products
continue to grow with a 4.4% increase year
on year. 
Innovation remains absolutely key to
maintaining sensible growth, with retailer
brands outperforming manufacturer brands, a
trend which is set to continue. The
importance of innovation has not been lost
on your Group and therefore we have
doubled the Innovations Team resource in the
year, to ensure we capitalise on all of the
opportunities that are presented to us.
SALES
The Group has seen positive results this year,
with sales increasing by 40.9% year on year
and by 14% on a like for like basis. This
performance should be measured by a
market that grew by 6% and is therefore a
particularly pleasing performance all round.
Double digit organic growth complements the
success of more recent acquisitions and
reflects the hard work and commitment of
everyone working in each of the Group’s 12
bakeries including Cukiernia Mistrza Jana.
Our strategy is to work alongside our
customers and sell a balanced portfolio of
retailer brands, brands we own and licensed
products which historically have positively
contributed to our growth. Looking back to
2003 it is recognised that the acquisition of
Soreen brand has added greatly to the
Group portfolio. Soreen malt loaf is far and
away the market leader and with its snack
products and with increasing consumer
demand, the business has never been in a
better position to maximise growth
opportunities for the brand.
OPERATIONS
Business focus is centred on improving all
manufacturing processes and during the year
we have invested in all bakeries in the Group
to improve productivity and efficiency levels. It
is recognised that capital investment should
dovetail into the consolidation of the number
of bakeries we operate. Therefore, the
announcement that the Group is to close its
bakeries at Newton House (Dewsbury) and
Crossfield Foods (Blackburn) where Inter Link
Foods began life in 1994, serves as a reminder
that efficiency and productivity are important for
us all.
Inter Link Foods PLC In the year, process improvement and
efficiency have been the hallmarks that we
have sought to encourage. Our latest initiative
to invest in an additional new bakery
alongside our 2001 new build bakery in
Blackburn will create a facility that is capable
of producing some 26,000 individual fruit
pies per hour. This most efficient facility with
its automated equipment, coupled with our
no compromise focus on quality, provides
confidence in the future.
The central buying team established in
2003 continues to generate very real benefits
for the Group and are enthusiastic about
prospects for the future. In all our bakeries
we have invested in additional high calibre
individuals to ensure we are in a good
position to capitalise on future prospects. The
investment in people remains pivotal to our
future growth.
DEVELOPING OUR PEOPLE
The growth of the Group has been outstanding
and none of this would have been possible
without the total involvement and continuing
support of our people. Training schemes and
management development initiatives have all
contributed to the improved performance of the
entire business — building on this success
remains a priority.
SUMMARY
Profit has grown encouragingly over the years
and management’s overall goal remains very
focused on enhancing shareholder value.
We remain confident that the management
team is well placed to ensure continued
growth and we are confident of achieving
our objectives.
Paul Griffiths
Chief Executive
13 July 2005
INVESTING IN MANUFACTURING
Our latest initiative to invest in an
additional new bakery alongside our 2001
new build bakery in Blackburn will create a
facility that is capable of producing some
26,000 individual fruit pies per hour.
07 Annual report 2005 options. Net debt has increased by £13.0
million to £32.9 million as a result of the two
acquisitions during the year and the financing
of capital expenditure. As a result, gearing has
increased to 103.2% (2004: 94%).
INTEREST AND FOREIGN EXCHANGE
The Group uses interest rate swaps to
provide protection against the expected
upward movement in interest rates. Interest
cover is 4.1 times (2004: 5.2 times) as a
result of the increase in the Group’s level of
borrowings and also the fact that the two
businesses acquired during the year will only
achieve their normalised profit levels in the
second half of 2005.
The acquisition of Cukiernia Mistrza Jana
will result in significant volumes of product
from Poland being imported into the UK 
for UK customers, with those customers
generally being invoiced in Sterling.
Consequently, the Group does now have
exposure to movements in exchange rates
— predominantly those between Sterling
and the Polish Zloty. The Group has
therefore put in place a series of forward
currency purchase contracts to protect against
adverse exchange rate movements. All of
these arrangements were put in place after the
financial year end, at the same time as the level
of imports from Poland has grown.
Chris Thompson
Finance Director
13 July 2005 
Inter Link Foods PLC
FINANCE DIRECTOR’S REVIEW
TRADING RESULTS FOR THE YEAR
During the year, sales increased by 40.9% to
£98.1 million. Profit before tax and goodwill
amortisation is £5.9 million and profit before tax
is £4.5 million, which represent increases of
18% and 14% respectively. Adjusted earnings
per share has increased by 10.2% to 42.1
pence, whilst basic earnings per share has
increased by 5.8% to 29.1 pence. The
weighted average number of shares in issue,
which has been used in the calculation of the
earnings per share figures, reflects the
1,650,485 new shares that were issued as
part of the Placing of shares in November
2004, together with 113,069 other new shares
issued as part of the acquisition of Cukiernia
Mistrza Jana and as a result of existing share
options being exercised. The Group’s operating
profit (excluding the impact of goodwill
amortisation) has reduced to 7.3% from 8.4%
last year. This reflects the increased cost base
that has been put in place to enable the Group
to move to the next stage of its development
process. A significant part of these costs reflect
the continuing investment in new plant and
machinery and this partly explains the 27.9%
increase in EBITDA to £9.8m.
WORKING CAPITAL
The Group’s working capital requirement has
continued to increase during the year. This
was due to a number of factors — the full
impact of the Hoppers business acquired in
the previous financial year, the impact of the
two further acquisitions in 2004/5 and is also
as a result of the consistent organic growth
throughout the other sites within the Group.
Whilst we have seen growth in all periods of
the year, the Christmas season is now an
important factor for us and we have therefore
started to see a larger stock build from
August through to November than we had
previously experienced. Our peak working
capital requirement is now at the end of
November and new overdraft facilities have
been put in place with our bankers to provide
the necessary working capital facility. 
ACQUISITIONS
The Group made two acquisitions during 
the year. In December 2004, it announced
the acquisition of Cukiernia Mistrza Jana, a
company based in Poland, for £1.12 million
and in January announced that it had
acquired the whole of the share capital of
Yorkshire Cottage Bakeries Limited for a
consideration of £12.00 million. The
transactions were financed by a Placing of
new shares in November 2004 with a
number of existing and eight new institutional
investors that raised a total of £8 million, net
of expenses, and by new loan facilities.
BALANCE SHEET
One of our strategic objectives is to grow the
business whilst remaining a low cost operator.
We are achieving that through a combination
of appropriate acquisitions and also continued
investment in the most modern and efficient
plant and machinery. As a result, last year
£8.8 million was invested across all facilities in
the Group. The largest single element of this
was in the new Comas pie plant at our
Shadsworth bakery, at a cost of £2.6 million.
Net assets have increased this year from
£21.1 million to £31.8 million, largely
generated by retained profits and the £8.2
million net proceeds from the placing of shares
in November 2004 and the exercise of share
08 09 Annual report 2005
CORPORATE AND SOCIAL RESPONSIBILITIES
Our Policy is to strive to enhance shareholder
value, whilst balancing this with the interests
of all other stakeholders in the company —
our employees, customers, consumers,
suppliers and all of the communities in which
we operate. We do recognise that we have 
a responsibility to manage the environmental
impact of our operations and believe that we
should operate in an ethical and socially
responsible manner. By doing this, we are
confident that we will be enhancing the
interests of all of our stakeholders.
FOOD SAFETY
We are absolutely committed to ensuring the
highest standards apply throughout our
organisation to ensure that everything we
produce is safe and of a consistently high
quality. Within the last year we have invested
further in technical resources at all of our
manufacturing sites and our technical audit
processes are of the highest standards. We
carry out regular, formal technical reviews at
each site to ensure that all appropriate
procedures and regulations are being
complied with and also work closely with our
customers’ technical teams. We have a very
effective central purchasing team who work
closely with our technical teams to ensure
the safety and quality of all of the ingredients
that we use throughout the food chain.
HEALTH & SAFETY
In a food manufacturing environment like
ours, the health and safety of our employees
is of paramount importance. We have
developed and implemented a
comprehensive set of procedures and the
strict adherence to these is monitored by
responsible managers at each site and also
through the use of third party audit teams.
Our monitoring of notifiable accidents and
lost time as a result of accidents enables us
to confirm that appropriate standards are
being maintained and to ensure that our
employees are being afforded the safest
possible environment to work in. 
ENVIRONMENT
Our manufacturing processes do inevitably
have an impact on the environment, and we
take our responsibilities in this area extremely
seriously. We see our prime objectives as
being to ensure that we comply with all
relevant environmental legislation and also
that we use all of the resources in our
business in the most efficient way possible.
We very closely monitor waste in all areas
and by doing so we are able to ensure that
we make best use of all of the ingredients,
packaging and energy that we buy. 
EMPLOYEES
Our success as a business is due to the
quality and commitment of our people. We
value them and their contribution and are
committed to helping them to develop within
the business to fulfil their full potential, and as
a result to enable the business to move
forward. We operate in a variety of different
communities and our people reflect this —
we condemn all forms of discrimination on
the grounds of race, colour, religion, ethnic or
national origin, age, sex, disability or sexual
orientation. 
ETHICAL POSITION
We are absolutely committed to operating 
to the highest standards of integrity and
business ethics. We expect all of our people
to abide by our code of ethics as they apply
to issues such as bullying and harassment,
and the use of Group assets. Through our
Purchasing team we seek to ensure that similar
standards are maintained by our suppliers,
particularly in relation to the employment
practices that they apply.
HEALTHY EATING
We develop our products in such a way that
they provide our customers and the
consumers with the taste and quality that
they demand, but we are also conscious of
the increasing focus on healthy eating. The
Government has quite rightly raised the profile
of this issue through its Health of the Nation
white paper and we are keen to play our part
in delivering improvements. A large proportion
of our sales are of private label products for
the multiple retailers, so our New Product
Development teams are working closely with
our customers to ensure that consumers are
able to buy products that have lower fat,
sugar and salt contents. 
COMMUNITIES
As a major employer in the communities
where we operate, we believe that it is very
important for our businesses and our people
to become involved in community initiatives.
We encourage them to act as school
governors, trustees of charities, local
councillors or representatives of professional
bodies. We are an active member of
Business In The Community, and we provide
financial assistance to a number of local
projects and charities that we believe provide
real benefits for their communities. We also
support our people who themselves
participate in fund-raising events. 10
DIRECTORS
Alwin Thompson Age 58,
Executive Chairman
A founding shareholder of the Group, Alwin
has previously held a variety of executive
director roles within national and
international companies. Since 1994, Alwin
has led the organisation through a process
of successful expansion, through both
organic growth and acquisition. A well-
known figure in the industry, Alwin has
combined entrepreneurial flair with strategic
vision to considerably raise the profile of the
Group and secure its position as a major
player in the UK cake market.
Paul Griffiths Age 52,
Chief Executive
Paul was appointed in September 2003, and
has over 34 years experience in the food
industry including food manufacturing with
Danepak and Tulip International where he
was Group Sales and Marketing director.
Paul held senior positions at Asda in trading
and manufacturing and he was formerly
Chairman of the Provision Trade Federation.
His most recent role was Head of Food at
United Cooperatives, one of the largest retail
cooperatives in Europe. In the roles he has
occupied, Paul has demonstrated his ability
in business improvement and the delivery of
consistent profit growth.  
Chris Thompson Age 49,
Finance Director 
In his most recent role with United Co-
operatives, Chris focused on identifying
opportunities for profit improvement in the
Society’s £500 million food retail business to
ensure that the business strategy,
organisational structures and systems would
enable the business to achieve its strategic
objectives. Chris subsequently became Chief
General Manager of the non-food trading
businesses where he was directly
responsible for businesses with turnover in
excess of £400 million. Previously, he held
senior roles at Woolworths and ASDA
following his earlier career at KPMG. He is a
fellow of the Institute of Chartered
Accountants in England and Wales.
Chris Neilson Age 51,
Business Development Director 
Chris joined the Group in 1997, having been
employed for twelve years as a Senior
Manager at Grant Thornton. A member of the
Institute of Chartered Accountants in England
and Wales, Chris was instrumental in the
flotation of the Group and also plays a
prominent role in the acquisition process. He
also fulfils the role of the Company Secretary.
Joe Tattersall Age 49,
Operations Director
Having held the position of Managing Director
in a previous business and worked in several
food manufacturing environments at a senior
level, Joe brought a wealth of experience to
the Group in 2000. Joe has considerable
expertise in operations, production,
distribution and technical issues and has
been responsible for the smooth integration
of all acquired sites into the Group structure. 
Jeremy Hamer Age 53,
Non-Executive Director
Jeremy joined the Group shortly before its
flotation in 1998, having previously been
Managing Director of J F Renshaw Limited.
Jeremy also provides considerable expertise
on acquisition and corporate governance
issues. Jeremy provides strategic guidance
and assists in the successful communication
of Group objectives to investors and
shareholders. Jeremy is on the Board of a
number of public and private companies.
Colin Davies Age 47,
Non-Executive Director
Colin is a founding shareholder of the Group
and has acted in a non-executive role since
1994. He is a fellow of the Chartered Institute
of Certified Accountants and currently acts as
a Corporate Finance Adviser to a number of
companies.
Secretary
and Registered Office
C. Neilson
Sett End Road, Blackburn, BB1 2PT
Company registration number
03570349
Inter Link Foods PLC Advisers
Solicitors
Davies Wallis Foyster, Centurion House, 
129 Deansgate, Manchester, M3 3AA
Nominated Adviser and Nominated Broker
Brewin Dolphin Securities Limited,
National House, 36 St Ann Street,
Manchester, M60 2EP
Joint Broker
Numis Securities Limited, 
143 Cheapside, London, EC2V 6LH
Principal Bankers
Royal Bank of Scotland plc
1 Spinningfields Square
Manchester
M3 3AP
Auditors
KPMG Audit Plc, Chartered Accountants,
Registered Auditor, St James’ Square,
Manchester, M2 6DS
Registrars
Capita IRG Plc, Bourne House, 
34 Beckenham Road, Beckenham, Kent,
BR3 4TU
Public Relations Consultants
Beattie Financial, 4 Great James Street,
Holborn,
London, WC1N 3DB
11
ADVISERS
Annual report 2005 12 Inter Link Foods PLC
DIRECTORS’ REPORT
The directors present their report and the
financial statements for the financial year
ended 7 May 2005.
PRINCIPAL ACTIVITIES AND BUSINESS
REVIEW
The Group is involved in the manufacture and
sale of branded, licensed and private label
cakes and pastry products to major retail
multiples and the sale and distribution of
cakes and confectionery to independent
retailers and the food service sector. A review
of the Group’s trading during the year is
DIRECTORS
The present membership of the Board, together with their beneficial and family interests in the
shares of the company, is set out below. All directors, with the exception of Mr C.H.G
Thompson, served throughout the year.
7 May 7 May 
2005 2004
Number Number
A.C. Thompson 210,202 310,202
P. Griffiths 27,000 27,000
C.H.G. Thompson (Appointed 13 September 2004) 7,500 Nil
C. Neilson 34,340 23,571
J. Tattersall Nil Nil
J.J. Hamer (Non-Executive) 21,218 21,218
C.E. Davies (Non-Executive) 176,800 276,800
There have been no changes to the directors’ shareholdings since 7 May 2005. Mr E.G.
Whitfield resigned as a director on 13 September 2004. In accordance with the Articles of
Association Mr C.E. Davies, Mr A.C. Thompson and Mr C.H.G. Thompson retire and offer
themselves for re-election. No directors had an interest in any material contract of the
company. None of the directors had any interests in the shares of any other Group
companies.
SUBSTANTIAL SHAREHOLDINGS
The company has been notified that the following shareholders held more than 3% of the
company’s issued shares at 13 July 2005.
Number %
F & C Asset Management Limited 1,554,439 13.50%
Gartmore Investment Management Limited 649,085 5.64%
Framlington Investment Management Limited 594,950 5.17%
Close Investments Limited 585,525 5.09%
Pension Services Limited 451,000 3.92%
contained in the Chairman’s Statement, Chief
Executive’s Review, and Finance Director’s
Review on pages 2 to 8.
RESULTS AND DIVIDENDS
The profit for the year after taxation amounted
to £3,059,000 (2004: £2,635,000). The
directors recommend a final dividend of 4.3
pence per ordinary share which, together
with an interim dividend of 2.15 pence,
makes a total of 6.45 pence (2004: 5.5
pence) for the year. The retained profit of
£2,361,000 (2004: £2,097,000) has been
transferred to reserves. CORPORATE GOVERNANCE
The company has applied the principles of
good governance contained in the Combined
Code as practical for a Group of this size.
BOARD COMMITTEES
The Board of directors
The company supports the concept of an
effective Board leading and controlling the
Group. The Board is responsible for
approving policy and strategy. It meets
monthly and has a schedule of matters
specifically reserved to it for decision.
Management supply the Board with
appropriate and timely information and the
directors are free to seek any further
information they consider necessary.
The Board consists of five executive
directors, who hold the key operational
positions in the Group, and two non-
executive directors who bring a breadth of
experience and knowledge, one of whom is
independent of management and any
business or other relationship which could
interfere with the exercise of his independent
judgement. The composition of the Board
provides a balance whereby decision making
cannot be dominated by an individual or
small group.
Audit and remuneration committees
The audit and remuneration committees of the
Board are an important part of our
implementation of the principles of good
corporate governance as set out in the
Combined Code. The audit committee,
chaired by Mr J.J. Hamer, is formally
constituted with written terms of reference and
comprised the two non-executive directors
throughout the reporting period. The executive
directors are not members of the committee
but the Finance Director may be invited to
attend its meetings. The committee meets at
least twice per year. The external auditors will
attend for the whole of one meeting and they
have direct access to the non-executive
directors for independent discussions without
the presence of executive directors.
The audit committee may examine any
matters relating to the financial affairs of the
Group. This includes reviews of the annual
accounts and announcements, internal
control procedures, accounting policies,
compliance with accounting standards, the
appointment of external auditors and such
other related functions as the Board may
require.
The remuneration committee comprised
the two non-executive directors throughout
the reporting period and is chaired by Mr
C.E. Davies. The committee determines the
remuneration policies of the Group which
include the terms and conditions, including
annual remuneration and incentive awards,
of the executive directors.
GOING CONCERN
After making enquiries, the directors have a
reasonable expectation that the Group has
adequate resources to continue in
operational existence for the foreseeable
future. For this reason they continue to
adopt the going concern basis in preparing
the accounts.
INTERNAL CONTROL
The Board is responsible for maintaining a
sound system of internal control to safeguard
shareholders’ investment and the Group’s
assets, and for reviewing its effectiveness.
The system of internal control is designed to
manage rather than eliminate the risk of
failure to achieve business objectives, and
can only provide reasonable and not absolute
assurance against material loss and
misstatement.
The control framework within the Group is
as follows:
•
A strong culture of internal control across
all areas of operation.
•
An organisational structure with clearly
defined lines of responsibility, delegation
of authority and reporting requirements.
•
Defined expenditure authorisation limits.
Major commercial, technological and
financial risks are formally assessed during
the annual business planning process, which
takes place in the last quarter of the financial
year. There is a formal schedule of matters
requiring authorisation by the Board including,
for example, major capital expenditure, and
new business initiatives.
There is a comprehensive system of
financial reporting. The annual budget, which
is derived from the business plan, is reviewed
in detail and approved by the Board. The
Finance Director presents a report to the
Board each month detailing the results of
each principal business unit, variances
against budget and other performance data.
The principal system for evaluating and
managing risk is the regular meeting of the
Board members with the management of
business units. The purpose of the meetings
is to monitor and control operations.
Performance is reviewed, risks identified,
financial and other implications assessed and
corrective actions agreed as necessary. Each
month Board members present the output of
these meetings to the Board for review.
The Board has considered the need for
an internal audit function but has decided
the size of the company does not justify it
at present.
RELATIONS WITH SHAREHOLDERS
The Group values the views of its
shareholders and recognises their interest in
the Group’s strategy, performance, Board
membership and quality of management. It
therefore holds regular meetings with its
institutional shareholders to discuss
objectives.
The AGM will be used to communicate
with private investors and they are
encouraged to participate. The Chairman of
each of the audit and remuneration
committees will be available to answer
questions. Separate resolutions are proposed
on each issue so that they can be given
proper consideration and there is a resolution
to approve the annual report and accounts.
The Group counts all proxy votes and will
indicate the level of proxies lodged on each
resolution, after it has been dealt with by a
show of hands.
The Group also has a website with links
providing financial information and press
releases. A welcome letter is issued to all
new shareholders registering in their own
name. Every effort is made to speak or write
to any shareholder making an enquiry.
13 Annual report 2005 SHARE OPTIONS AND EMPLOYEE SHARE
OWNERSHIP
Employee involvement in the overall
performance of the Group has been
encouraged by employee share option
schemes. An Inland Revenue approved
executive share option scheme (the
Approved Scheme) and an unapproved
executive share option scheme (the
Unapproved Scheme) were established in
1998. Under each of the schemes, directors
and employees of the Group may be offered
options to acquire ordinary shares, which will
only be granted on the achievement of
performance targets. 
On 27 August 2004 eight senior
employees were granted 30,623 options
under the Approved Scheme and 2,377
under the Unapproved Scheme. The
exercise price is 474 pence (the market price
at the time that the options were granted)
and the exercise period is between
27 August 2007 and 26 August 2014.
Details of directors’ share options are set out
on page 16.
EMPLOYEES
The Group has continued its practice of
keeping employees informed of matters
affecting them as employees and the financial
and economic factors affecting the
performance of the Group. This is achieved
through works council meetings and
newsletters.
Applications for employment by disabled
persons are given full and fair consideration
for all vacancies in accordance with their
particular aptitudes and abilities. In the event
of an employee becoming disabled, every
effort is made to retrain them in order that
their employment with the Group may
continue.
It is the policy of the Group that training,
career development and promotion
opportunities should be available to all
employees.
SUPPLIER PAYMENT POLICY
The Group’s policy is to comply with the
terms of payment agreed with suppliers when
terms of business are established. At 7 May
2005 the Group’s trade creditors represented
75 days of purchases (2004: 73 days). The
Group’s trade creditor days figure is given as
it is a more meaningful measure.
CHARITABLE SUPPORT AND POLITICAL
DONATIONS
The charitable donations for the year were
£6,835 (2004: £3,000) and there were no
political donations (2004: Nil).
DIRECTORS’ RESPONSIBILITIES FOR THE
FINANCIAL STATEMENTS
Company law requires the directors to
prepare financial statements for each financial
year which give a true and fair view of the
state of affairs of the Group and company
and of the profit or loss of the Group for that
year. In preparing those statements, the
directors are required to:
•
select suitable accounting policies and
apply them consistently;
•
make judgements and estimates that are
reasonable and prudent;
•
state whether applicable accounting
standards have been followed, subject to
any material departures disclosed and
explained in the financial statements;
•
prepare the financial statements on the
going concern basis unless it is
inappropriate to presume that the Group
will continue in business.
The directors are responsible for keeping
proper accounting records which disclose
with reasonable accuracy at any time the
financial position of the company and to
enable them to ensure that the Financial
Statements comply with the Companies Act
1985. They have general responsibility for
taking such steps as are reasonably open to
them to safeguard the assets of the Group
and to prevent and detect fraud and other
irregularities.
AUDITORS
KPMG Audit Plc have indicated their
willingness to continue as auditors and offer
themselves for reappointment in accordance
with Section 385 of the Companies
Act 1985.
By order of the Board
Christopher Neilson
Company Secretary
13 July 2005
14 Inter Link Foods PLC
DIRECTORS’ REPORT (continued) 15
REPORT ON DIRECTORS’ REMUNERATION
INTRODUCTION
The Board recognises that directors’
remuneration is of legitimate concern to the
shareholders and is committed to following
current best practice. The company operates
within a competitive environment that is
subject to rapid commercial change. Its
performance depends on the individual
contributions of the directors and employees
and it believes in rewarding vision and
innovation.
The Board presents the Report on
Remuneration for shareholder approval.
COMPOSITION AND FUNCTION OF THE
REMUNERATION COMMITTEE
The remuneration committee comprises both
of the non-executive directors of the Group. It
considers all aspects of the executive
directors’ remuneration and administers the
Group’s share option schemes. The
Committee meets twice a year. The
Committee consults the Executive Chairman
and has access to professional advice both
within and outside the Group.
The remuneration of non-executive
directors is considered by the Board as a
whole following recommendations by the
executive directors.
POLICY ON EXECUTIVE DIRECTORS’
REMUNERATION
Executive remuneration packages are
designed to attract, motivate and retain
directors of the calibre necessary to maintain
the Group’s position as a growing business.
The performance measurement of the
executive directors and the determination of
their annual remuneration package is
undertaken by the committee.
There are three main elements of their
remuneration package:
•
basic annual salary
•
annual bonus payments
•
share option incentives
Each executive director’s basic salary is
reviewed annually by the committee. In
deciding upon appropriate levels of
remuneration the committee has regard to
rates of pay for similar jobs in comparable
companies as well as internal factors such as
the achievement of strategic objectives,
improvement in operating efficiency and
overall Group performance. Executive
directors’ basic salaries were last reviewed in
May 2004.
The committee establishes the objectives
which must be met for a cash bonus to be
paid. The committee believes that the award
of any bonuses should be tied to the
interests of the Group’s shareholders and that
the principal measure of those interests is
shareholder value, including growth in
earnings per share, net asset value and
share price. Account is also taken of the
relative success of the different parts of the
business for which the executive directors
are responsible. 
The bonus paid and provided during the
year recognises that the Group has
increased turnover, profit and earnings per
share in every year and the additional activity
involved in the acquisition of Cukiernia Mistrza
Jana and Yorkshire Cottage Bakeries and its
group of companies.
PENSION ARRANGEMENTS
Executive directors are eligible to be
members of the Group’s defined contribution
pension schemes. Their dependants are
eligible for the payment of a lump sum in the
event of death in service. The pension costs
are charged by way of contributions related
to basic salary. There have been no changes
in the terms of directors’ pension entitlements
during the year. The Group has met its
contractual commitments to make payments
in respect of directors’ entitlements under the
schemes.
SHARE OPTIONS
The Board believes that share ownership
strengthens the link between personal
interests and those of shareholders and
encourages long-term improvement in the
Group’s performance. All options granted are
subject to performance conditions on
exercise.
The committee is responsible for
supervising the company’s Inland Revenue
Approved Share Option Scheme, Executive
Share Option Scheme and the Management
Incentive Scheme. On 25 January 2005
4,600 Approved Share Options and 35,400
Unapproved Share Options were granted to
Chris Thompson at an exercise price of
651.5 pence (the market price at the time
that the options were granted).
Annual report 2005 16
REPORT ON DIRECTORS’ REMUNERATION (continued)
DIRECTORS’ SHARE OPTIONS
Market price
7 May 7 May Exercise at date Exercise period
2004 Granted Exercised 2005 price of exercise or date
Executive Scheme
A.C. Thompson 15,000 — — 15,000 180p — 21/10/2002 to 20/10/2009
A.C. Thompson 50,000 — — 50,000 285p — 16/01/2004 to 15/01/2011
C. Neilson 6,731 — — 6,731 97.5p — 21/09/2001 to 20/09/2008
C. Neilson 10,000 — — 10,000 180p — 21/10/2002 to 20/10/2009
C. Neilson 30,000 — — 30,000 285p — 16/01/2004 to 15/01/2011
J. Tattersall 29,474 — 10,000 19,474 285p 685p 16/01/2004 to 15/01/2011
P. Griffiths 92,188 — — 92,188 384p — 10/10/2006 to 09/10/2013
P. Griffiths 100,000 — — 100,000 457.5p — 20/01/2007 to 19/01/2014
C.H.G. Thompson — 35,400 — 35,400 651.5p — 26/01/2008 to 25/01/2015
Revenue Approved Scheme
C. Neilson 30,769 — 30,769 — 97.5p 688.5 27/01/2005
C.E. Davies 10,000 — — 10,000 285p — 15/01/2004 to 14/01/2011
J.J. Hamer 10,000 — 10,000 — 285p 688.5 27/01/2005
P. Griffiths 7,812 — — 7,812 384p — 08/10/2006 to 07/10/2013
C.H.G. Thompson — 4,600 — 4,600 651.5p — 26/01/2008 to 25/01/2015
Management Incentive Scheme
A.C. Thompson 32,102 — — 32,102 311.5p — 18/07/2006 to 18/07/2009
A.C. Thompson 202,898 — — 202,898 289p — 18/07/2006 to 18/07/2009
E.G. Whitfield 32,102 — — 32,102 311.5p — 18/07/2006 to 18/07/2009
E.G. Whitfield 120,898 — — 120,898 289p — 18/07/2006 to 18/07/2009
C. Neilson 22,471 — — 22,471 311.5p — 18/07/2006 to 18/07/2009
C. Neilson 130,529 — — 130,529 289p — 18/07/2006 to 18/07/2009
J. Tattersall 22,472 — — 22,472 311.5p — 18/07/2006 to 18/07/2009
J. Tattersall 130,528 — — 130,528 289p — 18/07/2006 to 18/07/2009
C.E. Davies 153,000 — — 153,000 289p — 18/07/2006 to 18/07/2009
J.J. Hamer 53,000 — — 53,000 289p — 18/07/2006 to 18/07/2009
The exercise price was equivalent to the market price of the company’s shares at the date of grant of each option.
The market price of the shares at 7 May 2005 was 587.5p. The highest price in the year was 700p and the lowest 447.5p.
SERVICE CONTRACTS 
All the executive directors have contracts which are terminable by the company with 12 months’ notice, and the service agreements for non-
executive directors can be terminated by either party giving three months’ notice.
Inter Link Foods PLC DETAILS OF DIRECTORS’ REMUNERATION
Emoluments for the Chairman, executive directors and non-executive directors for the year are set out below. This information forms part of the
audited financial statements.
Total Pension 
excluding contri- Total Total
Salary Benefits Bonus Fees pension butions 2005 2004
££££££££
Executive
P. Griffiths (appointed 1 Sept 2003) 184,500 2,006 46,250 — 232,756 12,500 245,256 109,312
A.C. Thompson 173,000 28,581 52,500 — 254,081 45,638 299,719 229,036
C. Neilson 83,500 13,959 34,000 — 131,459 3,040 134,499 121,173
J. Tattersall 83,500 11,178 27,750 — 122,428 12,584 135,012 124,041
C.H.G. Thompson (appointed 13 Sept 2004) 80,223 671 15,000 — 95,894 7,292 103,186 —
Non-Executive
J.J. Hamer — — — 69,300 69,300 — 69,300 39,791
C.E. Davies 25,000 1,648 15,000 72,783 114,431 — 114,431 103,806
629,723 58,043 190,500 142,0831,020,349 81,0541,101,403 727,159
Included within the fees paid to Mr C.E. Davies is an amount of £72,783 (2004: £59,587) paid to Access Corporate Finance Limited, which
is owned by Mr C.E. Davies, in respect of fees for work on the acquisition undertaken by the Group in the year.
During the year directors have exercised 50,769 options. The aggregate gain based on the market price on the date of exercise is
£261,995.
On behalf of the Board
Colin Davies
Chairman of the remuneration committee
13 July 2005
PERFORMANCE GRAPH
Inter Link Foods total shareholder return v FTSE AIM Index
The graph shows the Group’s Total Shareholder Return (TSR) performance compared with the TSR of the FTSE AIM Index over the last seven
years. TSR is defined as the percentage change over the period in the market price of shares assuming reinvestment of income and funding
liabilities of the theoretical holding.
1998 1999 2000 2001 2002 2003 2004 2005
700
600
500
400
300
200
0
100
INTERLINK FOODS — TOT RETURN IND
FTSE AIM ALL-SHARE — TOT RETURN IND
17 Annual report 2005 18 Inter Link Foods PLC
REPORT OF THE INDEPENDENT AUDITORS TO
THE MEMBERS OF INTER LINK FOODS PLC
We have audited the financial statements on
pages 19 to 38. In addition to our audit of the
financial statements, the directors have
engaged us to audit the information in the
directors’ remuneration report that is
described as having been audited, which the
directors have decided to prepare (in addition
to that required to be prepared) as if the
company were required to comply with the
requirements under Schedule 7A to the
Companies Act 1985.
This report is made solely to the
company’s members, as a body, in
accordance with section 235 of the
Companies Act 1985 and our terms of our
engagement. Our audit work has been
undertaken so that we might state to the
company’s members those matters we are
required to state to them in our auditors’
report and for no other purpose. To the fullest
extent permitted by law, we do not accept or
assume responsibility to anyone other than
the company and the company’s members,
as a body, for our audit work, for this report,
or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF
DIRECTORS AND AUDITORS
The directors are responsible for preparing
the Annual Report and the directors’
remuneration report. As described on page
14, this includes responsibility for preparing
the financial statements in accordance with
applicable United Kingdom law and
accounting standards. Our responsibilities, as
independent auditors, are established in the
United Kingdom by statute, the Auditing
Practices Board, and by our profession’s
ethical guidance.
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. We also report to you
if, in our opinion, the directors’ report is not
consistent with the financial statements, if the
company has not kept proper accounting
records, if we have not received all the
information and explanations we require for
our audit, or if information specified by law
regarding directors’ remuneration and
transactions with the Group is not disclosed.
We read the other information contained in
the Annual Report, including the unaudited
part of the directors’ remuneration report, and
consider whether it is consistent with the
audited financial statements. We consider the
implications for our report if we become
aware of any apparent misstatements or
material inconsistencies with the financial
statements.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with
Auditing Standards issued by the Auditing
Practices Board. An audit includes
examination, on a test basis, of evidence
relevant to the amounts and disclosures in
the financial statements and the part of the
directors’ remuneration report to be audited. It
also includes an assessment of the
significant estimates and judgements made
by the directors in the preparation of the
financial statements, and of whether the
accounting policies are appropriate to the
Group’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 financial statements give a true and
fair view of the state of affairs of the
company and the Group as at 7 May
2005 and of the profit of the Group for the
year then ended and have been properly
prepared in accordance with the
Companies Act 1985.
•
The part of the directors’ remuneration
report which we were engaged to audit
has been properly prepared in
accordance with the requirements of
Schedule 7A to the Companies Act 1985,
as if the company were required to
comply with the requirements of that
Schedule.
KPMG Audit Plc
Chartered Accountants 
Registered Auditor
Manchester
13 July 2005 19
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the financial year ended 7 May 2005
2005 2004
Notes £’000 £’000
Turnover
Continuing operations 91,426 69,625
Acquisitions 6,712 —
2 98,138 69,625
Cost of sales 3 (61,320) (43,777)
Gross profit 36,818 25,848
Operating expenses
Amortisation of goodwill (1,359) (1,029)
Other operating expenses (29,692) (19,970)
Total operating expenses 3 (31,051) (20,999)
Operating profit
Continuing operations 5,360 4,849
Acquisitions 407 —
Total operating profit 5,767 4,849
Profit on sale of fixed assets 169 24
Interest payable 5 (1,435) (938)
Profit on ordinary activities before taxation 2 4,501 3,935
Taxation 6 (1,442) (1,300)
Profit for the financial year 3,059 2,635
Dividends on equity shares 8 (698) (538)
Profit retained and transferred to reserves 21 2,361 2,097
Basic earnings per share 9 29.1p 27.5p
Adjusted earnings per share 9 42.1p 38.2p
Diluted earnings per share 9 27.5p 26.5p
Diluted adjusted earnings per share 9 39.7p 36.9p
The accompanying accounting policies and notes form an integral part of these financial statements.
For the financial year ended 7 May 2005
2005 2004
£’000 £’000
Profit for the financial year 3,059 2,635
Currency translation differences on foreign
currency net investments (20) —
Total recognised gains and losses relating to the year 3,039 2,635
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED
GAINS AND LOSSES
Annual report 2005 20 Inter Link Foods PLC
BALANCE SHEETS
At 7 May 2005
Group Company
2005 2004 2005 2004
Notes £’000 £’000 £’000 £’000
Fixed assets
Intangible 11 35,437 22,111 7,191 7,049
Tangible 12 21,179 14,778 5,111 5,087
Investments 13 — — 12,786 11,128
56,616 36,889 25,088 23,264
Current assets
Stocks 14 6,838 5,163 1,382 1,280
Debtors 15 23,039 13,932 39,033 18,852
Cash at bank and in hand 4,713 3,240 2,046 1,664
34,590 22,335 42,461 21,796
Creditors: amounts falling due 
within one year 16 (35,086) (20,079) (23,662) (13,459)
Net current (liabilities)/assets (496) 2,256 18,799 8,337
Total assets less current liabilities 56,120 39,145 43,887 31,601
Creditors: amounts falling due after 
more than one year 17 (22,345) (16,891) (20,086) (16,387) 
Provisions for liabilities and charges 19 (1,945) (1,186) (637) (466)
Net assets 31,830 21,068 23,164 14,748
Capital and reserves
Called up share capital 20 230 195 230 195
Share premium account 21 22,930 14,544 22,930 14,544
Other reserves 21 128 128 — —
Profit and loss account 21 8,542 6,201 4 9
Equity shareholders’ funds 22 31,830 21,068 23,164 14,748
These financial statements were approved by the Board of directors on 13 July 2005 and were signed on its
behalf by:
Alwin Thompson
Director
Chris Thompson
Director
The accompanying accounting policies and notes form an integral part of these financial statements. 21
CONSOLIDATED CASH FLOW STATEMENT
For the financial year ended 7 May 2005
2005 2004
Notes £’000 £’000
Net cash inflow from operating activities 23 8,508 6,328
Returns on investments and servicing of finance
Interest paid 5 (1,435) (938)
Net cash outflow from returns on investments and servicing of finance (1,435) (938)
Taxation (1,810) (981)
Capital expenditure and financial investment
Investment in development costs (2,526) (961)
Purchase of tangible fixed assets (5,410) (2,681)
Sale of fixed assets 45 85
Net cash outflow from capital expenditure and financial investment (7,891) (3,557)
Acquisitions and disposals 
Purchase of subsidiary undertakings 10 (14,446) (6,820)
Net overdraft acquired with subsidiaries 10 (194) (727)
Net cash outflow from acquisitions and disposals (14,640) (7,547)
Equity dividends paid (563) (494)
Net cash outflow before financing (17,831) (7,189)
Financing
Issue of share capital (net of issue costs) 8,220 370
Net movement on loans 25 4,590 9,516
Capital element of finance lease payments 25 (1,043) (259)
Net cash inflow from financing 11,767 9,627
(Decrease)/increase in cash 24 (6,064) 2,438
The accompanying accounting policies and notes form an integral part of these financial statements.
Annual report 2005 22 Inter Link Foods PLC
NOTES TO THE FINANCIAL STATEMENTS
1. PRINCIPAL ACCOUNTING POLICIES
The following accounting policies have been applied consistently in dealing with items which are considered
material in relation to the Group’s financial statements.
BASIS OF PREPARATION
The financial statements have been prepared under the historical cost convention and in accordance with
applicable accounting standards.
BASIS OF CONSOLIDATION 
The Group financial statements consolidate the accounts of the company and its subsidiary undertakings, drawn
up to 7 May 2005 (2004: 7 May), using the acquisition method of accounting. The results of the subsidiaries
acquired during the year have been included from the date of acquisition. Profits or losses on intra-Group
transactions are eliminated in full. On acquisition of a subsidiary, all of the subsidiary’s assets and liabilities which
exist at the date of acquisition are recorded at their fair values reflecting their condition at that date.
Under section 230 (4) of the Companies Act 1985, the company is exempt from the requirement to present
its own profit and loss account.
TURNOVER
Turnover is the total amount receivable by the Group for services provided, excluding VAT and trade discounts.
INTANGIBLE FIXED ASSETS
Goodwill
Goodwill arising on consolidation, representing the excess of the fair value of the consideration given over the fair
values of the identifiable net assets acquired, is capitalised and is amortised on a straight-line basis over its
estimated useful economic life.
On the subsequent disposal or termination, the profit or loss on disposal or termination is calculated after
charging the unamortised amount of any related goodwill.
Purchased goodwill first accounted for in accounting periods ending before 23 December 1998, the
implementation date of FRS 10, was eliminated from the financial statements by immediate write-off on
acquisition against reserves. Such goodwill will be charged to the profit and loss account on the subsequent
disposal of the business to which it relates.
Development costs
Development costs incurred on specific projects are capitalised when recoverability can be assessed with
reasonable certainty and amortised over three years commencing in the year after the expenditure is incurred, in
line with the expected sales arising from the projects. Where the anticipated life of a character licence cake is
deemed to be less than 3 years, development costs associated with such a product are written off over a
shorter period following half-yearly reviews. All other development costs are written off in the year of expenditure. 
TANGIBLE FIXED ASSETS AND DEPRECIATION
Depreciation is provided on all tangible fixed assets at rates calculated to write off the cost, less estimated
residual value, of each asset over its expected useful life on a straight-line basis as follows:
Freehold property 50 years
Leasehold property Period of lease
Fixtures & Fittings 3–5 years
Plant and machinery 10–15 years
Motor vehicles 3–7 years
INVESTMENTS
Investments are stated at cost less amounts written off. STOCKS
Stocks are valued at the lower of cost incurred in bringing each product to its present location and condition,
and net realisable value, on a first in, first out basis after making due allowance for any obsolete or slow-moving
items. Finished goods include an appropriate proportion of attributable overheads.
DEFERRED TAXATION
The charge for taxation is based on the profit for the year and takes into account taxation deferred because of
timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is
recognised without discounting in respect of all timing differences between the treatment of certain items for
taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as
otherwise required by FRS 19.
LEASING COMMITMENTS
Assets held under finance leases and hire purchase contracts are capitalised and depreciated over their
expected useful lives. The interest element of leasing payments represents a constant proportion of the capital
balance outstanding and is charged to the profit and loss account over the period of the lease.
All other leases are regarded as operating leases and the payments made under them are charged to the
profit and loss account on a straight-line basis over the lease term.
PENSIONS
The Group operates a number of defined contribution pension schemes. Contributions are charged to the profit
and loss account as they become payable in accordance with the rules of the schemes. 
GOVERNMENT GRANTS
Government grants in respect of capital expenditure are credited to a deferred income account and are released
to the profit and loss account by equal annual instalments over the expected useful lives of the relevant assets.
Government grants of a revenue nature are credited to the profit and loss account in the same period as the
related expenditure.
FINANCIAL INSTRUMENTS
Financial assets are recognised in the balance sheet at the lower of cost and net realisable value. Provision is
made for diminution in value where appropriate. Income and expenditure arising on financial instruments is
recognised on the accruals basis, and credited or charged to the profit and loss account in the financial period
to which it relates.
INTEREST RATE SWAPS
The Group currently uses several types of financial instruments as part of its overall interest rate risk management
strategy. It does not enter into financial instruments for trading purposes. Interest rate risk associated with net
debt is managed using a combination of fixed and floating rate borrowings and financial derivatives such as
interest rate swaps. Interest differentials from interest rate swaps are recognised by adjustments to the underlying
interest payable over the term of the instrument. 
FOREIGN CURRENCY
Transactions in foreign currencies are translated at the exchange rate at the date of the transaction. Monetary
assets and liabilities in foreign currencies are translated at the rates of exchange ruling at the balance sheet date.
All exchange differences are dealt with through the profit and loss account.
Where appropriate, the Group does enter into forward currency purchase contracts in order to minimise the
relevant currency exposure to the Group from its transactions.
The assets and liabilities of overseas subsidiary undertakings are translated at closing exchange rates. Profit
and loss accounts of such undertakings are consolidated at the average rates of exchange during the year.
Gains and losses arising on these translations are taken to reserves net of exchange differences on related
foreign currency borrowings.
CASH
Cash for the purposes of the cash flow statement comprises cash in hand and deposits repayable on demand,
less overdrafts payable on demand.
23 Annual report 2005 24
NOTES TO THE FINANCIAL STATEMENTS (continued)
2. TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The turnover and profit on ordinary activities before taxation are attributable to the principal activities as set out
on page 12.
2005 2004
£’000 £’000
Turnover originating in the UK and Poland, sold to:
United Kingdom 96,307 69,625
Europe and the rest of the world 1,831 —
98,138 69,625
The profit on ordinary activities before taxation is stated after charging/(crediting):
2005 2004
£’000 £’000
Depreciation of tangible fixed assets
— owned assets 1,536 1,184
— assets held under finance leases 279 153
(Profit) on sale of fixed assets (169) (24)
Amortisation of goodwill 1,359 1,029
Amortisation of development costs 893 448
Operating lease rentals
— land and buildings 658 456
— other 187 161
Auditors’ remuneration
— audit services 
— Group 83 55
— Company 21 20
— other services 292 7
The amounts paid to the Auditors in relation to other services relate to acquisition and taxation services. 
3. COST OF SALES AND OTHER OPERATING EXPENSES
2005 2004
ContinuingAcquisitions Total Total
£’000 £’000 £’000 £’000
Cost of sales 57,265 4,055 61,320 43,777
Operating expenses
Distribution costs 5,779 348 6,127 5,505
Administrative expenses:
Amortisation of goodwill 1,187 172 1,359 1,029
Amortisation of development costs 862 — 862 448
Other 20,973 1,730 22,703 14,017
Total administrative expenses 23,022 1,902 24,924 15,494
Total operating expenses 28,801 2,250 31,051 20,999
Inter Link Foods PLC 4. EMPLOYEES
Staff costs during the year were as follows:
2005 2004
£’000 £’000
Wages and salaries 21,641 15,346
Social security costs 1,963 1,325
Pension costs (see note 29) 276 281
23,880 16,952
The average number of employees of the Group (including executive directors) 
during the year was as follows: 2005 2004
Number Number
Management, sales and administration 228 184
Production 1,485 1,022
1,713 1,206
Remuneration in respect of directors is covered under the Report on Remuneration on pages 15 to 17.
5. INTEREST PAYABLE
2005 2004
£’000 £’000
Interest payable
On loans and overdrafts 1,302 885
Finance charges in respect of leases 133 53
1,435 938
6. TAXATION
2005 2004
£’000 £’000
UK corporation tax
Current tax on income for the year 979 1,108
Adjustments in respect of prior years (280) (23)
699 1,085
Foreign tax
Current tax on income for the year 17 —
Total current tax 716 1,085
Deferred tax (see note 19) 726 215
Tax on profit on ordinary activities 1,442 1,300
25 Annual report 2005 26
NOTES TO THE FINANCIAL STATEMENTS (continued)
6. TAXATION (continued)
Factors affecting the tax charge for the year
The corporation tax assessed for the year is lower (2004: lower) than the standard rate of corporation tax in the
United Kingdom of 30% (2004: 30%). The differences are explained below:
2005 2004
£’000 £’000
Profit on ordinary activities before tax 4,501 3,935
Profit on ordinary activities multiplied by standard rate of 
corporation tax in the UK of 30% (2004: 30%). 1,350 1,180
Effect of:
Expenses including goodwill not deductible for tax purposes 314 76
Capital allowances in excess of depreciation (745) (233)
Other short-term timing differences (52) 14
Adjustment in respect of prior years (280) (23)
Disallowed amortisation on consolidated goodwill 118 71
Adjustment due to tax rate of 19% 11 —
Current tax charge for the year 716 1,085
7. PROFIT FOR THE FINANCIAL YEAR
The parent company has taken advantage of section 230 of the Companies Act 1985 and has not included its
own profit and loss account in these financial statements. The profit for the financial year of the company
before dividends payable was £693,000 (2004: loss of £244,000).
8. DIVIDENDS
2005 2004
£’000 £’000
Equity dividends:
Interim dividend of 2.15p (2004: 1.85p) per ordinary share 203 178
Final proposed dividend of 4.3p (2004: 3.7p) per ordinary share 495 360
698 538
9. EARNINGS PER SHARE
Earnings per share is calculated on the basis of profit for the year after tax divided by the weighted average
number of shares in issue for 2005 of 10,504,150 (2004: 9,595,168).
Diluted earnings per share is calculated on the basis of profit for the year after tax divided by the weighted
average number of shares in issue for 2005 adjusted for the dilutive effect of options granted which totals
11,134,321 (2004: 9,932,192).
An adjusted earnings per share and a diluted adjusted earnings per share, which exclude goodwill
amortisation, have also been calculated to allow shareholders to gain a clearer understanding of the trading
performance of the Group.
2005 2004
Weighted Per Weighted Per 
Average Share Average Share
Earnings No. Amount Earnings No. Amount
£’000 of shares pence £’000 of shares pence
Earnings attributable to ordinary 
shareholders 3,059 10,504,150 29.1 2,635 9,595,168 27.5
Amortisation of goodwill 1,359 — — 1,029 — —
Adjusted earnings per share 4,418 10,504,150 42.1 3,664 9,595,168 38.2
Dilutive effect of options — 630,171 — — 337,024 —
Diluted earnings per share 3,059 11,134,321 27.5 2,635 9,932,192 26.5
Diluted adjusted earnings 
per share 4,418 11,134,321 39.7 3,664 9,932,192 36.9
Inter Link Foods PLC 10. ACQUISITIONS
The acquisitions of the Group for the year were as follows:
On 13 December 2004, the entire issued share capital of Cukiernia Mistrza Jana Sp. z.o.o was acquired for
a consideration of £1,120,000 satisfied by the issue of 32,600 shares at £6.16 per share and cash of
£919,000. 
On 26 January 2005 the business, stock and certain fixed assets of the group of Yorkshire Cottage
Bakeries Limited was acquired for consideration of £12 million which was satisfied in cash. 
The acquisitions have been accounted for using the acquisition method of accounting, and goodwill arising
on consolidation has been capitalised and will be amortised over a period of 20 years, their expected
useful lives.
The following table sets out the identifiable assets and liabilities acquired:
CMJ YCBAdjustments Total
£’000 £’000 £’000 £’000
Tangible fixed assets 132 530 — 662
Intangible assets 2 — — 2
Stocks 367 655 — 1,022
Debtors 1,016 — — 1,016
Bank overdraft (194) — — (194)
Creditors (916) — — (916)
Provision for liabilities and charges (33) — — (33)
Net assets acquired 374 1,185 — 1,559
Fair value adjustments (41) (261) (103) (405)
Goodwill (see note 11) 1,220 11,727 103 13,050
1,553 12,651 — 14,204
Satisfied by:
Cash 919 12,000 — 12,919
Issue of shares 201 — — 201
Deferred consideration 37 103 — 140
Acquisition costs 396 548 — 944
1,553 12,651 — 14,204
Fair value adjustments were made in respect of Cukiernia Mistrza Jana Sp. z o.o to fully provide for liabilities
relating to holiday pay and contractual obligations not recognised under Polish accounting rules. A provision 
for onerous obligations amounting to £261,000 has been made in respect of the group of Yorkshire Cottage
Bakeries Limited and is based on the directors’ best estimate of those obligations at 7 May 2005. The fair 
value adjustments of these acquisitions are subject to further review during the financial year ending April 2006.
The fair value provisions in respect of Farmhouse Bakery Holdings Limited have been reviewed and
increased by £103,000 to make additional provision against stocks and debtors.
Cukiernia Mistrza Jana Sp. z o.o achieved a profit before taxation of £196,660 in the year ended
31 December 2004. The profit before taxation of the group of Yorkshire Cottage Bakeries Limited was
£939,807 in the year ended 31 December 2004 and no management accounts have been prepared 
for the period prior to acquisition on 26 January 2005.
27 Annual report 2005 28
NOTES TO THE FINANCIAL STATEMENTS (continued)
10. ACQUISITIONS (continued)
The businesses acquired during the year made the following contributions to, and utilisations of, Group
cash flow:
2005
£’000
Net cash inflow from operating activities 1,330
Capital expenditure and financial investment (1,817)
Decrease in cash (487)
Analysis of net outflow of cash in respect of acquisitions was as follows:
2005
£’000
Acquisition costs — current year acquisition 14,003
Deferred and contingent consideration paid — acquisitions of previous years 443
14,446
Contingent consideration of £400,000 was paid in respect of the acquisition of the Creative Cake Company
and £43,000 in respect of the acquisition of Cakes for the Connoisseur in line with the respective acquisition
agreements.
11. INTANGIBLE FIXED ASSETS
Development
Goodwill costs Total
Group £’000 £’000 £’000
Cost
At 8 May 2004 22,751 2,348 25,099
Additions — 2,526 2,526
Disposal — (272) (272)
On acquisition 13,050 2 13,052
At 7 May 2005 35,801 4,604 40,405
Amortisation
At 8 May 2004 2,081 907 2,988
Charge for the year 1,359 893 2,252
On disposals — (272) (272)
At 7 May 2005 3,440 1,528 4,968
Net book amount
At 7 May 2005 32,361 3,076 35,437
At 7 May 2004 20,670 1,441 22,111
Inter Link Foods PLC 11. INTANGIBLE FIXED ASSETS (continued)
Development
Goodwill costs Total
Company £’000 £’000 £’000
Cost
At 8 May 2004 7,661 805 8,466
Additions — 901 901
At 7 May 2005 7,661 1,706 9,367
Amortisation
At 8 May 2004 1,203 214 1,417
Charge for the year 383 376 759
At 7 May 2005 1,586 590 2,176
Net book amount
At 7 May 2005 6,075 1,116 7,191
At 7 May 2004 6,458 591 7,049
The useful economic life of the goodwill in respect of all acquisitions is 20 years, based on the directors’
assessment of the income streams of the acquired businesses.
Development costs are capitalised in accordance with SSAP 13 where it can be confirmed that the costs
relate to a specific new product development project and where the relevant costs can be specifically
identified. In addition, in all cases, an assessment is carried out to confirm that the products will be
commercially viable, that the costs that are capitalised will be less than the net revenues generated by the
products and that the necessary resources will be available to ensure that the product is successfully
launched. For these reasons, the development costs that are capitalised are not regarded as being realised
losses. 
12. TANGIBLE FIXED ASSETS
Plant, 
machinery
Freehold Leasehold Fixtures and motor
property property and fittings vehicles Total
Group £’000 £’000 £’000 £’000 £’000
Cost
At 8 May 2004 4,039 1,166 1,360 17,691 24,256
Additions 191 226 407 8,005 8,829
On acquisition — — 18 804 822
Disposals (1,368) — — (173) (1,541)
At 7 May 2005 2,862 1,392 1,785 26,327 32,366
Depreciation
At 8 May 2004 320 355 573 8,230 9,478
Charge for the year 94 82 236 1,403 1,815
On acquisition — — 2 157 159
Disposals (141) — — (124) (265)
At 7 May 2005 273 437 811 9,666 11,187
Net book amount
At 7 May 2005 2,589 955 974 16,661 21,179
At 7 May 2004 3,719 811 787 9,461 14,778
29 Annual report 2005 30
NOTES TO THE FINANCIAL STATEMENTS (continued)
12. TANGIBLE FIXED ASSETS (continued)
Plant, 
machinery
Freehold Leasehold Fixtures and motor
property property and fittings vehicles Total
Company £’000 £’000 £’000 £’000 £’000
Cost
At 8 May 2004 1,554 736 1,024 4,401 7,715
Additions 32 175 317 675 1,199
Disposals (604) — — (112) (716)
At 7 May 2005 982 911 1,341 4,964 8,198
Depreciation
At 8 May 2004 120 102 360 2,046 2,628
Charge for the year 53 38 189 328 608
Disposals (50) — — (99) (149)
At 7 May 2005 123 140 549 2,275 3,087
Net book amount
At 7 May 2005 859 771 792 2,689 5,111
At 7 May 2004 1,434 634 664 2,355 5,087
The figures stated above include assets held under finance leases and similar hire purchase contracts as
follows:
Plant and 
machinery
Group £’000
Net book amount
At 7 May 2005 4,681
At 7 May 2004 1,753
Depreciation charged during the year 279
Company
Net book amount
At 7 May 2005 803
At 7 May 2004 537
Depreciation charged during the year 127
Inter Link Foods PLC 13. FIXED ASSET INVESTMENTS
Company £’000
Cost and net book amount
At 8 May 2004 11,128
Additions 1,658
At 7 May 2005 12,786
At 7 May 2005, the Group held 100% of the allotted share capital of the following subsidiary undertakings, all
of which are registered in England and Wales, apart from Cukiernia Mistrza Jana Sp. z o.o which is
incorporated in Poland.
Proportion held Proportion held
Name Nature of Business by parent company by the Group
Crossfield Foods Limited Bakery — 100%
Lisa Bakery Limited Bakery — 100%
William Lusty Limited Bakery 100% 100%
Soreen Limited Bakery 100% 100%
Farmhouse Bakery Products
(Canterbury) Limited Bakery — 100%
Cukiernia Mistrza Jana Sp..z o.o Bakery 100% 100%
Yorkshire Cottage Bakery Limited Bakery/Int. Holding Company 100% 100%
Jessie Oldfield Bakery Limited Bakery 100% 100%
Farmhouse Bakery Holdings Limited Intermediate Holding Company 100% 100%
Inter Link Food Group Limited Intermediate Holding Company 100% 100%
Biscuits for the Connoisseur Limited Dormant 100% 100%
Cakes for the Connoisseur Limited Dormant 100% 100%
Creative Cakes Limited Dormant 100% 100%
Hepworth & Whittles Limited Dormant 100% 100%
Maid Marian Bakeries Limited Dormant 100% 100%
Multibake Limited Dormant — 100%
Premier Fine Foods Limited Dormant — 100%
Mother Hubbard Cakes Limited Dormant 100% 100%
The Clever Cake Company Limited Dormant 100% 100%
Butlers Pantry Foods Limited Dormant 100% 100%
14. STOCKS
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Raw materials 5,055 3,074 991 686
Finished goods 1,783 2,089 391 594
6,838 5,163 1,382 1,280
31 Annual report 2005 32
NOTES TO THE FINANCIAL STATEMENTS (continued)
15. DEBTORS
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Trade debtors 16,737 10,517 4,376 3,814
Amounts due from Group companies — — 29,514 12,238
Other debtors 1,992 1,399 714 1,174
Fixed asset disposal proceeds 1,400 — 1,400 —
Prepayments and accrued income 2,574 2,016 685 722
Corporation tax 336 — 2,344 904
23,039 13,932 39,033 18,852
All debtors fall due within one year.
16. CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Bank overdraft 10,792 3,255 6,173 1,322
Bank loans 2,400 1,650 2,400 1,754
Other loans 827 662 — —
Trade creditors 15,093 9,038 4,017 3,896
Finance lease obligations 1,210 611 255 246
Corporation tax — 758 — —
Other taxes and social security 768 554 243 263
Accruals 2,836 2,383 695 518
Amounts owed to Group companies — — 9,319 4,623
Other creditors 525 365 — 34
Deferred and contingent consideration 140 443 65 443
Proposed dividends 495 360 495 360
35,086 20,079 23,662 13,459
17. CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Bank loans 19,905 16,230 19,905 16,230
Finance lease obligations 2,440 661 181 157
22,345 16,891 20,086 16,387
Inter Link Foods PLC 18. FINANCIAL INSTRUMENTS
In January 2005, the Group increased its bank loan facility from £16.08 million to £22.28 million in conjunction
with the acquisition of Yorkshire Cottage Bakeries Limited. By 7 May 2005, scheduled repayments had
reduced the facility to £21,405,000. The loan facility is repayable by quarterly instalments over the period up to
October 2008, with four quarterly instalments of £562,500 in the next twelve months. The bank loan facility
includes an amount of £11.2 million which is a revolving loan which is not repayable until April 2010.
In addition, the Group has a mortgage of £900,000 which is repayable by quarterly instalments of £37,500
over 7 years.
At 7 May 2005, all bank borrowings were secured by cross guarantees between the company and its
subsidiary undertakings, together with a fixed and floating charge over the assets of the company. Amounts
owed under finance leases are secured against the specific assets to which they relate.
The Group had unutilised overdraft facilities of £2,921,000 at 7 May 2005. In July 2005, the overdraft facility
was increased from £9.0 million to £11.0 million, with a temporary increase up to £14.0 million for the 5
months to the end of January 2006. This overdraft facility is technically repayable on demand.
The Group uses financial instruments comprising cash, short-term borrowings, trade debtors and trade
creditors that arise directly from its operations. The main purpose of these financial instruments is to raise
finance for the Group’s operations.
The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency translation
risk and liquidity risk. The directors review and agree policies for managing each of these risks and they are
summarised below. Short-term debtors and creditors have been excluded from the following disclosures.
Interest rate risk
The Group finances its operations through a mixture of retained profits and bank and other borrowings. Interest
rates charged on all bank borrowings reflect a margin of 1.25% over base rate. The Group’s policy is to keep
approximately 40% of borrowing at fixed rates of interest. At 7 May 2005, the percentage of borrowings on
fixed rates was at 49%. This is higher than the 40% target in view of anticipated increases in the level of bank
overdraft as stock and debtors levels grow in the 6 months prior to Christmas 2005. 
The interest rate exposure of the net financial liabilities of the Group as at 7 May 2005 was:
2005 2004
£’000 £’000
Fixed — loans and finance lease obligations 16,150 10,239
Floating — loans and overdrafts 16,711 9,590
32,861 19,829
The weighted average fixed interest rate is for the loans is 5.10%, before bank margin, and the weighted
average period for which the rate is fixed is 3.6 years. The floating rate of interest is based on LIBOR.
The fair value of the interest rate swaps, which have no book value, was a negative £109,000 at the
financial year end. This value was determined by reference to the prices available from the markets on which
the instruments involved are traded. It is the Group’s policy not to recognise gains or losses on such financial
instruments until the time that the exposure that is being hedged is recognised. In practice this results in
adjustments being made to the underlying interest payable over the term of the instrument.
Foreign currency translation risk
Following the acquisition during the year of Cukiernia Mistrza Jana, the Group has started to import product
from Poland for onward sale to UK customers. It is the Group’s policy to minimise its foreign currency exchange
risk by entering into forward currency purchase contracts for at least 50% of the anticipated foreign currency
requirements over the following 12 month period. There were no such contracts in place at 7 May 2005,
although contracts have been put in place since that date in line with the Group policy. 
33 Annual report 2005 34
NOTES TO THE FINANCIAL STATEMENTS (continued)
18. FINANCIAL INSTRUMENTS (continued)
Liquidity risk
The Group seeks to manage financial risk, to ensure sufficient liquidity is available to meet foreseeable needs
and to invest cash assets safely and profitably. The Group’s general policy throughout the year has been, to
ensure continuity of funding, that at least 10% of its borrowings should mature in more than five years.
At the year end 34% of Group borrowings were due to mature in at least 5 years and throughout the year it
was over 10%. Short-term flexibility is achieved by overdraft facilities.
Fair values
The fair values of the Group’s financial instruments are considered equal to book values.
Borrowings, excluding bank overdrafts, are repayable as follows:
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Within one year:
Bank borrowings 2,400 2,312 2,400 1,754
Other borrowings 827 — — —
Finance leases 1,210 611 255 246
After one year and within two years:
Bank and borrowings 3,150 2,400 3,150 2,400
Finance leases 1,210 661 182 157
After two years and within five years:
Bank and borrowings 6,555 8,530 6,555 8,530
Finance leases 1,230 — — —
Amounts due on or after five years:
Bank and other borrowings 10,200 5,300 10,200 5,300
26,782 19,814 22,742 18,387
19. PROVISIONS FOR LIABILITIES AND CHARGES
Provisions for liabilities and charges includes deferred taxation on a full provision basis as follows:
Deferred Tax Other Group Total Company
£’000 £’000 £’000 £’000
At 8 May 2004 1,186 — 1,186 466
On acquisition — 33 33 —
Charged to profit and loss account (see note 6) 726 — 726 171
At 7 May 2005 1,912 33 1,945 637
Deferred tax provision
Accelerated capital allowances 2,005 660
Other timing differences (93) (23)
1,912 637
Inter Link Foods PLC 20. CALLED UP SHARE CAPITAL
2005 2004
£’000 £’000
Authorised
15,000,600 ordinary 2p shares (2004: 15,000,600) 300 300
Issued and fully paid
11,513,470 ordinary 2p shares (2004: 9,749,916) 230 195
In November 2004 1,650,485 shares were allotted to existing investors within the company by way of a
placing. The difference between the consideration received of £8,500,000 and the nominal value of the shares
of £33,000 has been credited to the share premium account.
In December 2004 32,600 shares were allotted to the vendors of Cukiernia Mistrza Jana. The difference
between the assumed consideration of £201,000 and the nominal value of the shares of £652 has been
credited to the share premium account.
During the year 80,469 shares have been allotted to directors and employees who have exercised share
options. The difference between the consideration received of £185,000 and the nominal value of those shares
of £1,609 has been credited to the share premium account.
21. SHARE PREMIUM ACCOUNT AND RESERVES
Share premium Other Profit and
account reserves loss account
Group £’000 £’000 £’000
At 8 May 2004 14,544 128 6,201
Arising on issue of shares 8,386 — —
Currency translation differences — — (20)
Retained profit for the year — — 2,361
At 7 May 2005 22,930 128 8,542
Share premium Profit and
account loss account
Company £’000 £’000
At 8 May 2004 14,544 9
Arising on issue of shares 8,386 —
Retained loss for the year — (5)
At 7 May 2005 22,930 4
35 Annual report 2005 36
NOTES TO THE FINANCIAL STATEMENTS (continued)
22. RECONCILIATIONS OF MOVEMENTS IN EQUITY SHAREHOLDERS’ FUNDS
Group Company
2005 2004 2005 2004
£’000 £’000 £’000 £’000
Profit/(loss) for the financial year 3,059 2,635 693 (244)
Currency translation differences (20) — — —
Dividends (698) (538) (698) (538)
2,341 2,097 (5) (782)
Issue of shares (net of issue costs) 8,421 370 8,421 370
Net increase/(decrease) in equity shareholders’ funds 10,762 2,467 8,416 (412)
Equity shareholders’ funds at 8 May 2004 21,068 18,601 14,748 15,160
Equity shareholders’ funds at 7 May 2005 31,830 21,068 23,164 14,748
23. RECONCILIATION OF OPERATING PROFIT TO NET CASH FLOW FROM OPERATING ACTIVITIES
2005 2004
£’000 £’000
Operating profit 5,767 4,849
Depreciation 1,815 1,337
Amortisation 2,252 1,477
Increase in stocks (697) (1,136)
Increase in debtors (6,403) (322)
Increase in creditors 5,774 123
Net cash inflow from operating activities 8,508 6,328
24. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
2005 2004
£’000 £’000
(Decrease)/increase in cash in the year (6,064) 2,438
Cash inflow from movement in debt and lease financing (3,547) (9,257)
Change in net debt resulting from cash flows (9,611) (6,819)
New finance leases (3,421) (658)
Finance lease acquired with subsidiary — (388)
Movement in net debt (13,032) (7,865)
Net debt at 8 May 2004 (19,829) (11,964)
Net debt at 7 May 2005 (32,861) (19,829)
Inter Link Foods PLC 25. ANALYSIS OF NET DEBT
At 7 May Non-cash At 7 May 
2004 Cash flow movement Acquisition 2005
£’000 £’000 £’000 £’000 £’000
Cash at bank and in hand 3,240 1,473 — — 4,713
Bank overdraft (3,255) (7,343) — (194) (10,792)
(15) (5,870) — (194) (6,079)
Loans (18,542) (4,590) — — (23,132)
Finance leases (1,272) 1,043 (3,421) — (3,650)
(19,829) (9,417) (3,421) (194) (32,861)
Non-cash movements relate to assets purchased under finance leases.
26. LEASING COMMITMENTS
Operating lease payments amounting to £1,159,000 (2004: £727,000) are due within one year. The leases to
which these amounts relate expire as follows:
Land & Buildings Other
2005 2004 2005 2004
Group £’000 £’000 £’000 £’000
In one year or less — — 3 2 
Between two and five years 162 252 304 165 
After five years 690 308 — — 
852 560 307 167 
Land & Buildings Other
2005 2004 2005 2004
Company £’000 £’000 £’000 £’000
In one year or less — — — — 
Between two and five years 37 161 213 94 
After five years 434 308 — — 
471 469 213 94 
37 Annual report 2005 27. RELATED PARTY TRANSACTIONS
The company has taken advantage of the exemptions within FRS 8 and has not disclosed transactions
with other Group companies, on the basis that all subsidiaries are wholly owned. Details of transactions
with the non-executive directors are included within the report on remuneration on pages 15 to 17.
28. CONTINGENT LIABILITIES
At 7 May 2005 and 7 May 2004, all Group bank borrowings were secured by cross guarantees between
the company and its subsidiary undertakings, together with a fixed and floating charge over the assets of
the company. There were no other contingent liabilities at either date.
29. PENSIONS
The Group operates a number of defined contribution schemes for the benefit of employees. The assets of
the schemes are administered by trustees in funds independent from those of the Group. The pension
costs for the year were £276,000 (2004: £281,000). There were no prepaid or outstanding contributions at
either the beginning or end of the financial year.
30. CAPITAL COMMITMENTS
The Group has capital commitments at 7 May 2005 amounting to £3,511,000 (2004: £2,540,000). 
The company has capital commitments at 7 May 2005 amounting to £8,000 (2004: £nil). 
38
NOTES TO THE FINANCIAL STATEMENTS (continued)
Inter Link Foods PLC 39
NOTICE OF MEETING
Notice is hereby given that the Annual
General Meeting of the company will be
held at The Media Theatre, Jack Walker
Stand, Blackburn Rovers FC, Elwood Park,
Bolton Road, Blackburn, Lancashire,
BB2 4JF, at 12 noon on 9 September
2005 for the following purposes:
ORDINARY BUSINESS 
1. To receive and adopt the financial
statements and the reports of the
directors and auditors of the
company for the year ended 
7 May 2005.
2. To receive and approve the Board’s
Report on Remuneration for the year
ended 7 May 2005.
3. To declare a final dividend for the
financial year ended 7 May 2005 of
4.3p per ordinary share, payable to
shareholders on the register at the
close of business on 19 August
2005.
4. To re-elect Mr C.E. Davies who
retires in accordance with the
Company’s articles of association.
5. To re-elect Mr A.C. Thompson who
retires in accordance with the
company’s articles of association.
6. To re-elect Mr C.H.G. Thompson
who retires in accordance with the
company’s articles of association.
7. To reappoint KPMG Audit Plc as
auditors and to authorise the
directors to fix their remuneration.
SPECIAL BUSINESS 
To consider and, if thought fit, to pass the
following Resolutions, of which Resolution
8 will be proposed as an Ordinary
Resolution and Resolution 9 will be
proposed as a Special Resolution:
8. THAT the directors be and they are
hereby generally and unconditionally
authorised for the purposes of
Section 80 of the Companies Act
1985 (“the Act”) to exercise all
powers of the Company to allot, grant
options over, offer or otherwise deal
with or dispose of relevant securities
(within the meaning of Section 80 of
the Act) up to an aggregate nominal
value of £69,743 provided that:
(i) this authority shall expire fifteen
months from the date of this
Resolution or at the conclusion
of the Annual General Meeting
of the company to be held in
2006, whichever is earlier,
unless previously renewed,
varied or revoked by the
company in General Meeting
save that before such expiry the
company may make an offer or
agreement which would or
might require relevant securities
of the company to be allotted
after such expiry and the
directors may allot relevant
securities in pursuance of such
offer or agreement as if the
authority conferred by this
Resolution had not expired; and
(ii) the authority conferred by this
Resolution shall be in
substitution for all existing
powers conferred on the
directors pursuant to the said
Section 80.
9. THAT, subject to the passing of
Resolution 8, the directors be and
they are hereby empowered pursuant
to Section 95 of the Act to allot
securities (within the meaning of
Section 94 of the Act) for cash
pursuant to the authority conferred by
the foregoing Resolution as if
subsection (1) of Section 89 of the
Act did not apply to any such
allotment provided that this power
shall be limited:
(a) to the allotment of equity
securities in connection with a
rights issue in favour of ordinary
shareholders where the equity
securities respectively
attributable to the interests of all
ordinary shareholders are
proportionate (as nearly as may
be but subject to such
exclusions or other
arrangements as the directors
may deem necessary or
desirable to deal with fractional
entitlements or legal or practical
problems under the laws of, or
the requirements of any
recognised regulatory body or
any stock exchange in, any
territory) to the respective
number of ordinary shares held
by them; and
(b) to the allotment (otherwise than
pursuant to subparagraph (a)
above) of equity securities up to
an aggregate nominal value of
£9,750
and shall expire fifteen months from
the date of this Resolution or at the
conclusion of the Annual General
Meeting of the company to be held in
2006, whichever is 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 directors may allot
equity securities in pursuance of such
an offer or agreement as if the power
conferred hereby had not expired.
By order of the Board
C. Neilson
Company Secretary
13 July 2005
Registered Office:
Shadsworth Bakery
Sett End Road
Blackburn
Lancashire
BB1 2PT
Annual report 2005 Notes:
1) Any member entitled to attend and
vote at the Annual General Meeting
may appoint one or more proxies to
attend and, on a poll, vote instead of
him and such proxy need not be a
member of the company. 
2) To be effective, the instrument
appointing a proxy (and power of
attorney or other attorney (if any)
under which it is signed or a notarially
certified or office copy thereof) must
be deposited at Capita IRG Plc,
Proxy Department, Bourne House,
34 Beckenham Road, Beckenham,
Kent, BR3 4TU not less than 48
hours before the time of holding the
meeting. Completion and return of
the form of proxy will not preclude
shareholders from attending the
Annual General Meeting and voting in
person if they wish to do so.
40
NOTICE OF MEETING (continued)
3) The register of interests of the
directors and their families of the
share capital of the company and
copies of contracts of service of
directors with the company or with
any of its subsidiary undertakings will
be available for inspection at the
registered office of the company
during normal business hours
(Saturdays and public holidays
excepted) from the date of this notice
until the conclusion.
4) In accordance with Regulation 41 of
the Uncertificated Securities
Regulations 2001, only those
members entered on the company’s
register of members not later than 12
noon on 7 September 2005 or, if the
meeting is adjourned, shareholders
entered on the company’s register of
members not later than 48 hours
before the time fixed for the
adjourned meeting shall be entered
to attend and vote at the meeting.
Inter Link Foods PLC 41 Annual report 2005
FIVE YEAR REVIEW
5 YEAR SUMMARY PROFIT AND LOSS ACCOUNT
2005 2004 2003 2002 2001
£’000 £’000 £’000 £’000 £’000
Turnover 98,138 69,625 51,376 45,989 18,715
EBITA 7,295 5,902 4,233 3,804 1,926
Interest 1,435 938 572 519 140
Profit before tax and amortisation 
of goodwill 5,860 4,964 3,661 3,285 1,786
Amortisation of goodwill 1,359 1,029 699 600 128
Tax 1,442 1,300 983 917 513
Profit for the year 3,059 2,635 1,979 1,768 1,145
Diluted earnings per share 27.5p 26.5p 25.2p 24.5p 20.5p
Diluted earnings per share 
before amortisation 39.7p 36.9p 34.1p 32.8p 22.8p
Dividend per share 6.45p 5.5p 5.0p 4.2p 3.6p
5 YEAR SUMMARY BALANCE SHEETS
2005 2004 2003 2002 2001
£’000 £’000 £’000 £’000 £’000
Fixed assets
Intangible 35,437 22,111 18,851 12,060 11,314
Tangible 21,179 14,778 11,261 7,900 6,416
56,616 36,889 30,112 19,960 17,730
Current assets
Stock 6,838 5,163 2,914 1,681 1,414
Debtors 23,039 13,932 10,771 6,979 5,963
Cash 4,713 3,240 2,084 1,947 432
34,590 22,335 15,769 10,607 7,809
Current liabilities 35,086 20,079 18,222 12,573 8,071
Long-term liabilities 24,290 18,077 9,058 7,479 8,481
Net assets 31,830 21,068 18,601 10,515 8,987
FINANCIAL CALENDAR
Annual General Meeting 9 September 2005
Final Dividend 2005 Paid 16 September 2005
Interim Announcement 10 January 2006
Interim Dividend 2006 Paid 17 March 2006
Preliminary Announcement 2006 11 July 2006
Designed and Printed by Jones & Palmer Limited, Birmingham. tel: (0121) 236 9007
This Annual Report is printed on Revive Silk.
A true recycled product with an industry beating minimum
75% de inked post-consumer waste content. INTER LINK FOODS PLC
Blackburn BB1 2QJ
t: 01254 55495
f: 01254 663602
www.interlinkfoods.co.uk
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